Start-ups’ Early Sales Don’t Guarantee Success

Start-up technology firms often fail because they consider the first commercial milestone — paying customers — a determinant of long-term success. The actual sale to a prospect that is enthusiastic about a new technology is an incredible (and credibility-building) event, but it is not a signal mainstream customers are ready to adopt a technology. Think about the Sony(SNE) Betamax, which had early sales and some adoption in the marketplace but was beaten by the VHS standard.

The real revenue stream for most innovative technology firms resembles Morse code. There’s an initial singular sale … dot. Then nothing. Work a little more, achieve another sale and maybe a few more … dot, dash, dot. Then, before you know it … nothing.

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Copyright © 2010 F.O.C.U.S. Resource, Inc.

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