Cool product idea! Now what?

Lessons learned on product development

Congratulations, you’ve come up with the next great invention that will take the market by storm and revolutionize our daily lives! You’re ready to join a rapidly increasing legion of inventors and entrepreneurs that are turning their ideas into millions of dollars. All the cool kids are doing it. Just check out the reality TV shows “Everyday Edisons” and “American Inventor” or Oprah Winfrey’s “Search for the Next Big Idea.”

coffe cup next to pen and napkin with IDEA written on itYou have a paper napkin sketch. You just need to get it to the engineers and find someone to make it. The cash will start rolling in.

Whoa, Einstein. You’d better take a deep breath and come up with a game plan. There’s a lot of research and details to think about before getting the designers involved. According to one of America’s most prolific inventors, Thomas Edison, “Genius is 1 percent inspiration, 99 percent perspiration.” You have the inspiration, now it’s time to get to work.

We’re not going to get into a step-by-step product development process here, but rather impart some lessons learned and areas of concentration that will work for first-time entrepreneurs and established businesses. For purposes of this article the product development process will be broken into three phases:

  1. Conceptual development
  2. Design and implementation
  3. Post-product launch

The first phase, conceptual development, lays the groundwork for what is to come. The more effort and thought put into this phase will save time during design and implementation.

I. Conceptual development

1. Product positioning
No matter how novel your idea, it will be compared to something already on the market. For example, the Segway Personal Transporter is one of the most unique, innovative and well-publicized products of the decade. Yet, because of its price tag (approximately $5,200) it can be compared to four-wheeled ATVs and functionally compared to motorized scooters.

  • Identify the competition. Who are you up against?
  • How does your product fit in the market? Is it a Cadillac or Honda Civic? Both are great products, but differ on features and benefits.
  • How will it compete (price, features or quality)?
  • Identify the target retail price.
  • Identify sales outlets (i.e. the “Mart” stores, specialty outlets or websites).

2. Brand development and acceptance
Unless you truly have a revolutionary, out-of-this-world idea it will be difficult to gain significant distribution with a single product to your company name. Why? It takes just as much time for a buyer from a nationwide distributor to manage a single-product company as it does to manage a company with a few dozen SKUs (stock keeping units). Buyers are basically graded on their sales generation efficiency. They are not going to risk their jobs by taking on a lot of new, single product brands.

  • Having several products in your line-up creates a more legitimate impression to buyers and the end consumer.
  • How many SKUs can you get out of one product idea? The next time you’re at a home improvement outlet check out how many cordless drills are displayed under each brand name.
  • Develop a supporting cast. Consider other products that can be sold with your main product (i.e. cordless drill manufacturers also sell drill and driver bits under their brand names).
  • Commodity-type items and consumables will have a lower capital investment than flagship products and more easily allow you to bulk up the product line on a tight budget.

3. Project scope
How difficult is the product development project going to be? If the new product idea is electronic and you don’t understand the basic workings of a light switch you obviously will need quite a few contracted resources.

  • Identify areas in which you will need help (i.e. engineering design, packaging, manufacturing).
  • Is the product a home run (high sales volume, high margin) or a base hit (okay sales, but it will still be selling 15 years later)? Home runs are great, but base hits more often win the game. If you have several product ideas, mix the base hits in with the home runs for better resource allocation. Home run projects often require a higher capital and time investment than smaller, base hit projects.
  • Estimate the capital expense. If you enlist contract manufacturing, the vendor should be able to give you a ballpark tooling figure without a finalized design.

4. Patents
One thing that can leave a project dead in the water is a possible patent infringement. It’s much better to realize this before a lot of time and money is invested in the project.

  • Perform due diligence on patent research. Research any infringing patents. Work around infringing claims if possible.
  • Enlist the services of a reputable intellectual property law firm.
  • Patent research can generate ideas on product features and other products. See where someone else left off.
  • All United States utility and design patents are online. Check out

5. Product specification
This is the compilation of the research done during conceptual development. The product specification is a living document (i.e. it’s not set in stone), but it needs to be completed before beginning the design and implementation phase.

