Archive for the ‘Product Development’ Category

Thomas Edison vs. Inventoritis: A Heavy-Weight Product Development Match for the Ages

By GSS on June 18, 2007 | Category: Product Development | No Comments

Lightbulb_lighting_2
Inventoritis…  Sounds like Gingivitis.   But without the bad breath.  Or, so I hear.

Generally, one of the most difficult challenges in developing a successful product or business is getting out of our own way.  I struggle with this daily.  I watch others struggle with it daily.  We all do–from corporate innovators to independent inventors.   I am certain that my own success as a business person and product developer is largely impacted by my own ability to train myself to get out of my own way.

How do we get in our own way in the first place?

Peter Paul Roosen and Tatsuya Nakagawa, two product marketing gurus, have co-authored a white paper, Inventoritis Exposed, which gives a name to the phenomenon of getting in our own way when it comes to innovation and new product development.  I previously wrote a blog post on the authors’ concept of "Inventoritis", which they have incorporated into the paper.  In terms of product development, Inventoritis, is a condition that prevents market-driven innovation, or design for the user experience.  Because it’s a challenge, that I believe, one can only control and perhaps eliminate through sustained effort over many years, decades, and perhaps a lifetime, it’s worth continually refreshing my awareness and knowledge of it.  "Inventoritis Exposed" offers an interesting perspective on the issue, by analyzing the methods of America’s most prolific inventor, Thomas Edison, who the authors assert exemplified the optimal path for commercializing innovative products.   

Before reading the paper, I have to admit, i did not know much about Thomas Edison beyond his invention of the light bulb and a few other items (which I am sure I will use today, but cannot name them).  But, Roosen’s and Nakagawa’s interesting stories of Edison (much of which is told through the first hand experience of Henry Ford) and analysis of his methods, create a vision of a person who was adamant about his own process of inventing and entrepreneurship, not just his own ideas and assumptions.  Edison’s most famous quote:

“Genius is one percent inspiration and 99% perspiration. As a result, a genius is often a talented person who has simply done all of his homework.” 

The point that Roosen and Nakagawa make, is that "…all of his homework" does not just entail perfecting the product for perfection’s sake, ego’s sake, or science’s sake.  The authors note:

What is not as well known, perhaps, is that his penchant for invention was rivaled only by his effectiveness as a marketer. Edison was in the habit of working backward from the market and doing whatever was needed to most expeditiously fill what he found to be the real or actual need. He was known to always be actively researching what everyone else was doing and had done. He sometimes bought and, on occasion, stole technology from others.

Few people today know or appreciate that Edison did not invent the light bulb. Joseph Swan was installing them in homes and landmarks in England before Edison’s first successful test was completed on October 21, 1879, when Edison’s carbon filament lamp successfully operated for only 13.5 hours. Additionally, Edison had bought the Canadian and US patent rights filed in 1874 for a carbon filament lamp by a Canadian medical electrician named Henry Woodward and his colleague Mathew Evans. What Edison did was to create the first commercially viable filament lamp which incidentally did not occur until more than six months after Edison filed his patent.

Henry Ford, a big fan and friend of Edison, offers his perspective: 

Not the least among the many remarkable qualities of the Edison mind is its ability constantly to maintain a perspective. He never has any blind enthusiasms.  An inventor frequently wastes his time and his money trying to extend his invention to uses for which it is not at all suitable. Edison has never done this. He rides no hobbies. He views each problem that comes up as a thing of itself, to be solved in exactly the right way. His approach is no more that of an electrician than that of a chemist. His knowledge is so nearly universal that he cannot be classed as an electrician or a chemist. In fact, Mr. Edison cannot be classified. He knows instinctively what things can be used for and what they cannot be used for.

It seems to me, Edison was a master of a process that helped him stay out of his own way.   He did this in terms of his assumptions of how things should be, and let the market guide him in terms of what products  and product features to pursue.  In addition, he was very adept at implementing a rigorous process that led him, technologically and commercially, to exceptional success.

The white paper offers much more.  And I believe the book, "Overcoming Inventoritis", by these authors covering this subject in much more depth has just become available. 

Prototyping Your Product: You Ain’t Seen Nothin’ Yet!

