Every business needs traction. Yet, lamentably, in the US 67% of information technology start-ups will fail in the first three years of existence. Vinod Khosla, one of the founders of Sun Microsystems, speaks to the need for a technology to get traction … and the peril that awaits those who don’t achieve it. The question of “traction” permeates every conversation I have with a client seeking to enter a new market. What, however, is traction?
To me, the notion of traction encompasses three things:
- The technology plants roots. Irrespective of who owns the IP, the technology must be ready for the market – and the market ready for the technology – now! There would never have been an iPod moment if there had first not have been an overwhelming Sony Walkman moment. Sony made music mobile. Your music. What you chose, what you wanted to hear, and when you wanted to hear it. There was one requirement that, though embraced in the Walkman’s early days, laid out the welcome mat for the iPod in its latter days: everything had to be on a CD medium. 20,000 songs in your pocket? Not with the Walkman. But with the iPod? Yes!
- Your solution is better than “good enough”. Not everything has to experience an iPod moment. Consider the number of mp3 player manufacturers, the names of which we no longer recall, that did well., though still did not garner the share of the iPod. One does not have to be right at the head of the long tail to win. One needs to ensure that they are not far along the tail to make the returns mundane.
- One must be able to scale. If there is one thing I can point to – one Achilles Heel – that clients encounter, it is being in the situation of having a “winner” yet not being able to get it entered into the Kentucky Derby. The impediments to scale? While there are many, in my experience the usual suspects number three:
- Inadequate funding. There is a huge difference between having an iPod, and having the funds to take it to market. “Build a better mousetrap, and the world will beat a path to your door.” How does the market know where to find your door?
- Inexperienced management. Anyone can stand at the bottom of Mount Everest and point up. How many have the know-how to make it up?
- Inadequate go-to-market execution.
The courageous – and the very best and wise CEOs I meet – recognize two things: (1) that their technology passes the first two tests: it establishes roots and is better than good enough (2) that they don’t organically have what it takes to scale, and are able to put their egos – and shareholdings – on the line to find alternatives that do scale.
Amen to those founders!
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