  • Acts as a leash for the design engineers. It will keep them from charging in the wrong direction. Marketing, sales, operations and engineering stay on the same page.
  • A well-defined product specification reduces the number of iterations during the design and implementation phase.
  • Keeps everyone in the loop of progress. Regular project review and reference to the product specification keeps the project on track.
  • At a minimum the product specification should identify:
    • market channels
    • target distribution channels
    • competition
    • suggested retail price
    • estimated annual sales (number of units)
    • target cost
    • estimated capital investment
    • product requirements (i.e. UL, CE approval)
    • features and benefits

Post development process

II. Design and implementation phase

1. Product specificationtree seedling held in cupped hands

If you’re paying attention you will notice this was the last point discussed in conceptual development. Why does it show up again in the design and implementation phase? You should not start this phase without a product specification. Without a well-defined product spec you will end up chasing your tail!

  • A well-defined product specification reduces the number of iterations during the design and implementation phase.
  • It acts as a leash for the design engineers. It will keep them from charging off in the wrong direction. Marketing, sales, operations and engineering stay on the same page.
  • It keeps everyone in the loop of progress. Regular project review and reference to the product specification keeps the project on track.

2. Project complexity
Take a realistic look at the complexity of the project ahead of you. Estimate a timeline to complete the project and add “X” number of weeks, or even months.

  • Don’t underestimate the project. There is no such thing as an easy project. Some are just less complex than others.
  • If you hit minor road blocks in design remember that fermentation is your friend. We’re not condoning the use of alcohol here, although we’re not ones to condemn it either. Sometimes you need to back off from a project for awhile to let it “ferment.” It’s easy to not see the forest for the trees when pushing hard in the design phase.
  • If you hit serious road blocks you may have to admit the idea may just not work. Pumping time and money into a project when there are serious limitations to a successful launch has its obvious consequences. Put it back on the product development list for the future or kill it.

3. Design deliverables

If you plan to use contract engineering and design services what should you expect to receive as verification of design?

  • Manufacturing-ready part and subassembly prints. This will include material specification, tolerances, all necessary dimensions and surface finish requirements (i.e. anodizing, powder coat, acceptable surface roughness).
  • If applicable, 3-D CAD models of the part(s) to be manufactured. Tooling for complex parts is more easily fabricated when the manufacturer has access to CAD models.
  • Prototypes
  • Bill of material. This typically includes all anticipated parts, quantities, piece price and tooling cost.
  • Quality control specifications.

4. Know when the design is finished

It is difficult to push the baby that you have created into the cruel marketplace when you don’t know if it’s ready, but you have to eventually launch the product to make money.

  • Meet the requirements of the product spec and be done with it.
  • Sell-fix-sell-fix, not fix-fix-fix-sell. This is not to say that a poor quality product should be released, but engineers can be prone to trying to fix things that are not broken.
  • Changes can still be made after initial product launch. These are new releases (new and improved), or even a deluxe model of the product just released.

5. Applicable process
No matter the complexity or simplicity of the product development process, you just need to have one that works for your situation. A documented process will keep you from leaving out vital steps or unnecessarily repeating others. It helps break what may seem to be an overwhelming project down into a methodical sequence of manageable steps. Although listed under the design and implementation phase, this really encompasses all three phases.

  • Googling the “product development process” will bring up more information than you need to draft a process tailored to your specific needs.
  • The product development process is not just about design and engineering. Don’t forget to include packaging, assembly and logistics (shipping).
  • A good process will also keep sales, marketing and operations informed of the project’s progress.

III. Post-product launch

1. The light at the end of the tunnel …

It may be a freight train headed your way.

  • Be prepared for product shortcomings or problems.
  • How will you handle product returns?
  • Review the product after introduction for final cost and look for quality problems. Was the product spec met?
  • Schedule periodic reviews of sales numbers and potential quality issues. It may cost more to keep a product with a sub-par record in inventory than what it’s worth.

2. Review the process

If this was the first product you developed, it probably won’t be your last. Take a step back and review the project.

  • How did you get here? Is this where you wanted to be?
  • Identify and document the bottlenecks. Streamlining any process is a ratcheting type of action. Eliminating one bottleneck moves you up, but exposes the next.
  • Learn from the mistakes and highlight the successes.
– Authored by: Tim Morrow. Tim Morrow and Doug Simon operate Simon & Morrow Design, LLC (contract product development) and Boone Outdoor Hardware. Morrow is a Business Development Program client.

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