By GSS on June 12, 2007 | Category: Product Development | No Comments

Do we live in an age in which we can draw with a pen, in thin air, an object we would like to create, and have the data captured by a machine and churned out in the form of a 3D prototype?  Or, perhaps we can take a 3D prototype, and just by touching, squeezing, pushing, and pulling on it, we could manipulate and mold the object into the dimensions we want to get a look at, and then change them to something else in seconds?  I am not on drugs.  These possibilities for Rapid Prototyping and Claytronics are beginning to become a reality, as the growth of new technologies is allowing for entirely new ways of creating and interacting with the 3D world.

Take a look at the sketch furniture of Front Design, a design group from Sweden.  They have devised a method of materializing free hand sketches in air by combining two technologies: motion capture and rapid prototyping.  Thus, what one draws in thin air comes out of a rapid prototyping machine hours later as a hard object.  What’s that?  Aunt Mildred will be coming to dinner tomorrow night as well and we need an extra chair?  Ok…let me draw one.  Ikea…watch out. 

Want to take this a step further?  Welcome Claytronics, a synthetic reality project undertaken at Carnegie Mellon University:

The goal of the claytronics project is to
understand and develop the hardware and software neccesary to create a
material which can be programmed to form dynamic three dimensional
shapes which can interact in the physical world and visually take on
an arbitrary appearance.  Claytronics refers to an ensemble of
individual components, called catoms—for claytronic
atoms—that can move in three dimensions (in relation to other catoms),
adhere to other catoms to maintain a 3D shape, and compute state
information (with possible assistance from other catoms in the
ensemble).  Each catom contains a CPU, an energy store, a network
device, a video output device, one or more sensors, a means of
locomotion, and a mechanism for adhering to other catoms.

Front Design’s methods, while currently possible, are not necessarily available to those who don’t have a motion sensor pen and rapid prototyping machine in the garage.  Looks like Ikea is safe for now.  Claytronics, and its various applications, are still a ways out from general use.  Researchers on the project have made noteworthy progress and are confident they will be able to manufacture their clay robots, but aren’t quite sure whether it will be 5 or 20 years before they will accomplish what they hope for.  While these technologies are still largely coming down the pipeline, it’s a sign of prototyping and so much more to come.  The possible applications are endless, but one that jumps right out at me is that companies and designers will be able to move through prototype iterations much more quickly and easily.  The length of time and work involved, for an idea to go from your head to a physical object, will be drastically reduced. 

5 Ways to Boot Strap, Prototype, Market Test, Focus Group, and Product Feature Your Way to Success, or Utter Failure

By GSS on June 4, 2007 | Category: Product Development | No Comments

Mp_burning_money_2
Who says you don’t have enough money to start a business?  Inventors and entrepreneurs:  How much does it cost to start your business?  Develop your product?  Test your product?  Launch your product?  Do you have enough?  Can you do it for less?

One of the number one reasons businesses fail is because they don’t manage their cash flow and costs well.  I am willing to bet that another top reason that people never start the business they always dreamed of, or launch the product  they’ve been fiddling around with for 5 years, is they don’t believe they have enough cash. 

Guy Kawasaki, a blogger/investor/entrepreneur/ tech evangelist, is smashing the belief that launching an internet business requires millions of dollars in venture capital investment.  Check out his latest post, through which we are seeing a live experiment in the launch of the Truemors.com site.  A business/website which he started for $12,107.09.  His monthly breakeven number?  $150.00. 

His point…well, he has many.  One of his points, is to show that without so many of the things we use to believe one needed to launch this kind of business, we can now go for it cheaply and see whether our idea will work in the real world.  It doesn’t matter if his website succeeds or fails.  He’ll either do well, or move onto the next thing quickly without much loss in time and money, and with the confidence that he knows for certain his idea wouldn’t work.

