All posts tagged: manufacturing

So you’re interested in starting a new product development project…Read this first!

Take me straight to the reasons

Most of us have been there at some point – when a flash of inspiration occurs and you get an idea for that new product. The one that fills a market gap perfectly and is a huge opportunity if you can get it right.  

But if you’ve gone beyond the initial idea stage before you’ll know there’s a bit more to it than that first thought or conversation, even more so if your product is electronic or a custom IoT product

On the road from discovery through to the ultimate goal for most product teams – manufacture at scale – there are a number of things that can derail a project, no matter how promising the initial concept. Whether that is at the planning phase or further along where changes to scope and form can be costly, hitting a barrier at any point is not ideal.  

Luckily for you, we have many, many years of doing just that; taking an idea from the first conversation all the way through to manufacture. So through experience and lots of learning along the way, we’ve honed our design process over time and are pretty good at avoiding the pitfalls. 

So, if you’re considering a new product development project, we’ve listed some of the key reasons projects don’t make it to the end of the road and how you can avoid them:

1.  Not getting your budget correct

It may be obvious to state this but designing and developing a new product takes a considered capital investment. Manufacturing one at scale even more so. Once you’ve identified a gap in the market and have a concept you think answers it, you next need to do your sums to work out your budget and ultimately the cost/benefit analysis for your business. That means knowing not just the development costs, but ideally ongoing capex and opex plus what you can realistically drive in terms of revenue (which ultimately means also knowing the perceived value of the product to the end user and any competitive benchmarking).

For startups, we know it’s often a challenge to determine how much is needed in terms of investment funding, or even where to start with raising capital. The clearest piece of advice we can give here is, to consider the technical risks on the project and build a budget and plan that seeks to mitigate the risks early in the product development program.  An understanding that design iterations will be required to refine the product will also ensure that the project budget is sufficient to enable the project to succeed.

With any project, you don’t know what you don’t know. And whilst many design companies can help highlight areas in discovery sessions, it’s never a bad thing to be prepared, both financially and mentally, that you may need to change your path based on internal or external factors. 

2. Misunderstanding product/market fit (or a lack of one!)

This one can come in many forms, for example if your product idea is for a medical IoT device you likely need to be across specific standards and certifications the finished product must to pass in order to clear regulatory hurdles and gain access to the market. Or if you’re building an IoT performance tracker for cyclists is it a key driver to make sure it doesn’t add too much weight for them to be competitive? 

Our advice here? Research, research and more research! Great research is a strong foundation for any project and that’s even truer when you’re designing a new product from scratch. Build your knowledge base by speaking to industry leaders and people who work in your chosen market, by conducting focus groups and by reading as much as you can around the topic. Really understand (through quantitative and qualitative research), who your target market is, what their drivers are, how your product solves a problem/provides a benefit and what their potential objections might be. 

3. Taking too long! It’s a race, so run at it

Let us refer to the genius of Theodore Roosevelt here:

“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”

Often in new product development, you’re not the only horse in the race and someone has had a similar idea to you. And we’ve all seen where the second or third product to market may be functionally far better than the first, but by the time that second product has launched they’re already being lapped by the competition. That’s a difficult point to come back from, plus when timelines expand, more often than not so does the budget. Or if you’re working with consultants and contractors, scheduling of resources can become a challenge, so there are multiple reasons why staying on your timeline can be important.  

So once you have your budget and your product/market fit, set out a plan and work to it. Whether you are using agile methodologies or another process, a clear roadmap with defined accountability for each key phase and task is a great start. 

4. Prioritising form over function and using ‘every crayon in the box’

Whilst we understand that physical appearance is important and we want things to be beautiful inside and out – the majority of the time they also have to work. So throughout the process, it’s a good idea to keep referring back to your business case and any initial workshop sessions.

5. Missing the manufacturing piece of the puzzle

It sounds obvious, but plan for the manufacturing process as well. You’ve done all the work to get there so you don’t want to fall at the final hurdle. Often it’s at this point that products have problems, when the design doesn’t pass manufacturing readiness tests. This test looks at the design, cost, process capability, materials availability, QA plan and test plan and if a product is too expensive to produce or the design doesn’t work at scale, it won’t pass. The other side of that coin is where manufacturing comes back as too expensive or timelines are too long to meet the in-market deadline. 

So have a timeline and cost set up for manufacturing and do research over the best manufacturer for your kind of product. Or depending on the type of project, your product development team may offer turnkey services where they handle not only the new product development but the manufacture too.

