Over the past 17 years since the founding of Inertia, we’ve had a lot of opportunity to speak with both prospective and existing clients at length about their approach to physical product development. We often end up talking about the challenges in launching their start-up or growing their existing business. After many discussions, we noticed some common themes emerging as we peeled back the layers of the initial, surface-level symptoms.
A big part of what we do at Inertia is helping our clients overcome these challenges. As the cliche says, bringing a physical product to market is a marathon, not a sprint. Hardware development can be difficult and it does take time, incredible focus and a lot of resources. However, when its done right the rewards can transform businesses (and people too).
Here are the 6 main challenges we’ve distilled from our customer conversations as to why they typically get stuck in their product development, along with some specific solutions that we apply to help them design, develop and manufacture amazing products.
WHY YOU’RE STUCK #1
YOU’RE CAUGHT IN THE WEEDS OF DAY-TO-DAY BUSINESS OPERATIONS
You’re spending all day fighting fires, just to keep your head above water. All the demands of running the day-to-day aspects of your business take every minute and every ounce of energy you have. You and your staff are constantly being pulled in different directions fighting fires just to keep all the plates spinning.
How are you expected to find time and energy to devote to long term strategic planning for your product development pipeline, let alone get new products validated, prototyped, manufactured and launched?
GETTING UNSTUCK #1
REFRAMING YOUR PRIORITIES
If you’re a business owner (or key decision maker in your business) then I’d like to share a simple, but valuable practice that has had a big impact on how I manage my time and how I prioritize where to focus my energies. It’s called the “Eisenhower Method”. The “Eisenhower Method” stems from a quote attributed to Dwight D. Eisenhower:
Using the Eisenhower Method, before I do anything, I evaluate my tasks using the following criteria: Tasks are either important/unimportant and urgent/not urgent. Once I decide where they belong, I place them in an Eisenhower Matrix (also known as an “Eisenhower Box” or “Eisenhower Decision Matrix.. 1)
Here’s a look at my Eisenhower Box as of late:
If you do set out to make your own Eisenhower Box, here’s a some quick guidelines to help you figure out what goes where:
Important/Urgent quadrant are for tasks that need to get done immediately and personally e.g. crises, deadlines, problems
Important/Not Urgent quadrant are for tasks with an end date and are done personally e.g. relationships, planning, recreation.
Unimportant/Urgent quadrant are for tasks that can be delegated e.g. interruptions, meetings, activities.
Unimportant/Not Urgent quadrant are for tasks that should be dropped e.g. time wasters, pleasant activities, trivia
Reference: Drake Baer (April 10, 2014), “Dwight Eisenhower Nailed A Major Insight About Productivity”, Business Insider, (accessed 31 March 2015)
Typically, because of relatively long timelines compared to the important/urgent of the day-to-day activities, for many, new product development falls into the important / not urgent. In this case, delegating new product development to a dedicated team will ensure the focus needed to get the job done.
CREATE THE RIGHT ENVIRONMENT FOR SUCCESS (BY ‘GOING SKUNK’)
Skunk Works is the official pseudonym for Lockheed Martin’s Advanced Development Programs. During World War 2, the aerospace giant LockHeed found a remote location, assembled a small work group and tasked them with tackling the wars most critical tasks.
First, the group was tasked with designing US fighter jets as the Germans had just appeared over Europe and America needed a counter-punch (ie. America needed to build a fighter jet QUICKLY).
The new remote office was intentionally located in a circus tent next to an exceptionally stinky plastics factory. (great place to put it you don’t want to be disturbed). The small team inside the tent designed and built America’s first fighter jet in just 143 days and created a philosophy for rapid innovation that is widely used today. “Going Skunk” is often used to describe an especially enriched environment that is intended to help a small group of individuals design a new idea by escaping routine and organizational procedures.
Here’s a link to Lockheed Martin’s site, where they list the original 14 rules of skunkworks.
If you’re serious about getting your product development pipeline unstuck, then you need to get serious about changing how you get ideas from the boardroom to market. “Going Skunk” isn’t the only solution, but it has consistently demonstrated remarkable results.
Credit: The summary outlined below is courtesy of renowned author, Steven Kotler (Stealing Fire, The Rise Of Superman, Bold, co-author), who summarized the approach in his slideshare presentation linked here which was adapted from a book he co-authored called “Bold: How to Go Big, Create Wealth and Impact the World”
Set High, Hard Goals: If you want the largest increase in motivation & productivity, understand that big goals lead to big outcomes.
