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The Matchmaker

The electronics industry likes to celebrate success, touting the unusual circumstances under which many of its biggest companies were founded — the garage is a favorite location.

It often fails to mention the hundreds, possibly thousands of other technological innovations that died unsung because the entrepreneurs either couldn't get anyone to pay attention to their ideas or failed to secure critical funding.

The stories many of us will ever get to know about events in the technology world are those of the successful companies, enterprises like Amazon, Apple, Facebook, Google, Hewlett-Packard, and Yahoo. But many others never get to Wall Street because their products failed to make it to Main Street. So, how can startups and innovators give their ideas and products the opportunity to get included in the narratives of successful companies?

The hurdles are certainly numerous. Many technological innovations die on the vine due to a variety of factors, the top reasons being lack of funding, failure to attract the right type or any sort of viable partnerships, insufficient marketing, management missteps resulting from inexperience, insurmountable competitive opposition, poor product timing, supply chain challenges such as inability to attract the patronage of suppliers, contract manufacturers and other third-party support services providers, and simply poor design of a potentially great product.

In the electronics industry, one of the toughest obstacles to the success of a new product — in the case of components — is failure to find a home for the parts in existing products. The industry jargon for this is “design win,” which refers to the possibility of getting the component included in the list of components used by the engineer when designing the end-equipment.

A “win” on a major OEM's platform, printed-circuit board, software, or enclosure is a highly coveted victory for a startup. Scoring a “design-win,” for example, on products from {complink 379|Apple Inc.}, could translate literally into tens of millions in sales for a startup and give its products greater visibility with other manufacturers.

But how can a startup in southern France, central UK, or the Midwest of the United States score such a win? How can an innovative enterprise even get its products before the top procurement and supply chain executives at companies that control tens of billions in purchasing expenses per year? What will it take for Apple to review a component vendor's latest innovation when the manufacturer does not have a history of supplying components to the world's biggest consumer electronics company and has no direct links with its supply chain boss?

That's where folks like John Lyons come in. A veteran of the electronics industry, Lyons is CEO of J Lyons Marketing, a technology matchmaking firm that assists developers in bridging the wide gulf separating them from the companies that can benefit from and help market their products.

Lyons told me in an interview that his company's specialty is hooking developers up with Fortune 500 enterprises. “If the technology can do what the manufacturer wants, we'll help you find a home for it,” Lyons said. It's not quite that simple, though. The first step to scoring that design win is convincing technology matchmakers like Lyons that the innovation is worth hawking around. Matchmakers are valued by OEMs especially because they would have already done much of the vetting that the enterprise would have to do if the middleman wasn't involved. Lyons said in a statement he emailed to me:

Over the years, we have been responsible for matchmaking hundreds of technology deals worth over a billion dollars. On one hand, we keep in constant contact with the CTOs of Fortune 500 companies so that we know the problems that they are trying to solve. It would be extremely hard for companies in Europe to know exactly which person in any number of vast US companies might be interested in their new technology but we do. Not only that but these guys will take our call because they know we deliver solutions time after time.

The products introduced to equipment manufacturers for consideration by technology marketers like Lyon must have already passed muster with the middleman who require have a deep knowledge of the customer's products and may even be aware of its product roadmap. In order to sustain the relationship on both sides, Lyons and his team are constantly in touch with CTOs at equipment vendors and spend a great deal of time hunting for valuable innovations.

An introduction by Lyons to a Fortune 500 company is not a guarantee of success, though. He admits to scoring wins regularly but added that many of the innovations he considers may not get past the front door at the equipment vendor. Lyons counts amongst “his successes a camera chip design win of 50 million units and counting, a battery design win for a Set Top Box worth $400 million, and a new disposable sample gathering device used in diagnostic testing with the potential to sell millions of units a year.”

Of course, if matchmakers like Lyons cannot deliver the goods, there are other avenues technology innovators and startups can pursue. They can leverage the strength of funding partners, tap the vast knowledge and contacts available at distributors, and if all else fails, there's always the chance cold calling the OEMs might elicit some interest. It's a long shot but it may just be worth trying — after all, both parties are always on the lookout for something different, something that improves their competitiveness.

