by dkeviv

Created on: April 02, 2010

We are in the web2.0 age where technology changes at a lightning speed. With the technology changes it is very difficult to gauge the customers' needs and preferences towards the technology.

The commonly made mistake by the startups is that they assume the customers will always go for the technologically superior products. In fact it is not the technology that matters but the customer needs that the technology satisfies matters. Even though the technology is superior, the market might not have developed to capitalize. For example, Apple launched the first personal digital assistant “Newton MessagePad” in 1993 where there was no PDA category. There was not a well-defined market then and the customer needs hadn’t matured to make the product a success. Even though the product was novel and technologically superior, it was a big failure. After several versions and mediocre sales, it was eventually discontinued in 1998.

The second mistake is the complacence of the initial market leader. The startup company that captures the market becomes complacent and forgets the competitiveness and innovation of the current technology age. When the barrier of entry is too low, complacence can be a grave mistake that can run your business down. For example Myspace started out to be successful corner a huge market share but became complacent with their service letting Facebook to catch-up and eventually become the market leader.

The most important quality to succeed in the current fast changing technology age is "Adaptability". The success of Facebook can be shown as an example that stresses on the importance of Adaptability for a startup to succeed. After recognizing the customers’ need for an elegant way to socialize online, Facebook initially started out to satisfy the college students. Facebook that started as a normal social network to connect with friends has grown into a whole different animal now. Facebook has now evolved more than just a place to connect with friend. It has become an online gaming platform, a news aggregator, micro-blogging tool, online marketing tool and social network all in one. This has created multiple revenue drivers for Facebook unlike myspace, which was unable to leverage its online traffic for a longtime until Facebook showed how.

The key to Facebook's success was that it judged customer's needs and provided an elegant way to share each other's activities and thoughts, which became the core value on which everything else was built. After creating a solid social network, it was not complacent with just ad revenues but rather took lessons from iphone soon and created a platform for third party applications. These third party applications has now opened up a million opportunities and create wealth not only for the app developers but also to Facebook.

To summarize, the most important things to adhere to in an environment of changing technology for a new business to succeed are i. Base your business on customer needs and not technology ii. Avoid complacence after initial success iii. Adapt faster to the changing technology and innovate continuously.

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