Companies do not “go skunk” for business as usual. They are created to tackle the the Herculean tasks built around what psychologists call high,hard goals. If you want the largest increase in motivation & productivity set big goals. Big goals significantly outperform smaller or more vague goals. It comes down to attention and persistence – which are two of the biggest factors determining performance. Big goals help focus attention and make us more persistent.
Isolate The Team: If possible, find or create a work space that is totally separate from your day-to-day operations.
Isolation may be the most important key to success. Isolation stimulates risk taking, encouraging ideas weird and wild, and acting as a counter force to organizational repetition. “In any organization the bulk of the people will be climbing the hill they are already standing on. That’s what you want them to do. That’s their job. A skunk works is a totally different job. It’s a group of people looking for a different hill to climb.This can be threatening to the organization. For some companies it is for these reasons above they choose to partner with an external product design firm.
Give Rapid Feedback: The road to bold is paved with failure. And this means that you must have a strategy in place to handle mistakes and learn from them, quickly.
The unofficial motto for Silicon Valley is “fail early, fail often and fail forward.” Bold ventures require a kind of experimental approach, Trying out crazy ideas means bucking expert opinion and taking big risks.
Intrinsic Rewards Matter Most: For most of the last century science focused on extrinsic rewards based on the “if-then” conditions of the “do this to get that” variety.
For example in business when we want to drive performance, we offer classic extrinsic rewards (bonuses, promotions). Unfortunately, an ever growing pile of shows that extrinsic rewards don’t work as they should. Once people’s basic needs are no longer a cause for concern, extrinsic rewards can lose their effectiveness and can crush the high level, creative, conceptual abilities that are central to current and future economic & social progress
Intrinsic rewards (internal, emotional satisfactions) are what really matter. Three in particular stand out. Autonomy (the desire to steer our own ship) Mastery (the desire to steer it well) Purpose (the need for the journey to mean something)
Science shows that the secret to high performance doesn’t come from our biological drive (survival needs) or our reward and punishment drive, but our 3rd drive. Our deep seated desire to direct our own lives, to extend and expand our abilities, and to fill our lives with purpose. These three intrinsic rewards are the things that motivate us the most.
WHY YOU’RE STUCK #2
YOU’RE SUFFERING FROM EXECUTION OVERWHELM
The detail, planning & management involved in taking a product from concept to market is completely overwhelming to you. Innovating, proving product market fit, strategic product design, prototyping, manufacturing & supply chain management are all highly specialized and challenging disciplines in their own right. Executing on all these fronts without a team of A Players and a proven systematic approach seems virtually impossible.
GETTING UNSTUCK #2
PLANNING IT VS WINGING IT
The right team, coupled with a plan and product detail can be the kryptonite against your feelings of overwhelm and create a clear path to getting your product to market. Here are some “first steps” you can take to create some momentum.
- Put your A-Team together : Hire new staff, redirect existing staff (be careful that’s a slippery slope) or hire outside expert partners. Remember to seriously consider “going skunk” when assembling your team.
- Define your long term product roll-out: Ask yourself, how does this product fit into your overall company strategy? Will all the effort and resources I put into this product build a larger customer base and/or get customers to buy more of my products over time?
- Create a high level product brief describing what your customers want.
- Drill down on defining all the aspects of your product . Here’s a quick look at all the key components you’ll need to include in your product definition:
5. Create and follow a product development plan.
These plans are typically highly detailed and cover all the major milestones and smaller steps in between. The major milestones in a product development plan include:
- Product Definition & Concept Design
- Detailed Design and Engineering
- Manufacturing Transfer
- Manufacturing Management and Testing
Here’s a look at a small piece of a project plan for one of our clients detailing the first steps in our Product Definition & Concept Design
6. Hold yourself accountable: Make sure your team documents its learning, knowledge and progress weekly.
Think of it as writing a diary about your product development journey. You’re looking to capture the thought process of each person who is working on the project. Documenting the successes may be good for your ego but so is learning from your failures. Make sure all the bad ideas, wrong assumptions and learnings are captured – that stuff is the real gold.
Make sure you are diligent to have a formal project review at least once a week with your design team and stakeholders. At this meeting you should review project progress, did you achieve what you set out to from the previous week, if so, great. If not, why not? What was learned? Are you on schedule? Are you on budget?
WHY YOU’RE STUCK #3
YOUR TEAM CAN’T AGREE ON WHICH PRODUCT TO BRING TO MARKET
Without exception, if you are in the business of creating products these days, you see innovation as an essential part of becoming a market leader and growing the value of your business. It’s very common for your company to be brimming with new product ideas. It’s just as common to make impulsive decisions on which ideas to bring to market without enough insight or validation from future customers.
