Radio Frequency Identification (RFID) has been around for many years in many forms. An early version was used in World War II to identify an aircraft as friend or foe. RFID has ben used in access control badges for years- it’s likely you have one that allows you to access your office or school buildings. Impinj, my former employer of seven years, is leading the way in modern RFID. Impinj RFID chips have gotten so small and inexpensive-they can be used to track and identify just about everything in our physical world. I have worked on projects tracking everything from live salmon to packaged food to marathon runners.
But how does an impressive technical invention translate into financial success? The answer isn’t terribly clear and Impinj as been working for years to find enough markets and customers. Over time, the efforts have paid off; the company went public in 2016. There are many ways to go about creating a business, but you’re often faced with an initial choice; you either start with a problem that needs a solution or you start on the solution itself. Impinj started with the solution (RFID technology) and has been searching for years to find the appropriate set of problems to solve.
Starting with the solution creates certain challenges: convincing potential customers that your technology will solve their problems and that they should pay money to solve that problem. After leaving Impinj, I took a position at Starbucks. In my early days at Starbucks I put together some demos showing my new company how RFID could help track coffee in the supply chain. They weren’t interested, to say the least. People acknowledged that yes, RFID could probably improve some supply chain efficiencies and save money, but that wasn’t what kept them up at night. The Starbucks teams were much more concerned with locating new coffee farms and strategically buying coffee at the right time of year at advantageous exchange rates. These were not problems that RFID was likely to help with. However, I learned a valuable lesson; just because you think a customer has a problem, doesn’t mean they think they do.
So, does that mean when starting a business, you must start with a problem? It’s probably a good idea, as that means you’re more focused on a specific customer (or type of customer) who has that problem. It means you’re not married to a particular solution or technology. It means that your potential customers already believe they have a problem worth solving. If people know they have a problem, then they’ll pay money to make it go away. There’s a say that “people pay money for medicine, not vitamins,” which implies that if your product is a nice-to-have item rather than something lifesaving, you’ll have an uphill battle.
But what does that mean for a company like Impinj, which was founded by brilliant technologists who patented many key inventions early in the company’s history? Should they have abandoned their efforts, just because they weren’t solving a specific customer need? OF course not- it just changes the way you go about your business. If you give a child a hammer, suddenly everything becomes a nail. Impinj tried using the RFID hammer on many industries with many different problems. Some of them turn out to be valid nails, and some of them turn out to be dead ends. Will Impinj (and the RFID industry more broadly) find enough nails to ensure long-term financial success? Only time will tell.