What is the key to get a successful product?

Some weeks ago my wife Blanca and me had the pleasure to spend some time with not only Robotics experts, but very good friends from California (US), Bob Allen (COO at Ologic Inc), his wife Cori and Angel Hernandez (Business Development Director at Fetch Robotics).

We talked about a lot of personal and professional questions during a nice and relaxed dinner at a typical Spanish restaurant, in the oldest area of Madrid (Spain). But one of the (professional) questions we talked about was the jump from an R&D prototype to a successful product in the market. I have to anticipate that none of us had the magic key, but was really interesting to share our ideas and experiences. All of us have the experience on transforming R&D prototypes in commercial products, but not always these products had the success we expected. This is not rare at all as most product launches fail (see article Why Most Product Launches Fail from Harvard business review). The key is to do as much as possible in order to increase possibilities of success. So, how to do that?. Let me give you advice on some steps you may follow from the very beginning

About the product

• “Think big, but start small”. Sometimes we think on products that may be very interesting, but complex. Sometimes it is better to go step by step, so we could have a product in the market soon, so we could then learn about the acceptance of it and start gaining market quote. Then we could make a better and more complex version. Sometimes go to a very nice and complex version may take too much time, so we lose market opportunities.

• When defining the product, see it from the eyes of the customers and not from your eyes. The customers are who will pay for it, so you should cover their needs and not your desire to do something interesting for you. It is key to have the advice from potential customers not only in the moment of specifying the product, but during all the development and testing phases.
• If you could not offer a product that is either cheaper or have a great difference from the competence, do not spend time trying to produce it.

Market research

Ok, you have a great idea. Are you sure there is enough people interested in paying for it as you expect?. Let`s start doing some kind of market research. Yes, it takes time and effort, but it will help you understand where you are. It should include:

• A definition of your product and the needs you will cover (for example a cleaning robot may cover your need to have more free time and do less work)
• An analysis of the market target and size (for example people between 18 and 80 year old, with high education and located in these or those countries)
• An analysis of the competence, the price and other characteristics of their solutions. This point is crucial. May be we have a new product that does not exist in the market, so we could think we are the unique one that found a Blue Ocean, but this may be wrong. The competence is not only the group of companies that produce a similar product (for example cleaning robots), but any company offering alternative solutions to cover the same needs for our potential customers. For example a broom is a competence of a cleaning robot. Believe me, when I was selling cleaning robots at an online store I created several years ago, a potential customer told me that a broom was cheaper and faster way of cleaning than a Roomba. The size of our market may be much smaller than we expected (or dreamed). If you could not offer a product that is either cheaper or have a great difference from the competence, do not spend time trying to produce it. For one person a broom or a vacuum cleaner may be better than a cleaning robot just because the user have the full (manual) control of the tool, so they could find very fast were the dust is and rapidly clean the corners, but for others, the idea of having a useful robot at home may be even a more powerful decision factor than the pure results. The “needs” covered may be quite different from one people to another.

Ok, after a first quick market research you have some preliminary information that may help you decide if it worth the effort to jump to the next step: Do a Business Plan. 

Business Plan

A Business Plan should cover the following points:

• Mission, Vision and goals
• Sales and Marketing analysis: Needs to cover, Business model, Competence analysis, Product definition, Costs, Price, Margin, Target market, SWOT, Sales plan, Marketing plan, Sales channels, After sales service.
• Supply Chain: Suppliers, Manufacturing, Warehousing, Channels and Delivery.
• Technologies: Intellectual/industrial properties, R&D, IT infrastructure
• Operating and organizational structure: Shareholders, Human resources, …
• Finance analysis: Incomes, payments, accounting, payroll and taxes, financing, results forecast, treasury forecast
• Milestones, actions and Plan-B

There is a lot of information in Internet about how to produce a business plan, so I will not go very deep in it, but I will just give some recommendations on this process:

• Be very pragmatic. Creating a business is always a risk, but also something that may produce you a lot of proud, so we have to fight against optimism and be just pragmatic with dates, sales and financing.
• Ask skilled people to advice you. The view from others could give a complementary vision, making you pay attention to details you may forgot.
• If there is a R&D phase, consider it may take more time and money than expected. R&D projects tend to find issues due to the uncertainty of the results. 
• Always consider a plan-B. Your plan may be on time and cost or may not. You should plan alternative routes to follow in specific times. You should set milestones in your plan, so you have an action plan if the results are not expected by those milestones. Consider to have Plan-B for very few but important milestones. For example a milestone could be: Complete the product by month M. The Plan-B action may be: If not completed by then, reduce operating costs by x% so the project could have enough funds for another x months to get to market. 
• Keep attention to the core business and if possible delegate or contract the rest. When running a business, even a very small one, there are several tasks that make you lose attention to what makes the difference: The core business, therefore consider in your plan contracting them. This kind of things may be: administrative tasks (accounting, HR, mailing,…), Technology infrastructure tasks (computers, printers, lan, phones,…), Marketing (web page, online advertising, Internet presence,..), facilities maintenance (cleanup, maintenance,…)

