Tech Driven vs Market Driven Companies

What is the best approach towards engaging the agri-food market with new products and services? Are you a developer of a new technology that seeks opportunities, aka problems that your latest creation solves? Or do you recognize this great void in the market that begs a solution you can surely fill by hiring a lot of geniuses?

Techies Rule

The “geeks” of the world, and I use this term endearingly, will tell you that the first method of market engagement is far superior to the MBA way. There are many companies that have had great success creating software, hardware, services, systems and devices and then finding the nail that fits their hammer. On the other hand the road to riches is littered with innovative technology that could not gain acceptance by potential customers with a very clear and well-defined need.

PowerPoints and Business Plans

Taking the business route might seem to be a more prudent way to succeed in the market. Unfortunately, the development of a detailed business plan does not insure that those “hockey stick” sales forecasts will be achieved. This is not to say that one shouldn’t have a plan but sometimes all of that market research, positioning, pricing, messaging, profiling and needs analysis may not be enough to get that startup across the finish line.

Examples of The Tech First Approach

Two companies, Iteris and Descartes Labs, have some very similar beginnings when it comes to launching their businesses. One introduced and subsequently proved the value of their technologies in other non ag market sectors with a bona fide solution to a well-defined problem. The other leveraged their public sector knowledge and technology for use in the forecasting of commodity yields. Each had their beginnings as a collection of some very smart people who had done the heavy lifting technically and found customers who, for the most part, recognized the ROI of those offerings very quickly.

Iteris

Iteris launched their business by solving the problems of logistics and traffic flow optimization for municipalities as well as for private industry. Understanding the science of big data analysis provided them with the wherewithal to leverage that knowledge into ag and food. The term they use is “informatics” or informed decision-making.

Descartes Labs

Descartes Labs was founded by a group of astrophysicists, cosmologists and big data analysts out of the prestigious Los Alamos National Laboratory who had a sense that their skills and knowledge would deliver value to a myriad of business inefficiencies that could be solved geospatially.

Innovative Technology + Business Plan + Capital + Leadership = Success

Let’s just say that with any one or two or even three of the above companies will not get to the equals goal.  It seems that by putting tech first and building a business around that might be the best path towards success. The smart money is on "the geeks".

Sales & Marketing and Vice Versa

How We View Ourselves is Who We Are

A friend and I have had a long running discussion about the way that many companies have departmentalized the functions of “sales and marketing”.

First of all it seems that many agri-food technology startups put them in the same box on the org chart. While it might seem logical due to a perceived inherent close relationship between the two, upon further inspection these distinct disciplines are as different as software development and accounting. Which begs the question why any organization would have IT coupled with accounting – which some do. But that is a different discussion entirely.

Looking at the functions of each one sees that while they are tasked with the ultimate goal of moving product or services to the intended market their methods for doing so are not in the least way related.

There is a Difference

Marketing, and I am going to simplify here, is all about product definition, perception, branding, pricing, positioning, messaging, promoting and all of that other stuff that goes into laying the foundation for the sales staff as a means to assist in the adoption process.

Sales is the act of converting a prospect into a customer by having those people or organizations exchange money for those products and services. OK. I have really oversimplified that one!

It is very difficult to have one without the other. Salespeople are not good marketers and we all know that marketers can be lousy salespeople. We need the unique expertise and talents of each in order to be successful in the agri-food technology market segment.

Carts and Horses

Secondly, a common error in establishing the department name is when companies assign the name as “Sales and Marketing”. Combining them is the first mistake but when we don’t lead with marketing in order to support sales and not the other way around we have missed a key step towards success. It may seem trivial but by transposing these activities we fail to recognize the true nature of the challenge in engaging the market.

In any business planning process one cannot possibly establish sales projections without conducting the necessary market research first. Market size, demographics, customer profiling, value propositions, pricing, SWAT analysis and all the other things that marketing provides the sales group are what position them for success.

This is not to say that there might be some overlap of sorts in a few of the functions of the two but for the most part there is a definitive line of demarcation that necessitates separate boxes on that organizational chart.