The Burden of a High Potential
Technology companies have a reputation of being "high-flyers" -- that is, they have high potential for rapid and significant growth. Companies like Microsoft, Cisco, Dell, and Google underline that perception. But for every technology company that flies high, there are hundreds of others that can't make it past a sales mark of a few million dollars or can't cross the line to become profitable. Often it's these companies that come to KLynn looking for a way to bust out of their doldrums and realize the high-flyer potential they have. These companies all share certain characteristics.

The Good Idea
The most common characteristic is that they tend to have a really good idea behind their business. Yes. Their problems are not because they have a bad idea, a bad product concept or a bad service concept. Just the opposite. They have a good idea and they know it in their bones.

Solutions Looking for Problems
But too often, what they also have is a solution looking for a problem. They know they have a good idea, true, but they do not know who has the problem. Because the founders of these companies are often technologists themselves, they have the view that a really good idea should be sufficient to draw customers out of the woodwork. If we build it, they will come. (see 'Magical Thinking' below.)

Ambiguous Markets
That type of view complicates their entire business model. If a company hasn't found the problem their solution is for, then they haven't found a market. Without a market, finding customers is difficult (at best).

What often happens is that the company is glib about where the problem is that they have a solution for. "Our market is the Fortune 500" is a phrase I often hear. That's just not good enough. It doesn't mean anything in terms of how the company can get to the market.

In contrast to that glibness, let's take a company like NEBS (NYSE: NEBS www.nebs.com). NEBS' market is small businesses. They have the name and address of every one of the small businesses in their marketplace. As a catalog sales company, they know exactly who they're selling to. They have to. Without a name and address they cannot mail their prospective customer a catalog. So with NEBS, there's no glib description of the market; knowing who their prospects are is a core value for the company.

Poor Understanding of Customers
A poor understanding of the marketplace can only result in a poor understanding of one's customers. Too few technology companies really understand their buyers. Why did they buy? Who made the decision? What other products or services did they consider? What else do they buy? How often do they buy? These are just a few of the questions that most market-driven companies can answer, and most technology-driven companies can't.

Looking at NEBS again as an example of someone who does know their customer, they can answer these questions and many more. They also require their management team, executive and middle-level, to each visit a number of their customers every quarter. Customer knowledge is a vital component to their business and they have incorporated that into their very culture.

Insufficient Measurement of Results
Outside of the lab or the engineering development organizations, technology-driven companies tend to be equally glib about the measurement of results. It's a strange contradiction of disciplines. They will know the number of lines of code that each software component has, but they will not know how well the last advertisement performed. They will know the Mean-Time-Between-Failures (MTBF) of every hardware component they use but they couldn't tell you the average value of an order or the maintenance plan renewal rate for their customers.

"There is no competition."

"I know the market."