by 
The electronics industry likes to celebrate success, touting the unusual circumstances under which many of its biggest companies were founded — the garage is a favorite location.
It often fails to mention the hundreds, possibly thousands of other technological innovations that died unsung because the entrepreneurs either couldn't get anyone to pay attention to their ideas or failed to secure critical funding.
The stories many of us will ever get to know about events in the technology world are those of the successful companies, enterprises like Amazon, Apple, Facebook, Google, Hewlett-Packard, and Yahoo. But many others never get to Wall Street because their products failed to make it to Main Street. So, how can startups and innovators give their ideas and products the opportunity to get included in the narratives of successful companies?
The hurdles are certainly numerous. Many technological innovations die on the vine due to a variety of factors, the top reasons being lack of funding, failure to attract the right type or any sort of viable partnerships, insufficient marketing, management missteps resulting from inexperience, insurmountable competitive opposition, poor product timing, supply chain challenges such as inability to attract the patronage of suppliers, contract manufacturers and other third-party support services providers, and simply poor design of a potentially great product.
In the electronics industry, one of the toughest obstacles to the success of a new product — in the case of components — is failure to find a home for the parts in existing products. The industry jargon for this is “design win,” which refers to the possibility of getting the component included in the list of components used by the engineer when designing the end-equipment.
A “win” on a major OEM's platform, printed-circuit board, software, or enclosure is a highly coveted victory for a startup. Scoring a “design-win,” for example, on products from {complink 379|Apple Inc.}, could translate literally into tens of millions in sales for a startup and give its products greater visibility with other manufacturers.
But how can a startup in southern France, central UK, or the Midwest of the United States score such a win? How can an innovative enterprise even get its products before the top procurement and supply chain executives at companies that control tens of billions in purchasing expenses per year? What will it take for Apple to review a component vendor's latest innovation when the manufacturer does not have a history of supplying components to the world's biggest consumer electronics company and has no direct links with its supply chain boss?
That's where folks like John Lyons come in. A veteran of the electronics industry, Lyons is CEO of J Lyons Marketing, a technology matchmaking firm that assists developers in bridging the wide gulf separating them from the companies that can benefit from and help market their products.
Lyons told me in an interview that his company's specialty is hooking developers up with Fortune 500 enterprises. “If the technology can do what the manufacturer wants, we'll help you find a home for it,” Lyons said. It's not quite that simple, though. The first step to scoring that design win is convincing technology matchmakers like Lyons that the innovation is worth hawking around. Matchmakers are valued by OEMs especially because they would have already done much of the vetting that the enterprise would have to do if the middleman wasn't involved. Lyons said in a statement he emailed to me:
Over the years, we have been responsible for matchmaking hundreds of technology deals worth over a billion dollars. On one hand, we keep in constant contact with the CTOs of Fortune 500 companies so that we know the problems that they are trying to solve. It would be extremely hard for companies in Europe to know exactly which person in any number of vast US companies might be interested in their new technology but we do. Not only that but these guys will take our call because they know we deliver solutions time after time.
The products introduced to equipment manufacturers for consideration by technology marketers like Lyon must have already passed muster with the middleman who require have a deep knowledge of the customer's products and may even be aware of its product roadmap. In order to sustain the relationship on both sides, Lyons and his team are constantly in touch with CTOs at equipment vendors and spend a great deal of time hunting for valuable innovations.
An introduction by Lyons to a Fortune 500 company is not a guarantee of success, though. He admits to scoring wins regularly but added that many of the innovations he considers may not get past the front door at the equipment vendor. Lyons counts amongst “his successes a camera chip design win of 50 million units and counting, a battery design win for a Set Top Box worth $400 million, and a new disposable sample gathering device used in diagnostic testing with the potential to sell millions of units a year.”
Of course, if matchmakers like Lyons cannot deliver the goods, there are other avenues technology innovators and startups can pursue. They can leverage the strength of funding partners, tap the vast knowledge and contacts available at distributors, and if all else fails, there's always the chance cold calling the OEMs might elicit some interest. It's a long shot but it may just be worth trying — after all, both parties are always on the lookout for something different, something that improves their competitiveness.
I think comanies like like Lyons is most desired by many start up to find their real home. Even OEM's can solve the most difficult problems by joining with startup companies. I believe out there may be much more companies doing similar business.
