"Very knowledgeable, easy to communicate with, very proactive. I can't think of anything you could improve; everything went very well."
Tod Schiff
Field Applications Engineer
Analog Devices
TechPromo, May 2007
Marketing Newsletter For Technology Promotion
Hijack The Market, Or Let It Take You For A Ride?
Build it because you can, or because somebody wants it?
As a young engineer in Silicon Valley, you often hear about technology-driven or market-driven development. You build a product because you can, and it’s a really cool product. Or you build it because the market will break down doors to get it.
Which approach is right?
Before I answer that, let's take a look at them.
TECHNOLOGY DRIVERS FOR GENERAL
MARKETS
Companies develop new technology to manufacture the Next Big Thing.
Or they do it because competitors with the new technology will eat their market
share if they don't. In a sense, it is market-driven - a company needs the ability
to make what the market wants.
Once the technology is in place, though, companies discover a lot more products they can make with it, ones the market isn't asking for right now. They can see product advantages and a general market, without identifying specific applications. They decide the market will see the advantages too and figure out how to use them. So the company builds the product, and the MarCom professionals all groan, "Here's another one we have to figure out how to promote!"
This is a common scenario with general-purpose products like op amps for OEMs in the electronics market. Either no specific application gets identified, or there are several.
General purpose products need a specific app. Even if it turns out to be a small one, the application shows one use for the product. Designers will be looking for anything relating to their specialty, and will take good solutions from anywhere. Then they'll adapt them to their needs.
A good example of this is the data acquisition and measurement market for high-voltage, precision op amps. There's a trend towards more measurement channels in tighter spaces - miniaturization - in the electronics. Op amps built with older technology are too big to fit in tiny surface-mount packages. So chip makers borrowed techniques from CMOS microprocessors, added some wrinkles their engineers asked for, and developed a new fabrication process. Now they can fit two op amps in the same small package. And those amplifiers perform much better than older op amps. They can be used for much more than space-saving data acquisition systems.
CUSTOMERS WANT SPECIFIC APPLICATIONS
Data sheets may
list applications in medical instrumentation, phase-locked loop filters, or strain
gage measurement, but show just one possible application schematic. Sometimes
there's no application schematic.
That happens when the company doesn't know exactly how customers will use the product, and decides to shove it out into the cold without spending time on any applications. Lip service is paid to things like circuit design and PC board layout to achieve specified performance, but that's it. No applications. No hints at specific support. Just, "Here's what it will do. Now figure out how you can use it."
What happens next? OEM customers may see the new chip's advantages for their products, request samples to try out, and buy some. Or they may go after a competitor's chip with a more specific data sheet, application note, or article in a trade journal. Either way, sales take a long time to develop.
MARKET DRIVERS FOR FASTER REVENUE
Market-driven
products live at the other end of the spectrum. They're no-brainers to companies
serving that market. They can be standards-driven, like chipsets for Ethernet
computer networks. Or the application can be everywhere, like engine control in
automobiles.
Ever-faster Ethernet standards come from the crushing flood of new data. The market always demands more speed. To meet that thirst, I managed a team that developed the first Fast Ethernet interface chip in the mid-1990s. There were many meetings to hammer out the standard, and they were always well-attended. So I knew we'd have a winner.
But seeing great market opportunities isn't enough. I asked customers good questions about what the product needed beyond compliance with the standard, so we designed the right chip. Then I drove the project so it finished on time, just before approval of the Fast Ethernet standard. We were first to market, so giants like Cisco and HP used our chip. We sold over $30 million of them in the first year.
I also saw a four-port interface chip for routers fail when it was late to market. The company's thinking was, "If we can't be first, we've got to be best." So they added extra features that delayed the chip even more. The lesson? If you can't release it on time, develop the next generation instead.
THE RIGHT APPROACH
So which approach
is right? Both are.
Market-driven products produce instant revenue when they hit. But there are some 'ifs'. They need to be among the first to market with the right features, properly publicized, with good technical support and reliability. Most of the Fast Ethernet interface chips we sold worked very well. But customers found a subtle problem with some of them. We spent some nail-biting weeks verifying the problem and developing a way to screen for it. Our test and applications people stayed on top of it and we kept all the customers.
Technology-driven products take longer to show significant profits, but yield a steady income stream. High-performance op amps will sell for several years. Ethernet chipsets last only until the next standard comes along, after a year or two. When you miss the market, steady-sellers fill in the gaps.
The other lesson here is don't throw any new product into the world to sink or swim on its own. Especially with technology-driven products, take the time to develop one application and show it in an article or marketing collateral. It demonstrates your expert support for the product, a crucial enticement for customers to buy. It also pays to think hard about what can go wrong, so you catch it before your customers do.
Mark Bohrer is a technology writer based in the San Francisco Bay Area. His work has appeared in EDN, Portable Design, Electronic Design, and Elektronik i Norden. He's also written technical advertising copy for agencies and Fortune 500 companies. Mark is a 25-year veteran of Silicon Valley. Visit www.precision-copywriting.com to download his free report, Technical Articles For Leads And Sales: Nine Ingredients to Grab Your Customers.