I’m waiting to see the version of this in terms of a consumer product.  The ballgame is a bit different, but could it be done in relative fashion?  Barbara Carey seems to have developed a very strong product development strategy to keep her costs down before she feels good she has a winner.  For those new to the game, here are 5 quick strategies to getting your product as far along as possible without burning a ton of cash:

  • Provisional Patent:  It costs roughly $100.  It gives your intellectual property a degree of protection for up to one year.  That’s a lot of time to develop and test your product to feel good about it before spending a lot of time and money on a full patent. 
  • Build Your Own Prototype:  This might not work in every case.  But, chances are you can start to prototype parts of your product or rough, works-like prototypes of your product with off the shelf parts, a little ingenuity, and elbow grease.  This might be enough to get it front of a test group to start getting input.
  • Test Your Product:  You can put your product, packaging, concept, drawings, anything in front of friends, family, focus groups, shoppers walking out of stores, your barber, and the monkeys at the zoo, to get as much input as possible for free, before you spend more to move your product down the development path.
  • Wait on the Formalities:  In my first business, I learned a ton.  I learned that I didn’t need to go out and spend wads of money on gold-plated business cards, an expensive website (it should look good though), a $5000 logo, my own six figure salary, and any other thing that didn’t directly help me do the most important things of all: develop customers for my product and develop a product for my customers.
  • Don’t Stop Testing:  Did the record skip?  Nope.  Testing again.  Don’t stop.  Ever.  Each testing point is a gate to see if your product passes through and warrants spending more time and money.  It’s a chance to continue innovating and developing a better product for a better market.  Have a question about your product or anything related to it?  Get others’ input by putting it before them.

The monkeys at the zoo are waiting…

Business and Product Strategy – Part 2, The Long Tail

By GSS on May 22, 2007 | Category: Product Development | No Comments

Longtailgraph_3I apologize for putting a graph at the top of this post.  I bet half of you will wince in pain upon seeing that.
But those aren’t just pretty colors; they help me to build on yesterday’s post on strategy and risk. 

Can your business strategy or product development strategy be based on flexibility and variety?  Take a look at HitForge, a new web 2.0 start-up company in Silicon Valley.  I first ran across this company in Business 2.0 magazine, and then on a blog post by David Bayless, of EvergreenIP, a product capitalist company, entitled The Cost of Failure Falling…Success Remains Elusive.  Bayless notes the 80/20 Rule of Long-Tail Economics, which describes
the phenomenon that 80% of the revenues made out there by start=up
businesses seem to come from 20% of the offerings.  You hear this rule in many industries: 20% of the real estate brokers make 80% of the money, 20% of waiters make 80% of the tips, etc.  The point the rule is trying to make is that it’s not a bell curve out there in terms of returns.  It’s a long tail.  In addition to this phenomenon, Bayless notes observations by Guy Kawasaki, a notable Silicon Valley investor and entrepreneur, that the
cost of starting up businesses has fallen dramatically.  Naval Ravikant,
a Silicon Valley investor and entrepreneur, will be testing this model
with his new company HitForge.  Bayless comments:

…the hit-and-miss nature of Web 2.0 companies is not
unique.  The market outcomes of a host of other businesses, including
movies, music, and books are subject to long-tail economics, where a
small number of offerings account for the bulk of revenues…

In fact, research shows that a remarkably broad range of consumer
products, from food to sporting goods, can be similarly described [3].

Secondly, the cost of failure is falling.  As Kawasaki puts it,
 

During the dot-com bubble, you needed $5 million to do stupid ideas.  Now you can do stupid ideas for 12 grand.

The implication for these entrepreneurs is to predict less and experiment more.  To do that, Ravikant has launched Hit Forge:
 

This is like a movie studio.  It’s about milestone-based
development, piloting concepts, access to distribution…The engineers
have the freedom to experiment, but they have 90 days to ship a
product.  The product has to grow organically without any marketing.

  Those that survive get more funding and access to distribution.
 

We are going to build as many as 20 companies a year.  We need to find one hit to succeed.  We can do that.

Is this Michael Raynor’s ideas on prozac?  Or crack?  HitForge might be an extreme test of this model, but Venture Capitalists have been doing this for years.  They always seem like geniuses after Google goes public or YouTube gets bought out, but the fact is that they invested in at least 100 other companies in each of those cases, just to hit upon the big payoff in Google and Youtube.

Perhaps the strategy might be to develop a variety of 10 low-cost
products, test them in various specialty stores to see how they’re
received, take the winners to the tight shelf space in a large
retailer, where they win you more shelf space?

