Every technology centered company, whether creating products and services from scratch, playing an integrator or a value addition role, faces the challenge of value positioning, which has a direct correlation on the final pricing and ultimately the sustainability of the business.
I have come to realize, based on a quick sampling of entrepreneurs in my network, that the biggest hurdle lies in the market perception of the value and many a tech entrepreneur will attest to the sheer frustration that follows a business development process where the client, makes a mockery of the actual work that it takes from ideation through to production and eventual support of platforms and technologies that deliver business value; with value here measured differently by businesses even if in the same industry.
There are four market segments that indigenous technology firms target. These are: government, blue chip companies, small and medium sized enterprises and lastly individual customers. Deciding where to focus will have you pick your flavor of pain as you enter the business battleground.
Arguably the most lucrative of the segments with proposed budgetary allocations publicly known, it is no secret that government is stifled by process, process that festers with gatekeepers who often times frustrate legitimate business development effort leading to warped value attribution. The networks and capital required have over the years made government technology contracting a preserve of the few. Action has been applied on this front with the drive to digital procurement with legislative support for citizen contractors that promises to make working with government more predictable.
Large enterprises or blue chips present the second most difficult selling challenge for indigenous technology companies especially those that “create or build”. The very nature of corporate Kenya, driven by KPI’s and cost cutting almost always ensures that financial propositions for any deployment will go through numerous subtractive iterations. Aggregators and integrators can sometimes find salvation by hiding behind the big name tech brands that they represent via vendor relationships to realize agreeable return on value created.
SME and individual technology consumers have their unique peculiarities but offer the benefit of understanding that the price point offered by service providers could be higher where it not for economies of scale, and provided the product or service delivers as it should they do not have any qualms using it nor do they make unreasonable demands as happens often in the previously addressed segments.
To the technology entrepreneurs; know your numbers and defend them vigorously and to the technology buyers, respect and acknowledge that your service or platform provider delivers real value and be willing to pay for it. This is the only way we can create an attractive and stable ecosystem.