You've Developed a Product, Now What?
Originally Published on Business.com
Transforming an idea into a physical product and into the hands of the masses can be challenging for a new entrepreneur. You don’t need to make the journey alone. Find out how a strategic partnership can provide you with the expertise to drive your growth.
Having worked in manufacturing for the past 10 years, and as part owner of a contract manufacturing company in China, I've had the pleasure of supporting entrepreneurs as they bring their product concepts to life. It amazes me how many people neglect to plan how to get their product to market. It is like what they say: Ideas are free, execution is everything.
Let's assume you have developed a new product in the XYZ industry. You performed your due diligence, and you firmly believe your product is a better mousetrap and an improvement to your competitors in the market – now what?
First, you will need to get your product made. Second, you will need to generate product hype. Understanding these two parts will lead to your product being in the hands of the masses.
Getting it made
Getting your product in the hands of millions requires a systematic approach to having your product made efficiently. If you are like most startups, you need to keep a lean team, thus, forming partnerships with the right companies will become very important.
One of the earliest partnerships you should make is working with a contract manufacturer (CM). Working with the right CM will not just provide you with production expertise, but also engineering, development, logistics, supply chain expertise and more. This will allow you to allocate more resources to sales and marketing.
It's best to connect with a CM sooner rather than later, considering there are a few things they can help with.
Prototypes
While you may already have a prototype on hand, keep in mind not all prototypes are created equal. Not all prototypes can be mass produced. Some changes may need to be made to the overall design to ensure your product can be made as efficiently and cost-effectively as possible during mass production.
Design for manufacturing (DFM) becomes very important. The best resources for this are engineers that understand the production process. The goal of DFM is to drive down manufacturing costs by eliminating unnecessary parts and choosing the most cost-effective materials.
Costing
You might have an idea about the price, but if you want to market the product, you will need to develop a pricing plan. When setting your price, you will need to know how much it costs you. Provide your CM with a target price, and let them provide design and engineering changes that will make your target price manageable to reach.
Tooling
Tools are essential for production to provide consistency to the product. Each production line requires different tools, and the lead time associated with the tooling stage will vary depending on the production line needed.
Lead time
When you start planning, you will need to know the production lead time. Make sure you understand that production lead time is precisely that, the lead time associated with the production process and doesn’t take into account for any sea or air freight.
Getting your product out there
The next step is building hype and distribution lines for your product. However, you will need to validate your product before taking the plunge.
Once you have a prototype you are satisfied with, validate it. This should have been already completed during the due diligence stage, but once you have a prototype, it helps to gauge market reaction to your physical sample. This does not mean the old lady across the street who gets excited about everything you do – the goal is to seek critical feedback. Ask people who are not immediate friends or family.
Also, once you have the prototype and have a rough idea of your landing cost (the cost to get the product to your doorstep), you can develop tentative pricing strategies. Getting your product to the market can be a rather costly process. You might need to seek outside investments to do this.
Investments
Getting your product made is not cheap, so you might want to seek outside investment to bring your ideas to life. When seeking investment, target individuals that can provide additional value other than just providing cash. Also, find someone that can compliment you, such as choosing someone that has manufacturing or distribution experience in your field.
Seed investors, angel investors and venture capitalists are the most common forms of investments out there for entrepreneurs. However, investments through CM are starting to gain popularity due to their knowledge that's backed by the investment.
Crowdfunding
A new and trending way of launching products are through crowdfunding campaigns, which allow people to give you money to open up tools and manufacture your product in return for receiving the product first. This is a great way to market your product and to raise funds without giving up any equity.
After the campaign, it is important to know that you're not done with your marketing. Many Kickstarters lose traction because they believe the hype of their campaign will outlive their time on Kickstarter. The most successful brands on Kickstarter constantly launch new and innovative products while continuing to market their existing products.
Conclusion
Taking an idea to a product in the hands of the masses can be a considerable challenge for new entrepreneurs. It's important to take it in stride and to not bite off more than you can chew. Seek strategic partnerships with companies that can provide you with expertise that last longer than the value of a dollar.
Acknowledgements:
Special thanks to http://www.Business.com for posting this blog.