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Entrepreneurship 101 - Product Development

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Converting an idea or a lab prototype into a real, customer-ready product is no simple task. Learn how to turn your idea into a successful product by following the “V-model” of concept ...

Converting an idea or a lab prototype into a real, customer-ready product is no simple task. Learn how to turn your idea into a successful product by following the “V-model” of concept development. Learn how to differentiate between the steps of product development, including research, design, implementation, testing, verification, validation, operations and maintenance.

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    Entrepreneurship 101 - Product Development Entrepreneurship 101 - Product Development Presentation Transcript

    • 1
    • Entrepreneurship 101 Product Development Basics Steve Carkner Nov 2010 2
    • Introduction to Steve Carkner •  25 Year product development experience •  Award winning designer, products featured in Popular Science, Smithsonian, Science & Tech Museum, and many more… •  Founder and President of Panacis •  Investor, advisor and board member in many startup companies •  Former Director of Product Development and Intellectual Property Research at RIM •  Dozens of patents world-wide 3
    • Introduction to Panacis •  Medical, Military and Consumer product developer, focus on advanced power systems •  Roots in full product development from napkin sketch to production •  Many products launched internationally from tiny novelties sold at Wal-Mart to power systems for fighter jets and artificial hearts •  Profitable, high growth (100% P.A.) •  Profit 100 Ranked 4
    • Product Development Path •  Does not matter how large or small – same basic path can be followed •  Failure to have a plan WILL result in inefficiencies at best… complete failure at worst •  Following a plan will dramatically increase the chances of success defined as the launch of a profitable, high quality product or service 5
    • Let’s look at a Flashlight! •  You might assume that a flashlight would be very easy to just “throw together” in a design •  We will chart the development path for a flashlight against the product development path that could be used for much larger programs •  It’s really just the number of zeroes in the budget that changes 6
    • The “V” Model of Development 7
    • Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it •  What is it for •  Who pays •  What is YOUR capability in the area 8
    • Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it –  Wal-Mart, Road Warriors or Stocking Stuffers? •  What is it for –  Serious lighting or Fun? •  Who pays –  Consumer, Industrial, Government? •  What is YOUR capability in the area –  Distributor, Designer, Manufacturer? 9
    • Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it –  Wal-Mart, Road Warriors or Stocking Stuffers? •  What is it for –  Serious lighting or Fun? •  Who pays –  Consumer, Industrial, Government? •  What is YOUR capability in the area –  Distributor, Designer, Manufacturer? 10
    • Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it –  Wal-Mart, Road Warriors or Stocking Stuffers? •  What is it for –  Serious lighting or Fun? •  Who pays –  Consumer, Industrial, Government? •  What is YOUR capability in the area –  Distributor, Designer, Manufacturer? 11
    • Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it –  Wal-Mart, Road Warriors or Stocking Stuffers? •  What is it for –  Serious lighting or Fun? •  Who pays –  Consumer, Industrial, Government? •  What is YOUR capability in the area –  Distributor, Designer, Manufacturer? 12
    • Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it –  Wal-Mart, Road Warriors or Stocking Stuffers? •  What is it for –  Serious lighting or Fun? •  Who pays –  Consumer, Industrial, Government? •  What is YOUR capability in the area –  Distributor, Designer, Manufacturer? 13
    • Concept of Operations We are going to build a Flashlight for Road Warriors to use in Serious Lighting situations. This will be bought by the Consumer. We will Design this product and outsource the Distribution and Manufacturing. Entrepreneur’s Note: Cheaper is very rarely a viable business model 14
    • Requirements and Architecture Break down into separate documents with the first TWO being the most important •  Customer / Market Reqs. – non technical •  Functional Requirements – more technical 15
    • Requirements and Architecture Break down into separate documents with the first TWO being the most important •  Customer / Market Reqs. – non technical •  Functional Requirements – more technical •  Product / Engineering Specification – technical •  Test and Verification Specifications – technical 16