In terms of products and supply, the driver of the long-tail phenomenon is the cost of inventory and distribution.  If these are higher, it only makes sense to stock your hottest selling items.  If these costs are lower, then it is cheaper to offer a greater variety.  Think about limited shelf space.  If a retailer has only 2 spaces for your 8 products, only the 2 hottest selling products will be shelved.   In addition, manufacturing 10 different products is expensive and creates a much more complex and expensive supply chain. 

So how does one capitalize on this strategy?

How Much Are the Strategies Behind Your Business and Products Really Worth?

By GSS on May 21, 2007 | Category: Product Development | 1 Comment

Too interesting to do all in one post.  In the last few months, I’ve been routinely running across this topic in everything from business blogs, conversations with entrepreneurs, to business books.  It’s the topic of business strategy and whether a significant amount of strategic planning for our business, product marketing, product development, etc., as we know it, is really worth a…  I couldn’t do the topic justice in one post without making your eyeballs bleed from gray font.  So this is just the beginning.

A good starting point is this video.  If you can get past the cheesy intro on this short interview with Michael Raynor, author of the The Strategy Paradox: Why Committing to Success Leads to Failure, and questioning why the interviewer’s side of the room looks like it’s midnight and Michael’s side 9am, what Michael explains about business strategy is worth listening to and pondering.

His analysis points to the basic question of risk. How much do we really know?  How certain are we about that which we’re guessing about?  The idea is to embrace the fact that, generally speaking, we don’t know a whole lot about the business environments we face and we can’t be certain of much beyond what we do know, so what good does having a masterful business strategy and executing it perfectly do if the outcome is based on many factors out of our control anyways?

His comments on Microsoft developing multiple strategic options and possible product offerings in the 80′s gives us a great example  of how Microsoft enabled itself to dominate the personal computing software space no matter which direction the market went.  Some companies have hit home runs by coming up with a great strategy and executing it flawlessly.  But the percentage of these is likely to be miniscule in comparison to those companies who have done the same, but failed miserably because the market went an unforeseen direction.  In an age where market shifts are occurring more frequently and quickly than ever, variety of options and flexibility may win supremacy over commitment to a strategy in the early stages of starting your business and getting your product out there.

Does your business strategy allow for flexibility to go the right direction when the market gives you feedback?  When developing your product line, are you creating a variety of products that will test various niches, offer different solutions or combinations to the problem your product resolves, or allows you to push it out through various channels to see where it does well?   

Another good interview with Michael Raynor on this topic can be found at Guy Kawasaki’s popular business blog here.    

Interview With Barbara Carey: A Woman With Something To Teach You About Successful Products and Business

By GSS on April 3, 2007 | Category: Product Development | 1 Comment

Recently, I had the pleasure of talking at length with one of the most successful people I know of when it comes to taking products to market. Barbara Carey is one of a kind.  She is a very charismatic woman and I never knew an interview could be so fun and interesting.  Who knew how important chugging beer and being incorrigible could be to learning how to commercialize a product? 

Barbara spoke to me about how she blossomed from a young woman struggling to get her business going, to a tremendous success as an inventor and entrepreneur.  In the process, she has become a master at taking products to market successfully.  She has commercialized over 100 products.  For anyone interested in building a business or getting their idea or product out there, this woman has something to teach you.  She taught me a lot, and I’m in the business. 

We covered some of the psychological and behavioral aspects involved in getting your product out there, and getting a business going.  But, Barbara also offered great, practical strategies about pricing your product, selling it, and building your business in general.  She’s launching the The Carey Formula, which consists of a book, resources on CDs, and more.  Because the interview had so much useful info, I will post the entire dialogue, split into three parts.  Bottomline, for those interested in getting a product on the market or building your business, this is information that will help you:

Part I
Getting Your Product to Market:  Passion, Persistence, and Perspective

A:  How did you determine what you were going to put into your book?  Was it based on the other kinds of information you already saw out there in other books and programs? 

B:  I didn’t look at what was out there already.  I’ve read a lot of business books and knew that my experience was unique and I wanted to dig deep into my soul and answer the questions that I get whenever I give speeches or people call me up, they say “gee, you’re an overnight success, how did you do it?”  Because when you read about me, typically it’s about one of the successes I’ve had, but there’s a lot that goes on behind the scenes, and I wanted to give them the real story.  The truth is, I’m not an overnight success.  But the trick is that I always knew who I was.  And I really wanted to give my readers an experience.  Right at the beginning of the book, I talk about “the two P’s”, Passion and Persistence; they are common threads throughout the entire book. 

