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Rice University researcher discovers what makes a tech product stand out in a crowd

Turns out, timing is everything when launching a new tech product, this reacher found for Rice Business Wisdom. rawpixel.com /Pexels

From smart phones to video games to virtual reality toys, new products roll forward as relentlessly as the tides. So what, and how, should you tell consumers about your product to avoid being swept away in a sea of similar wares?

To answer this question, Rice Business professor Amit Pazgal and colleague Yuanfang Lin of Conestoga College dove into the particulars of how companies differentiate their products by informing consumers about a new product's quality.

The rush of new products, they note, is particularly intense in technology, where innovations are constant — which means consumers constantly need information about them. Traditionally, tech companies make the case for their products using advertising, free sample, product trials and splashy product demonstrations. (See your local Apple Store).

But how does a consumer's wish for information interact with their ultimate buying decision?

Timing, Pazgal and Lin found, plays a powerful role in the type of information that best influences consumers. Suppose, for example, Firm 1 offers a new product, say a smartphone with innovative features. This makes Firm 1 a pioneer. For a certain golden period, Firm 1 might hold a monopoly in the market, since there's simply no other smartphone like theirs. This is the moment, the researchers say, to offer consumers information that reveals the product's true quality and uniqueness. Because no similar product is out there, Firm 1 has the power to establish the parameters for judging its invention.

Inevitably, of course, another company (call it Firm 2) will come up with something comparable. Thanks to the heavy lifting in innovation by Firm 1, Firm 2 has the luxury to create a phone of equal or greater quality. And this is when the tide starts to turn. One might assume Firm 2 would just inform consumers of the superior quality of its product. But, surprisingly, Pazgal and Lin found that in most cases Firm 2 will instead focus on educating consumers about their preference for quality — in effect, leaving it up to the buyer to decide which of the two phones they really wants.

However, if another firm emerges with a similar product of lesser quality, its marketing will likely take yet another turn. Instead of trying to claim better quality, late entry companies offering an inferior product typically admit outright that their product isn't as well made as other versions.

That's because such firms calculate that if customers discover this themselves, they'll react badly. By telling the truth and pricing appropriately, a firm can find a calm stretch of water elsewhere in the market, someplace where it's not clashing directly with the earlier, higher quality products.

Whether it's Alexa, a smart TV or a virtual reality game, Pazgal and Lin explain, when a product enters the market for the first time, consumers need to be shown how it works. When a second product in the same line is introduced by a different company, the marketing task changes: it's now more important to show consumers how to identify a quality product, and then let them choose for themselves.

Any time a company launches a device or service into the world, in other words, it needs to trust consumers' ability to learn — and not drown them with too much information. Informed what good quality looks like, Pazgal and Lin conclude, consumers will swim on their own to the item they truly want.

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This article originally appeared on Rice Business Wisdom.

Amit Pazgal is Friedkin Chair in Management and Professor of Marketing and Operations Management at Jones Graduate School of Business at Rice University.

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Building Houston

 
 

The latest Houston innovation news includes a name for the burgeoning Texas A&M University campus in the Texas Medical Center. Photo courtesy of TAMU

Houston's innovation ecosystem has been booming with news, and it's likely some might have fallen through the cracks. From a Texas university naming its burgeoning new campus to a Houston SaaS startup with fresh funds, here are some short stories in Houston innovation.

ThoughtTrace raises $10M series B

ThoughtTrace has received investment from Chevron Technology Ventures. Photo via thoughttrace.com

ThoughtTrace Inc., a Houston-based software-as-a-service startup closed a $10 million series B round led by Canadian venture capital fund McRock Capital with contribution from Houston-based Chevron Technology Ventures.

"Chevron Technology Ventures (CTV) pursues externally-developed technologies and new business solutions that have the potential to enhance the way Chevron produces and delivers affordable, reliable and ever-cleaner energy," says Barbara Burger, president of CTV, in a release. "ThoughtTrace fits that mandate with the potential to automate the complex, time-consuming, and document-intensive workflows required for our ongoing business operations."

ThoughtTrace's software quickly analyzes documents and contracts and produces results at a fraction of the cost and time of traditional methods. With the fundraising deal, Scott MacDonald, McRock's co-founder and managing partner, will join ThoughtTrace's Board of Directors.

