KEY POINTS:
Understanding your customer's pain might sound all soft and new-age, but ten New Zealand company executives discovered it was imperative to survival in the tough US market.
The entrepreneurs were shoulder-tapped by the Foundation of Research Science and Technology to take a week off from their high growth businesses and attend a course in entrepreneurial thinking at Massachusetts Institute of Techonolgy [MIT] in Boston.
Self-described engineer-turned-businessman Richard Downs-Honey from marine engineering company High Modulus said he has come back with a clearer view of what his company needed to deliver to customers.
"We are very clever engineers. We can design you wonderful boats. We can do all sorts, but before we start doing that we have to go back to the underlying question -- 'who is your customer and what is their pain or suffering or problem that you will solve with your efforts?'."
He said that too often engineers "jump to pain" they would like to solve rather than real issue their customer's face.
"I've come back home, still fired up with the passion and vision for world dominance, but more down to earth with the obvious -- that you cannot neglect your core business," said Downs-Honey.
Michael Whitehead, chief executive of software company WhereScape Red, said the realities of competing in the US market, where they already have operations, was brought home to him by entrepreneurs who had successfully started and sold up to six companies.
He said the culture of "serial entrepreneurs" doesn't exist to the same extent in New Zealand.
Whitehead said many New Zealand start-ups come into being out of the frustration of "working for the man" and the end-goal is getting someone to pay you some money for what you do.
"The concept that you could do that, then create something of value and then sell that on as a valuable entity, and then do that again and create a whole business is not something that New Zealand companies really strive for."
Whitehead said the course drove home the importance of the "value proposition" -- answering the question why someone should pay you money.
"You have to be really, really crisp on what you're doing and really crisp on the execution aspect of it," he said.
"You really have to understand exactly what you do. You really have to understand exactly what your customer is going pay you money for."
Whitehouse has returned to New Zealand with a renewed sense of discipline towards focussing on the needs of his customers.
The Foundation's northern regional manager Dr Suki Siriwardena, who also attended the course, said companies often know their products so well that they find it challenging to put it into a language their customers understand.
"I know from my own experience of companies over the last 15 years, creating value propositions and articulating them and making sure that the customers understand is not something that New Zealand companies always do really well."
Supporting business people to the MIT course was a pilot initiative by FoRST and no decision has been made yet if it will continue in the future.
