Making a new product is hard.
People say introducing a new product to the market is like jumping off a cliff while building the parachute on the way down…except that in hardware, the parachute is a hell of an expensive one, there are thousands of ways you can get it wrong & iterations are always slower than the speed of your fall.
But why would you build a parachute after jumping off a cliff anyways?
People usually say “hardware is hard” which is true in a way but this is also quite over-estimated. Most of the time, ignorance and resulting lack of planning makes an otherwise-quite-straightforward process seem hard. Hardware is hard but good new, it is manageable. We’ll dive into how.
Making the right product is even harder.
Making the right product requires to pull a lot of resources & data from many different sources to make sure that your product will achieve product-market fit. You sure could go with your gut feeling alone but that’s a huge uncompensated risk you do not want to take.
Your organization needs to have a way to validate your market and talk to its users. It then needs to align those market findings with how a new hardware product development project is usually handled.
How others are handling the process.
They believe technology is a selling point.
People usually look for a market for a technology instead of the other way around.
Are you sure the product you are making is actually what the consumers want? Don't fall for the “if we make it, they’ll come and buy it”. If you do so, you may end up making something that nobody wants.
You have to start with the customer experience and work backwards to the technology - Steve Jobs
They believe making a prototype almost “gets you there”.
It is super easy to make a prototype with very little investment but it’s a whole another game to industrialize a product at scale.
Understand that even if you've spent the last 6 months working on a demo board based prototype (Raspberry Pi and the likes) enclosed in a 3D printed casing and that you already got something delivering your main features, you still have only accomplished 20% of the total work. There is still a long road ahead.
So before committing yourself to any serious delivery or heavy investment, make sure you backed yourself up with some real product-market fit validation and you have a clear view of the lead time and budgeting required to deliver your product at scale.
They believe their close relationships will provide the right suppliers.
Being introduced to a great supplier by a friend is awesome, it saves you time and effort. Well it should not: you should still spend time and effort on qualifying that supplier to make sure it is a great fit for your project.
Famous last words: “Foxconn would be a great suppliers for my hardware start-up and I just happened to get a nice warm intro from a VC friend”. Even seemingly “great” suppliers can be bad fit for your project. Good news is that applying the following framework in search for the right product can also help you find the right supplier. The more you know…
How you should handle the process.
So how do you make the right product ?
We have talked a lot of finding the right fit: product-market fit and product-supplier fit.
You need a way to evaluate at any given time during the execution of your project that you align what your supply side can output and what your market side wants to absord.
One simple way you could go at it is to zoom out from the feature list alone and use the “simple magic triangle” framework.
This simple magic triangle allows you to create different product mixes reflecting different shippable product’s set of features (scope) at a given unit price (cost) and at a given time-to-market (time).
Using this framework can help you shed light on critical issues you might not be aware of during your product development process if you only focus on features or technology:
- What is our minimum viable set of features? Did we pack too many features into our V1?
- Did we make the right technology or design choices? Did we overshoot our requirements on performance?
- Do our design choices allow for manufacturing scaling? Can our design choices be easily supplied by our supply chain?
- Are we creating enough value with this projected set of features at this price point? Will it be relevant on the projected time-to-market?
If your estimated unit price or product development budget and timeline ends up being too high, you might need to go back to the drawing board and adjust your product mix and roadmap.
Better making adjustments before you invested hundred of thousands and better be sure you’ll hit your target when you do.
Another more holistic approach is to embed the first simple magic triangle into the “St. Galler Magic Triangle” which gives a higher bird-eye view of your product mix embedded into your whole business organization. This is a great way to think of your hardware product as a platform on which you’ll be able to generate different revenue streams (HaaS, leasing or rent, etc).
Apply and define your magic triangle early on in the project and refine as you go. It’s like having a compass when going out in the wild.
Start from the market.
- Talk to your users and have them tell you what they need and how they want to use it. Technology is just a means to an end which is always bringing value to your users and that value is never technology. There you go: you have your minimum viable set of features.
- Screen your market for alternative & competing solutions, evaluate each solution’s time-to-market and pin point each solution’s price positioning. There you go: you have a rough idea of your required retail price and time-to-market.
Create a prototype asap & acap to fulfill intermediary KPIs
- Validate your market & organize a small focus group.
- Raise the money that will help you fuel your growth & the high NRE investment down the way.
Do not launch crowdfunding at the prototyping stage.
- Having a successful crowdfunding is a good market validation indicator at best but you now have a deadline. So whenever you feel you’ve made it because you had a successful crowdfunding using a prototype based off a Raspberry Pi, be cautious because you’ve only achieved a small part of the actual work (and spent a small part of the actual money required).
Prioritize your focus but know you are making trade-offs.
- If you focus on time to get the project done as fast as possible, the scope will have to be reduced or you’ll need to allocate more resources to deliver the work on time.
- If costs are your main priority and you want to finish your project under budget, you’ll need to descope the project or extend the initial deadlines since you’ll be employing fewer or cheaper people.
- If you prioritize scope and want to deliver feature-rich, high-quality products/services, you’ll require extra budget and time to accommodate complex tasks.
Contract with your engineering or manufacturing partner using your magic triangle KPIs.
- The magic triangle can also help you align your product mix with your potential supply partners. You can use it as a way to better define what you want, to screen and score suppliers but most importantly to contract. There you go: you have now an expert legally commited on delivering on your magic triangle.
Refine as you go but do not forget to execute.
- Congratulations, you are ready to invest heavily on making your product a reality. There are loads of work ahead which will test your patience but also your magic triangle. Make sure you ponder every decision correctly but do not procrastinate too much. You have an efficient framework in place so use it and execute faster!
- The magic triangle framework is a great way to maximize your (high) return on investment by making sure you have a process in place from ideation to market. It is robust enough to make sure you end up making a profitable and market-relevant product but it also allows for enough flexibility at handling whatever challenges will - definitely - be thrown at you along the process.