The Perfect Product Design
Moving from Prototype to ManufacturingBy Greg Harris
A customer wrote me asking for some advice on how to turn his product prototype into a viable product. After watching episodes of ABC's Shark Tank and CNBC's The Profit, he felt like he knew the basics but was struggling at how to best take the next step for his product.
In the interest of confidentiality I won't detail the product, but suffice it to say he had a scary incident in his personal life and realized that he wanted to design a product to prevent it from happening again.
The good news for Jameco is that the customer invested upwards of a thousand dollars buying components and building prototypes. He designed and then redesigned his product, lovingly adding features and capabilities until he got a prototype he was really happy with. But while he was confident during the design phase, he had no confidence about how to move forward.
This was not a full time endeavor. By day the customer is the CEO of his own company and despite the passion he has plowed into this side project, it's not more than a hobby today. He was approached by a close friend who for as little as 40% equity in his company, proposed that he would introduce him to a friend who knows a buyer at a big retail chain, but obviously that didn't sound too attractive.
When he wrote me, his first question was about moving from a prototype to manufacturing. I jumped on the phone for a chat, but I wanted to hear more about the product first. He explained his product to me in about 15 minutes. He was passionate about his product and was articulate about its benefits and the unique elements of his electronic design. He had a good answer to every question and when he was through, I was convinced that this was indeed a perfect product.
Then our perspectives parted. I've learned that engineers and marketers don't think the same way and that we both approach problems very differently. The engineer had designed a perfect product, but as the marketer, I had little interest in a perfect product and more interest in finding a "lowest common denominator" business strategy that might appeal to the masses.
My first concern was that it took 15 minutes to convince me. Most consumers make decisions in seconds, not minutes. The speed with which one can convince a prospective buyer of value is critical. Can a picture or a product name do the job or is more explaining required? In my case I wanted to know how this was different than alternative products on the market. While he had great answers, consumers walking down an aisle wouldn’t have the luxury of this interaction.
Now that I understood the product I volunteered what I would be willing to pay. I asked, "Will this be priced higher or lower than $39.99?" It's what I felt that the product was worth to me. If he had told me that it cost $19.99 I would have predicted huge success, but he said it would cost $119.
Again, he was very articulate about how inexpensive $119 was as compared to the worst case scenario without the product. He pointed to the quality of components and how he didn't cut corners like cheaper alternatives. In response, I pointed to a product that cost $9 and probably prevents the worst case scenario. He explained how his product was better.
We had a few chuckles about our differences and I summarized my feedback:
- Find out what your market will pay. Create a brief online survey that explains the product in a sentence or two (no more) and ask them what's the most they would be willing to pay for the product.
- Design for a price point. Take a price point that seems viable from your research and work your design backwards to see how you make that work. If $39.99 is the right number and you have to leave 20% for a retailer, and 20% for yourself, then the challenge is a design that costs no more than $25.59 to produce.
- Play for the long run. Finally, I suggested he should trade short-term gain for long-term success. I thought he should find a single retailer (ideally a specialty catalog in his case) and offer them an exclusive on the product for one year. I even suggested that he try to simply break even to see how high he could get sales. If this experience was successful it would be relatively easy to leverage this success into a longer term solution.
Do you need some "go to market" advice? I'm here to serve. My fee is a mere five cents and my advice will be worth every penny!