J Lyons may be a good option. But once they it is established, its response to startup may be slow, just like fortune 500 companies. Also, it will eat up most of profit and startup will not have good kick start. I would suggest startup to also have direct marketing and strong determination and perseverance. They need to try many different ways, conact numerous persons in different networking group. They will eventually find few good breaktroughs.
Is there any way to see some case studies showing Lyons' success?
Sounds like an interesting business model, and one that innovators should take advantage of. I would also like to see an article on more case studies.
Flyingscot, John Lyons told me a few examples of previous and more recent design wins on the behalf of some of his clients. There are some anecdotes and customer testimonials on his website. Please see: http://www.jlyonsmarketing.com/
“Many technological innovations die on the vine due to a variety of factors, the top reasons being lack of funding, failure to attract the right type or any sort of viable partnerships, insufficient marketing, management missteps”
Bolaji, you are right. I had started a small company in 2003 and everything went smoothly for first 2 years, but later we had failed to market our products due to competition and availability of low cost products from China. Most of the Chinese products are selling less than the component prices and finally I winded up my assembly unit.
For doing business one need the ability to foreseen the hindrance and to take quick decision based on current trends. Only expert peoples have both these two and service or guidance from them will help to sustain in market for a long term.
Every business needs a good planning — the only exception if you're an ISV, in this case independent software vendors only rely on venture capitalists to snap their innovations as well as risks associated with them.
As you have mentioned in many earlier blog posts there is no exist a recipe that the developers should follow…. Lyons it looks like is doing a great job actually his job was the missing part in the whole procedure having a success story.
If you don't mind why kind of business and products ? Also I would like to ask do you regret it or what you should change if you had the opportunity to start again ?
Jacob, In the US, it is said four out of five start ups fold within the first five years of launch. This is certainly not odd even globally. Too many times we fail to consider many of the hurdles when starting a business and the greatest of this could be that rivals seeking the same business may be better funded.
In my opinion, we have too much innovation happening too fast. The speed of innovation should match the speed of economy otherwise the electronic industry would face too much of a non moving products and unnecessary obsolete products leading to too much of the e-waste.
This has to be a concerted effort by all the biggies together so that no one feels left behind and the rat race is slowed down at least till the global economy recovers.
Disposable income for most folks these days is alarmingly low. Loans are difficult to get. Fear pervades the markets. It is only to be expected that companies will not be doing too well. The question is how pessimistic the markets are vs reality as that is what sets expectations.
Bolaji,
Your points regaridng employees here are all well taken and well regarded.
Just feel Employees need to get Leaner and more Agile too today.
No Employee can and should be totally dependent on one Single Source of Income.
Diversify,Diverisfy and Diversify!!!
Employees need to think smarter,Get more Agile and be prepared to think of their feet today!!!
Regards
Ashish.
FlyingScot,
Yeah Man.
I really know what you mean by your Statement here- “No Cash Man!!!”
I just wanted to change your Statement slightly-
“The question is how Optimistic the markets are vs reality as that is what sets expectations.”
To get an idea of what Works and what Does'nt(& what is the realistic point of view for the markets) of how Market Perspective differs from Reality check this out.
http://www.hussmanfunds.com/wmc/wmc120924.html
John Hussman writes an excellent Newsletter every Fortnight.
Regards
Ashish.
Prabhakar,
Innovation Happening too fast??? You gotta be kidding me!!!
How are you gonna put a stop on Innovation???
We just seem to be going faster and faster and faster and faster….
Its entirely your decision(as a Consumer or a Company);either you Stick on for the ride or Get off…
Its like a Wild Bull.
Fun to ride as long as you can Hold on.
Then get off!!!
Regards
Ashish.
Bolaji,
True.
Very,Very true.
More often than Not-Funding is the critical issue that curtails most Businesses and forces them to shut shop.
Could'nt agree more!
Regards
Ashish.
Perhaps it may be upcoming US election. Obama or Romney, after election things will move quicker and job market will improve considerably. Most organizations are very cash rich, but they are holding on to it.
You are right on that but to attain balance between innovation and the economy is a hard tihing because sometimes innovation is even the major influence on the economy
You are right on that but to attain balance between innovation and the economy is a hard tihing because sometimes innovation is even the major influence on the economy
You know even if the economy choose to lack behind, innovation may tend to leave it behind I think innovation determines the economy sometimes
It was innovation that brought the recession, it is still the same innivetion that will bail us out of it
Ashish, Andy Grove, the former chairman and CEO of Intel, said in a book:
“The sad news is, nobody owes you a career. Your career is literally your business. You own it as a sole proprietor. You have one employee: yourself. You need to accept ownership of your career, your skills and the timing of your moves.”
