In early stage investing I think it is in error to believe that technology vendors are selling solutions. For there to be a solution, there must first be a problem. Many times a prospective customer does not even know he has a problem (and many times he actually doesn't). The point I am making here is that early stage companies generally must convince the market that there is, in fact, a problem. The attributes of the problem must include that its resolution is meaningfully beneficial and that resolution is possible. This process of "selling the problem" to the prospect is fraught with many points of potential failure. Let me explain.
As humans, we long for personal security. The process of automation generally depreciates human relevance and value around the process automated. The human is increasingly commoditized by automation and, as a result, and his wage rate is made to decrease. He becomes a form of appendage to the revised, automated process. Thusly his, "I feel secure barometer" reveals lower-than-normal pressure.
When the eager "solutions" vendor appears at the doorstep of the would-be affected labor pool, this labor pool perceives that something perilous is afoot. "We are about to be commoditized by the machines", they chant and they withdraw inward into problem avoidance. The labor pool is knowledgeable in this regard because it has its own history of dislocating some predecessor process and labor pool in some prior revolution where a now deceased labor pool put up its own fight.
Extrapolated to a larger scale this is the same type of "revolutionary" dynamic that has permeated history disguised as political change - the war between the old ways of making money vs. the new ways. Lenin knew all about this and would have likely been the all-time master of software sales.
As humans, we long for personal security. The process of automation generally depreciates human relevance and value around the process automated. The human is increasingly commoditized by automation and, as a result, and his wage rate is made to decrease. He becomes a form of appendage to the revised, automated process. Thusly his, "I feel secure barometer" reveals lower-than-normal pressure.
When the eager "solutions" vendor appears at the doorstep of the would-be affected labor pool, this labor pool perceives that something perilous is afoot. "We are about to be commoditized by the machines", they chant and they withdraw inward into problem avoidance. The labor pool is knowledgeable in this regard because it has its own history of dislocating some predecessor process and labor pool in some prior revolution where a now deceased labor pool put up its own fight.
Extrapolated to a larger scale this is the same type of "revolutionary" dynamic that has permeated history disguised as political change - the war between the old ways of making money vs. the new ways. Lenin knew all about this and would have likely been the all-time master of software sales.
Successful early-stage technology companies should many times be viewed NOT as technology companies per se but rather highly competent group psychologists. They are psychologists who can untangle problem avoidance and convert it into a purchase order. They can manage around the labor forces that might fearfully resist change. "Fire good, Trog like fire!" Once groups of people believe they have a problem and it is sucking income out of their wallets they generally will stampede to find a solution (sometimes they try and kill the solution and anything that may be a threat). The stampede runs fast and buying the solution happens in a hurry. On the other hand, selling the problem takes time. Studied through this lens my perception of what is in play at an early stage technology company is definitely altered.
