Entrepreneurs in High Technology: Lessons from MIT and Beyond

By Edward B. Roberts | Go to book overview

CHAPTER 10
Product Strategy and Corporate Success

Formed by three engineers who had done advanced computer systems development in a large electronic systems firm, Computer Technologies, Inc. (CTI) initially developed calibration machines for the production of magnetic tape storage devices, sold directly to large computer manufacturers. Encountering limited opportunity the company then developed its own read/write heads for tape machines, sold as components directly to its manufacturing customer base to satisfy a new user functionality. CTI subsequently developed a third and unrelated product line, attempting to enter the microcomputer software business with a proprietary operating system for a popular microcomputer. In a following product release the firm also developed small business applications software. The two software products entailed major changes from CTI's earlier user functionality, customer groups, and channels of distribution, selling these packages through office systems dealers and computer retail stores. None of the products became profitable and, after six years of struggling, Computer Technologies ran out of funds that had been provided by the founders and some private investors. The founder-CEO thinks they would have made it if only they had more capital. I think the fundamental problem was in their product strategy.

Deciding what products to make and how to make them is a constant challenge to the management of technology-based firms. Companies operating in areas such as computers, electronic components, optics, medical devices, telecommunications, lasers, and biotechnology are frequently and profoundly affected by rapid advances in their respective product technologies. In these industries where the rate of new product introduction is high, a stagnant research and development effort can be disastrous. Even good ideas are insufficient; firms must turn them into successfully marketed products. Given that technology-based companies must continue to innovate their products (and perhaps their manufacturing processes as well) to survive and grow, they must make fundamental choices about their technology and market strategies.

____________________
This chapter draws heavily on two articles that I previously co-authored with Marc H. Meyer ( 1986, 1988).

-281-

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Entrepreneurs in High Technology: Lessons from MIT and Beyond
Table of contents

Table of contents

  • Title Page iii
  • Preface vii
  • Acknowledgments ix
  • Contents xi
  • Chapter 1 High-Technology Entrepreneurs 3
  • References 30
  • Chapter 2 an Environment for Entrepreneurs 31
  • References 45
  • Chapter 3 the Makings of an Entrepreneur 47
  • Summary and Implications 94
  • Notes 96
  • References 97
  • Chapter 4 the Technological Base of the New Enterprise 100
  • Summary and Implications 121
  • References 123
  • Chapter 5 the Financial Base of the New Enterprise 124
  • Summary and Implications 156
  • Chapter 6 Evolving Toward Product and Market-Orientation 160
  • Notes 186
  • References 186
  • Chapter 7 Finding Additional Financing 188
  • References 215
  • Chapter 8 Going Public 217
  • Summary and Implications: Sizzle or Steak 242
  • References 244
  • Chapter 9 Survival Versus Success 245
  • Chapter 10 Product Strategy and Corporate Success 281
  • Notes 306
  • References 308
  • Chapter 11 Super-Success 309
  • Notes 336
  • References 338
  • Chapter 12 Technological Entrepreneurship: Birth, Growth, and Success 339
  • References 358
  • Appendix a Quarter Century of Research 359
  • References 375
  • Index of Founders and Firms 377
  • Subject Index 381
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