HBO’s Silicon Valley is a hilarious and true-to-life version of many of the issues young companies face when trying to take a product to market that uses advanced technology. While anyone who has seen the show recognizes that many of the situations are exaggerated for comic effect, much of the journey that the show’s main character, Richard Hendricks, and his company, Pied Piper, go through, are accurate depictions of the lifecycle of startups.
That journey reveals many vital lessons about #product marketing strategy for advanced technology. Here are some of the most important:
- As early as possible, seek to clarify and test the definition and value proposition of your product. See “What is this Show About? Marketing Lessons from Fiddler on the Roof” for an example of how Jerome Robbins made Fiddler on the Roof a success by relentlessly challenging the vision for the show.
- Practice product marketing thinking so that you clearly understand how the product creates value for the customer, how to communicate that value, and how to support the sales process.
- Make sure your product management and product marketing teams are communicating and learning from each other. Product marketers share their insights about how the users are creating value. Product managers should educate product marketers about new capabilities that can help create even more value.
The biggest mistake made by young companies, and one that Hendricks falls prey to, is failing to think of how your technology will be a true product, something that users recognize immediately as something they want, which leads to a lot of the growing pains nascent companies experience. Instead, entrepreneurs often revel in the power of their tech, as Hendricks does with his compression algorithm.
In this article, we will review the Pied Piper product’s stages of development and examine several ways of thinking about technology products and their market viability. Building on this, we will examine how specific product marketing thinking would have helped resolve the conflicts and challenges Pied Piper faced, sometimes successfully, sometimes not, during the course of the show.
Technology Isn’t Enough
At the start of the first season of Silicon Valley, the tech innovation that Hendricks created is the star of the show. Hendricks invented a powerful compression algorithm and uses it in an application that demonstrates its power — and potential. The demonstration is so impressive that as he begins to circulate the technology among other tech entrepreneurs, he immediately receives an offer for the algorithm. Yet Hendricks resists selling his invention. Instead, he sees the chance to strike out on his own and start his own business. As so many other innovators have done, he decides to leverage his revolutionary technology and seeks VC funding.
During his presentations to VCs, they ask him for a business plan. But they’re so impressed by the power of the compression technology, they do not press Hendricks too hard on his specific plans for how he intends to turn his invention into an actual product that he takes to market. The VCs obsess about the potential of the core technology: Hendricks’s algorithm. They can already envision its many applications and their excitement for it builds because of these possibilities.
What Hendricks experiences is very similar to the first stage of product development identified by Geoffrey Moore in his book Crossing the Chasm. Under Moore’s analytic framework, Hendricks and Pied Piper are in the innovator stage — this is when you’re trying to sell a product to people who are innovators. There are benefits to this stage — namely, you’re speaking to people who understand your language. They know innovation, and they get advanced technology.
But there are also drawbacks from a product marketing perspective. Because VCs and innovators understand technology so well, they do not require the creators of new technology to explain their innovations in detail or even demand that the technology take the form of an actual product. The innovator audience just needs technical specifics to buy into the concept. They understand what they want to do precisely, so deep explanations are unnecessary. Thus, all that the creators of the new technology have to do at this point is explain capabilities. Many VCs are quite conscious of the lack of a product, and instead are happy to wait for a product to emerge.
The problem with this is that most of the world, and especially the business world, is not made up of people who grasp technology so deeply. Hendricks and his team thus receive just enough VC funding to get their idea off the ground, but not enough to develop it into a full-fledged product. At this stage, startups often have the chance to sell their technology to other, larger tech companies, as Pied Piper was offered in the show. But this only makes sense if you want to be acquired. It doesn’t help Hendricks, or any other entrepreneur, build a business. The innovator stage can thus stymie product development because the tech inventors are never forced to put their new tools in the context of business.
Trying to Fit the Square Peg of Innovation into the Round Hole of Business
For a new technology to really gain traction, most of the time it has to be applicable to the enterprise. On Silicon Valley, Hendricks eventually realizes this and Pied Piper thus enters the next stage of development. Enter Action Jack as adult supervision. Jack arrives and he recognizes immediately that the algorithm will remain in an embryonic stage until it becomes a product.