A:  I’ve come across a lot of articles and books about business and successful people and many of them have put forth the common idea that those two things (passion and persistence) are undoubtedly the most important factors that determine success.

B: Absolutely.

A:  It’s one of the softer, fuzzier subjects, which people tend to think of abstractly, but it’s so important.

B:  It’s also important that we, as people, evolve.  Our businesses evolve.  It’s so important as human beings to remember that we have the ability to be open and receive information, learn, and turn on a dime.  This is a huge advantage for a small company.  You don’t have to take your decision through the company’s board of directors.  I call these fax machine decisions.  Sometimes you’re standing around the fax with your co-workers, and a fax comes through, and you have to make a decision.  You have to be nimble and you can when you’re small.  As a small company, you have to use a different set of weaponry, like speed and flexibility, than the big companies. 

A:  Let’s talk about decision-making for a second.  In making a decision on the spot, for someone who is starting out in the process, you never have perfect information and you never have all the information.  So how do you ‘wing it’?  How much do you need to know before you go forward?  And the emotional process that goes along with that?

B:  It’s hard.  You can only make the best decision you can at the time.  I collect as much data/information about that decision as I can.  I might go to people who I respect and bounce ideas off of them.  And finally, I weigh my gut instinct.  You take all of those things into account.  And you also have to know that sometimes, with some issues, you’re gut instinct is not the way to go.  Sometimes, the way I feel people will receive a key message, is not in fact the way the masses do.  So I talk about this in the book—I do a lot of surveys.  Whether you are sending out surveys through friends of friends, or more formally, you have to try and get a feel for the masses.  And, depending on how big the decision is, that’s how much research and thought you put behind it.  I’m consistently asking people questions and for feedback.  That’s a part of my success.  I don’t just charge ahead according to what I think.  But I try to open myself up to receive outside information as much as I can.  You want to learn as much as you can about your customers, end users, key influencers, and stakeholders, in the process.

A:  What would be the different steps someone would take with the Carey Formula—the book, the CDs, where would they start?  Where would they go from there?

B:  First, most companies, large and small, keep this information a secret.  I never had it in my DNA to withhold information.  When I competed in the hair product business, a lot of other inventors would come to me and say “how do I get my hair product to market?”  I would tell them, not only how to do it, but give them a phone number at a particular store and a buyer’s contact info.  I love connecting people like that.

But, my golden rule, is to sell your product first!  There’s a key example in my book, when I was very young, when I learned the power of this as I started my first business, pre-teen years.  It was a social security card business.  I went door-to-door and sold little cards to people with their social security numbers on them.  I sold out fast and when I went back to get my next order, I found out it was going to take 3 weeks.  But, I did have one card left and I used that to go around in the mean time and pre-sell my next order.  It turned out that people were very willing to do this.  Thus, my Carey Formula started at that very young age.  Of course, I didn’t really realize it as a young child.  But, as an adult, when I went to take my first product to market, I did not have the money to purchase my first order of inventory up-front.  So, I remembered my days of pre-selling social security cards based on showing one item that I made. 

I have a funny story.  One secret to my success is called ‘Perspective’.  So there’s Passion, Persistence, and Perspective.  Perspective is about the fact that I’m a thinker.  I constantly think about what I have learned in my life and how I can apply it to what I’m doing now.  When I was 16, I had visions of summers in Santa Cruz—cute boys and suntans were my thing.  But my parents had a hard time keeping me in school because, although I love to learn, I wanted to learn outside the four walls of a classroom.  That summer, my dad told me that I had a lot of potential but I was “incorrigible”.  And I didn’t know exactly what that word meant.  I thought it sounded like it had to do with encouragement.  So I said, “thanks dad”.  Instead of going to Santa Cruz, cute boys and suntans, he sent me to St. Louis, Missouri to baby sit my six little cousins all summer for $1 an hour.  At the time, I didn’t know I could have just as much fun in St. Louis as I could in Santa Cruz. 

