What can entrepreneurs do to discover a good fit between a customer need and a proposed solution?

Entrepreneurs must make sure to verify their proposed solution with real customers through interaction via surveys and research. However, this must be taken with a pinch of salt, as firstly, verbal support may not reflect true intent and secondly, as Henry Ford famously said if people were asked what they wanted they would have asked for faster horses (Da Rin and Hellmann, 2017). They must also evaluate the proposed solution against alternatives, carefully studying the benefits and the drawbacks against each other to determine whether customers will in fact be willing to adopt the new product or service. The founders of Avatech made sure to test their product on a skiing trip which was instrumental in refining the product, particularly when meeting with skiers on the mountains.

What options do start-ups have when competing with established corporations?

Start-ups can either be acquired, choose to collaborate or compete against establish corporations. This will depend on whether the product can fit into existing value chains in which case the most appropriate strategy may to be collaborate (Gans, Stern and Wu, 2016). An example, of this is where WiTricity can be used to charge mobile phones produced by existing manufacturers, so can easily slot into their value chain, albeit with some additional adjustments. Whereas, if the product seeks to establish its own value chain it will be much more difficult to collaborate and it must be decided whether the best decision will be to execute iteratively and compete openly in a disruption strategy or otherwise carefully develop a strong competing product in an architecture strategy (Gans, Stern and Wu, 2016). This would involve WiTricity developing their own manufactured products to compete with existing manufacturers and possibly even their own mobile phones which can be charged wirelessly. There is a fourth option to innovate and collaborate with established firms by licensing technology. This will involve WiTricity licensing their patents for their wireless charging technology for other firms to use in exchange for royalties. However, for a start-up this is a difficult strategy to adopt as there is likelihood of being exploited by large corporations. This is due to the expensive costs of patents and their defence which will give large corporations leverage in negotiations making it difficult for start-ups to hold the upper hand and impose reasonable licensing fees (Bagley and Dauchy, 2012). An example of a firm who has managed to implement this strategy is Dolby, albeit they are a rare feat and not many firms are able to capitalise on such a business model.