Lack of marketing knowhow hampers IT start-ups
The number one killer of small IT businesses is their naïve p e r s p e c t i v e on how to market t heir products. A small team might have developed the next big technological innovation, but i f t hey f or get t he pr i nc i pl e s of Marketing 101, they will struggle to become commercially viable.
This is the view of Neil McMurchy, ma n a g i n g v i c e - p r e s i d e n t for application software at Gartner, one of t he world’s leading i nformation technolog y research and advisor y companies.
Annually, about 2 000 to 3 000 small companies appear on Gartner’s radar. The single fundamental issue they all have in common is a lack of understanding of strategic marketing. “It is not just about social media or SEO [search engine optimisation], it is about having a good understanding of who your customer is and why they would need your product. And then t uning your message from a buyer’s perspective.”
This is something that companies t h a t p r o d u c e c o n s u mer g o o d s understand too well. They start with t he customer and ask t hemselves: “How can I satisf y my market or demographic?”
McMurchy says the majority of IT start-ups do not start out this way. “They usually get very excited about new ideas and then start to develop a product. Something that might be amazing, but that nobody needs or wants to buy.”
It might be rel at i vely easy for “I T- preneurs” to develop a good product, but according to McMurchy it is really hard to make it commercially successful. “At the end of the day, only one out of 20 tech start-ups turn into significant viable businesses.”
Kodak is an example of a business that failed because it didn’t adapt to changing markets.