What Problem Does Your RFID Product Solve?

By Mark Roberti

Too many RFID companies are focused on selling products and not on addressing business issues.

On Saturday morning, I was sipping a cup of coffee and reading the business pages of The New York Times. One article, "The Secret of Their Success: It's Not About the Money," was about Bob Parsons, who founded GoDaddy, and David Neeleman, who started JetBlue. As an entrepreneur, I'm interested in stories of other entrepreneurs, so I started reading.

The stories of these two successful men were interesting, and I related to the idea that they didn't start their companies just to make money. But it was a quote from Kyle Jensen, associate dean and director of entrepreneurship at the Yale School of Management, that really caught my attention. "Entrepreneurs usually have some inkling about a problem they can solve," he told the Times. "But typically, they're not exactly right. So, if you survive long enough, you pivot and pivot and pivot and find what sticks."

This struck me, as some companies that offer radio frequency identification products don't get into business because they realize they can solve a business problem. The founders are engineers and they start their own business because they believe they can build a better RFID reader, tag or software product.

Years ago, I was speaking to the CEO of a company that had a proprietary RFID solution. He said, "Our reader is better than the one based on industry standards. We have a longer read range, faster data throughput and a more robust signal processor." My response: "It doesn't matter. No one is going to buy it." He became indignant and said, "That's ridiculous. Of course companies will invest in a superior product."

I asked him if he would buy a personal computer that was faster, more robust and more reliable than his existing Windows PC if it could not run any Microsoft Windows programs or open any documents created in Word, Excel or PowerPoint. The conversation ended soon thereafter, but the company, not surprisingly, went out of business.

Regular readers of this column know that I have long advocated building a "whole product," or working with partners to create a complete solution that involves tags, readers and software designed to solve a business problem. That is not a guarantee of success, of course. You still need to prove the solution can solve a business problem, and you may, as Professor Jensen said, need to pivot and pivot and pivot until you find the right fit for your product.

But just selling a piece of a solution puts the burden on the technology buyer to either piece together the whole product or hire a systems integrator to do it, and many companies don't want to take on that job. So my advice to RFID startups is to not get into this market just to make money, and to focus on a problem you think you can solve for potential customers. Do that and get the marketing piece right, and you will be successful. I'm sure of it.

Mark Roberti is the founder and editor of RFID Journal.