    • Requirements and Architecture Break down into separate documents with the first TWO being the most important •  Customer / Market Reqs. – non technical •  Functional Requirements – more technical •  Product / Engineering Specification – technical •  Test and Verification Specifications – technical •  Issues found during the design phase may change the technical specifications, but will rarely change the customer and functional requirements documents 17
    • Customer / Market Reqs. – non technical Flashlight is: •  Durable and light weight for the Road Warrior 18
    • Customer / Market Reqs. – non technical Flashlight is: •  Durable and light weight for the Road Warrior •  Bright, even light, with good battery life for Serious Situations •  Should never be left without light •  Price is only a moderate consideration •  Good place to add our special sauce such as a desire to be the smallest, or lightest, or brightest and explain how this helps to focus on the ultimate target market •  Good place to add competitive comparisons which we can seek to meet or exceed 19
    • Customer / Market Reqs. – non technical These considerations may SEEM obvious to you, but they may not be obvious to the people helping you grow your business! Make sure everyone is going in the same direction! 20
    • Functional Requirements – more technical Helps to give both a fixed goal and a stretch goal •  How lightweight, example of less than 50 grams with a stretch goal of 40 grams (why?) 21
    • Functional Requirements – more technical Helps to give both a fixed goal and a stretch goal •  How lightweight, example of less than 50 grams with a stretch goal of 40 grams (why?) •  How bright, even, adjustable, long life, etc. •  Drop, shock, water resistance, etc. •  This is the place to add any extra feature requirements such as onboard storage of an extra bulb (why?) 22
    • Product / Engineering Specification – technical Should answer “how” for many of the previous functional requirements •  Achieve weight requirement by use of small AAA batteries AA AAA 23 Grams 12 Grams 23
    • Product / Engineering Specification – technical Should answer “how” for many of the previous functional requirements •  Achieve weight requirement by use of small AAA batteries •  Material selection, Aluminum, Titanium? •  Achieve long run time by use of LED technologies •  Mechanical design to meet IPXX, plus 2 meter drops, etc. 24
    • Test and Verification Specifications – technical Should answer “prove it” for the previous functional and engineering specification requirements •  Test can be simple – Weigh it! 25
    • Test and Verification Specifications – technical Should answer “prove it” for the previous functional and engineering specification requirements •  Test can be simple – Weigh it! •  Light output •  Battery life •  Durability •  Every item from specification to be checked! 26
    • Test and Verification Specifications – technical Should include sensitivity analysis •  Variation •  Allowable limits Tests focus on proving the design does what we expected and therefore will also meet the customer specification. Tests are NOT done on every product 27
    • Detailed Design This is the most common product development activity to outsource •  Well written, complete requirements and architecture documents will dramatically simplify this step •  Larger programs are often broken up and assigned in a mix of in-house and outsourced models •  Keep an eye on the Customer Requirements, ensure that design decisions do not impact these, it is the basis of your plan! 28
    • Implementation This is the building phase •  Break into smaller, easier to test and validate modules where possible •  Create a Statement of Work for any contractor, clearly define tasks and reference back to the specifications •  Any departure from the specifications, especially feature creep, should be documented and a revised SOW issued, otherwise unexpected invoices and departure from plan timelines will result 29
    • Suggested Tactic Create a tracking system at this point Any feedback can be reported, and tracked to closure Reduces design spin due to items “falling through the cracks” Schematic PCB Mech Open / Who Date Who Date Item # Description 5part@n Revision Revision Revision Category How Fixed or Suggested Fix Verify / close Opened open it? Closed Level Level Level Closed it? 4 Customer spec does 0.0 0.0 0.0 Electrical This has been clarified, signal is absolute closed 26-Nov-07 Steve Feb-08 Rene not explain what requirement. Second procesor added to Charge Enable signal design to handle it. is used for or if it can be ignored, we plan to ignore it. 5 Cells have too much 0.0 0.0 1.0 Mechanical Manufacture carrier boards that are CLOSED 26-Nov-07 Eric May 23-08 Eric free movement inside taped to the cells to restrict free housing and will easily movement and support tab structure. Pot tear connectors or batteries into case. slam into circuit board. New design required here. 6 LCD Display angle is 0.0 0.0 0.0 Electrical Increase drive level to LCD by clocking closed 26-Nov-07 Rene 11-Mar Steve incorrect, designed for the COM pin at 180 degrees to the 6-oclock view, should segmet pin. This dramatically increases be designed for contrast and looks great. overhead view 30
