Every day, people come up with new ideas. Sometimes small, but every now and then, such an idea concerns something extremely innovative that can be developed into a radically new product or service: a new product or service that has never been seen before, but that is exciting and may even create a whole new product category or market. Such a new product or service represents a market opportunity that may become a financial success for the entrepreneur who came up with the idea and decided to develop it into a business. While new products are important, the trend of digitalisation and rise of the Internet of Things (IoT) have stimulated interest in and opportunities for developing smart products and their related services. Consisting of a combination of hardware and software, these products involve product-service systems that are often accompanied by performance contracts or subscription services and can be customised and optimised based on data collected across customers and use situations. Examples are inner-city mobility solutions, animal health monitoring solutions, and smart doorbells. Consequently, complexity increases and the distinction between products and services blurs.
Entrepreneurs are people who act on a perceived market opportunity. They develop the opportunity into a business by creating a new product or service for a group of customers not served well by existing alternatives in the market. They are aware of the uncertainty but willing to take the financial risk involved. They often feel the need, or even the urge, to pursue their luck and build their own businesses.
Many entrepreneurs aim to improve existing products and compete in existing markets. Their markets involve familiar products that are clearly delineated. Consequently, these new entrepreneurs know who their customers and competitors are. They can rely on traditional marketing, which focuses on identifying and targeting a particular customer segment and positioning a product to address this segment’s stated (or latent) needs to grow sales. Its systematic and goal-oriented approach can help the nascent entrepreneur specify the features of the product or service, develop a pricing strategy, and create the right message and adequate promotional support.
In contrast, people with radically new ideas based on new technology are better defined as (high-)tech entrepreneurs. Based on new technology, their application often redefines existing markets by creating a new or altering existing product categories (e.g., action cameras, electrical and hydrogen cars, smart refrigerators or doorbells, fitness gadgets and Apps, and customised 3D-printed shoes). These entrepreneurs generally are engineers, data analysts or technology enthusiasts who have developed something unique that no one has seen before or that people have only dreamed about. They see the potential of their idea and confidently go about making a business out of it, even when first customers’ reactions are sceptical. However, particularly if the new concepts they come up with are new for the market, convincing prospects to become buyers can prove extremely difficult.