I agree.
Adenji,
You are way too optimistic(Regarding Innovation's Potential).
I have a honest belief 90% of all Innovation achieved today has very little(if any) benefit to mankind today.
People have waay too much Time on Hand today;That's why they spend it tinkering with stuff which is best left alone!!!
Regards
Ashish.
Bolaji,
I could'nt agree more!!!
Andy Grove is absolutely right and on the Ball here!Far too many CEOs talk all kinds of wishy-washy nonsense(in public) which has no practical relevance today.
But this is stuff which anyone and everyone can and should use.
Regards
Ashish.
Ashish :
The main reason the world economy is going through a prolonged rough patch is because since the late 1980s Wall St profiteers have quite heedlessly facilitated the inducton of vast & cheap Chinese labor into the world economy.
The first decade of Globalizatiion produced cheap products at Wal Mart Made in China but the next CENTURY would be tough for the developed world
Anyone with some familiarity with College Math / Control Theory could have predicted the scenario now unfolding.
Unless something is done to put the leash back on China and their patrons in Wall St., get ready to be eaten alive by the 300 million poor workers in China who too want to live like the Taiwanese or Singaporeans. This will come at the expense of not just the West, but also that of the other resource poor BRIC nation i,e. India.
You too will soon get a personal lesson in the limits of “Free Market”.
With all the comments below, I still is of opinion that too much innovation in consumer electronics is wasting a lot of natural resources, money and people's time in unproductive areas.
What the world needs today's is energy and water which is becoming more and more scarce . We need the world focus on increasing power generation, alternate energy sources, water harvesting and such things.
These gizmos where billions of dollars are being spent by the consumers just because every six months a new generation product is forced into the market declaring the previous product as obsolete although technically it could last for another decade may be.
Isn't it a madness? isn't it an unnecessary innovation?
But most Chinese do the work despised by the developed countries' people, scuh as the US, German; besides, they also expand consumer market. I think the reason resulting in the economic crisis is the mess production and trade. In fact, next year is still a hopeful year, after all, Chinese market is gradully recover, and the US economic growth rise to 2% from 1.5% in the second quarter. 2012 will complete political change.
“With all the comments below, I still is of opinion that too much innovation in consumer electronics is wasting a lot of natural resources, money and people's time in unproductive areas.”
@Prabhakar: I'm not sure if I'd agree with this. Innovation leads to better products at lower prices and this makes more and more people be able to afford these products. In a way, that increases the demand for the products. In the context of low demand, I don't see how innovation is the culprit here.
@Bolaji: Isn't the third quarter normally the slowest each year? How does this year's third quarter compare to previous years. I suppose this is directly linked with conusmers expectations: they want to save the money to make their purchases towards the end of the year on Thanksgiving or Christmas where the prices will be significantly lower.
I don't agree with you. If without innovation, then there will be more and more investment in the same industry and no company being wiped out, and the whole economy will face constant maliganant competition, will the economic situation be worse?
Besides, innovation also creat new job opportunity and energy-saving products.
@TaimoorZ,
“they want to save the money to make their purchases towards the end of the year “
Does that suppose that the fourth-quarter revenues will the better than the third-quarter of the year. End of the year purchases do impact positively the economy, but chances are that many companies will have to revise down their revenues forecast.
Bolaji good analysis on the ongoing economic situation and the impact it's created on the electronic manufacturing industry based on the companies third and Fourth quarter report outlooks. I agree, events outside the electronics manfacturing industry is bound to impact the industry like many other busnesses have been too. It's not surprising to note that electronics manufacturing industry are taking steps to adjust to changing times and demand . You're absolutely right, even the major players in the industry i.e Apple too now realises its not entirely immune. I think these steps are essential.
“The sad news is, nobody owes you a career. Your career is literally your business. You own it as a sole proprietor. You have one employee: yourself. You need to accept ownership of your career, your skills and the timing of your moves.”
Good qutotations Bolaji. This is what changing times dictates. Challenging individuals to take ownership of their skills and the timing of moves. This is crucial in the ever changing employment market.
“End of the year purchases do impact positively the economy, but chances are that many companies will have to revise down their revenues forecast.”