GETTING UNSTUCK #3
ASKING YOUR FUTURE CUSTOMERS FOR THE ANSWERS
Ideas are a dime a dozen. Ideas supported by rigorous customer research that validate your prototype (or not) is how you’ll make the best decisions on what products to create.
- If you aren’t constantly testing your ideas with your target audience, iterating, refining then repeating the process, you’re stacking the odds of failure in your favour.
- Proving your product’s value with potential customers as early as possible is critical. I can’t tell you how many times I’ve seen products created with very little (or no) input from future customers.
- Start by nailing your product’s value proposition and then test it with customers, again and again.
- The Value Proposition Canvas video from the folks at Strategyzer is a great place to start. Doing this exercise with your current or future customers is a must.
- Earlier this year, I set out on my own journey to reposition my product development company and blogged about it.
- I hired someone (in the interests of impartiality) to interview a handful of my customers to help me create my value proposition for our corporate clients. It’s really important to create the conditions for honest feedback. If you’re the inventor or the founder, you should seriously consider recusing yourself from conducting this research. I’ve seen many founders drown out crucial feedback from potential customers with their own mix of bias, poor listening, overselling and asking too many leading questions.
The first step in working on our value proposition was to define our customer segments. Our three top customer segments are Corporate, Hardware Start-Ups & Investors. In this post, I’m going to share how we’ve fleshed out our value proposition in preparation for our corporate clients. As a first step to defining our value proposition, we mapped out our customers jobs, pains and gains alongside Inertia’s services, gain creators and pain relievers.
Once we created our lists, we picked the top 5 or 6 most pressing customer jobs, pains and gains along with Inertia’s main gain creators, pain relievers and services. We placed the lists side by side so we could see where the the fit was (or wasn’t) between our customers pains/jobs/gains our what Inertia was offering by way of pain relievers, gain creators and services.
I won’t go into any more detail in this post, but if you’re interested in seeing the outcome of our value proposition exercise, then you can check out my previous post here. This isn’t an exact science, but at the core of it this exercise was a great way for us to start organizing our value proposition around our customer’s most important jobs and pains and desired gains.
This part of the exercise is often referred to as finding your product-market fit. Anyone developing a physical product MUST find their product-market fit by ensuring the product they are creating is addressing their customers jobs, pains and gains.
This exercise will show you if your product has found a fit with your customers OR provide some very actionable insight on where you’re missing the mark.
There’s no doubt these exercises are time consuming, but I can’t stress enough how important nailing your product-market fit is before you’re too far along in your product development journey. In my next section on this post, I’ll be sharing my perspective on why so many people get stuck on the heavy upfront costs associated with developing products. There’s no arguing that developing products is expensive. Do you want to know what’s magnitudes more expensive? Making changes late in your product development journey because you made assumptions and cut corners upfront.
WHY YOU’RE STUCK #4
YOU DON’T WANT TO SPEND “THAT MUCH” ON PRODUCT DESIGN
Whether you’re paying for prototypes and tooling, hiring extra people or outsourcing a product team, you just can’t stomach the upfront costs.
GETTING UNSTUCK #4
GETTING CLEAR ON THE OPPORTUNITY COST OF CUTTING CORNERS
You need to get over the sticker shock associated with creating physical products, because it’s going to cost a lot of money – much more than you think. But have you really thought about your product design costs compared to the total costs of getting your product to market.
- First, consider the bigger picture. The truth is, when you look at the entire product design and manufacturing life cycle – on average, product design and engineering accounts for only 5% of the cost to produce that product – material, labour and overhead make up the remaining 95%.
- When I explain this to clients, initially it doesn’t make them feel any better. Until I share some horror stories of folks who have tried to cut corners at this vital stage.
- The bottom line is this: If you don’t invest properly in the product development stage, everything that comes afterwards will become magnitudes more expensive.
A product development company Munro & Associates, illustrated this point quite elegantly with a graphic they produced way back in 1989 that still holds true today. key part of this graphic is the influence (look at the shadows) that each stage of development has on the entire cost of the project.
Looking at the upfront costs without looking at the downstream business and return on investment is short-sighted and incomplete thinking. To illustrate this even further, I put together a quick payback analysis graph to compare 2 different approaches (and budgets) to bringing a product to market.
“Slow Launch Larry” Investment: Spends 500k on product development plus 20k per month on overhead expenses. His limited spend translates into fewer resources and longer development timelines. It takes Larry 36 months to get to market. Overhead plus initial spend comes to 1.22 M
“Fast Launch frederika” Investment: Spends 1M on product development plus 20k per month on overhead expenses. His spend translates into more upfront resources and shorter timelines. It only takes 18 months for Frederika to get to market. Overhead plus initial spend comes to 1.36M
Here’s where things get interesting:
- Because “Fast Launch Frederika” got to market in 18 months, Frederika begin generating revenue sooner, reach break even at month 29 and begin amassing profit.
