There are a few reasons to follow a tried and true process when developing a product:
1. It will save you money
2. It will save you time
3. It will increase your odds of success
This process — which you will encounter over and over again if you talk to those with experience or search the internet — has emerged over time through trial and error. Those who succeed in developing products follow it. Those who don’t follow it are unlikely to succeed.
Your biggest challenge
One big reason this process is valuable is that people tend to get overly excited about their ideas. In business and in life, people have an innate bias toward the things they want to be true.
In this case, that means we have a hard time accepting the problems and limitations of our ideas. Of course it’s a great idea — especially to the person who came up with it. But is it a profitable idea? How many people would perceive its value the way you do? How accessible are these people? How are you going to help them comprehend the value?
Even when we do ask ourselves the right questions, we don’t necessarily pursue the answers diligently. The fact, again, is that we want to believe our idea will be a huge success and make us a pile of money.
So how do you know when you’re being fair to yourself, or when you’re biased toward a rosy picture of how things will play out?
The right mental approach
The product development process, when applied correctly, is similar to the scientific method. When investigating an idea, you don’t want to try and prove that it is great. You want to try your hardest to prove it’s not great.
If it can withstand this kind of testing, you know it’s good. If it can’t, pursuing it is going to lead to a lot of pain. You’ll end up looking back and seeing money wasted and time lost.
Even when your idea does withstand testing, it’s no guarantee — you just know that it’s worth it to invest more time, money and effort into it. It still might not pan out. But the earlier you invalidate your idea, the less you’re going to invest into a dead end.
The product development process
Recognize a problem
Come up with a solution
Assess needs, costs, challenges
Putting resources together
Marketing and distribution
Whether you want to follow these steps or not, you will have to in order to get to market and see are turn on everything you’ve invested. There’s simply no way around them, and there’s no idea so great that you can speed past any of it.
These steps will cost time and money. But the reality is they aren’t avoidable, and they’re meant to save you time and money in the long run.
Questions you need to answer
You can test the profitability of your idea by asking yourself the right questions. Think of this like prototyping You want to test your idea at every stage of the process.
Market research: analyze the market for said solution + analyze the competition
Before you invest anything, check to see if the product exists. If it does, that will impact profitability. Even if your idea offers superior value, you’ll have to compete for the attention and trust of consumers.
Who needs my product?
What value does my product offer over alternatives?
How will I communicate the superior value to those who can benefit from it?
How much will it cost me to reach and win over those customers?
Prototyping is the epitome of the whole process. The entire point is to test your idea. You start with low-cost methods like sketching. When you’ve exhausted a low cost method and your idea still appears valid, you continue on to more in-depth methods, like modeling. Learn more about prototyping in this article.
Assess needs, costs, challenges
Here, you’re assessing everything you need for future prototyping, market research, marketing and production. Keep in mind that time is money, for you and your investors. Just because you’ve assessed the average square footage cost for the right facility doesn’t mean production will be up and running this month. Set realistic timelines for bringing all the key parts together.
What will development cost IE materials, labor, facility?
What will marketing cost?
What will distribution cost?
What legal challenges can I expect to run into, and what will that cost?
How much margin for error should I include?
How long will it take you to find a facility at a manageable cost?
How long will it take you to assemble the right team at a manageable cost?
How long will it take to raise product awareness?
How long will it take to set up distribution channels?
Now that you’ve assessed your needs, you can figure out how you’re going to finance your idea. If you’re bringing in funding from partners, friends, family, investors or banks, you’re going to need to clearly articulate exactly how you plan to get them their money back, plus profit.
Answering all of the questions on this list will help you do that.
How much money do I need?
How much margin for error do I need to account for?
Where will the money come from?
What questions are they going to need answers to before investing?
When can my investors and I expect to see a return?
No matter how meticulous you’ve been up to this point, you’ll probably run into more complications and challenges when you actually begin production.
How am I going to cover unforeseen costs?
Who is going to help me troubleshoot unforeseen challenges?
If your product isn’t marketable, it won’t sell enough to recover your investment. Putting it on the shelves of the local hardware store isn’t a realistic strategy.
Assuming that people will automatically understand it’s value isn’t a realistic strategy.
Assuming that your product will be found by the people who are suffering from the problem it solves is also not a realistic strategy.
Don’t leave it up to the consumer to find your product. They may not have even identified the problem they’re dealing with the same way you have.
Assuming that people will “get it” falls under what investors call speculating. They won’t be interested in speculating on your idea. So why would you? You’ve got a lot more than just money in it.
Raising product awareness takes time. Most marketing campaigns take about 6 months to see significant results — assuming the product is marketable and the messaging is effective.
What is the Unique Selling Proposition of my product?
Who are my ideal customers?
How can I get their attention?
What are the most cost-effective marketing strategies for my product?
If you can’t answer these questions, your idea may still need some work. Or, frankly, it may not be as great of an idea to others as it is to you.
Analyze your assumptions
Another human tendency to watch out for during product development is assuming that other people think like you. In some ways they do. In some ways they don’t. Are you willing to bet thousands of dollars or more that they do in this way or that way?
And that ties right back into market research, which is, of course, crucial for answering most of the above questions.
If you have a profitable idea, you can get business and legal help in getting it to market from Free Vector Advisors. Helping businesses get started and grow is our specialty. We can work within your means; Free Vector offers flexible payment arrangements, because we believe there’s value in businesses of all types and sizes.
Contact Free Vector here or business help in Palm Springs, Seattle, Bozeman or Pittsburgh.