In his excellent book “The Idea Factory: Bell Labs and the Great Age of American Innovation”, Jon Gertner quotes Jack Morton, who worked at the Labs on the development of the transistor in the 1940s, saying “[Innovation] is not just the discovery of new phenomena, nor the development of a new product or manufacturing technique, nor the creation of a new market”, but all of these working together to deliver things that make a difference. Or, as one of our investors puts it succinctly: “a business without customers is just a hobby”.
As technologists, we of the nerdly persuasion tend to believe that the tech is the key ingredient in the success of any startup. At MACH37 we talk to a lot of incredibly smart technical people, some with potentially game-changing ideas…but, technology is not innovation. For a startup to deliver products that make a difference it takes a great technical idea, but also someone who knows how to build a business, someone who knows how to turn an idea into a product, and people who can find customers, understand their problems and sell them your idea. Innovation is a team sport.
So, how important is the tech? As we evaluate startups and talk to investors, a large majority consider it essential to have someone with deep technical domain expertise, as well as product development skills, as part of the initial entrepreneurial team. Many of those same people will tell you however that the initial technology contributes maybe only 10% or 20% to the success of the business, that the ability to pivot is critical, that technology almost never creates new market segments. My own rule of thumb is that your going-in idea is always wrong.
Making sense of the contradictions can be maddening…being passionate about your ideas but willing to turn on a dime; knowing what is necessary but not sufficient; being game-changing in a way that’s not too ground-breaking. This is the first of a series of posts to explore these contradictions from the technologist’s point of view. How many features make a product? When do you abandon Rev 1 and start over? When does one product become two? How do you know what customers really want? How far ahead of the market or the product can you be? And once you delegate the product design, and customer interaction and hands-on coding, how do you continue to add value to your organization?
David Ihrie is CTO of MACH37 and has been the lead technical person for six startup companies. He has a BS in EE/CS and an MS in Management specializing in the Management of Technological Innovation, both from MIT.