EdgeCraft: Take Brainstorming to New…Edges

By GSS on January 3, 2007 | Category: Product Development | Comments Off

Seth Godin writes one of the most consistently insightful blogs on marketing and the way ideas spread. I am continually impressed by his ability to take my thinking in new directions. An excerpt from his book, "Free Prize Inside" was published on Fast Company’s website.

In it, he describes a process called "EdgeCraft", a method of overcoming brainstorming sessions which yield little. The process involves taking your product through small innovations to the edges of what exists out in the marketplace.

The free prize is the element that transcends the utility of the
original idea and adds a special, unique element worthy of more money
and notice.

The way to find these ideas is what I call "edgecraft." It is a
methodical, measurable process that allows individuals and teams to
identify inexorably the soft innovations that live on the edges. It can
be done quickly or over long periods of time. And you can even do it by
yourself (I do my edgecraft in the shower. It has the added benefit of
dramatically increasing personal hygiene).

Edgecraft is a straightforward process:

Find an edge–a free prize that has been shown to make a product or service (in someone else’s industry) remarkable.

Go all the way to that edge–as far from the center as the consumers you are trying to reach dare you to go.

Moving a little is expensive and useless. Moving a lot is actually
cheaper in the long run and loaded with wonderful possibilities. It’s
easy (but pointless) to open your store another 30 minutes a day. It’s
more difficult (but possibly a fantastic strategy) to open your store
24 hours a day. Little changes cost you. Big changes benefit you by
changing the game, but only if you go first.

Brainstorming might create the occasional breakthrough, but
edgecraft can inexpensively and quickly churn out lots of ideas–good
ideas and sometimes great ideas. Ideas you can rapidly implement. If
people aren’t blown away, they won’t talk about it. If they don’t talk
about it, then it doesn’t spread fast enough to help you grow.

There are hundreds of available edges–things you can add to,
subtract from, or do to your product or service.

I found this approach to be a wonderful break from the traditional product development step of "brainstorming" ideas. Typically, analyses of possible product features consist of small feature developments in different directions. This is very common with an inventor or small company building a business off of one product, as they want their ‘product benefits’ list to be as long as possible. I’ve witnessed companies try to add features to their products with the hope that the product will serve a different, useful purpose after it breaks. While this is interesting from a recycling perspective, if it’s not the top one or two selling points of your product, it will probably only serve to detract from the top selling points. Why not make a more lasting impression by taking the top 1 or 2 selling points all the way to edge with the hopes of giving people something that truly stands out?

Engineers in China: Reality vs. Sensationalism

By GSS on January 2, 2007 | Category: News | Comments Off

Despite my experiences overseas, I have fallen prey to China-mania
factoids on occasion. I thought the media had moved on from the competition issues between Chinese and US engineers, but I still
hear questions and comments whenever China comes up in conversation and
continue to explain that

the swelling stats of new Chinese engineers are misleading
foreign companies operating in China
are likely to have very different experiences depending on a number of
factors, R&D included.

China Law Blog wrote a post about an article published in the Wall Street Journal today, entitled "Innovation, China Style". The author, Thomas Hout of Boston Consulting Group’s HK office, writes about the challenges China faces in trying to build an innovation economy based on world-class R&D. It’s nice to see the mainstream media work to rein in a big, China-mania factoid that has been haunting policymakers, businesses, engineers, and your average American (maybe this last one is too optimistic) for the last few years. It has been reported by both Chinese and US organizations that anywhere
from 250,000 to 600,000 engineers are graduating from China’s
universities per year. This number compares to our graduation of
approximately 70,000 to 130,000 per year. Business publications,
newspapers, and books have highlighted this six-digit number repeatedly for several years as evidence of China’s emerging capabilities
and imminent surge onto the world stage as a leading engineering and R&D resource.

