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It's Not the Technology; It's the Psychology

By Bruce Freeman

ASBA Today (American Small Business Association)…Summer 2000

Because of my 20 years of experience in high technology, people often ask me what it takes to successfully market high-tech goods and services. Why do some companies make millions while others fail or just hang on for years? What makes one company the darling of the media, while another can't get a single column inch in the local weekly penny saver?.

Back in the early '90s when I managed PC Magazine's PC labs, I couldn't always tell which company would succeed. But I could almost always predict which ones would fail. Later, when I formed my own PR firm to provide marketing and media relations services to high-tech companies, I began to recognize entrepreneurial companies that would be successful no matter what their products or services. I realized that the psychology of the company principals and their approach to the market mattered almost more than the quality or uniqueness of the technology.

Does this mean that an entrepreneur who builds a better digital mousetrap will fail if he or she takes the wrong approach to the market? In my experience, it's a better than even bet. Conversely, you might not have the newest of even the best product out there (though you may think you do), but with the right combination of personnel, perseverance, and willingness to learn from others' mistakes, you just might make it big.

If entrepreneurs are special kinds of people, high-tech entrepreneurs are in a class by themselves. You probably know one; they are easily recognizable. A special light emanates from them-they are in love with what they do. They believe in their product or service with a fervor that makes others uncomfortable. For most, their companies are like children, making them as blind to faults or weaknesses as most parents can be. Unfortunately, this blind faith that sets technical entrepreneurs apart from other small business owners can produce disaster just as easily as success


Take, for example, a case study I call "My Cousin Vinny" after the movie of the same name. John, a young entrepreneur, asks for PR help for his fledgling high-tech consulting firm. He is intelligent, enthusiastic, and dedicated, with big dreams, boundless energy, a full-time job, and no support. When I ask John who is managing his hourly consulting fees and the purchase of capital equipment to bolster revenues for his new company, he introduces me to his cousin Vinny. When I question him about Vinny's skills and abilities, he confides that Vinny is actually a bellhop at a Manhattan hotel. "Don't worry, he's my cousin!" John assures me.

The reason for the eventual failure of this company seems obvious. Building a successful business is not something you can do while you are working a full day elsewhere. And hiring relatives or friends with uncertain skills may seem judicious in the beginning, but these folks can often turn into liabilities.

The best way to hire your first employee is to start with the best-skilled employee you can afford, understanding that you can let this person go without prejudice. Knowing whom to hire-and how and when to fire-is the first skill every successful high-tech company principal must develop.

More high-tech startups than conventional businesses are engineering driven because it is the engineer-inventor who has the inspiration, vision, drive, and skills to bring a products or service into existence. Making the successful transition from "beta test" to "full release," however, requires marketing and sales professionals who understand the market and how to get the most from it. It is highly unusual for someone who does his best work with a circuit board or numbers to excel as a sales director.
There is some scorn on the part of the technical populations for anyone considered non-technical, like sales and marketing types. Holding onto this attitude is one of the biggest mistakes principals of high-tech companies can make. Like it or not, marketing and selling are equally important to creating the product and managing the business. Each function has its place and each must be on equal footing for the company to succeed. One need only look at Microsoft's overwhelming success to see that the successful merging of technical creativity with quality management, sales and marketing are requirements for corporate profit.


Someone once said the definition of "smart" includes knowing what you know and, even more important, what you don't. I say that the definition of "successful" includes knowing how to hire someone who knows what you don't know.

Once in place, the successful in-house or outsource team works together, within a budget, to form a marketing strategy. This sets the company on a well-planned route that can be monitored and adjusted as necessary, rather than one managed by the seat of the
principals' pants.


A good plan will have marketing's classic "Four P's" in place. The Product, which is packaging and price, often evolves over the development period based on knowledge of the competition. The Place, where or by whom the product will be sold and distributed, may be market-dictated or decided based on the marketing budget. Promotion, which includes advertising, sales materials, trade shows, and all paid marketing costs, is always a function of the annual marketing budget. And finally, Publicity (also known as public relations) can be mapped out. These decisions and the people who act upon them are the cornerstones of success in the high-tech field.

High-tech executives are sometimes unfamiliar with the complexities presented by the marketing function. Many do not understand that sales, marketing, and PR are not mutually exclusive, and that all three elements should work together to achieve success. While funding may be scarce in the beginning, firms should not cut corners in this area at the expense of quality. Every new high-tech firm should invest a percentage of its time and resources in a professional marketing plan and in the services of a qualified public relations consultant who understands how to manage its information flow with the appropriate media.


As a general rule, the skilled management professional can often function as a vice president of sales when a company is small. But sales are only one part of marketing, and marketing-especially for new product plans-requires specialized knowledge. Marketing people can often sell, but sales professionals are rarely expert marketers. This distinction is often lost on the inexperienced executive in charge of hiring.

Marketing professionals are enthusiastic and creative communicators. Marketing executives strive to know the competition and the market as a whole, understanding the best value for your budget dollar. Marketing also incorporates public relations, an extremely specialized skill that depends on personality, experience, and relationships that can take years to build. Skilled marketing/management professionals are not, by definition, direct contributors to the bottom line, so it may be easier and less expensive to outsource a new product marketing strategy rather than to hire a marketing manager or vice president, especially when your budget is small.


Positioning your high-tech company for success takes more than a technological jump on the market. The people who represent you to the world are just as important to the success of your product. Some simple rules hold true for both start-ups and established firms that are investing in the introduction of a new product.

Put every ounce of your professional self into your company. You'll never make it if you are distracted by other responsibilities. Don't hire relatives or friends. It's too hard to let them go. Honestly categorize your own strengths and weaknesses. Realize that one person can't do everything a company needs for success. Seek out the professionals who have skills that complement your own. For critical positions, employ people for whom you have respect, and make sure you listen to them.


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