How To Kill A Business: Let Business Guys Do Technology

Written by Frank Hayes
August 11th, 2010

Business people are a lot better at cutting business deals than they are at creating the technical infrastructure to make those deals work. That’s one of the points readers made after hearing about the new mobile contactless payment alliance between AT&T and Verizon. Telcos, in particular, have a long history of having good ideas but failing to deliver on them because of conflicting objectives or simply poor execution of the technology.

Even when telcos get an industry-wide standard right and make it a profitable business–with text messaging, for example–there’s usually a reason. “SMS was a technical feature of the GSM standard which was baked into every operator’s infrastructure,” one reader wrote. “Engineers from various European operators collaborated to build the spec. Business people weren’t in the room. It wasn’t even originally intended for consumer use. Only later did unanticipated revenue opportunities arise, when it was already built. Mobile payments are being led by business people at the U.S. operators–very unlikely to be able to agree to the commercials, let alone standards.”

That sounds harsh. It’s not. In fact, it’s true. And telcos aren’t alone. Retailers are also a lot more successful when they don’t try to create both a standard technical platform and a new business at the same time.

Consider RFID. Suppose that when retailers first began looking at RFID as a way of tagging inventory there was already a single kind of tag, with an established format for tag content and a well-established protocol for securing and reading the data. In that case, all retailers and suppliers would have used the tag in the same way. Suppliers would still moan over a Wal-Mart mandate and retailers would still grumble about the cost of the tags. But 90 percent of the early confusion over RFID would never have been there.

Or think about the number of different variations in EDI documents–not just the number of documents themselves but the fact that for years every retailer seemed to use a different set of options for each document. Retailers embraced this approach because it was easier to customize EDI documents to match the requirements of their existing business systems than it would have been to change the business systems to match EDI forms. But it was miserable for suppliers, who needed a different set of electronic paperwork for every different retailer.

And those examples are just the ones that managed to survive. The recent history of retail is littered with technology-dependent business efforts that collapsed or never got off the ground because too much technology had to be invented along with a new business model.

On the other hand, when there’s an established, well-standardized technology for business people to build on, there’s far less pain and a much smoother ride. Think barcodes, Wi-Fi and, of course, the Web.


One Comment | Read How To Kill A Business: Let Business Guys Do Technology

  1. Fabien Tiburce Says:

    Business people shouldn’t have to deal with technology in the first place. Technology should be commoditized, packaged and exposed as a business service. Technologists alone will kill a business just as fast as the other way around. Software, hardware, these are all implementation details. They are and should be irrelevant to most business situations. Business people need reliable services, fully-hosted, maintained turn key solutions. Business needs to focus on value and functional benefits, not cables and routers. This model exists, it’s called Software as a Service and is slowly but surely eclipsing traditional software vendors. SaaS allows business people to do what they do best: business.


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