As usual, there is more to the story behind the stats of new engineers in China. A few observations:

the grand sum of 250,000+ graduates accounts for engineers of all kinds—civil, software, mechanical, electrical, and so on. Many of them are civil and mechanical engineers who will spend a great deal of time in China’s interior and western regions building infrastructure.

Although multinational corporations have been able to attract and retain the best in a one billion population—making for world-class talent, in my experience, the same cannot be assumed of the vast majority of Chinese firms. From a ground level perspective, I’ve witnessed many Chinese firms hurting from an inability to find and keep good engineering talent.

I am not alone. I recently listened to a panel of speakers at the Asia America Multi-Technology Association’s
China Connect Conference, and listened to similar human resources woes
of middle-sized US firms setting up shop and operating in China.

One particular example that comes to mind is my experience with a trade company in Shenzhen this year. The company spent months advertising for new engineers with no results. They had serious difficulties finding solid engineers, and had even more difficulty keeping them in the organization for an extended period of time. The engineers we did work with were typically young and were often lured away by other companies offering more ‘lucrative’ opportunities. Some projects proceeded smoothly. With others, it seemed that progress was impossible without routine supervision. We might spend three hours in one sitting, communicating the details of a project, after which we felt confident about the progress that should result. Upon following up the next day, we’d find our project stood in line behind three others. In the end, we found that it was very difficult to predict how quickly progress on a given project could be made, particularly if we weren’t there in person to prod people along. Having this kind of transparency into a company’s HR situation is very helpful in situations like this, because we can always pull and go to another vendor if we know what we’re up against beforehand. But it’s also very time intensive for the already-stretched smaller organization.

The simple fact is that even though hundreds of thousands of engineers are graduating every year, attracting and retaining solid engineering talent somehow continues to be a challenge for many US and Chinese firms in China. This reality-check isn’t meant to dissuade you from enlisting the help of Chinese engineers, as the benefits of working with the right organizations that manage to keep a sufficient number of qualified engineers in their ranks are many. Instead, this sobering dose of reality is meant to illuminate and pull back into focus some of the fear, protectionism, and irrational exuberance that big, hairy, six-digit numbers can evoke. Smaller companies are advised to get a handle on the engineering department of their overseas partners. And, if you’re an engineer in the U.S. and you’re worried, don’t be too alarmed by all the hype. Do continue your education, job responsibilities, and growing sense of innovation.

Offshore Sourcing: An Ever-Shifting Landscape, Part I

By GSS on December 30, 2006 | Category: Product Sourcing and Strategy | Comments Off

Sourcing is a fun business because it is constantly evolving. Developing new products abroad requires keeping your fingers on the pulse of a number of issues and developments, both short term and long term, taking place in many different countries. On the ground level, it’s important to know that there is a difference between a company that produces a good product for the domestic market and a company that is prepared to export a product to foreign markets. From a macro perspective, there is a difference between countries and regions that are a bit premature for stable, cost-effective sourcing operations and those that are mature. The more you’ll be investing into working in a country, the more in-depth your investigation ought to be. Consider just a few of the macro-forces at work that shape who is doing what, where, how, and why:

trade relations
economic development
government regulations
business trends
commodity prices
technology
culture

Trade Relations:

Trade relations between the United States and a given country can have a substantial impact on long term sourcing strategy. Vietnam will continue to become an attractive destination to do business, particularly after their admission into the WTO. If you are having trouble sleeping at night, visit the WTO page regarding Vietnam’s accession, and you can download and view three reports, hundreds of pages long, listing Vietnam’s commitments and schedules for tariff reductions, subsidy ceilings, etc. All these items entail the reduction of trade barriers in both goods and services between our countries, making Vietnam an increasingly attractive place for foreign companies to do business.

