Nobody has an ugly baby. The same goes for new product developers. Whether an independent entrepreneur or seasoned marketing team, once a new product concept is developed and months, even years in some cases are invested, our babies become prettier every day. The same unconditional love and support that builds as our children mature and develop transfers into the professional mindset of innovators.
Calling All Product Developers
Creating a viable and robust market for a new product takes enormous resource, planning and resolve. The sheer capital to unveil and furthermore generate brand equity is often the most overlooked aspect of getting a product to market. Take the Segway for instance. This emission free, efficient mode of personal transportation has been around for over a decade. With some quick, simple training even children can master riding this marvel. Reaching top speeds of 12.5 mph it has a range of up to 24 miles on a single charge. Still commercial acceptance has been scant. Why wouldn’t every warehouse and airport have a fleet of them?
Recently two Swedish designers have developed an entirely new concept for biking safety in the form of the Hovding, an airbag which deploys vies-a- vie algorithmic intelligence protecting riders from head trauma in the event of a fall or crash. This revolutionary “bike helmet” is worn around riders’ necks and actually becomes a stylized accessory. At $520 prospects for commercial distribution of any scale in the next five years may be slim. However according to Forbes writer Jeremy Bogaisky this startup has already taken in $13 million in venture capital. He cites bicycle industry analyst Gary Coffrin who gives a great summation stating “The adaptation curve for such a unique product at this price point is not likely to be rapid.”
Taking the tech factor down a notch, in my own gym sits a clever form of a door stop called “James the Doorman.” I would imagine the designers, Black+Bum had their “Eureka” design moment and the wheels started spinning. Honestly I have never seen such a cool variety of a door stop and without knowing much about how they developed this unique version of an age old application, I can’t comment on what lengths they went to in commercializing their product. I do know that the one in my club is the only that I have ever seen.
Every week we hear from inventors and product developers who have put great thought into products which offer unique solutions to every day needs. Often though there are many missing pieces to their overall strategies. Below are the Top 8 Hurdles to Successful New Product Launches. In the coming months, I will be writing a series which individually expands on each of these, why they are often overlooked and how they are important for taking new products to market.
1. Product Development Costs
Most inventors underestimate the cost for designing a manufacturing ready product. Tools and molds can easily run into the five to six figure range and can dwarf first year profits. Developing engineering drawings—those that translate into production and material specifications require time and money.
2. Distribution Channels
Some products are ideal for Big Box retail but unless you know how to navigate this space, most category managers are not going to take a chance with a single line item vendor. It creates additional administrative work for the system, and most inventors don’t have the capital to market their products. Specialty and on-line retailers generally are better proving grounds for a products’ acceptance but you still have to generate interest and traffic. Oh, and did you get a UPC code yet?
3. Inventory Capital
Minimum order requirements (MOQs) by factories usually cause a lump in the throat. Even if you have the greatest gadget in the world, how do you plan on financing that first big order?
4. Educating the Masses
How will you announce the arrival of your new product to the world? Magazines? PR campaign? Put an ad in the paper? Direct Response Television (DRTV) is a great but often expensive form of advertising and one of the best ways to demonstrate a new application or use as well as building brand equity. It’s great to have a video on your web site but again, how will you drive viewers and a following?
5. Price vs. Value
In the initial phase of your product’s life-cycle there will likely not be the scale (volume) to drive down production cost. Unless you can convince consumers they should pay a premium retail price, break-even may be longer off than you expect. Plus, buyers will tell you whether your SRP (Suggested Retail Price) is in line with their category.
6. Regulatory and Testing Requirements
With your product in the public domain, most retailers will require some sort of regulatory or product safety testing and compliance with groups such as the Consumer Product Safety Commission (CPSC), Underwriters Laboratories (UL) and others. Depending on what industry you are in, your item may require testing and certification by default. To you this means additional time, red tape and money.
7. Patent and Intellectual Property Protection
This is perhaps the most critical and misunderstood area of product development. In many cases developers could have saved themselves months of work simply by doing some basic research and analysis. The United States Patent and Trademark Office site has become more navigable and efficient thanks to improvements in their search functions. There are three ways to begin your inquiry using key words, designs or a combination to see if someone else has registered a similar product. Even if they have you may be able to make some functional changes to distinguish yours but again, many underestimate the time and capital required to protect the investment of your innovation.
8. Aftermarket Sales and Support
Now that you’ve got a patent pending, finalized your business plan, raised early stage capital, have product on the warehouse shelf and are starting to generate traction don’t forget the basic administrative requirements. If you hit the lotto and are selling to Wal Mart, using retail link is a requirement. This entails sending a staff member for training and ultimately using their on line tool daily or weekly. Is someone manning the phones for product questions and concerns? How robust is your web site? Oh, we haven’t even discussed how much this will cost to build.
While these hurdles aren’t surmountable, it is critical to factor in all the critical and time consuming elements of bringing a product to life. Even this list is not comprehensive enough to account for the unexpected turns in the pathway to new product development. If it were easy, everyone would be doing it.
David Alexander is president of Baysource Global and has a decade of experience with new product development and contract manufacturing.