    • Integration, Test and Verification This is the Collection phase •  This portion of the program is the MOST underestimated in terms of time and costs 31
    • Integration, Test and Verification This is the Collection phase •  This portion of the program is the MOST underestimated in terms of time and costs •  Budget should include the same amount of time and cost for this stage as was allocated to the Design and Implementation phases together •  Pull in the modules and work created by the team and start “plugging it together” 32
    • Integration, Test and Verification (cont) •  It will NOT work the first time 33
    • Integration, Test and Verification (cont) •  It will NOT work the first time •  Most of the problems you encounter will tie back directly to mistakes in the technical specifications, this is where a small mistake gets multiplied by orders of magnitude in terms of cost and timelines 34
    • Integration, Test and Verification (cont) •  It will NOT work the first time •  Most of the problems you encounter will tie back directly to mistakes in the technical specifications, this is where a small mistake gets multiplied by orders of magnitude in terms of cost and timelines •  Resist temptation to revise on-the-fly 35
    • Integration, Test and Verification (cont) •  It will NOT work the first time •  Most of the problems you encounter will tie back directly to mistakes in the technical specifications, this is where a small mistake gets multiplied by orders of magnitude in terms of cost and timelines •  Resist temptation to revise on-the-fly •  Fix the specification, revise the statement of work, move forward again 36
    • Integration, Test and Verification (cont) •  It will NOT work the first time •  Most of the problems you encounter will tie back directly to mistakes in the technical specifications, this is where a small mistake gets multiplied by orders of magnitude in terms of cost and timelines •  Resist temptation to revise on-the-fly •  Fix the specification, revise the statement of work, move forward again •  Only fix it once, don’t break something else in the process 37
    • System Verification and Validation This is where you take the fully assembled product and start testing it in real-world situations •  Most of the problems you encounter will tie back directly to mistakes in the Customer Requirements (not technical requirements) •  The most common complaint will be unexpected operation or interactions with other equipment 38
    • System Verification and Validation (cont) •  A detailed system verification plan (sometimes called a Design Validation plan) is key to ensuring every element of the customer and functional requirements document is satisfied 39
    • System Verification and Validation (cont) •  A detailed system verification plan (sometimes called a Design Validation plan) is key to ensuring every element of the customer and functional requirements document is satisfied •  It is possible that a mistake now can invalidate most of the work of your work (and money, and time) 40
    • Real-World Flashlight Example •  A large gun manufacturer was tasked with providing a portable target lighting system on their weapon. The object was to have a flashlight on the weapon so enforcement officers would not have both hands full (one with a flashlight and one with a gun) 41
    • Real-World Flashlight Example •  A large gun manufacturer was tasked with providing a portable target lighting system on their weapon. The object was to have a flashlight on the weapon so enforcement officers would not have both hands full (one with a flashlight and one with a gun) •  ALL requirements were met with respect to brightness, battery life (using LED’s), weight, etc. 42
    • Real-World Flashlight Example The Problem (which still exists today) •  The white light from the LED’s is quite harsh and the human eye cannot perceive contrast and detail very well with it •  When they tried it in real life, they had a “criminal” hold either a gun, a stick, or a doll •  With conventional light bulb flashlight they could easily figure out what the criminal was holding •  With the LED light, they couldn’t tell •  Customer requirements did not envision this scenario, it is now part of their spec and validation plans 43
    • Treat Failures Like Gold! You may be losing valuable information about product weaknesses •  Products will fail in the field in ways that cannot be predicted, therefore any failure during small scale production testing have a very high probability of indicating a real problem, fix it now rather than recalling a product that goes to full production •  Avoid the temptation to write off an early product failure as “because it’s a prototype”, follow the failure to a known root cause.
