Rickerism

The essence of selling is trust. Most start ups look at what the existing competitors have invested in building their product. What you cannot ignore is how much the existing competitors have invested in building their customers’ trust.

You have heard the old axiom, “No one was ever fired for buying IBM.” Have you ever considered how many billions IBM spent to establish that axiom?

Most start ups do not face a technology barrier; they face a trust barrier. It is usually more expensive to wedge through the trust barrier than it is to build the technology. Start ups led by engineers struggle with this fact or ignore it completely. People naturally focus on what they understand. Engineers focus on the effort of building the technology while dismissing the effort of selling it, while salesmen do the opposite.

The customer must trust the company as much as product. That is why “me too” efforts usually fail for start ups. Given two identical products, the customer will go with the company that they already trust. It is very cheap for a company that has established trust with a customer to spread fear, uncertainty and doubt (FUD) about a new competitor.

There is a marriage to be made between large existing technology companies and start ups. The large companies have established trust with customers. The small companies have the innovations that the customers need. It is inefficient for small companies to batter themselves against the trust barrier. It is just as inefficient for large companies to throw money and research and development with no true means of fostering innovation.

Such marriages occur often enough by happenstance. Usually both the large company and the small company delude themselves as to why the partnership was created. They treat the partnership as an anomaly. The large company thinks that it is still an innovation factory but has only brought on a partner as an exception to “fill a gap”. The small company thinks that it has the wherewithal to build its own customer base, but has brought on a partner as a shortcut.

Entrepreneurs, venture capitalists and executives in the large technology companies should recognize the trust barrier and innovation factories as principles of business. Small innovation factories such as Google and eBay who break through the trust barrier are the exception. Once they have broken through, those companies themselves cease to be innovation factories and achieve further innovation through acquisition just like any other large technology company.

Also see The Essence of Selling and The Innovation Factory.