11
MAR
2014

Market Validation vs. Business Development

Although these two titles and responsibilities appear to be the same they are not. It is with this lies the confusion and the common mistake of misunderstanding the difference between the two and why both are necessary at different times in the technology adoption curve. Market development is exactly that… developing a market or more so gaining knowledge and insight into the current state of the market. Early stage companies should do this first and foremost as should larger companies when they have a new product or service they are looking to launch. By the way, this is NOT a marketing role or type of person who can do this function. It typically is a highly skilled person who has both sales and marketing experience… we call them “smartketing” types. Many times market development does NOT create immediate revenue so the next big mistake companies make is to set revenue metrics on market development activities when this is better reserved for business development efforts when the market is fleshed out and early adopter sales and trials begin. Even in the business development stage, metrics should be based more on management by objectives  (MBO’s) versus pure revenue.

We see the above mistakes constantly made by these types of companies and it is marked by the hiring and firing of as many as 3-4 successive sales and marketing teams by the founders and their boards. Sales by definition is the life blood of any company thus the easiest and most tangible metric to measure performance by. However, as a result we have seen numerous top flight sales teams/people blamed for this metric based on their “lack of talent” when it was really the management team not understanding the technology acceptance curve and hiring classic sales teams at the wrong time. We have rarely seen bad sales or marketing professionals at these companies. What we have seen is that they are in the company too early in its life. These teams are best hired after crossing the chasm.

The reality is deploying the wrong type of resources at the inappropriate time leads to frustration by the CEO, Founders and the Board of Directors. If any of these veterans looked back at prior successes of companies they would easily see this. Many times the product is not tuned for the market or the market is not ready for the solution yet. We have even seen in some cases both! Understanding this will save not only much frustration but a tremendous amount of capital.

What is needed is firms like ours who can cost effectively give you the touch points you need and assist your firm in transitioning to a traditional sales model quickly. Our time slice model gives you the results you need without breaking the bank. Feel free to contact us at info@momentumtp.com to discuss your firms needs and how we may be able to help.

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