It's not about the technology—

it's about leaders

Incumbents under threat of market change tend to over focus on the new technologies that threaten their hegemony.   Developing truly new technologies that will dominate giant new markets is really hard and rarely occurs rapidly or in a vacuum.   Particularly when that technology can be classified as hardware rather than software, it is highly unlikely that the new will sneak up on the old.  A far more important factor is the insight that correctly identifies the exact nature of the new market opportunity. 


Startups can be characterized as “a dime a dozen.”  By definition, because there are so many of them, they represent diversity.  Within that diversity lie many different problem identifications as well as potential solutions.  Sometimes those solutions are brilliant, other times they are simply the result of discovering that one has inadvertently solved a bigger or different problem than what the startup itself was addressing.  But most startups get good at rapidly testing their potential solutions and in pivoting in response to the market reaction, refining and redefining and rapidly going back into the market with a better solution.   The best startups go that one better – they develop a clarity of vision about what makes the new solution, business model, technology or product so well suited for meeting the revised needs of the market.   Often that clarity is not a consensus solution; it can be the vision of a particular founder, such as a Steve Jobs or an Elon Musk or it can be a vision developed through the crucible of diverse ideas, strong individuals, strongly stated views, loosely held beliefs and a constant willingness to fine tune, increment and invent. 


Almost by definition, those visions are not shared by the many.  They cut through the status quo, the assumed “way it is,” and the conventional wisdom.   Often they are the result of strong disagreement, a view that becomes strongly shared by a minority (but greater than one) and doubted by the majority.   In a democratic structure that view tends to lose.  In a structure dominated by the “old guard” it too is likely to lose.  In one driven by a visionary, risk-loving leader it can often not only take root but thrive.


Much of the efforts at large incumbents in dealing with market transformation involves one variant or another of “technology scouting.”  This term can refer to a constant scouring of newly filed patents or the creation of internal venture units working with incumbent business units to keep an eye on what the outside startup world is working on.   In both cases, the focus tends to be on new “technology.”  That technology is then carefully examined in light of the market circumstances as the incumbent sees them.  Under that lens, most new technologies fail.  They are either immature, cannot easily be scaled, or seem too close to internal R&D developments to be worth pursuing further. 


The judges of these new technologies tend to be either the heads of incumbent business units whose livelihood the new might challenge or they are the investment managers of the corporate venture fund – who are often chosen for their technology acumen and “love of the new.”  In reality, however, both of these “judges” view the new from the safe haven of the old rather than from the bleeding edge of market adoption that is typically testing and responding to these new products. 


The core skill is often a far more personal one of product definition and product marketing – closely matching a new solution to a not yet well understood market need.   It is not about technology invention, marketing or selling.  Often the inventor doesn’t actually see the market clearly, he merely sees it differently than his predecessors.  So the critical skill isn’t about the technology, it is about the clarity of the market insight that can very clearly define exactly what product will satisfy that nascent and evolving market need and then having the leadership to enforce that vision.