There are just those two ways. Let’s look at Google as an example. Google is the leading search engine in the world, and for good reason: Its search technology is tremendous. Founders Larry Page and Sergey Brin developed the technology and are the twin names behind Google’s meteoric rise.
Google also has another incredible product called Google Earth. It allows users to view very detailed satellite photographs of locations all over the world. It is really amazing. It was used by TV stations in the United States to show viewers the devastation caused by Hurricane Katrina in 2005. You might be surprised to learn that Google did not develop this. It bought the technology or, rather, it bought the company that developed it.
CISCO – the American computer network company, not the security services company in Singapore – is the master of acquisitions. It buys innovative companies with leading technologies and absorbs them into the CISCO empire. It allows the respective founders to continue to run their companies and use CISCO’s marketing muscle and distribution network to sell their product or services. This model has worked very well over the years. So what you don’t have in terms of technology, you can always buy, provided you can raise the money. Another question that you would want to ask yourself is that, what do you do if you have the technology? What do you do with your technology leadership? If you are fortunate enough to have technology leadership, there are many things you can do. We will name tree things that you can do.
1. Use it to establish your brand.
If you have a new technology, do not afraid to brag about it. Use it to differentiate your brand. That was what Hyflux did with its HVM membrane filtration. Hyflux was not the biggest or oldest water-treatment company when it entered the market. But its technology leadership allowed it to become a strong brand in very short span of time. Hyflux used its technology leadership to become a strong brand despite having to face more established players such as Dayen and Darco in the market.
2. Use it to sell your company.
Companies with innovative technology are very attractive buys for larger companies. Why can’t these large companies develop similar technologies? They can. But it takes time and it takes money. Sometimes, it is cheaper to just acquire another company that has the technology a larger company needs or might need in the future. You can use your technology to build a brand or to sell your company. Sometimes it is for a small company with cutting-edge technology to build a brand. The technology may be fantastic but the company may not have the marketing expertise, funding or distribution channels needed to make the brand successful. Of course, if you want to sell your company, make sure you can get a good price for it. After all, you have invested a lot of your own money, blood, sweat and tears into the development of this technology that you have.
3. License the technology
There are two types of science – pure and applied. There are also two types of companies – those good at developing technology, and those skilled in the commercial application of technology. If you are the former and not so good at applying it to build successful commercial products, we suggest you license your technology to other companies. A Singapore company by the name of Trek 2000 invented the thumb drive. It decided not to license the technology to other players. Instead, it tried to build its own brand. We think that what Trek 2000 invented was a really great product but it was not very successful in building a brand around it. It might have made more sense for Trek 2000 to license it to other manufacturers in the first place. You can still make a lot of money doing that. Creative technology is another company that could have gone into licensing model. Creative Technology beat apple into the MP3 market by about 18 months. But Apple’s red-hot iPod thoroughly trounced Creative’s MP3 playes in the global market. We have a lot of respect for Creative Technology. When it was focused on selling its inventions such as the sound card to other companies, it was doing well. But we do not think Creative has what it takes to win in the consumer market. That is a very different ball game together. In another words, look at your resources and skills, what are you good at? It make more sense for you to focus on what you do best – perhaps developing new technologies, which it can then license out to other players. In a nutshell, technology is the new bread and butter. Without it, running a business would be difficult. Life, in general, would be very different. That is why everyone is interested in technology and leaders in the field are given respect. If you have a technological edge over the competition – any edge – use it to differentiate your brand. But technology leadership is a fragile thing. You have to direct all your energy and resources into maintaining that edge. The day you lose it, you lose your brand differentiator.