Technopreneurship - Planning The First Seed
As we have discussed, a technopreneur needs a vision. These questions will help him develop that vision.
* What is the idea, concept or plan for innovation?
* How big is this market and how scalable can it become?
* Do I have the resources to R&D, develop and market the new product?
* Can I survive for six, 12, 18 months without pay?
* Who should be on the team?
These questions would also help in choosing team members, partners and opportunities because they help the technopreneur decide if team members, partners and opportunities fit into the vision.
Pre-qualifying team members, partners and opportunities at the earliest possible stage is important because technology start-ups are very risky ventures. This is the dark side of the ability to grow exponentially.
What Is The Idea, Concept or Plan For Innovation?
There are many great ideas out there but many are not commercially viable either because they are too forward-looking to gain market acceptance, they may be difficult to develop and deliver or they have little profit potential. For example, selling music over the Web by the recording industry is a good idea but nobody wants to pay for any downloaded music. CD privacy is bleeding revenue from record companies and artistes' royalties as a proliferation of websites are allowing people to download music for free.
Technology is dynamic, flavors and trends change quickly. Solutions demand changes. For instance, a couple of years ago, a search engine or a free Web-based e-mail concept could command good value. Today these do not fly anymore. Technopreneurs are so involved in the joy of discovery that they often forget that an idea has to be of some commercial value for it to be a success.
If the product is too new or innovative, buyers might have to be educated on its use. The technopreneurs must ask themselves if the costs such promotions and education will incur might outweigh the profit of this new innovation offer.
They also have to ask themselves if anyone else has done a similar project before. If so, what were the results? If they were successful, what did they do right? If they failed, how can they learn from them?
How Big Is This Market And How Scalable Can It Become?
Once that idea, a product or service to be delivered is determined, the next logical thing to do is to understand how large the opportunity really is. Then ask whether it can be tested successfully in local markets, then duplicated elsewhere with little or no difficulty. If it is a service, can it be delivered or fulfilled online to reach global audiences on the desktop? If the answer is “Yes“, the projects are scalable. The key is to understand how large the market, demand and product reach, and scalability of the project are. A technopreneur wants a global market that is scalable.
Imagine a restaurant with a superb cook, decor and lots of customers. This is a success story, but the business itself is not scalable. The restauranteur makes money but his business is limited to his location and available seating space. No matter what he does, he can only serve a certain number of customers in any given day. The restaurant owner may try to duplicate the restaurant's success by opening more outlets but the scalability question still remains as this would require significant resources and even if the resources are available there is still only one chef.
The restauranteur may try to franchise the model, but franchising is more about license fees, not F&B sales. And there is still only one chef.
Restaurant chains recognize this problem. Instead of focusing the revenues on the food business, they tend to structure the revenue model in other areas to acheive scalability. For instance, McDonald’s makes more money by purchasing properties and leasing them to franchisees then through selling to customers. Its real revenue model instead of rental income and capital appreciation from real estate deals. Similarly, other restaurants concentrate on the fulfillment of the supply chain and structure their businesses around supplying patty burgers and frozen fries instead of trying to sell food direct to consumers.
A web design or an e-solutions company that constantly develops customized solutions for clients faces the same problem as a restaurant owner. The problem here again is scalability because as the business grows, the company has to hire people to meet the demand for its products. But the company has to fire people when businesses is slack.
Then there is the issue of cost of operations growing proportional to the revenues.
The trick for the Web design or e-solutions company is to quickly design and build a number of products and market them extensively under a brand name. This way the focus is sales and support, not writing code. As the technopreneur scales up with the regional offices are international branches he needs to ask himself if he needs a service center.
Do We Have The Resources To Develop And Market The New Product?
Once the technopreneur has got the concept and ideas in perspective, the next logical step is to figure out the amount of resources required to complete his plan. He needs patience and resources to develop the product and means to get the product out of the door.
In most cases this requires capital. This means that the technopreneur must understand the issues of raising capital, pitching to investors and preparing a business plan. He has to address the need for other resources such as management, technical development and marketing expertise.
It would be perfect for the technopreneur to start putting his plans are directions from his home. Most successful companies in the US began in the garage and slowly scaled up when the opportunity presented itself.
The development of technology-related products and services involves a lot of risks. Technopreneurs have to guage and predict the development time which should not be greater than it shelf-life. Also, global competition has made the need to get products to market more compelling than ever. As we have seen in recent years, especially in Silicon Valley, teams have gone into R&D for a period of years only to find out that a better product has hit the streets before them. This has meant abandoning the project, or fine-tuning before a launch. However, all is not lost although you may not be the first mover.
If a competitor's product is new, it may hit substantial something block such as customer education and training, or may not be able to fulfill market expectations. Some may run out of bandwidth trying to handle a technical and support issues.
A technopreneur could quickly use this information to his advantage and address market demands while others are still or in the learning phase.
The key is to use resources niggardly and efficiently. Build the product in stages, releasing versions in stages till the final product is out. Get the product out as soon as possible, so that revenues can start coming in, reducing the need for more outside capital.
Can You Survive For 6, 12, 18 Months Without Pay?
My company once ran an advertisement in the local papers, which read Technopreneur seeks partner for an interesting project. Team players required. Call 1800-technop.
The results were interesting. Everyone who called had a different objective and was very enthusiastic about the overall growth prospects of this venture, but when we asked above question, the enthusiasm died and they asked “Is there a salary while working on this venture?"
What we were trying to gauge was the level of risk a person is willing to take. The person with an entrepreneurial spirit must be a risk takeer, albeit an informed one. The willingness to take a risk, along with other considerations, will determine the degree of your business success or failure.
Who Should Be On The Team?
Most people assume that working in a start-up is all fun and very rewarding. What they do not know is that things can get quite rocky before they get better. A technopreneur has to be not only a risk taker, he has to be persistent as well. He has to be able to continue on against the odds to succeed. Someone who signs on just for the rewards will surely desert at the first sign of failure.
You need great partners to build your business. Who then should be on the team? This topic will be covered in a greater detail in the next chapter..
Chapter 9 Planning The First Seed >>>
Technopreneurship Development - A Role for Society in Technopreneurship Development, a chapter written in 2002, explains the creative destructive forces at work in practically every aspect of human life and the reasoning for the massive confusion, leading up to revolutions, lack of employment opportunities and governments fiscal deficits. Technology is usually blamed for making the world a smaller place, the writing was on the wall since the late nineties, this chapter refreshes our memories.
Technopreneurship - The Successful Entrepreneur in the New Economy - Daniel Mankani. Published 2003. Pearson Education Asia - All rights, copyright reserved Daniel Mankani { ISBN0-13-046545-3 }
