A disruptive technology being developed by great talents, with no killer application. Is it bad? Should the investors look for other alternatives?

Last week we celebrated the Passover holiday which commemorates the emancipation of the Israelites from slavery in ancient Egypt. The following picture (comics of the miracle of the Red Sea splitting) was posted by one of my friends on Facebook:

The next day I saw the picture I put in the headline, “Selfie with Moses”. We see this guy, several thousand years ago, holding a disruptive technology device in his hand, taking some selfie pictures with Moses… but what will he do with it? No Facebook to share with his friends and fans, he cannot tweet, and probably cannot store the pictures in the cloud, not to mention that there is even not a decent WiFi in the desert…

It immediately reminded me of my favorite strategic marketing topic. What is the value proposition of your product? What value does it bring to your customers? Who is your target customer anyway and why should he care at all?

In my favorite EMBA course at Kellogg-Recanati, a few years ago (Marketing Strategy, by Prof. Ashwin Joshi) we discussed several methodologies for value creation and communication.  Among them

1. The voice of the customer – focusing on the un-met needs of the customer
2. The voice of the product –focusing on how to develop new product ideas using your present product as a point of departure. (It’s a very effective methodology to generate new value when your product is commoditized).
3. Blue Ocean Strategy –focusing on generating value for new customers and by this growing the market size.
4. The Profit Model – focusing on generating value through optimizing the value chain

All the methodologies above, if used, result in a well defined value, and a clear identification of the customers and the use cases of the product. This happens already during the product definition phase which comes prior to the product development phase. These methodologies are relevant for both technology and non-technology companies.

However, at technology start-ups this is usually not the case. Many technology startups develop top notch innovative technologies, burn lots of money on R&D and advancing the technology, but don’t have a clear killer application or use case for that. In some cases these companies are aware of the situation and are trying to find the killer application at the same time they are working on the technology and in other cases they even don’t bother thinking about that. They are focusing on generating technology assets, keeping in mind that the product will go through some cycles and new spins until it will fit the market needs and a killer application will be devised. In most cases the target customers are identified in high level (for example “we are targeting mobile operators” or “our customers are the mobile devices makers”), but it is unclear at those stages what exactly these customers will do with the technology, what will the use case be and what will generate, at the end of the value chain, the customer’s willingness to pay. This stage may last several years, even in successful companies.

Many such start-ups are being funded by VCs who are aware of this situation but also believe that if they invest in a company with both technical and business talents (“A Team”) – they will eventually be creative and excel also in the marketing strategy front.

In some of the companies I worked with and at some of the companies I am helping to this is exactly the situation:

A disruptive technology being developed by great talents, with no killer application. Is it bad? Should the investors look for other alternatives?

The answer is absolutely not.

Technology innovation is essential as it is an enabler:

• Enabler for synergy between the technical innovators (engineers and scientists) and the marketing strategy guys (who use the methodologies above as a working tool, given the developed technology),
• Enabler for synergy between the above and other companies (partner and customers) with whom they innovate and multiply the value through innovation synergy.
• Enabler for synergy between all of the above and the value chain partners who make sure things can be realized, manufactured, distributed and bring economic return to the value creators and accordingly to the share holders.

Peter H. Diamandis, co-founder and chairman of Singularity University, says we all need to wake up to the potential threats and opportunities of disruptive Technologies. Take a look at this video – trust me, you will be inspired!

Video Length: 00:19:48

Oh yes, and back to Moses:  This camera there… is it serving an un-met need? Probably not. But imagine, if they had a camera back then during the Bible era, we could have seen what really happened there, on one of our friend’s Facebook’s wall, perhaps we could even “Like” or “Share” it.