What qualifies as a product? According to Moore, a product is something that knocks down a bowling pin — or to put it simply, something that addresses a business case companies are already looking for. In the case of the show, Jack comes up with the idea of using the algorithm to create a box for companies to store and compress large amounts of data.
But Hendricks is bored to tears by this application. After all, this was his revolutionary idea and now it’s being used inside something with all the sexiness of a VCR. To him, the enterprise incarnation of the product is a failure of imagination. He instead wants to turn the algorithm into a consumer product, and so he undermines the progress of the box. Hendricks sets out to launch an app that shows the full power of his compression algorithm. And in one sense, he succeeds: he creates the app and in fact, it even develops a legit following and fairly widespread usage.
Yet he never asks his main VC investor, Monica Hall, what she thinks of the app. So while many people are using it and are excited by how smoothly it compresses data, Hendricks realizes only too late that there’s no there there. He’s created an app, but not a product. His app can compress data, but little else. And ultimately, after the initial excitement fades, who cares about an app with little practical use?
Hendricks’s app failed to knock down any bowling pins. Thus, he enters a new stage in the show’s last season. Hendricks is forced to deal with reality, and ultimately must go back to a less glamorous enterprise approach, in which he tries to sell a data compression service that allows businesses to store data on crowdsourced storage cheaper than they could do themselves. After various machinations with an executive and his wife who run into problems with the Pied Piper team, Hendricks does successfully sell this product. Ironically, this product has similar capabilities to the box that bored him earlier in the show’s run.
At end of Silicon Valley’s last season, because of some good fortune on the part of Pied Piper, the crowdsourced infrastructure model has worked. While the Pied Piper crew is surprised that the source of storage for their compression product is smart refrigerators, rather than cell phones as they’d expected, the product still functions well. Hendricks has turned his brilliant idea into a product people actually want and that has real-world enterprise applications.
The Lessons of Pied Piper’s Journey
So what have we learned from Pied Piper’s saga of turning tech into a product? I think there are three main takeaways for startups to keep in mind.
- Advanced technology isn’t a product. Every innovator would do well to understand the fundamental analysis that Moore lays out in his book about the innovation stage. It’s worth keeping in mind that innovative technology in and of itself is not a product. And a product is the foundation of a business. For your product and portfolio to succeed, product marketing thinking has to be part of your strategic approach. Even in the initial invention stage, entrepreneurs should never stop thinking about how their technology can be operationalized for the real world.
- You’re going to have to sell to who has the money. If you’re going to create a business out of an advanced piece of technology, at some point you’re going to have to sell to the entities that have the money to spend — namely, enterprises. There’s always the possibility an established tech giant will find your technology appealing and offer to buy it, but the chances of this happening are not great. Having your product used by Google is fine, but it only happens if Google is interested in what you’re doing and is also working on applications that would interest the enterprise. Truthfully, if you want to make world a better place, you have to solve boring problems for people who have budgets to pay for solutions. Therefore, understanding the enterprise environment and the current needs of those in the marketplace is essential.
- Don’t get trapped in your own world. In life, as in tech development, it’s easy to get trapped in your own little bubble. But it’s important to escape your ecosystem. Don’t believe the people who are interested in your product, like your friends, when they tell you it’s a fantastic idea. They may be right, but it benefits you to hear all the things that are wrong with your idea and all the adjustments you’ll need to make to reach a stage of profitability, rather than only hearing what a genius you are. Politicians who rely on sycophantic adoration generally flame out, and the same is true of innovators. You should surround yourself with people who can see a way to push your idea into a product that has potential market value and hear what they have to say, even if you disagree with it. That’s what Hendricks and Pied Piper failed to do with Monica Hall on the show, and the result was a lot of wasted time and money. Granted, that made for some entertaining television. But it also makes for less-than-successful startups.
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