16 comments on “The Matchmaker

  1. elctrnx_lyf
    October 25, 2012

    I think comanies like like Lyons is most desired by many start up to find their real home. Even OEM's can solve the most difficult problems by joining with startup companies. I believe out there may be much more companies doing similar business.

  2. _hm
    October 25, 2012

    J Lyons may be a good option. But once they it is established, its response to startup may be slow, just like fortune 500 companies. Also, it will eat up most of profit and startup will not have good kick start. I would suggest startup to also have direct marketing and strong determination and perseverance. They need to try many different ways, conact numerous persons in different networking group. They will eventually find few good breaktroughs.

     

  3. FLYINGSCOT
    October 25, 2012

    Is there any way to see some case studies showing Lyons' success?

  4. Eldredge
    October 25, 2012

    Sounds like an interesting business model, and one that innovators should take advantage of. I would also like to see an article on more case studies.

  5. bolaji ojo
    October 25, 2012

    Flyingscot, John Lyons told me a few examples of previous and more recent design wins on the behalf of some of his clients. There are some anecdotes and customer testimonials on his website. Please see: http://www.jlyonsmarketing.com/

  6. Daniel
    October 26, 2012

    “Many technological innovations die on the vine due to a variety of factors, the top reasons being lack of funding, failure to attract the right type or any sort of viable partnerships, insufficient marketing, management missteps”

    Bolaji, you are right. I had started a small company in 2003 and everything went smoothly for first 2 years, but later we had failed to market our products due to competition and availability of low cost products from China. Most of the Chinese products are selling less than the component prices and finally I winded up my assembly unit.

  7. Daniel
    October 26, 2012

    For doing business one need the ability to foreseen the hindrance and to take quick decision based on current trends. Only expert peoples have both these two and service or guidance from them will help to sustain in market for a long term.

  8. Wale Bakare
    October 26, 2012

    Every business needs a good planning — the only exception if you're an ISV, in this case independent software vendors only rely on venture capitalists to snap their innovations as well as risks associated with them. 

  9. Nemos
    October 26, 2012

    As you have mentioned in many earlier blog posts there is no exist a recipe that the developers should follow…. Lyons it looks like is doing a great job actually his job was the missing part in the whole procedure having a success story. 

  10. Nemos
    October 26, 2012

    If you don't mind why kind of business and products ? Also I would like to ask do you regret it or what you should change if you had the opportunity to start again ?  

  11. bolaji ojo
    October 26, 2012

    Jacob, In the US, it is said four out of five start ups fold within the first five years of launch. This is certainly not odd even globally. Too many times we fail to consider many of the hurdles when starting a business and the greatest of this could be that rivals seeking the same business may be better funded.

  12. Ashu001
    October 27, 2012

    Bolaji,

    True.

    Very,Very true.

    More often than Not-Funding is the critical issue that curtails most Businesses and forces them to shut shop.

    Could'nt agree more!

    Regards

    Ashish.

  13. Daniel
    October 30, 2012

    Nemos, I had started a solar inverter manufacturing unit with some advance functionalities like bypassing the home need energy directly from solar panel during day time and during the power cut and night time from the storage cells. The inverter part is assembling in our facility and the panel is purchased from local market.

    Now also, if I will get a chance obliviously prefer for that because I want to be an entrepreneur. I would like to be a “A job creator rather than a job seeker”. 

  14. Daniel
    October 30, 2012

    Wale, everything is planned well and went smoothly for the first 28 months. We got a good business, a set of customers and quality components from the suppliers. Everything went wrong, when China had started dumping low quality products at a through away price to our market. You know majority of peoples are bother about price rather than quality and features. With the other minority, we cannot run a business.

  15. Daniel
    October 30, 2012

    Bolaji, my case is different. Before starting the company I had done a full set of analysis, market study, financial impacts etc with a third party consultant. I had done everything according to the specifications with reasonable price and went smoothly with a rising graph of sales and profits for the first 2 years. I still believes that my product is superior to my competitors, but I cannot sell it for a throw away price like Chinese products because it's a star rated product with QA certificate.

  16. itguyphil
    October 31, 2012

    This is why I've felt the belief is to build a business around the consuer so  much so that they are will ing to pay for the product prior to it being built. Pre-selling allows you to figure out what they want and get funding up front, rather than trying to sell after the product is built.

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