The first day I came into the neighborhood, I decided that I was going to meet some friends and went door-to-door and said “Hi, I’m Barbie Kraft.  I’m incorrigible, but I have a lot of potential and I need to learn new behavior.  Do you have any teenage girls here?”  That night I had about nine teenage girls come to my house and sleep over.  We all sat together and talked about our dreams and I said, “you know girls…we’re all the same.  Do you know what you all are?  You’re all incorrigible just like me!”  They asked what the word meant and I told them “It means you have a lot of potential”.  So that summer, we all ran around with these badges of “incorrigibility”. 

I also learned “new behavior”, because that was the summer I learned to chug beer.  We would go to bars and I would approach men and say, “I bet you five dollars I can chug a beer faster than you.”  They took me on, and I beat them.  I thought to myself “this is a great way to make money”.  And, I wanted to make more, so I tried doing it 7 times in one night, but that didn’t end pretty.  So I tried a different approach.  “I bet you fifty dollars I can chug a beer faster than you”.  No one wanted to take me on for fifty dollars.  So I tried again, but with different approaches—test in pennies, spend in dollars, right?  So I said, “hey, I bet you twenty-five dollars I can chug a beer faster than you”, and they took me on.  So it was my very first lesson in price elasticity.  The point is: ‘Perspective’. When I first began selling my Hairagami product, I couldn’t make my commercial work.  I started at $19.95, but it didn’t sell very well.  Then, I remembered my beer chugging days.  Although instinct might tell someone to charge more money for their product because they are not selling enough of them, I realized I needed to sell my product for less money and get our call volume up.  So I charged $14.95, and it took off.  So the summer that I learned “new behavior” provided me an important perspective on how to approach this question that came up with my business.  In the end, everything that you do is the sum total of who you are.  When you are in a hard situation, use your perspective to call upon those key experiences in your life, no matter what they are, to help you understand the situation, make decisions, and go forward. 

A:  How would you deal with fear in those situations, such as approaching men in a bar and challenging them to drinking contests?  Or, in a professional situation, approaching a buyer for a major retail chain that will be key to your product’s success?  How do you deal with the fears that come up in these situations?

B:  I’m just like anyone else and I’ve had many of the same fears as anyone else. My father talked to me at a very early age about fear and we made a deal not to be controlled by it.  Sure, I was a little afraid approaching people, whether to challenge them to chug beers or ask them to place an order for my product, but I realized that I can’t control someone else’s reactions anyways.  I can control the choice to try and approach them and ask for the order or to chug beer. 

A:  It’s amazing how we often spend time concocting fears in our minds and reasons why a person will reject our requests, and we get a completely different reaction from what we expected, when we actually approach them. 

B:  This happens almost 100% of the time.  It’s amazing.  I worry just like anyone else worries, but usually someone’s reaction is a lot different than what I thought it was going to be.

A: And, your intention with the book was to bring these emotional aspects together with all of the tips, strategies, and lessons you’ve learned professionally to create a platform for people to launch from?

B:  It took me 25 years to develop all of these contacts and this story about one girl, who started with nothing and learned how to get where I am now through passion, persistence, and perspective.  I think it’s important to not only hear other people’s stories for motivational purposes, but to provide a roadmap on how to get there.  One of the secrets in the roadmap that I want to share with people is, if you can make one prototype of your product and get an order from that, there are many manufacturers out there that are willing to make that product for you and ship it.  And I’m not talking about a guaranteed sale order, in which your customer can ship any items back to you that don’t sell.  I’m talking about getting a real order and having a great chance of finding a manufacturer who will want to work with you. 

And, you don’t have to go out and get investors or financing.  Let’s talk about that for a second.  There are a lot of entrepreneurs out there who want to be their own boss, but they bring investors in and all of a sudden, they are working for someone else.  Why not be your own boss and have own your company?  And banks, they only want to deal with people who already have money, not with people who need money.  The Carey Formula is for anyone who wants to take a product to market or build a business, but will be specifically beneficial to people who are cutting their teeth in the business with a simple product or idea.  Starting this way is a great way to learn, make money, and then move on to more complex products if you want to. 

Obtaining Cost Estimates for Product Manufacturing

By GSS on March 20, 2007 | Category: Product Development | No Comments

I recently wrote an article for Barbara Carey’s Newsletter for inventors and entrepreneurs about how to obtain accurate cost estimates for the manufacturing of your product.  What do you need to begin this process?  I get this question all the time from clients new to the game, so I thought I would post the article here.