"We are extraordinarily excited to have both McRock and Chevron join the team. McRock brings a great background in the industrial space, which we see as a great fit. In the case of Chevron, they went from being a new customer in 2019 to an investor in 2020," says Nick Vandivere, ThoughtTrace CEO, in a release.

"With the new capital raise, ThoughtTrace will accelerate its investment in creating AI with unparalleled speed and accuracy, grow strategic partnerships and platform integrations, and add to its existing team of talented professionals, all of which will bring further value to the growing ThoughtTrace customer-base," Vandivere continues.

Texas A&M names its Texas Medical Center campus

The new campus will be called Texas A&M Innovation Plaza. Photo courtesy of Texas A&M University System

After announcing its plans for a $546 million medical complex in Houston's Texas Medical Center in February, Texas A&M University has released the name of the 5-acre campus rising at the intersection of Holcombe Boulevard and Main Street: Texas A&M Innovation Plaza.

The project will be completed in phases. The first phase, which will open later this year, is a renovation of an 18-floor building at 1020 Holcombe Blvd., which will to be the new home for EnMed, a dual degree program that produces both a master's in engineering and a medical degree.

"EnMed is just the first example of innovation that Texas A&M System intends to bring to the Texas A&M Innovation Plaza," says Chancellor John Sharp in a news release. "We are excited to have such a visible location in the Texas Medical Center."

Rice Business Plan Competition lays out virtual plans

The competition must go on. Photo via rbpc.rice.edu

This year's Rice Business Plan Competition, which was planned for March 26 to 28, was canceled due to COVID-19, but the Rice Alliance for Technology and Entrepreneurship has decided to offer up an alternative: A virtual RBPC. Forty two student teams will compete over three virtual events.

  • Elevator Pitch Competition on June 17 (Open to the public): Each team will deliver 60-second pitches.
  • Round 1 on June 18 (Open to startups and judges only ): Each team will deliver 10-minutes to pitch to a panel of judges followed by Q&A.
  • Live finals on June 19 (open to the public): The seven finalists will pitch to the judges, and following a round of questions from judges, the winners and prizes will be announced.

Two health care educational institutions team up for new program

Xavier University and Baylor College of Medicine have launched a collaborative medical track. Photo by Dwight C. Andrews/Greater Houston Convention and Visitors Bureau

Louisiana's Xavier University and Baylor College of Medicine in Houston have joined forces to allow Xavier students a smooth transition into Baylor's graduate programs. Xavier students, including traditionally underrepresented minorities — according to a press release — will have the opportunity to apply for the program in November. Three students will be selected for the program, which facilitates acceptance into the medical school.

"Our commitment at Baylor College of Medicine to diversity and inclusion creates the best environment for success across our mission areas of healthcare, research, education and community outreach," says Dr. Paul Klotman, president, CEO and executive dean of Baylor College of Medicine, in the release. "This important collaboration with Xavier University will strengthen this commitment, and I look forward to welcoming students from this new partnership into the Baylor family."

Klotman continues to express how inclusiveness is a priority for BCM and for this partnership.

"We live in a world where healthcare is changing and evolving," says Dr. Anne McCall, provost and senior vice president for Academic Affairs at Xavier, in the release. "This partnership will further equip our students with the diverse tools and training that they'll need to foster equity in the medical field and compete on an international level."

University of Houston begins offering virtual tours for perspective students

Potential UH Cougars can get the 411 on campus via a virtual tour tool. Photo via uh.edu

Before COVID-19 sent everyone home and canceled gatherings, classes, and events across the world, the University of Houston was already working on a way for potential students to tour and learn more about the campus. Now, in light of the pandemic, UH has released this virtual tour offering complete with live interaction from UH student ambassadors.

"I'm really excited about the live component we just added because prospective students can ask questions just like during a face-to-face campus tour and that interaction is invaluable," says Mardell Maxwell, executive director of UH Admissions, in a release. "UH is so committed to access, and we see this as a great opportunity not only for students in Houston and Texas, but for those coming from out of state. We are opening up access to campus across the world."

Anyone can sign up for a tour online through the university's website.

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