For more information on preparing a business plan see the following articles:

• How to Write a Great Business Plan 
• The business plan  

Funding and investing

Another key point. May be you have enough money to run the project or may be you need some external funding. Also for this point you have a lot of information here and there (see the article 35 Great Ways to Fund A Small Business) but let me just give some advice on this point:

• You prepared your figures in the business plan. Just be sure that you consider at least two cases: the pragmatic one and the worst case scenario. This will give you more vision on the risks. Either if you have the money or ask for funding, you will know the risks in case someone find out them and believe me, investors are pretty much expert on finding risks. If you do not have answers for that or a Plan-B, they will not feel confident.
• Consider also how much time could your company or project survive if it doesn’t get incomes. This will really be the worst worst scenario: You get long delays to reach the market with your product. Investors will ask you this in order to understand risks.
• If you incorporate investing partners to the company, even if they are family or friends, prepare a good partners agreement, detailing any possible action. Remember always this is money, not friendship.
• When you have the opportunity to talk to an investor, don’t just talk about your project. Be different. Consider that investors have the money for lots of hungry business and get lots of boring offers. Surprise them and if possible, make them enjoy your presentation.
• Be sincere. If your project figures are unrealistic, they will find it. Do your job and get the correct figures to make the project work. Running a new project or business is always a risk and investors know it. Doing your figures as perfect as possible do not ensure the business will work.
• If you have a running company and want to put another product in the market, please take care on the investment limits so you do not put the whole company on risk. Is key to set a milestone that limits the investment in a project. Is better to abandon or stop temporarily a project/product, even considering the time and money lost, than putting all the business in risk. May be the development of the product was more costly or complex than expected, or may be we reached the market but sales are not as expected. A point of review and limit should be stablished and actions should be taken.   

Running the project

Ok, we got the Market research, the Business Plan and the money to execute it. Then let’s do it!. Let me give you some advice:

• Find the correct people to work with. Never hire for friendship. Do it for knowledge and experience.
• Be in the business. Check that everything is ok in a daily basis. Help to make things go on.
• Do not forget that the steps from "Prototype" to "Product-ready-for-the-market" takes time. Industrialization steps should be performed with care (selection of components, product oriented to optimal mass production,...) 
• Review monthly that you are following the business plan and make a good communication with stakeholders, so they feel confident. Lack of communication is one of the first things that start warning investors that things may be wrong.
• Do not forget paying attention to the milestones and execute Action-B if needed. Don’t miss this unless you have a clear and powerful reason.
• Encourage people. Make a team, so people feel motivated, not only because of their salary or position, but because they believe in their role in the project.
• Train people. As Peter Drucker said: “If you think training is expensive, try ignorance”. Training is key in order to increase people productivity and sense of professional growth.
• Have fun. Running a project or business may be hard because you have to be prepared for the uncertain, the time and funds limits, usually the lack of resources and the motivation of the people. This is the reason you should find ways to have fun with your work for you and your team. Enjoyment and good ambience is key to maintain the team energy alive and the higher this energy is, the better are the productivity, creativity and involvement of the people in the project.

Getting to the Market

So you got the product ready for the market. Then lets go ahead with some more advise:

• Normally it takes some time since you have the product until potential customers find out they need it. Therefore is good to start some marketing activities before the product is ready to the market. There are loads of methods to do that either online or by using mock-ups in trade fairs. But take care to be serious in your advertising, so what you offer is what you will have ready to the market in a short time. A lot of companies advertise about product that are not even finished the prototyping phase and the only thing they make is inform possible competitors on your technologies, so they get time to modify their technologies and get to the market at the same time as you.
• Make a lot of noise, ask online advertising companies to make viral videos of your product, contact media, go if possible to trade fairs, but choose them correctly as they are usually very expensive, so you go to those were your potential customers also go as visitors. 
• Keep superb relationship with first customers. They are the early adopters, using your product possibly in different ways you did in the testing phase. Make them help you improve the product and services around it.
• Ensure your product follow the correct legislation. Depending on the country it may be different. For example in Europe, for electronic devices there are several considerations to have (make the product be CE compliant, follow the rules of electromagnetic compatibility, etc.)
• Get an insurance that cover the products sold, so if the product cause any trouble to the facilities of the customer, the insurance could cover it. Take care on the previous point. If insurance company find that you do not have the correct legal documentation of your product, they may reject paying.

These are just some advice on getting to the market with a product. If you need more information, just tell me your needs.

Written by: Alejandro Alonso-Puig. HISPAROB Robotics Platform Vicepresident, IXION Industry & Aerospace MR Systems Manager and Quark Robotics Partner.