strategyWe are building a tech company building 3D printer technology.
My colleagues develop the product and I am developing the strategy and business plan. My co-founders and I had a few discussions about the strategy. We could build a print head which is the distinguishing feature of the printer or we could build an entire printer.
The key difference is this: If we just build a part we would sell the print heads to businesses who then build printers with it. In the other scenario we would sell directly to the end consumers or to distributors.
Now the question: What do you think is the best way to go for it? How does the marketing and sales strategy differ in the two cases. What about profitability? I think one could sell the end product at a higher margin then just the head to businesses.
It’s hard to answer without knowing what your tech does differently from other options in the market, but here are a few pointers:
First off, note that 3D printers are a very high growth market. It might not be anything comparable with the www sector in the late 1990s but the growth trend is strong enough that you should be fine picking either option - provided, of course, that you don’t mismanage yourself to death.
It’s not clearcut which of the two options will be most profitable. Don’t delude yourself by thinking a larger sales figure automatically means a more profitable business. Being a mere supplier of parts (the 3D printer head) is a much simpler business. When you factor in cost of sales and cost of providing proper support, the simpler business might turn out to be more profitable. (Give the maths your best shot if you haven’t done so already.)
Interacting directly with end-users has both pros and cons. The main benefit is it’s easier to get to know client needs and client feedback first hand - which is really priceless. But as already noted, selling to and providing support to a larger audience is much harder.
Probe into whether it might make sense to start out as a print head supplier later expand into building printers. If you go down that road, note that your initial printer maker client base will hate you when you start competing with them. They’re a good chance they’ll dump you at the first opportunity when you make your final move.
Conversely, not competing with your printer maker client base carries a similar type of risk: if you’re one of many 3D print head suppliers, you might get dumped at a moment’s notice by clients if a new kid on the block shows up with better/cheaper tech.
Lastly, I’d stress the high costs involved in going full steam ahead into the mainstream market, particularly if you go in there with a finalized printer. You’re not going to get market share overnight. You’re going to need to heavily invest in marketing and sales in order to get would-be users to use your printers or print heads. You’ll have a much easier time entering the market through specialized niches.
Expanding on that last remark, tap into the domain knowledge of your team. Presumably at least one of the founders is over 30 and has reasonably strong understanding of what typical problems a specific industry faces. (If not, I’d highly recommend that you expand your founding team.) The value proposition will then be closer to “the perfect printer (or print head) for X” - which is a lot simpler to market.
As to your headline question (“how to determine key customers?”), ideal customers are good customers that send referrals. Let this sink in a bit, because it should guide how you’ll be marketing your product.
PS: My email is in my profile if you’d like to hire someone to help you iron out your business strategy.
intersting question.
First of all, If you are selling just printer heads - then it is a B2B model and if you are selling printer itself - then it is B2C model.
What is the best way to go forward?
B2B : It works by numbers. I.E how many business are there that are willingly to buy printer heads and at what cost. Do remember for B2B, your profit margin can be (hugly) different from B2C. Business can definetly have their own profit margin. In that case, you can investigate, and find a strategy* to attract their customers to your product( if you choose to do B2C)
*Find a strategy: Find out whats the average rate the businesses are selling product to customer and then find the cost behind that product. You will be able to gauge the profit margin. And if you can sell the product, a better one, with similiar rates, then choose to go B2C.
B2C: Here customer service should be the priority especially when it comes to selling a technological product.
B2B less bussiness means less people to tackle compared to B2C. B2B are usually the most successful as they dont do much research however for B2C you need to take care of people needs.
In your case, I will go with B2B.
Why? Because 3D printers have very sellective market. the businesses already have userbase. So why not just sell it to businesses!
It is a personal view.
Hope this helps.
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