Technology startups spend a lot of time, effort, and capital trying to go past the proof-of-concept (PoC) stage. Only a small percentage of them are able to do it. The secret of success? Disciplined entrepreneurship to take a new venture well beyond PoCs and into commercial territory. Market research, digital marketing, and B2B sales get a lot of entrepreneurial attention. However, we lack enough insight into why startups get stuck in ‘production hell’. Hence, I gave a talk in 2020 – hosted by Venture Center – on the consequences of going beyond PoCs, prototypes, and pilots. I explored how a sharp focus by founders on creating business value can lead to favorable venture outcomes.
The rewards are huge for startups that successfully take their IP-rich products to the global market. Conversely, high failure rates of startups are directly tied to the obstacles faced by entrepreneurs in making their products reliable, scalable, and profitable.
Entrepreneurial Discipline in Technology Startups
As expected, production deployments are orders of magnitude more challenging for entrepreneurs. This is especially so for deep-tech startups who must overcome technical challenges before any commercial sale. In fact, the most successful story of disciplined entrepreneurship in recent times is that of Elon Musk at Tesla. He created a new, global car company for the first time in nearly a century. His incredible focus was able to take electric vehicle technology to production. Moreover, there is an eerie similarity between the cost curves for Tesla’s Model 3 and those of Ford’s Model T!
Production Contracts & Commitments
Finally, we cannot understate the importance of the non-technical aspects of this journey. These range from providing maintenance and support to customers to negotiating fair contractual terms and insurance policies. Entrepreneurs should also build mechanisms to expand the lifetime revenue of each customer, having put in the hard work of taking technology into production.