@Hospice: Normally companies make their forecasts for each quarter based on the sales in the same quarter over the previous several years. Yes, the third-quarter slum should have some impact on fourth-quarter estimates, but largely the fourth-quarter predictions rely on the past several years' behavior.
Nemos, I had started a solar inverter manufacturing unit with some advance functionalities like bypassing the home need energy directly from solar panel during day time and during the power cut and night time from the storage cells. The inverter part is assembling in our facility and the panel is purchased from local market.
Now also, if I will get a chance obliviously prefer for that because I want to be an entrepreneur. I would like to be a “A job creator rather than a job seeker”.
Wale, everything is planned well and went smoothly for the first 28 months. We got a good business, a set of customers and quality components from the suppliers. Everything went wrong, when China had started dumping low quality products at a through away price to our market. You know majority of peoples are bother about price rather than quality and features. With the other minority, we cannot run a business.
Bolaji, my case is different. Before starting the company I had done a full set of analysis, market study, financial impacts etc with a third party consultant. I had done everything according to the specifications with reasonable price and went smoothly with a rising graph of sales and profits for the first 2 years. I still believes that my product is superior to my competitors, but I cannot sell it for a throw away price like Chinese products because it's a star rated product with QA certificate.
Is it ? Normally its the season where the prices go up.
“Is it ? Normally its the season where the prices go up.”
@hash.era: Normally companies want to clear their stock for next year so there's massive sale on Thanksgiving and Christmas each year. A lot of people wait for this time to make their purchases.
electronics manufacturers will find it harder to predict demand in the coming quarters and possibly the coming years.
@Bolaji, I totally agree with your opinion. Unfortunately the uncertianity is here to stay and I think not only the companies but the employees should also prepare themselves to face this uncertainity.
Normally companies want to clear their stock for next year so there's massive sale on Thanksgiving and Christmas each year.
@Taimoorz, has the sale season started. Are you seeing good discount this time around or companies are conservative about rebates because sales are already down ?
Challenging individuals to take ownership of their skills and the timing of moves. This is crucial in the ever changing employment market.
@Anna, I totally agree with you. This changing employment is very challenging. Only way to tackle this is continuously update the skill-set and keep in sync with current technology. If companies dont care about employees skill-set then employees themselves should plan to update their skill-set.
Managing the risks in the demand-supply chain is part of the challenges facing manufacturers. Uncertainty is now built into the system but winning companies still find a way to mitigate this risk and use it to their advantage. If we agree the global system is now inherently unpredictable, the next set of skills management need is knowing how to take advantage of even this uncertainty.
I still is of opinion that too much innovation in consumer electronics is wasting a lot of natural resources, money and people's time in unproductive areas.
@prabhakar_deosthali, no doubt we need more research in power generation, alternate energy sources, water harvesting etc but that doesnt mean we should stop the innovation in consumer electronics. Let's not forget this sector creates lot jobs for the employees and drive the semiconductor industry.
I have a honest belief 90% of all Innovation achieved today has very little(if any) benefit to mankind today.
@tech4people, I dont think you can term innovation as useless. We can always use these innovations in new places in new ways, we just need to be receptive for new ideas.
This is why I've felt the belief is to build a business around the consuer so much so that they are will ing to pay for the product prior to it being built. Pre-selling allows you to figure out what they want and get funding up front, rather than trying to sell after the product is built.
Besides, innovation also creat new job opportunity and energy-saving products.
@Shelly, I totally agree with you but what if the innovation is distruptive technology ? It can sometimes destroy existing jobs aswell.
Anand,
Its tough to say that every Innovation that has been achieved by Man has either been Useful or Useless.
But if you sit down and look at the list of patents which Companies(&Individuals) go to great lengths to set up;You realize not everyone of them is really-really useful.
At no point have I disputed the need for New ideas;but I feel the Biggest reason for the Current Financial Crisis which we are suffering from Globally is this so-called Innovation.
Sometimes simplicity and sticking to the old way of doing things works out much better(and more sustainable) in the Long-term.
Regards
Ashish.
Anandvy that is exactly my point, employment market conditions and change reminds me of Karl Marx's conflict theory. I perceive this as a time for individuals to take stock of his or her individual 'conflict management skills' and possibly bring it in line with the employment market condition. I believe this the only way to keep abreast of the situation.
Taimoor: Ohh I see. Here its the opposite. They try to grab what ever they can since they know that during this time people are looking to buy things at any cost.