What Is a Good Business Strategy for Starting a Successful RFID Business?

By RFID Journal

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Ask The ExpertsWhat Is a Good Business Strategy for Starting a Successful RFID Business?
RFID Journal Staff asked 10 years ago

Can you please provide some pointers?

—Name withheld


There are many potential strategies. If you have an innovation in hardware that radically alters the price-performance equation of radio frequency identification systems, then the strategy would be to develop the product and market it aggressively to a particular sector that is most likely to embrace the new product. For example, if you have a passive ultrahigh-frequency (UHF) reader that can read standard Electronic Product Code (EPC) tags at a range of 200 feet, you could look at an industry, or an application within an industry, that might benefit from that additional read range. Or if you can manufacture readers at half the price of those currently on the market, many sectors would likely embrace a lower-cost reader, even if the performance was a little weaker than what's available on the market today.

Absent a technological breakthrough that changes the price-performance equation, my advice would be to focus on developing a complete solution for a specific industry, or an application within an industry, for which you have special knowledge of the problems or issues companies in that area are facing. Let's say, for example, that you previously worked in the airline maintenance, repair and operations (or overhaul, depending on which version of MRO you like) sector. You might know that MRO service providers have a particular problem tracking rotable spare parts. You might develop a solution that comprises tags for these parts, readers for shelves where rotables are stored, software to manage rotables across multiple locations and services for installing the system.

I'm not suggesting you design special tags and readers. Your firm can select them to fit a particular application. Your expertise is in providing the software to manage the parts, and in installing the system. You market the complete system, targeting airlines and MRO service providers.

Most RFID companies struggle for two reasons. One is that they do not provide a complete solution. They offer either tags, readers or software, but not all three. This creates risk for the company buying the solution and inhibits adoption. The other issue is that they do not market their solution effectively. They think that if they merely show up at some big MRO trade show, everyone will immediately recognize the value of their solution and buy it. Unfortunately, with relatively new technologies like RFID, it doesn't work that way.

—Mark Roberti, Founder and Editor, RFID Journal

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