Michelle Rodger: Put the customers before technology if you want to win

Published on Friday 3 September 2010 10:57

HISTORY tells a tale of a long line of technically and aesthetically brilliant products that didn't make it as a successful business - you only have to think VHS vs Betamax for a cracking example (if you're younger than 30, apologies for the comparison; it was about video recorders).

But latterly there has been a number of outstanding design-led successes - such as Apple, and Dyson's bagless vacuum cleaner.

The difference was in the customer consideration: what do customers want, why do they want it, what will it look like, how will it work better, can we make it cheaper and what will the customer pay for it, will they like it, will they buy it and will they recommend it to their friends?

So James Dyson got it right. And Apple keeps getting it right. But for the small startup, that's a lot of questions to answer. How on earth do you manage to understand exactly what it is you've got to get right?

This week more than 100 entrepreneurs, educators and investors from 16 countries will converge on Edinburgh as part of the Stanford Roundtable in Entrepreneurship Education. Focusing on design, the goal is to help startups think, connect and act globally.

Scotland is already making its mark at turning world-class research into entrepreneurial ventures; just last week the University of Edinburgh announced a record-breaking 40 companies created in the year 2009-10. Of those 40, 16 - all from the School of Informatics - had raised in excess of 2 million of equity investment.

But it's not enough. Andrew Mitchell says it's time to remove the blinkers and focus on customers and sales wins, rather than remain immersed in technology.

Mitchell, of the School of Informatics, is involved in the organisation of the Stanford event. He says design is a huge opportunity to not only make a further step change in the volume of startups and spinouts but to also improve the quality.

Why? Because design-led entrepreneurs start with the unmet needs of a customer. According to Mitchell, too many of Scotland's tech startups are obsessed with, in love with and blinkered by their technology. They need to understand that, often, the companies with the best technology do not win. The companies that are focused on customers and profitable sales win.He highlights two great examples with which we are all familiar: the industrial design success of the Apple iPod by Jonathan Ive, and the market-changing Dual Cyclone bagless vacuum cleaner by Sir James Dyson.

"One of the most exciting opportunities for the tech startup scene in Scotland is the potential to fuse the worlds of our creative talent and our equally robust technical talent," says Mitchell.

"For example, taking the Edinburgh Coffee Morning community and all the talent in Leith and mixing this in a crucible with the phenomenal talent in our Tech Meetup community that meets each month, not only in Edinburgh but in Glasgow and Aberdeen.

"This could generate a significant number of design-led, customer-focused startups. Scotland has the talents of Ive and Dyson and we have the makings of an entrepreneurial ecosystem to help them flourish."

Professor John Lee has been involved with the Scotland/Stanford link for years, trying to import the model of Silicon Valley entrepreneurship activities and implement them here.

It's not as straightforward as it sounds. The challenge is the lack of a nurturing ecosystem. We simply don't have enough VCs with money willing to take risks, says Prof Lee. How do we create conditions like that? "It's very difficult. The risk-averse nature of VC capital in Scotland is a well established problem. "

It seems that where Scotland may be getting it wrong is in the focus on the lack of what we have got - lack of resources, perceived lack of access to funding, lack of risk-excitable VCs, lack of a wider community that aims to nurture - instead of a focus on the intellectual ability, skills, passion and commitment that are inherent, coupled with a desire to find a community that will deliver the rest: mentoring, coaching, experience, advice and cold hard cash.

Got a problem with your mobile phone? If you do, it is often the case you get to wait in that special circle of hell, the customer services call centre. But Edinburgh Chamber had a different strategy. It invited Ronan Dunne, the head of mobile phone group Telefnica O2 UK to speak at its breakfast AGM last week. Some directors of the chamber also took the opportunity to ask Dunne when they might expect to get their Porting Authorisation Code, the numbers you need when you switch mobile phone providers. Yes, the chamber is switching its phones from O2 to another provider.

A good sport, Dunne said he'd look into it. We're sure that's not the only reason they invited him to their event.