We see some amazing technology here at C-leveled.
Fuel cells, drug-development software, robotics, IoT, data orchestration software, advanced analytics/digital twin . . . we haven’t “seen it all,” but we’ve seen a whole lot. Intellectual property, advanced features, order of magnitude performance increases and product roadmaps are some of the basic building blocks of the dialect spoken by these truly technology-driven companies.
These types of technology companies typically can’t bootstrap their way to any level of any meaningful financial results, and winning, say, $10K in a business plan competition isn’t enough to even begin to fail properly, let alone move the company forward in any meaningful way. That’s not to say that the same $10K can’t be put to good and productive use. Filing a provisional patent and having 3D models printed requires money. But ultimately, tech companies doing big things will require big money to jack up the growth curve. And therein lies the challenge — investors invest in a business, not a technology. Even if the core business model is technology-driven, most investors will require some level of business validation before moving into their investment process.
This raises one of the most common discussion points in most early-stage technology companies: What’s more important: the product or the business? Product or technology-centric thinkers will correctly point out that without a product, there is nothing to really talk about. It’s hard to disagree with that rationale. Business-centric thinkers will state that if you don’t market and sell your product, then that product is essentially worthless. It’s tough to disagree with that rationale, too. There is a way to resolve this debate, though:
Q: What’s more important: the product or the business?
A: Yes
Entrepreneurs are particularly good at Both/And thinking. It’s the kind of thinking that enables truly breakthrough products and results. This kind of thinking frees an entrepreneur to consider and reach for apparently divergent goals, like an order-of-magnitude increase in speed at one-third of the current price. Back in the Internet bubble days, if you had predicted that in 2017, a person could purchase a one-terabyte hard drive for personal use that also doubled as a hotspot and a router and could do an incremental computer backup wirelessly, in about 5 minutes, for $199? You would have been laughed at. Both/And thinking is positive-sum; Either/Or thinking many times yields incremental results.
Even if the core business model is technology-driven, most investors will require some level of business validation before moving into their investment process.
So how can Both/And thinking be applied to building an early-stage company? This isn’t yet another piece about the virtues of/requirement for customer discovery, or how rapid prototyping has obliterated operational and financial barriers to market entry. Everyone knows that. Rather, it emphasizes how to deploy a team in such a way that can loosely plan both the business and the product development at the earliest stage.
Not every company can be launched with $10,000. A product or service that requires the development and implementation of a “deep technology” often measures the cost of market and product development misses in $100K increments at the early stage. If founders and their friends-and-family investors can cobble together a $200K seed round, or manage to obtain a Phase 1 SBIR, the pressure is enormous to “get it right,” or as right as they can, on the first swing:
• Have you overlaid a thorough and thoughtful market segmentation on the product specification?
• Have you talked to any channel partners who are selling into these segments to understand where the pain really is and what would be considered to be a painkiller?
• Have you recruited a level of experienced business acumen to your founding team?
• Does your technical team understand the value of having that business acumen on the team?
• Have you begun assembling an advisory board that can plug knowledge gaps regarding the needs of your target market segments?
New business formation is fundamentally important to our economy, regardless of industry or product. No matter what your business idea is or who it will serve, Both/And thinking may help you identify product and team blind spots or gaps in your own conceptual thinking as you embark down the path of entrepreneurship.