You’re probably not really a tech startup, after all

We think of tech startups as just that – technology companies just starting up. But I would argue that, as much as ever, the defining characteristics of successful technology startups are not about technology. Gone are the days of competing primarily on processor speeds or megapixels. For all but a precious few, algorithmic supremacy and faster performance are not what separate success and failure. Which begs the question – what are the dimensions that matter most in becoming a successful tech startup?¹ If we’re able to identify these dimensions, I gotta believe it will help better focus our efforts.

The top “wow” tech introductions of the past decade.

This post actually started with an entirely different direction. I was re-watching a clip of Steve Jobs introducing the original iPhone as inspiration (I know: geek), and it was so darn amazing, so impressive technologically and with such obvious appeal to customers, that it got me wondering: What is the list of the most impressive tech introductions of the previous ten years? And what sorts of technological arcs could we glean from this list, and how might they inform the future? So, with help from colleagues, I created a list of product introductions² with impressive technology that have also become household names with customers:

• iPhone
• YouTube
• Gmail
• Amazon Web Services
• Blackberry
• Skype
• Microsoft Kinect

Now, this wasn’t meant to be a top five list. It just turned out that, frankly, my fellow tech enthusiasts and I were hard-pressed to come up with even a top ten. And that, I thought, was intriguing.

Beyond the technology

To be sure, other recent, hit tech products have been impressive for other reasons.³ Perhaps, I pondered, considering this alternate list may be even more instructive for people starting or investing in so-called “tech companies.” So, I compiled the longer list:

Hulu, Groupon, Netflix, iTunes, Twitter, Zynga, Myspace, Facebook, Wikipedia, iPod, iPad, Nintendo Wii, Tivo, Kindle, Asus Eee

Five paths to home runs

To my mind, what’s clear from this list is that these days, even more than in the past, it’s often not technical supremacy that leads to success. To the point where calling them “tech companies” might be something of a misnomer. So what does lead to runaway success? In examining this list, I think we can distill it into five big attributes that lead to outsized success:

• Strong partnerships
• Watertight adoption strategy
• Inciting users to generate content
• Product definition and user experience design
• Business model innovation

What is your real differentiator?

Out of this, it’s worth considering: Is technical superiority really your differentiator? Are you creating “the next Gmail” (which, tellingly, still does not have as many users as Yahoo or Hotmail, by the way)? And if not technology, what is your real source of differentiation? Most importantly, for this “something else,” do you have the right team to win against all odds, to persevere, achieve, and sustain this differentiation?

– Notes –

¹ Oh sure, we know it’s not about the tech, you say. Fantastic… but when I talk with startups about differentiation and how they’re better than the competition, I still hear a lot of technical rationales: “our technology can scale better,” “our developers are ninjas,” or “our solution is much faster.”

² I’m excluding enabling technologies like: RSS, the mainstreaming of GPS and Location-Based Services (LBS), RFID, Wifi/3G/Mobile Internet, and HDTV.

³ That’s not to say these weren’t challenging technologically. I just don’t believe a significant technological breakthrough was central to their growth.