A salesperson, trying to close me on signing up for some new technology, said, "Joe, the train is leaving the station. Either get on board or get left behind." Wow! Did he get my Irish up! I lost all faith in the facts which he had presented and showed him the door.
New technology, new machinery or new products are interesting and exciting. As a smart business owner, you should keep your eyes open to spot changes in your business world. But if some salesperson says to you, "If you don't do it right-this-here-minute, you're doomed.", you should run - not walk - to the nearest exit. There are lots of new things out there - materials, processes, technology, devices, software and apps. Some of them don't quite work yet. As a former new product specialist for a Fortune 500 company, I can state that any responsible new products person will tell you the risks and rewards of any new endeavor.
A new products specialist wants satisfied Beta-test customers because these customers will happily provide the testimonials needed to launch a new product. And there are enough target customers out there that new products people don't have to beg or threaten to get test subjects.
Most new product people will target smaller firms for testing developmental products. Smaller firms provide faster and more honest feedback - there are no multi-level layers of management to slow and filter the flow of information. Field fixes can be implemented quickly.
Should you be willing to try new things which may not be fully proven in your business arena? It depends. The benefit is that the new product may give you an advantage over your competitors. The downside risk-level is probably the most important factor in your decision. What if things don't work out? Can you go back to your old product or system? Or will it be corrupted by the introduction of the new item? How much will it cost you to be a guinea pig? Is it an investment of only a few hundred dollars and a little time? Or does it require commitments of large blocks of time and money? If things don't work out, will you lose the confidence and respect of your present customers?
In the mid-1970s, I worked with a $15 million dollar building products manufacturer. The owner was driven to be the first-on-the-block in all things. He was trying out a new product which required a $200,000 investment in new equipment, which had no other uses except to process this new product. The owner's unbridled enthusiasm prevented him from seeing the downside risks. When the product/process didn't work out as expected, he was so strapped for cash that he couldn't invest in the additional equipment required to make the new product work. He had staked his future on this new venture and, when he couldn't deliver, lost credibility with his existing customers. He eventually went bankrupt.
In the early 1980s, plastic sheet manufacturers were touting the concept of using lower-molecular-weight acrylic to make fabricated parts. The benefit was a significantly lower materials cost. The downside was that it handled differently in processing and required special saw blades. The technology was proven; it had been used in Europe for 30+ years. American plastic fabricators are a curmudgeonly lot and grumbled about making the changes required. Except my company. We felt that the downside risk was low, as was the investment, so we tried the new acrylic. After some tinkering and fine-tuning, it worked. We were able to lower our prices, increase our profits and make serious inroads into our competitors' markets. This, for us, was a very successful Beta-test.
Don't be pressured into a decision about something new. Weigh the risks and rewards. The techno-train may be leaving the station but it will make many stops along the way. You'll have plenty of opportunities to get on board. (posted 1/15/15)
Copyright 1997, 1999, 2015 Joseph M. Sherlock All rights reserved.