Hardware is hard.
Maybe you’ve been working away in your incubator or co-working space looking enviously at your neighbour who’s strung together a pilot app running on iOS in just two weeks. They’re already out getting sales traction while your IoT hardware product is months, or even years, away from its first sale.
So why is it so hard and why does it take so long?
And how do you convince investors to come on board when you don’t have a product or sales traction to point to?
Here are five tips to help you navigate your hardware product through to commercial success.
1. Validate early but plan for a long road
Before you head off spending time and money you need to be certain that the product your engineers design and build is the product the market wants, otherwise, you may as well take your cash and burn it.
However, you don’t need a working product to validate the market. You can start with a prototype that your customers can touch and feel, anything from a simple storyboard to a hand-crafted visual model that looks and feels like the real thing.
It’s absolutely critical to validate, validate and keep validating.
The effort you put into this early stage has the most influence on your market success, even though it’s only a tiny fraction of the cost of getting to market.
When I launched Agersens, I started with a dummy cow collar that looked like the real thing but only cost a few hundred dollars to build. I took that around the world to every customer, stakeholder and investor meeting. It didn’t function but it looked like it would, and when people had something to see, touch and feel it became very real.
2. Develop a realistic journey with value inflections
When organising a road trip you can plan when to refuel, when you’ll need a meal break and include a back-up plan for a breakdown along the way.
You’ll also need to plan your product development journey into achievable stages that include value inflections. It doesn’t matter what market you’re in, or how complex your product is, there are the same logical milestones you’ll need to achieve.
The first milestone is normally market validation of your product concept. If you’re using new technology, the next milestone will validate the new tech in your product concept.
Then comes the big one — completing a detailed design of the whole product and building a working prototype. After that, you’ll need to focus on transferring the product into manufacture and selling it to your early adopter customers.
When developing your strategy be aware that you don’t need to solve all your problems at once. Break big problems into smaller knowledge gaps that can be solved progressively in each stage.
Aligning each product development stage to value inflections builds shareholder value. If you need to raise more funds, you’ll be able to demonstrate what you’ve done with the funds so far, what knowledge you’ve gained, and how the future is more certain.
And you’ll need to build in some contingency — the back-up plans in your product development road trip.
3. Bring investors on the journey
Are we there yet?
As a child you probably remember driving your parents nuts by asking this when you were only 30 minutes into an eight-hour road trip because you didn’t know how long it would take or where you were on the journey.
We’re all a lot happier if we can see a map of where we’re going, and what we can expect to see along the journey. That way we can look forward to the next meal break or milestone and see progress.
Your investors are on a product development journey with you. You need to show them a road map or a strategic plan that’s realistic and achievable. When you reach a value inflection, keep your investors informed by showing what you’ve achieved and where you are on the journey. Avoid surprises.
4. Engage competent, committed experience
Getting smart, experienced people will save you time, money and sleepless nights.
Not all engineers are equal and having a bunch of engineers on board doesn’t mean they’ll deliver what you need. Technical people can often let the perfect technology solution derail meeting market needs — resulting in the wrong product or long delays getting to market.
You need to have someone leading your team who has completed the journey before. Someone who has the scars from having to live with the results of their earlier decisions.
Product development is a multi-disciplinary, multi-skilled activity, so you’ll need a range of people with different skill sets that come and go during the course of the project. For example, you may need a lot of PCB design work early on but only a maintenance effort later.
Poor management of the skill set will magnify cost and time that will have to be made up later. A poor foundation laid earlier can sometimes lead to firmware being completely re-developed from scratch.
To manage the skill set supply and demand, consider getting a design house with a team of competent experts to help you. It will cost more initially but may get you to market earlier because they can supply skills to match demand.
When choosing a design house, find one that demonstrates they can ‘walk in your shoes’ and are strong communicators. Design projects generally fail, not because of a lack of technical skill, but because of poor communication.
5. Engage manufacturing talent early
A dumpster filled with new but useless products is a heartbreaking sight. Especially if they cost millions of dollars to manufacture, can’t be sold, or worse, need to be recalled from customers. This happens when design and manufacturing fail to deliver a robust product that meets customer needs.
You need to develop a product design that’s aligned to the manufacturing process and manufacturing supply chain, and ensure effective communication between the two teams. Designers are creative and thrive on continuous improvement, but rapid or frequent change causes manufacturers to go into a tailspin.
You can avoid recalls, long delays and high costs by getting manufacturing skills on your design team, thus preventing ‘over the wall’ transitions when designers and manufacturers don’t communicate.
Successful manufacturing is about getting details right and having a super-controlled quality process right through the supply chain. That doesn’t mean zero change, but it does mean that every change, no matter how small, must be validated and implemented in a very controlled way.
You’ll sleep better if you choose a manufacturer that is motivated to support you and has an effective quality system with robust supply chain management.
In 1986, the space shuttle Challenger blew up due to a faulty rubber ‘o’ ring. While creativity is an essential element to innovation, getting a reliable hardware product to market that works day in, day out is about continuous learning and getting details right. Once the creative part is done, it’s an experienced, disciplined and committed team that will do the hard yards to deliver an outstanding product to your customers.
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.