Managing your first product in the marketplace, and preparing the next
It’s very likely you’ll have ideas about new features that you want to add in the next-generation product. These will probably have started forming during the previous development cycle, but – being the self-disciplined entrepreneur you are – you will have resisted the temptation to make changes that could hold up your project and risk delaying market entry.
Keep the revenue flowing
Now is your chance to design in those cool new features you’ve been itching to add. But hold on. You now have a product in the market that you need to manage. And that includes ensuring production goes ahead smoothly and deliveries continue on time, to keep the revenue flowing that will sustain your company and fund the next product development.
You need to stay aware of the supply chain and keep in touch with all parties. Make sure potential problems such as unexpectedly extended lead times for key components, or allocation issues, do not catch you on the back foot. Leaving it to the contract manufacturer to raise the alert risks limits the choice of actions that are open to you. If you receive the news late, you may have no choice but to pay increased prices for emergency supplies of parts that your usual partners can no longer provide. An earlier warning can give time to find a more satisfactory solution; time to secure sufficient inventory to fulfil remaining production, or time to design-in a suitable replacement.
Be aware that anything can happen. At Anglia, we had a customer whose supplier experienced a breakdown in their manufacturing machinery for a small mechanical part; not a semiconductor component. As this part was already quite mature in the marketplace, the supplier elected not to repair the machine and instead simply discontinued production. This is quite an extreme example of the kinds of things some suppliers may do. Keeping in touch will give you a chance to negotiate so you can minimise the impact of events like this on your production plans. And, of course, price fluctuations can be guaranteed, rising with periodic shortages in the semiconductor parts, and generally rising with other parts as suppliers’ own costs rise. Currently, the volatility in energy prices mean that all manufacturers are experiencing increased costs that they must seek to offset by raising the selling prices of their products.
Analyse feedback and customer returns
While ensuring production can continue as smoothly and efficiently as possible, you also need to deal with units that are returned by customers. If your products are aimed at consumers, prepare for a large number of units to be returned, particularly with products that are sold in high volume and hence earn small margins for the vendor. High-street retailers that pile them high and sell them cheap tend to operate no-quibble returns policies that customers often use enthusiastically. You may find that large numbers of units are returned with no faults at all – the problem is simply that the customer has not used the product according to the instructions provided.
While managing the fortunes of your current product in the market, you must also prepare the next model for production. Of course, you will have exciting plans. But don’t be too hasty to redesign. Check the feedback from the early customers and use the information to your advantage to fine-tune your ideas. Most likely you will be adding features. However, the market feedback may help to identify product capabilities that customers would be most interested in. This is valuable information that you can use to set design priorities when developing the next and subsequent product generations. You can use these inputs to refine your designs and decide which new features will be included.
You can also gain useful information by analysing units returned from the field and the reasons for their rejection. You must be prepared, financially, to handle the costs associated with returned units. But you can use them to your advantage, too. Look for patterns such as any recurring failures that may indicate an in-built weakness. Again, don’t be hasty to redesign: if the failures are the result of customer misuse, an amendment to the user guide may solve the problem more cost-effectively. You may consider a software change to make any animations or on-screen menus clearer. If the failures are associated with a particular button or switch, a straight swap for an updated version, or an equivalent of higher quality from a different supplier may solve the problem. Changes like these could be implemented in the current production as well as future generations.
Just one further note on handling customer feedback. While using the information to inform your decisions for the future, also be aware that the way you engage with your customers in online forums can be seen by everyone and will shape the perception of your brand. Engage positively, show a willingness to address any issues, and take the opportunity to explain any improvements you are making. It may be worth investing in training to understand how to use these channels, particularly in handling criticism and, of course, online trolls.
Use the time for change
In addition to adding the exciting new features you have been itching to get started on, this is the time to consider more general improvements. You may have chosen some suppliers, or materials, or components based on immediate availability. Or time-to-market pressure may have prevented refining some parts of the design. You now have the opportunity to deal with those compromises.
Analysis may reveal areas where cost can be removed, through material or component selection, streamlining manufacturing processes, simplifying parts such as the enclosure to reduce the number of constituent parts or accelerate assembly.
Have new products or technologies emerged, since the first design, that you can use to improve the product? As far as any ICs are concerned, there will almost certainly be new parts that integrate more features on chip, and at a lower cost, as well as lower power consumption. Your manufacturing partner may have introduced new automation – perhaps a robot to take over driving screws or attaching heatsinks, which you could benefit from by optimising your design.
And consider your chosen suppliers. Could you work with them to reduce costs? Can any changes help them improve efficiency too? It’s time to consider whether you are happy with the quality of the products supplied, or the service? Can you work with them to address any of these issues, or can another supplier offer a better solution? This period, while you are building one product and working on the next, is the best time to address these issues to save disrupting production later.
You’re in a great position right now. Generating revenue, and excited about bringing your next product to market, with all that previous experience to draw on. It’s also a critical point in the evolution of your business. Getting the product right, and the timing, is crucial as you aim for future success – building up sales, market share, and profitability.
This article originally appeared in the March/April issue of Startups Magazine. Click here to subscribe