- Meanwhile “Slow Launch Larry” gets to market 18 months later – at month 36, and hits breakeven at month 45.
- By the time Larry starts seeing profit, Frederika has already generated 900K more in profit with only a marginally higher initial investment.
What I’m trying to reinforce here is the idea that trying to cut corners in the beginning ends up being more expensive in the long run. Obviously I’m aware that in many cases, limited cash flow is a very real constraint. The unfortunate outcome is that the lost opportunity cost is very high.
So when you’re putting together your next product plan consider this:
Scrimp on design, engineering and validation and you will be paying much much more down the road if the product has not been designed properly. Cutting corners means you’ll likely end up with manufacturing costs that are too high, poor quality materials, warranty recalls and in the worst case, lawsuits. Here’s a true story about a client that came to us with what he felt was a “production-ready” product.
- It was made up of 70 pieces that would all need to be manufactured and assembled perfectly to work.
- We reduced the number of pieces required for manufacture from 70 to 9.
- Can you imagine the costs and potential for error when creating tooling for 70 pieces of assembly compared to 9?
- It’s unfortunate, but many customers that we end up working with have spent countless energy, time and dollars getting product design wrong in the early stages all in the name of trying to save money up front.
WHY YOU’RE STUCK #5
YOU’RE THINKING ABOUT GETTING SOME HELP, BUT DON’T KNOW WHERE TO START
Deciding on which product design firm to hire is a huge decision. You worry about whether they’re up to the task. You wonder if they’re agile enough, open to true collaboration, have the specific expertise, manufacturing savvy and on and on.
GETTING UNSTUCK #5
MEETING WITH AT LEAST 3 PRODUCT DEVELOPMENT AGENCIES AND ASKING VERY SPECIFIC QUESTIONS
Vetting numerous product development firms for your project can be intimidating. It doesn’t have to be. Here are some very specific questions to ask when considering your options:
Many product design firms websites have beautiful images of products but ….
- What the company’s actual involvement or responsibility for each product?
- Did they contribute industrial design only? Did they help on a portion of the design?
- Were they responsible for the entire design?
- Were they involved in defining the product requirements to determine product market fit?
- Were they responsible for the mechanical design, electrical design, communications, and so on.
- Were they responsible for the manufacturing launch of that product?
- The DEPTH of involvement speaks more than the pretty pictures.
The key word here is relevant.
- While they don’t need experience in your exact type of product, you should be able to see translatable experience from other products to your product. It is common for people to get hung up on the idea that if they haven’t designed a product just like mine, then they have no relevant experience. It is very common for product design firms to work on a diverse range of industries and products. This diversity can be a great advantage as technologies, methods and practices can be cross-pollinated from one industry to another.
- Does the firm have all the required competencies for your project? Can they help you validate your product market fit? Can they design electronics, controls, communications, do they have manufacturing experts, and so on.
- Do they design for manufacturing and assembly? Designing the prettiest product that customers love but can’t be manufactured profitably or with good quality isn’t good business.
- Were they actually responsible for selecting the manufacturer and seeing it through? There are many product development companies out there who design products and then “throw it over the wall” to a manufacturer.
- How do they work with their clients? What is their culture? Do they talk about that when you meet with them? How do they communicate?
- How do they capture the knowledge, document it and communicate it so they can include you into the product development process to collaborate effectively?
- What kind of design and business processes do they have and use or do they just wing it? Do they create product specifications, do they create project plans, do they have project and product risk assessment techniques, do they follow change management protocols? Do they have a staged gate process?
- Do they have project managers that are accountable for overseeing the project budget and schedule?
- In hardware development, prototypes are key to learning, communicating your product, and reducing both technical and commercial risk. The faster you can turn around prototypes, the faster you can learn and get to market with a winning product. Prototype quality also becomes increasingly important as you progress through the product development process. The further you get in the process the better and better your prototype quality and fidelity need to get. You want your customers to ask “When can i buy it” when they see your prototypes.
- How does the company handle product validation, testing and certification? What is their process to integrate these tests when they are planning and designing the product. If you don’t plan for the testing during design, then how can you expect to pass it?
In my next and final update for this post, I’m going to share how having robust & disciplined systems & processes in place can set you free when developing a product. It’s common for clients to get what I call “process paralysis” when they see all the process that’s involved in developing a product. The truth is the exact opposite happens (more creativity, deeper collaboration and higher quality products) when you honour a disciplined path in your product development journey.