    • Operations and Maintenance Day-to-day activities would normally include production and maintenance of the design, updates to the design and product in the field •  The verification documents used in the previous step usually form the basis of a production test plan, a subset of tests that aims to prove the product is built correctly •  The production test plan forms the basis of a product return validation method, anything returned by a customer would be validated using the same tests as production 45
    • Operations and Maintenance Dealing with customer support, returns and field upgrade issues is rarely budgeted for •  If you are planning a very steep deployment ramp, there are a number of companies that you can outsource this to •  Planning a slower deployment ramp with a friendly customer will allow you to manage support in-house 46
    • Operations and Maintenance Dealing with customer support, returns and field upgrade issues is rarely budgeted for •  If you are planning a very steep deployment ramp, there are a number of companies that you can outsource this to •  Planning a slower deployment ramp with a friendly customer will allow you to manage support in-house Seek out your friendly customers! 47
    • The Next Revision It is normal to go to Revision #2 •  Seeding the initial market target may give you ideas on an even larger market that you can reach with minor product changes •  You may realize how to get more money for the product with an additional feature •  Revision may be necessary due to a misunderstanding of the market itself •  This is the time to allow some feature creep, now that you have experience with Rev #1 48
    • Tools A few project management tools will help to improve communication and reduce risk •  Gantt Chart is the most common planning tool •  Gate Review Chart more common in Military 49
    • Gantt Chart Allows all tasks to be managed on one sheet Assignment of resources and loading Estimates of program costs Quickly helps locate critical paths But… easy to get too deep into micro-management 50
    • Gate Review Also called a “Phase Gate Plan” Can be linear (as shown) or tiered Provides clear illustration of when the teams need to be brought together to approve moving to next phase Each gate has documented set of deliverables and sign-offs Very useful when managing external resources as progress can be charted in terms of performance, timeline and cost to be sure you are on target at each gate 51
    • Budgeting for Development Programs are generally over time and over budget •  It is NOT always a bad thing to be over-budget, quite often the end product is better when an appropriate amount of “spin” is added •  Budget can refer to dollars, to people or to time •  If you are solely responsible for the estimate, you may be an order of magnitude too low, get a second opinion… and double it? •  It is exceptionally rare to over-estimate a budget •  Find similar products and see if you can find out how much it cost to develop from end to end •  Don’t expect to “beat” the predictions just because you are a smaller team / company 52
    • Choosing a Partner •  The people and companies you choose to work with will be directly responsible for the success of your idea, do you really want to go with the lowest bidder? •  Investors are increasingly skeptical of heavily outsourced models because there is often a lack of buy-in by the outsourced company •  Look for a partner that will ADD to your company’s reputation and will improve your chances of getting funded •  Check references, do a search on past news releases and other information… dig •  Be open with the companies you deal with, treat them with respect and they will be there to help you later if/when things don’t go exactly to plan 53
    • Contracts •  Business should be done on a handshake, with a high level of trust •  The handshake must be backed up with a contract •  A good approach is to start with an MOU (Memorandum of Understanding), it can be a 1 page bullet list which a lawyer can then easily turn into a full blown contract •  Ultimately, if you don’t trust the person or are nervous about the business relationship then an MOU or contract will NOT help, sometimes you have to go with your gut impression •  A well written contract will benefit both parties in conveying more than just rates and billing practices, but should also include the statement of work to be performed and methods of dispute resolution – Get a lawyer •  Refer back to the contract DURING the project to ensure nothing new has been added or taken away by casual verbal agreement 54
    • One Last Look - Flashlight •  Don’t underestimate complexity, each part of this unit needed to be designed •  Effectively, each part is a mini-project itself 55
    • That’s It •  Wake Up… •  Any questions? 56
    • Please send any feedback you have to me, I would like to keep improving this presentation! Steve Carkner President Panacis Inc. 613-727-5775x727 scarkner@panacis.com 57