At an early point in the product development process, inventors and product developers need to address the manufacturing issues surrounding their product.  Can I make my product for a cost that is feasible within my business plan?  This is one of the burning questions you will want to address early on, before you invest too heavily in taking your product to market. 

Your production estimates might be fuzzy in the beginning.  You will probably create some form of ‘back-of-the-napkin’ analysis, and look at similar products on the shelf to get an idea of where your product should come in.  A very generic rule of thumb is that a product is marked up four or five times from manufacturer to retail.  If you see a widget selling for $4 on the shelf, you can assume that the hard cost to produce it was about $1. 

As your product progresses through the development cycle, you’ll continue to refine the assumptions that you’ve madeAccurate numbers become much more important at the later stages of the development process.  When you believe you are close to finalizing your design specifications package, it’s a good idea to add some concrete cost information to this analysis by contacting manufacturers to get quotes on your project. 

To do this overseas, you need to realize that effective communication is critical to accuracy and success. Thus, anything that can help you overcome the barriers of language, culture, and distance will help.  Engineering drawings – such as professional, CAD (Computer Aided Design) drawings – are excellent for this.  They convey information in the international language of math, instead of variables such as “very long,” or “deep shade of red.”  If you don’t have access to the services of a professional industrial designer, hand drawings may suffice for initial quotation purposes, particularly if the product is simple and you include basic dimensions.

Another great method for conveying information about your product is sharing, under a confidentiality agreement, an actual prototype or sample with the manufacturer.  An incredible amount of information can be deduced from a physical representation in one’s hand.  Color, finish, materials, parts, mechanics, etc., can all be quickly ascertained via a sample of your product. 

Finally, if you don’t have these things in your quiver just yet, pictures and descriptions can be helpful.  A picture can convey numerous qualities in similar fashion to samples.  And descriptions of how the product functions, what conditions it will need to withstand, and such, can help an engineer understand what is going to be needed to manufacture your product correctly. 

Product Design for Manufacturing

By GSS on March 3, 2007 | Category: Product Development | No Comments

Product design, a fun but never easy task.  There are so many things to miss the mark on.  Does my product stand out?  Does it offer too few or too many features?  Does it offer the right features?  Can I  manufacture this product at a profitable price point? 

The Michael on Product Management and Marketing blog has a good article on 5 Tips for Kick-Butt Design.  Although his blog is primarily focused on high tech and software products, many of the central tenets are the same for hard consumer products.  He recommends:

  1. Start with User Interface
  2. Work with user Interface Designers
  3. Pay Attention to Details
  4. Simpler is Better
  5. Be Brave

To add to the difficulty in successfully accomplishing these five items (Michael notes the ease with which these are understood and the disturbing regularity of general neglect for them), it’s a good idea to begin pondering how all of these things  will play out in a manufacturing sense, or design for manufacturing.  For whatever reason, the realities of manufacturing are often brought in late to the equation and can force a product development team to go back and start again, force undesirable tradeoff decisions, or in a worst case scenario, scrap their efforts.

A product development group recently came to us to get some preliminary costing for a large toy product they were working on.  Thankfully, I don’t think they had gotten too far down the path when they began to explore the cost issues.  We didn’t have much information to go on, but the pricing that came back from overseas vendors was way out of the ballpark in regards to their targets.  We’ve got some tricks up our sleeves to get the costs down.  Looking at alternative fabrication processes, alternative materials, feature tradeoffs, and good ol’ negotiation tactics are all worth exploring.  It’s going to be tough, but they’re not out of the game yet.   

The point is, those 5 tips in product development are all great goals, just don’t forget you have to be able to make the thing at a reasonable cost.  And if you can’t, explore what changes you might be able to make to produce it at a reasonable cost.  And if can’t do that, better to find out earlier rather than later.
 

Six Reasons Why Prototyping Pays

By GSS on February 10, 2007 | Category: Product Development | No Comments

Prototyping in your product development process pays.  I can’t stress the importance of prototyping your product.  If you are a first-time inventor, you should try and create a prototype yourself.  If off-the-shelf products and components are available–rock ‘n’ roll, you could be in business cheaply and in no time.  If you are going to work with a manufacturer and it’s cost effective, having them create a prototype of your product can be very helpful in assuring that you get 10,000 units of what you paid for in a production order.