Muhammad Awais5 Reasons why New Products don’t make it to Manufacture

So you have an idea – the “next big thing” in the technology or consumer electronics area. You may have developed it alone, or with a group of friends or colleagues. Over many sleepless nights and busy weekends it was developed into a working example. Or your small company worked on it non-stop. You overcame the design challenges, early bugs and faults. Now you’re at the stage where the prototypes are performing as required and you know it’s ready to convert into a product.

At this juncture the project may have hit the largest stopping point there could be – funding and commercialisation. More money is required to further development, however as an individual, small group or business there’s no way the bank will lend you the money. Furthermore with almost everyone “feeling the pinch” you don’t want to ask family or friends.

However there is a solution – “Crowdfunding”. Until recently crowdfunding was unheard of, but like most great ideas has spread like wildfire and is now a legitimate form of fund-raising for great projects. How it works is very simple – you describe your new product in as much detail as possible, showing the features and benefits just like any other sales tool.

However you then offer people the ability to pay in advance to either sponsor or back the product development and purchase the final product. You will set in advance a goal amount. Different monetary amounts are set, each with a ‘reward’ of the product and other extras – and the higher the amount, the greater the reward. At this point is is supremely important to accurately state the delivery date. People will wait if they know when to expect their product. These amounts are pledged, and not received unless the financial goal amount has been met at a set cut-off date.

If the total amounts pledged fall short of the goal amount, the project remains unfunded and you’re back to try again. However – if the goal is met – the backers funds’ are transferred to your organisation, less a fee by the crowdfunding facilitator. And this is when the next challenge arises – bringing the product to market.

For inspiration, two recent examples of crowdfunding success were developed locally here in Australia. The first of these is “Ninja Blocks”, a hardware and cloud-based solution to interface all sorts of objects interactively with the Internet. Their goal was $24000 however ended up receiving just over $100000. The product captured the imagination and enthusiasm of so many people the founders have had a second round of VC funding.

Another is a current project – the “LIFX Light Bulb”. It’s an RGB LED energy-efficient light bulb that can be controlled via wifi and therefore an Internet-connected device. Although the end date hasn’t been reached, and the goal is $100000 – they have already received over one million dollars in backing.

As you can see – with the right product, pricing and promotion – crowdfunding can be a raging success. However before moving forward and examining further development, who are these crowdfunding facilitators?

The largest and most popular is known as Kickstarter. Based in the United States, they have a huge range of products and projects being funded. If you need to reach a global audience, this would be the facilitator to consider. They collect the pledges via the Amazon payment system and capture a small percentage, around five to ten percent. But there is one drawback – projects must be based in the United States. However this can usually be worked around by having a representative in the US who can act on your behalf.

Another choice is Pozible, although not as large as Kickstarter they’re based locally which makes the process so much easier. However as a domestic facilitator you may not reach the global audience due to foreigner trust issues and being far from the majority of the target market.

Back to your project – let’s say you’ve successfully gained your funding. Where to next? You could be staring a huge bank balance, a prototype on your desk and have several thousand people waiting for their reward. Do you understand the processes of taking a design from prototype to actual manufacture? Perhaps it could be redesigned for a cheaper cost price – not only components but making it cheaper to make. And where will you have it made? Locally? You’ve heard about how cheap it is to offshore to East Asia – but who do you contact? Who can you trust? Do you feel confident sending your designs and a large payment offshore – hoping everything will work out? Or do you have the time, knowledge, language skills and savvy to research in country?

If the answer to even one of those questions is “no” – to ensure success you need a partner who understands your product, will take the time to work together with you from your initial contact right through to delivering the final products to your backers. That is where you can take advantage of our experience and success to bring your product to market.

LX has experience in successfully taking electronic products from concept through the commercialisation process. There are many factors to consider before commencing product development and LX can provide expert advice throughout the process, lowering your commercial risk.

Some of the services offered by LX include:

  • Development of business cases and business plans

  • Competitor research and analysis

  • Evaluation of proposed solutions

  • Intellectual Property (IP) landscaping

  • Market research and feasibility studies

  • Rapid market testing

  • Surveys and focus groups

  • Development of marketing strategies

  • Starting a business – LX Business Quick-Start pack

  • Assistance in raising funding (investment and government grants)

  • Product versioning strategies and technology road mapping

For more information or a confidential discussion about your ideas and how we can help bring them to life – click here to contact us, or telephone 1800 810 124.

LX is an award-winning electronics design company based in Sydney, Australia. LX services include full turnkey design, electronics, hardware, software and firmware design. LX specialises in embedded systems and wireless technologies design.

Published by LX Pty Ltd for itself and the LX Group of companies, including LX Design House, LX Solutions and LX Consulting, LX Innovations.

Muhammad AwaisLX discusses bringing your product ideas to market with Crowdfunding