Take the apparel industry for example, garments and textiles will have some of the largest reductions, as governement subsidies in this sector will be eliminated. One of the biggest export earners for Vietnam, the textile and garment industry will no longer be subject to quotas from its largest customer, the United States, as well as other countries. The U.S. will carefully monitor the effects of this, but taken in conjunction with the safeguard quota schedule imposed on textiles imported from China, Vietnam is already reaping the benefits. Check out this article by Just-Style, an organization that keeps tabs on the apparel trade for more info. The article points out the increased business Vietnam and other developing countries have enjoyed because of the quotas imposed on China, but also notes that the long-term effects are still up in the air due to the fact that the US’s current quota schedule for China will end in 2008.

What are the implications for an overseas sourcing strategy? Well, the most obvious is that it’s important to watch the consequential developments closely. The political climates in Washington and Beijing and the dialogue between them will be very important in what happens over the next 3-5 years. But what can be done aside from just watching and reacting? Major retailers, who in the past have had containers of apparel goods sit idle for over 6 months because of quotas, don’t want to get caught again with their pants down…in a customs warehouse (I couldn’t help myself). Thus, many are seeking more diversified sourcing strategies and set up supplier networks in multiple countries. Even though keeping abreast of trade relations and trends is important, as trade agreements flourish in a spaghetti bowl fashion, multiple-country sourcing strategies will become more popular as risk mitigation strategies. It’s very difficult to predict what is going to happen. There will be a point where your small business will have grown to handle it’s supply chain within the first country it has begun. Once you have stabilized your operations there, this will be a good point to begin investigating what possibilities are out there in other countries. If you do begin production in another country, your risk will be spread and your chances of absorbing damaging trade policies will be less.

Working with Independent Sales Reps

By GSS on December 26, 2006 | Category: Product Marketing | Comments Off

We get a lot of questions about finding and partnering with the right ISRs (independent sales reps). George Krall, National Sales Manager for Regal Lager/Baby Bjorn, a distributor for the juvenile products industry, has written a great article on what’s involved in a strong working relationship with an ISR (posted in Baby Shop Magazine). You can quickly refresh yourself or learn about your responsibilities and those of the rep, and what are the most important elements in creating a successful sales team for your product. It’s not surprising that Mr. Krall finds that "the key factor in the success of a company/rep relationship is founded in the selection process". Why would you ever entrust the sales of your product or the production of your product to people or companies that you haven’t thoroughly investigated and believe to be the right provider of each?

Launching Your Product: Go Big or Go Home

By GSS on December 15, 2006 | Category: Product Marketing | Comments Off

The Marketing Profs, a great website which puts out bite-sized tips on marketing your business, put out a good article reminding us not to let ourselves think the job is done when the product is on the boat and will soon be in customers’ hands. The article, Launching Your Product: Seven Marketing ‘Musts’, gives some great ideas and inspiration for the ever-critical marketing aspects of launching your product. The steps are (my comments in parenthesis):

1) Secure a great name
2) Nail down the "what is it?" description (especially all you former NASA engineers out there)
3) Establish a strong visual identity
4) Insist on effective creative (codeword for: an attention-grabbing promotion strategy)
5) Promote in multiple channels
6) Tier your message
7) Collaborate from the get-go

Most articles out there focus on the marketing aspects of a new product launch. That’s because marketing is so hard to get right. Between Engineering, Manufacturing, Marketing, Sales, Product Support, and Field Serivce, there’s a lot to keep track of. Most of these steps will occur before your product actually touches down in your market. This is just a reminder to make sure you plan for marketing to lead up to GOING BIG when it will.

Step 1) Product Development Schedule; Step 2) Set First Customer Ship Date

By GSS on December 4, 2006 | Category: Product Development | Comments Off

Calculating your first customer ship date can be tricky business. When you are engaging in product development and marketing simultaneously, you must make sure that not only are you letting the customer lead you down the path towards the product they really want, but you know how long it’s going to take to get it to them before you begin promising ship dates.

