Words of guidance and insight from an experienced entrepreneur and private investor to high-tech entrepreneurs, start-up companies, and fellow investors.
Thursday, November 11, 2010
Focus on your core competencies
There are many "layers" of product development, from core IP to a complete system. To get a new, disruptive product out the door, sometimes you need to develop layers that are beyond your core competencies. But be sure to do this for the right reason: because it's necessary to gain market acceptance. Then, once the market has accepted your disruptive product, shed the layers that aren't part of your core competencies and don't have high gross margins. After all, it's your core competencies that help give you that unfair advantage over the competition. Here's an example: Qualcomm developed CDMA back in the late 80's and early 90's. But to get this new, disruptive technology accepted in the market, it had to make handsets and infrastructure equipment (not part of its core competencies, and becoming commoditized). Once CDMA became a popular standard, it shed its handset and infrastructure divisions, and focused on its core competencies: IP licensing and ICs.
Labels:
competition,
core competencies,
product
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