Product Development

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Converting an idea or even a lab prototype into a real, customer-ready product is no simple task. Steve Carkner of Panacis Medical discusses the topic of product development.

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Product Development

  1. 1. Follow or Tweet: #ent101
  2. 2. Entrepreneurship 101 Product Development Basics Steve Carkner December 2009 2
  3. 3. Introduction to Steve Carkner •  20+ 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
  4. 4. Introduction to Panacis •  Medical, Military and Consumer product developer •  Full product development from napkin sketch to production •  Many products launched internationally from tiny novelties sold at Walmart to power systems for fighter jets and artificial hearts •  Profitable, high growth (100% P.A.) •  Profit 100 Ranked 4
  5. 5. 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 “almost the worst” case •  Law suit is perhaps the worst case •  Following a plan will dramatically increase the chances of success defined as the launch of a profitable, high quality product or service 5
  6. 6. Lets 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
  7. 7. The “V” Model of Development 7
  8. 8. 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
  9. 9. Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it –  Walmart, 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
  10. 10. Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it –  Walmart, 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
  11. 11. Concept of Operations Comprised principally of the idea behind whatever you are trying to do. •  Who wants it –  Walmart, 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
  12. 12. 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 12
  13. 13. 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 13
  14. 14. 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 14
  15. 15. 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. 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?) 15
  16. 16. Product / Engineering Specification – technical Should answer “how” for many of the previous functional requirements •  Achieve weight requirement by use of small AAA batteries •  Achieve long run time by use of LED technologies •  Mechanical design to meet IPXX, plus 2 meter drops, etc. 16
  17. 17. Test and Verification Specifications – technical Should answer “prove it” for the previous functional and engineering specification requirements •  How do you test light output, battery life, weight •  Tests at this stage may be quite complex, but are not expected to be performed on every product •  Tests focus on proving the design does what we expected 17
  18. 18. 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! 18
  19. 19. 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 19
  20. 20. 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 / Date Who open Date Who Item # Description 5part@n Revision Revision Revision Category How Fixed or Suggested Fix Verify / Opened it? Closed close it? Level Level Level Closed Customer spec does not explain what Charge Enable signal is used for or if it can be This has been clarified, signal is absolute ignored, we plan to requirement. Second procesor added to 4 ignore it. 0.0 0.0 0.0 Electrical design to handle it. closed 26-Nov-07Steve Feb-08Rene Cells have too much free movement inside housing and will easily tear connectors or slam Manufacture carrier boards that are taped to into circuit board. New Mechanica the cells to restrict free movement and 5 design required here. 0.0 0.0 1.0 l support tab structure. Pot batteries into case. CLOSED 26-Nov-07Eric May 23-08 Eric LCD Display angle is incorrect, designed for Increase drive level to LCD by clocking the 6-oclock view, should COM pin at 180 degrees to the segmet pin. be designed for This dramatically increases contrast and looks 6 overhead view 0.0 0.0 0.0 Electrical great. closed 26-Nov-07Rene 11-Marsteve 20
  21. 21. 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” 21
  22. 22. 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 22
  23. 23. 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 •  The most common complaint will be unexpected operation or interactions 23
  24. 24. 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 at this point can invalidate most of the work done to this point 24
  25. 25. 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. 25
  26. 26. 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 26
  27. 27. 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.
  28. 28. 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 28
  29. 29. 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 29
  30. 30. 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 30
  31. 31. 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 31
  32. 32. 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 32
  33. 33. 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 33
  34. 34. 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 34
  35. 35. 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 35
  36. 36. 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 36
  37. 37. 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 37
  38. 38. That’s It •  Wake Up… •  Any questions? 38
  39. 39. Steve Carkner President Panacis Inc. 613-727-5775x727 scarkner@panacis.com 39

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