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Technology for Sale

Having tags and readers that perform better than existing products does not mean you have a business.
Posted By Mark Roberti, 09.23.2013

I received a call the other day from a gentleman who claimed he had developed an active real-time location system that offered better reliability, more precise location accuracy and lower-cost tags than anything currently on the market (I hear this kind of thing all the time). He said he was planning to target the produce industry, and that he wanted to know what I thought.

"Are you aware that farming, historically, has one of the lowest rates of investment in technology of any industry?" I asked. He wasn't aware of that minor fact. I asked why he was focusing on produce. He didn't have a good answer to that question. I asked what application he would focus on. He didn't have an answer to that, either.

"You have some tags, readers and software to locate tagged items," I said. "But really, you have nothing to displace the current market leaders, who have customers, solutions for specific markets and revenue coming in."

I advised him to think about the single biggest difference between his technology and what currently exists on the market. The difference has to be significant, demonstrable and marketable, I explained. Then, I suggested he map that advantage to the applications that would give his company a competitive advantage.

"For example," I said, "If you really can make active tags similar to those on the market but 50 percent or 75 percent cheaper, then your focus should be on applications for which there are many items to track. If a customer needed to buy 100 tags for $75 apiece, that would not be a big deal. But if that company needed to buy 10,000 tags for $75 each, then that would be a lot of money. And if you could cut the price to $25 per tag, you would save that customer half a million dollars."

I think he understood, and I don't mean to pick on this individual. This problem is all too common in the RFID industry: An engineer develops a system without thinking about who might use it, what the user requirements might be or how to market it.

It's like a guy buying a new Les Paul guitar and expecting to be a rock star—without knowing how to write songs, having a record contract or enjoying a large following. Even if you are a great guitarist, you still have a long way to go.

Don't get me wrong, I'm not discouraging innovation—but marketing is just as important as technology development. That's why RFID Journal set up Marketing Services for small RFID solution providers unable to produce their own banners, that do not know how to target specific customer segments.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.

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