THE IRISH tech sector may be keen to adopt new approaches to building successful companies that can compete on the global stage but it still lags behind in key areas, a new survey said.

According to the Irish Tech Survey 2012, today’s technology firms are using different approaches to build products, win customers and measure their success than their more traditional counterparts, but companies need to become smarter in the areas of sales and marketing if they want to become globally successful.

The report, which surveyed more than 50 Irish technology firms, found new company leaders were emerging who were using small, cheap and fast experiments to make sure they were building products that customers actually want.

Some 39 per cent of companies involved in the survey said they developed their product due to recognising a need that was not being met in the market.

“Products only become alive when used – if they stay in the lab too long they are dead on arrival,” the report said.

Co-author of the report Paul O’Dea said small start-ups can go global a lot quicker than previously, getting access to international customers through the internet.

New internet start-ups are not waiting for products to be built, he said.

These “fast and cheap” experiments could include setting up a dummy website to see what customers do, Mr O’Dea said.

“There might be no product behind it,” he said. “At a more advanced stage when they have a product and site, they could be tracking metrics to see what the customer goes for.”

Start-ups are using intelligence from their own target market – their customers – to gauge the potential market. The customer is a live measure in a true way, he said.

The survey found that cloud or web-based companies were more likely to use some form of formal method to conduct customer validation before launching products, including market research and focus groups.

Some 42 per cent used informal feedback from clients and prospects, and only 6 per cent of those surveyed used no validation at all to assess how likely it was that customers would buy products and services.

Getting the correct information on potential markets is crucial for firms who need to get sales quickly to deliver the cash to survive.

“These businesses are being built in different ways,” said Mr O’Dea.

Because tracking customer preferences is much more straightforward with internet firms, the tech companies can build customer acquisition quite quickly.

However, with the potential of the online market comes some challenges. Customers are often making the decision on whether they want to buy from a firm or not based on what they see on the web, eliminating the face-to-face element of sales.

“They’re half-way or more down the cycle without human contact,” said Mr O’Dea.

The report noted that some customers never want to interact with a salesperson. As such, companies need to sharpen their online communication, with clear messages and a straightforward buying process.

One issue that the report uncovered was the need to have the appropriate digital marketing skills, managing multiple channels.

The survey found only 64 per cent said marketing was carried out by a senior team, compared with 82 per cent for technology and 89 per cent for sales.

“The role of virtual ‘word of mouth’ and the word of the online influencers rather than the marketing department is key,” the report noted.