A Key to High-Tech Startup Success: Market Need Anticipation

My many experiences as a high-tech entrepreneur and executive have taught me many lessons.

Perhaps the most important thing I have learned is that the high-tech companies that do best are those that can see market needs emerging well before the competition does.

If you are first to see a big problem coming, you can solve for it and be there with a solution when everybody else realizes there is a problem.

My First Success Story with Predicting the Future

Almost fifteen years ago, when I was an executive at iPass, a company that provided secure, managed wireless solutions for businesses, we knew before most that many businesses would soon be experiencing a world of hurt because they had not properly planned for the impact of Wi-Fi on enterprise organizations.

Believe it or not, back then many companies just refused to offer wireless networks to their employees because they were accustomed to managing wired networks and didn’t want to go into the then unknown and risky territory of setting up and administering wireless networks within a business.

What they failed to realize it that employees, the good ones anyway, naturally seek out efficiencies. If they wanted wireless networks, they would set them up, even if “Corporate” was telling them not to.

Indeed, I remember one financial firm in Boston that I spoke to that was adamant about not embracing corporate wireless networks.

Just six months after that first meeting, however, they called us back and let us know that an audit had found that their employees had created 28 different unauthorized wireless hot-spots within the company. They now knew they had a real problem, and we got a new customer.

What’s important to understand here is that we saw this problem coming years earlier, long before our customers did. The clairvoyance of our team allowed us to get in front of this issue and become a market leader for a market that would only materialize in large numbers long after we first identified the problem.

Did we profit from our ability to see that large problem coming before others saw it? Absolutely. We took the company public and it was a big success for all of us and our investors.

The Need for Market Foresight

The key lesson here is that a tech startup that is setting up shop today, in 2016, may do best if it solves a problem that will only come into existence or have a large, widespread impact in, say, 2019.

How do you find those problems? Are there patterns to watch for? Does early problem identification ensure your future success? How do you pay the rent while you are waiting for everyone to recognize the problem you’ve bet on? What if the problem you bet on never materializes? These are topics I will write more about in the future.

But, for now, what I want to convey is that the big problems of today have likely already been solved. A this-year startup that works on a this-year problem will find that it will be beaten by a startup that saw the problem coming three years earlier and that has therefore earned the right to own and dominate the new market.

I’ve Used This Tactic More Than Once

With my Infinite Convergence, we saw the challenges that carriers and enterprises would encounter with respect to SMS text messages long before they did. We built technology for it well in advance of our competitors, and we dominate the market now – handling trillions of messages per year for our customers.

The same is true of NetSfere, our secure enterprise messaging solution. Just as the employees of the Boston firm I mentioned above embraced wi-fi networks well in advance of their corporate minders, we saw the BYOD (“Bring Your Own Device”) trend coming long before most did, and beyond that we recognized that employees would start to use consumer messaging services at work, and for work. As we discussed that future trend, we realized that companies would soon be dealing with a massive problem: proprietary company data being transmitted via unsecure consumer messaging services.

New startups are launching now to solve this problem. They are getting a lot of attention. What they don’t realize is that we are years ahead of them with a solution that is far superior in the areas that actually matter. Without much fanfare, we are winning business around the globe. With much fanfare, they are not – and it is because they only saw this year’s big problem this year or last year. We saw it earlier, and, as a result, I believe when the dust settles in the crowded secure enterprise messaging space, there will only be a handful of winners, still standing among many casualties. I am confident that NetSfere will be one of them.

How You Can Use Clairvoyance to Drive Startup Success

The bottomline for those of you who are new to the world of high tech entrepreneurship?

It’s the problems of tomorrow, not today’s challenges, that offer the most opportunity for high-tech companies.

Think forward, reason back, and then execute flawlessly. If you do those three things, you will win.


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