It is not uncommon to encounter companies or inventors that have done remarkable jobs of generating buzz for their product, but find themselves in a bind because they didn’t realize that developing and getting a high-quality, finished product to market can be a time intensive process. Of course, this greatly depends on the complexity and uniqueness of the product. But, too often, inventors and smaller companies attempt to mitigate their risk by evoking demand from the marketplace before they thoroughly investigate all the steps that will be involved in getting their product into their customers’ hands. What is the second question a potential customer or distributor, who loves your product, will ask you? "When can I get it?" (The first question is, of course, "How much is it?") It’s very tempting to want to throw out a promise at that point. Some experts might advocate the strategy of ‘get the sale, worry about making it happen after’. And, you might be able to scramble and hasten a few steps in the process, but if your product requires some sort of testing or certification, such as by UL, then there’s no getting around that time requirement. Timing things like media attention, product development, and product launch is an art. It’s extremely difficult to get everything right. When taking new products to market, nail down a development schedule with some extra time for cushioning, and you’ll save yourself a lot surprises and backpeddling.

Web Resources for Product Launch

By GSS on December 1, 2006 | Category: Product Marketing | Comments Off

Squidoo? It’s a website that allows people to create a "lens", or aggregate web resources on a particular topic. Websites that break down the web into more navigable, useful sources of information like this are becoming increasingly important in the ever-expanding internet. Tatsuya Nakagawa, president and CEO of Atomica Creative, a product marketing firm, has put together this lens on product marketing. It has quite a few helpful resources on this issue.

Indonesia: Beginning to Get it Together

By GSS on December 1, 2006 | Category: International Trade and Political Economy | Comments Off

Since I lived in Indonesia a few years ago, the country has experienced impressive signs of growth and potential. The economy is "lebih sehat" (in better health) as they might say. But, as most know, they’ve also experienced the devastation of natural disasters, terrorism, and other setbacks. Unfortunately, disasters like these have always seemed to make for better news than 5% yearly economic growth over the last few years. Or, the first democratic elections in over 30 years, in which there was a 90% voter turnout rate and proceeded in a peaceful fashion. These are some respectable achievements only 8 years after the Asian Economic Crisis sent the whole region into a tailspin and ousted a government that held power since the 1960’s. But when I overheard a conversation the other day about traveling to Bali, and one woman asked "Isn’t that where that horrible earthquake was?", and another woman chimed in, "no, that’s where the terrorists blew up a bar", I realized that Indonesia needs to hire a PR firm in America. They really have made some laudable advances, but you wouldn’t otherwise know it if you tuned in to the majority of media outlets here.

They certainly have a ways to go, but the challenges they have had to deal with and the accomplishments they have made in this decade are worth pat on the back. A politically stable, low-wage country with considerable natural resources stands to offer quite a lot. If ASEAN (Association of Southeast Asian Nations) is able to move forward with bilateral and regional trade agreements, and the government can effectively deal with the growing workforce and stabilize the country, we will see a resurgence in economic activity and foreign direct investment in the region. Keep your eyes on Indonesia. In five to fifteen years, the largest muslim nation in the world could be a major economic force in the region.

Vietnam and the WTO

By GSS on November 29, 2006 | Category: International Trade and Political Economy | Comments Off

Vietnam’s National Assembly ratified the country’s accession to the WTO today. In his closing remarks, after 90.24 percent of the delegates voted in favor, National Assembly Chairman, Nguyen Phu Trong, said that Vietnam’s asscession to the WTO was a political, economic, and social event of great significance.

Vietnam attracted foreign direct investment (FDI) of 5.8 billion USD in 2005, a record high for the past eight years. And, 2005 couldn’t have gone better for foreign entrepreneurs in Vietnam, who reached their highest revenue, 20 billion USD, since the 1997 Asian monetary crisis.

What does this mean? Vietnam is continuing its advance, and that of Southeast Asia’s, onto the world stage as an attractive place to do business. The government is making slow and steady improvements to improve and promote the investment climate. The country offers low labor rates, factories that can produce quality product, and employees demonstrating a strong work ethic. Vietnam will increasingly become more attractive as a sourcing destination.

Global Sourcing Specialists