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Summary

This chapter focused on the activities that you, as a technology entrepreneur, need to engage in to identify and satisfy real market needs. You need to identify real customer needs: something that must be solved, often because of a problem that the customer has. You must figure out a way to develop a solution to the need because identification of the need alone, without offering a product or service that meets the need, generates no profit. You need to evaluate customer preferences. For established products and services, this is very easy because entrepreneurs can use surveys and focus groups to identify what customers want. However, when products or services are new, these techniques are often ineffective, and you need to use other mechanisms to identify customer preferences, such as detailed interaction with lead users. You need to ensure that your products and services meet customer needs in an economic manner and in a way that is better than the approach offered by the competition. You need to understand the process of marketing and selling in new companies. You need to understand that marketing in new firms relies very heavily on personal selling by entrepreneurs because new firms do not have brand name recognition, superior distribution channels, or other dimensions of marketing that benefit established firms. Moreover, you need to get the prices right for new products, a difficult task because many of these products have high fixed costs and hidden costs, because of the industry environment and because customers trade off price and product and service attributes.

Now that you understand rule number four of technology entrepreneurship, identify and satisfy real market needs, you now turn to rule number five, understanding customer adoption, which is the subject of the next chapter.


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