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How to monetize technology through tech startups? The answer will surprise you

During childhood kids learn to build block constructions. At first glance it may seem a mere kids’ play, but it actually entails a lot more: it gives us a deeper sense of curiosity and achievement, it helps us develop our social skills, and it also teaches us how to create a solid base so that our construction does not collapse.

As kids become adults, they may found companies, and the building-blocks play becomes a principle applicable to their businesses since they need to know which elements have to be on top and which ones have to be the basis of the company so that it does not collapse. We can think of the popular PPP framework also in this way, as it encompasses three core elements to boost a business: People, Product, and Profit, which must be adequately combined, connected and established.

The most important lesson of this framework is that the foundation for all solid businesses is a great team, however, in practice, not all companies follow this line.

Alternative constructions

The PPP framework also provides one of the best approaches to technology monetization. While tech founders try to monetize their new technology-based products and innovation-driven services through startup businesses, they tend to have a very product-focused strategy. Tech founders spend endless time in defining features, product journeys, and developing the technology. However, in not so many cases, they start by creating the right team since the product is their main focus.

The most radical view of the PPP process for a tech founder would be the opposite, that is, to start first with no product in mind but define the right team and, only then, start working on the product. Most tech founders would be really surprised when reading about this way of entrepreneurship, but some founders do follow this line.

Although these two alternative constructions may seem efficient for some companies, there should be a balance regarding the PPP process: People, Product and Profits are core elements, but so are the order and the importance given to each one of them.

People

Image by StockSnap in Pixabay 

When founding a company, it is essential to have the right team, so if we follow the block-construction play metaphor, this element would be our base, that is, the pillar that must prevent our company from failing and thus the first thing we should take into account.

The well-known metaphor about the sinking ship is very often used to describe how important cooperation and collaboration is. However, rather than thinking of a crew that struggles to keep the boat afloat, we could conceive it as a match where every player counts. Business is not an individual sport, but a team sport in which every employee has his or her own role, and the leader has to be able to provide guidance and support to make them feel part of a common project.

For this reason, relationships are indispensable elements that may either make our company fall apart or lead our business to success. Only people have the power to go one way or the other, and the stronger that relationship is, the more committed the team will be to join forces to boost the company.

Product

After having explained why every company needs people, we should focus on the next question: for what?

Well, to sell a product, which is the element that helps the company make money. According to our building-blocks metaphor, the product would correspond to the middle part of our construction, that is, the next floor we can build on top of our solid base that, in turn, will allow for the construction of the top part.

But to achieve this, not only do companies need to have a good product, but also the right marketing strategies to sell it, including pricing, packaging, sizing and targeting. All these elements have to be balanced and should make the product look special and unique, as well as affordable for the targeted customers. If these requirements are fulfilled, then our construction will acquire a new floor that will reap the benefits sowed by the other two.

Profits

Finally, after having built the right team and after having developed the right product, come the profits. Of course, this last floor is absolutely dependent on the other two, so the more solid the first are, the greater profits we will have.

Most of the time earning profits is the main goal of a company, given that it is what allows the company to grow and survive, but it also brings the opportunity to invest in improvements, for instance, in new products, services or employees. This is a circular idea, since workers and products yield benefits that founders can use to invest in them, just as sowing seeds gives you fruit from which, in turn, you can extract more seeds to sow. And in this way, the harvest will not stop growing and will bear better and better fruit.

But in addition, profits are also a reliable indicator that the company is doing well. If the profits earned are high, it would mean that the workforce is doing a good job and that the product meets the needs of the customer, or just the opposite if not.

And the order matters!

As we have seen through this article, these three elements are closely interrelated; people make a good product possible, and a good product leads to profits for the company. That is why, in business terms, success is spelled with three Ps: one for People, one for Product, and another one for Profit, but always start focusing on People, not on Profits!

By Sara Gavidia

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