Like us, many engineering or manufacturing businesses have aspirations to launch their own products. After all, the equipment and infrastructure are there already, all that’s needed is the product. Simple, right?
Well, actually it’s not that simple.
Across NZ, businesses spend millions of dollars developing and launching new products each year, but the reality is failure rates are extremely high.
It’s an area, as a country, we need to get better at. The Government wants New Zealand to raise research and development (R&D) expenditure to 2% of GDP in the next 10 years. That’s why they’ve introduced an R&D tax incentive.
R&D and product development is a topic I’ve been thinking a lot about lately. After all, we supply parts for many individuals and businesses, ranging from back shed inventors right through to companies who invest heavily in R&D. Further, we’re currently going through the process of developing and launching a range of products ourselves. One thing we don’t want to do is make mistakes that could easily be avoided.
That’s why we’ve researched and compiled this list of 5 mistakes to avoid in product development.
This is one for those companies who find their own development project always takes second priority to paid work. In this situation, you need to do your research and work out your potential return on investment. If developing the product makes fiscal and strategic sense then you should find a way to give it the resource and structure it needs. If not, shelve it. Don’t just keep hoping that someday you’ll get around to it, because you probably won’t.
Before significantly investing in a product development project you need to be sure you’re developing a product people will actually need or want. No amount of hard work can make up for pursuing the wrong idea. And the only way to determine how good your idea might be is market research. Research helps manage the risk of taking on a project as well as deriving valuable insights that could help you develop a better product. You need to find out how significant the problem or opportunity that your product addresses is, and only proceed if it’s real. Don’t make the mistake of falling in love your product. Fall in love with the solution to your market's problem.
Once you have resourced your project appropriately and determined it’s likely market appeal, you need to keep track of it. This starts with articulating the product vision – “what we are trying to build here and why” and defining a timeframe and budget for the project. If you want to avoid scope creep and product cost escalations, decisions need to be reviewed against your key objectives.
Sure, you want to keep your project under wraps so you can get an edge on your competition, but not at the expense of the project’s success. As soon as you can you want to be talking about your product with potential customers, suppliers, distributors etc. Having renders, prototypes, or even sketches or a simple value proposition for the product, can help highlight potential problems or opportunities early on in a project when it’s easier and more cost effective to make changes. Securing and building important relationships (such as with suppliers and distributors) early on can also speed up the whole process.
When you’re developing a product it’s easy to imagine that once you’ve resolved all the issues, and developed a product to meet the needs of the market, the sales will start to roll in soon after the product is launched. If only! For your product to be successful you need to have the right sales and distribution set-up, as well as good marketing and sales support. You need a strategy and plan beyond your product launch.
Made any of these mistakes yourself? I know we have. We’re probably guilty of #1 and #5. But not next time! And referencing # 4 Keeping projects secret, as suppliers, we see the benefits of collaborating with our customers doing product development every day. So don’t be shy, if you’d like to discuss laser cutting and engineering solutions for your project, the sooner the better.