It can be chaotic and unruly. While it may not consume a lot of resources or money, it can represent more than half the time it takes to get a product to market.
For this process to work, it must involve your whole team. This includes sales and marketing, along with senior management. You need everyone at the table, to engage in a complete SWOT analysis and assess whether you have a reasonable chance of success against established competitors.
It isn’t enough to bring something to market that’s marginally better. It must substantially out-class your rivals.
It’s important to make sure your employees and anyone else who comes in contact with details about the new product (investors, suppliers and consultants) maintain secrecy by signing non-disclosure or confidentiality agreements. You don’t want information to leak out and watch a competitor profit from your hard work. This also preserves your right to file for patent or industrial design protection later.
Step 2—Gauge the market
“If you build it, they will come,” is not a mantra to adopt for your product development efforts. Instead, you need to pound the pavement.
Talk to current and/or potential customers to gauge their interest in the product you propose to create. Ask them about the features and benefits they find most beneficial, and the price they would be willing to pay.
This is the kind of first-hand market research you need to determine whether you can make a viable business case for the product.
Now take it further. Attend trade shows. Take advantage of social media to solicit market feedback, offering some kind of incentive for participation. Use online A/B testing to see which features or variations yield the strongest response.
Just make it clear that this is a product concept, and not a product that is available for purchase.
Step 3—Build and test a prototype
At this point, you’ve already reached step five of Robert G. Cooper’s popular eight-step Stage-Gate Innovation process. You’ve generated the idea, screened it, tested the concept in the market and generated a viable business case. (Or, you have proven there isn’t a viable business case, and it’s back to the drawing board.)
Now it’s time to create a prototype and test it.
Consider the merits of creating a minimum viable product. With this approach, you hit the market running with a bare bones prototype to get feedback as fast as possible from testers. You incorporate this feedback into further refinements before sending the prototype out for testing again. Repeat as often as you must.
This “fast market testing” cuts down the time it takes to arrive at a final product with the best chance of attracting customers. And don’t overlook the marketing opportunities to build advance buzz for the product through this process.
Make sure that your testers sign non-disclosure or confidentiality agreements to keep this under wraps.
Be diligent and ensure that your prototype is not violating someone else’s intellectual property registration. Doing this early will help you avoid wasting precious time and resources, only to discover that you have to pay hefty licensing fees or revamp the product to work around someone else’s intellectual property rights. This research can be done online (Canadian Intellectual Property Office, United States Patent and Trademark Office, World Intellectual Property Office, Google Patents), or with the help of an expert. Protecting the brand (trademark), the literary/artistic/musical/dramatic work (copyright), and the look and feel of a product (industrial design) or the invention (patent) will help your business create value over the long term.
Step 4—Take it to market
Now it’s time to sort out the details of manufacturing, distribution, sales and support to commercialize the product.
Manufacturing and distribution may be areas your business must outsource to third parties. If so, research your options with the same diligence you used to carry out your market research. Look for credentials and testimonials. Seek referrals from companies with needs comparable to yours.
If a potential manufacturing or distribution partner balks at providing you with access to its clients, it’s a red flag that should give you pause.
Step 5—Iron out the kinks
The final stage of Cooper’s process is fine-tuning all aspects of production, testing, sales and distribution.
He also emphasizes the idea of “perfect pricing.” After any introductory pricing, adjust pricing to maximize your margins, without pricing yourself out of the market.
And remember, nothing is written in stone
The process to develop new products is seldom without its setbacks and failures. Be flexible and realistic in your expectations. The key is to have a firm grasp of what the market wants and is willing to pay for, and acting fast on that intelligence.