The Wikipedia Entry on Prototyping:

Prototyping is the process of quickly putting together a working model (a prototype)
in order to test various aspects of a design, illustrate ideas or
features and gather early user feedback. Prototyping is often treated
as an integral part of the system design,
where each prototype is influenced by the performance of previous
designs, in this way problems or deficiencies in design can be
corrected. When the prototype is sufficiently refined and meets the
functionality, robustness, manufacturability and other design goals,
the product is ready for production.
 

Here’s our take on what you can get out of creating prototypes of your product:

1)  Marketing Research:  Having something to place in your customers’ hands allows them to physically interact with the product and opens a whole new realm of observation and insight possibilities into assessing and answering their needs better.

2)  Design and Engineering Spec Verification:  Having an overseas manufacturer create and send you a prototype based on their understanding of the product allows you to quickly assess whether they really understand the product.  You would be amazed at what can come back from a manufacturer after you think everything has been clearly explained.

3)  Quality Control:  A prototype from a manufacturer is going to give you an idea of the kind of quality of work that they do.  Typically, prototypes are not up to the quality level that your actual product will be.  They often are made from different materials, might be hand-poured, and might not perform all of the functions of the actual product.  That is ok.  What you want to see is how much effort the manufacturer puts into it in the first place–the attention to detail.

4)  Packaging:  You can photograph a good ‘looks-like’ prototype to use in your packaging, website, or other promotional materials.

5)  Communication:  Submitting an existing prototype to a manufacturer allows you to convey to them an enormous wealth of information.  They can hold the product in their hands, feel the finish, understand the working parts and requirements, sniff the glue, see the colors, etc.  This will help you circumvent the language barrier as they will be able to see for themselves.  This is extremely helpful.

6)  Attracting Investors and/or Selling Your Product:  If you are looking for investors for your company or product, or if you plan on using sales reps, or contracting with distributors or retailers, a prototype is an excellent way to sell your product.  It shows them that the design is almost or completely finished, allows them to better understand the value of your product, and indicates a seriousness about taking the product to market.

For one step in the product development process (which may be repeated many times), that’s a lot of value in many important areas of your business.   

Inventoritis: The Surefire Way to Decrease Profits

By GSS on February 2, 2007 | Category: Product Development | No Comments

I recently had a conversation with Tatsuya Nakagawa, author of the Product Life blog and CEO of Atomica Creative, a Vancouver based product marketing company, about the syndrome he likes to refer to as "Inventoritis".  He defines this as:

Inventoritis n. Any of a group of disorders usually
characterized by withdrawal from reality, illogical patterns of
thinking, paranoia, delusions and hallucinations accompanied in many
cases by a portfolio containing granted patent applications and other
forms of intellectual property including trade secrets. Inventoritis is
associated with depressed or non-existent product sales and defects in
marketing programs and is caused by excessive reliance on the assumed
idea that one’s product or idea is an excellent one.

Taken from a product development and manufacturing perspective, I watch companies and inventors make their way through the trade-off process, in which they select their optimal combinations of features, costs, materials, and so forth for a product.  We’ve recently worked on a product requiring a rather simple component–as simple and as common as a button for a TV remote product or a shoulder strap for a carrying case.  With a common component like this, it’s probably a good idea to see if one is already being produced out there that might fit with what you had in mind.  Avoid the need to spend thousands on tooling for a new component for your product!  Take that money and put it in marketing, or keep it as profit, or put it all on Black in the nearest casino.  Why design and build a new TV button? 

We sourced a nice alternative component, but the specs weren’t quite a match (slightly wider than needed).  Rather than modify the designs for this (which would only have been an aesthetic modification), the client is still interested in tooling to maintain exactly what was envisioned.  This is where inventoritis and its evil cousin ‘designeritis’ smack into reality.  Multiply this approach a few times within one product development process and your looking at a surefire way to decrease your profits.

I say let it ride on Black…

 

Testimonials

“Global Sourcing Specialists’ services have simultaneously helped us reduce costs, improve efficiency, and expand our presence in the market.”
by Laine Caspi President, Parents of Invention