Successful Startup (Part 5)

Today the blog is about R&D versus marketing and the advantage of creating technology versus creating a product.

The classic startup school says: build a product and plan a decent marketing budget. You will be judged by the conversion rate and the number of returning customers. Well. This is true. But there are alternative ways to be successful.

We have, at wiho.me, opted to stay invisible. No web site (just the teaser). No marketing budget. 90% costs in R&D. And support. We do not make apps. We even do not make products. We make our customers' products better. We were not sure about this strategy at the beginning, but now it shapes very effective.

Access to the market is very expensive for startups. Because the market is crowded and you have to pay a lot to be seen or heard. On the other hand there are many big market players whose products are aging. Well known and established brands with no wildcards left in their pockets.

Do you know why big companies rarely innovate? Because the real innovation is risky. Requires courage. So it goes down to the very selection of people within the organization. Those individuals, who are courageous to take risks, are creating the startups. They do not work in large organizations. Psychological profile, that is it.

So you are a startup, you have this brave new idea materialized, this new technology developed. Where do you go from here? Yes you can fight for your market presence. Your name on billboards and on Google ads. Or you can silently, under the radar, approach carefully selected customers. Yes, those big names, big brands, living in the big offices made of metal and glass.

If you really have something valuable. A technology with a high entry barrier. The product of your idea and the focused R&D process. Something that will make this big brand name shine and fly high again. Don't be surprised how welcome you will be. But there must be an unquestionable value in what you offer. Then they will be buying. Today it is always build versus buy decision. And everybody races against time. Buying is almost always a better way than building.

So then when you've sold, again, under the radar, your technology to make your customer's product better. Make them love it like their own. And support them as good as you can. This is crucial. Support is the marketing when you sell technology. Usually you do not have many customers. So the ones you have are precious. Make them feel like you are their own R&D. They will keep buying. You will stay invisible. You will not make your products. You will make their products - better.