Message to Tech Companies: “We don’t care how it works”

After surveying and speaking with dozens of tech companies, investors, and buyers of technology, the words of one leader was a clarion call:

 “Focus on the specific value and the benefits the customer hopes to achieve.”

Part of what I do is evaluate technologies and tech companies for prospective investments. I speak with tech experts, buyers of technology (tech company customers), and investors in technology – especially for transportation-related businesses. Many of the technologies I’ve evaluated recently deal with advanced air transportation, advanced air mobility, drones, and autonomous vehicles. The future of how people and things move will be shaped by some of these leaders and their companies (hint: future blog!).

What’s the value?

During one of my recent interviews, a recognized transportation leader said to me, “Sometimes technology doesn’t focus enough on the use-case.” Roughly defined, a use-case describes how those using the technology intend to “use” a system; taking it one step further, it answers the question, “What’s the eventual result the technology is intended to provide to the customer?” Use-case purists may take some objection to my extended definition…but then again, if you’re a use-case purist, you probably have more pressing worries…

The transportation leader summarized in one sentence how so many of us feel about technology.  

A tech investor echoed, “Many tech firms don’t even really know why customers are actually buying their products or services.” In other words, they don’t really know their use-case or use-cases, let alone their customers!

A friend and top business leader who evaluates companies for potential investment identified the single biggest mistake some tech company CEOs make in first meetings with investors: The CEOs often ramble on about their technology rather than who their customers are, what they need, or how their technology solves problems.

A top technologist from private equity shared with me, “It’s the executives who use the most tech-related buzz words who know the least about the real value of their company and their technology.”

Popular technologies: What’s the why?

5G

Can you explain the real value of 5G? Well if you can’t, don’t feel inadequate – phone companies don’t even try to explain the why or the real value during those TV commercials. Because the real value has little to do with your cell phone – phone companies hope 5G sounds cool enough that you’ll perceive enough value to buy into their network.

Read future blogs to realize the 5G real value (those of you in future transportation, logistics, and mobility systems already know the answer!).

Drones

For years we’ve been reading about the hundreds of thousands of drones and the supporting drone technologies that will be concurrently introduced to the market. Many companies and investors jumped on investment opportunities, feeling they had to be in the game, causing valuations to skyrocket. But here again, the vast majority ignored asking the why. Some of these companies are (and will be) the real winners because they’re focusing on the why and use-case of their technology.

Machine learning, etc.

We hear of technologies using artificial intelligence, machine learning, the Internet of Things, or cloud technology. Don’t be fooled by the jargon – let the companies explain their value to their customers. It’s OK if you don’t understand the tech buzz words – but you must understand the why and the real value before you invest or buy the technology for your airport, airline, city, etc.  

Where the rubber meets the road

So, first on the checklist of evaluating technology and/or a technology company is answering the most important question: who are the customers and why are the customers buying the technology – what’s the real value?

It’s motivating to work with companies where the leaders focus on customer value because let’s face it – that is where the “rubber meets the road.” We really don’t care much about HOW it works, and the predilection of many tech company leaders to fail to understand this by launching into detailed and often too-complicated technical monologues about the wonders of the underlying enabling technology is NOT at all what moves most customers, investors, or partners.

They are moved and inspired to act and be involved through a passionate discussion that focuses more on delineating and understanding WHY the technology delivers value to a user, solves big problems, increases efficiency, etc.  On the occasions when I work with those who are missing this focus on the “why,” then we simply roll up our sleeves and work together to get there.

Read my next blog to see the more complete checklist of how to evaluate the value of technology companies – before jumping into the financials!