New business, new product

New business, new product

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Tuna

19,930 posts

283 months

Wednesday 22nd July 2020
quotequote all
LooneyTunes said:
That’s the (relatively) easy bit!

Taking things from proof of concept to scale is often MUCH harder, especially if you’re doing something innovative. I’d argue that some of the thinking around “lean startup” can really hold you back if the organisation doesn’t mature quickly and/or rejects planning and process as “bureaucracy”. Leave it too long and your technical debt can seriously inhibit your ability to develop. You also need to be realistic about how long tech will last at each stage and what the implications of this are for your development efforts and resourcing.
That's a good point, but one I'd class in the "good problems to have" category. Far more startups fail because they couldn't get enough customers rather than because they couldn't build things fast enough. You're right that running around with cardboard prototypes doesn't prepare you for large scale manufacture/development though. Lining up partners for the necessary work, understanding manufacturing, working out the business case should happen - but some people interpret Lean development as just abdicating yourself of all responsibility and waving a magic wand over a team so they can magically do the work of a team five times the size. I've recent experience of a CEO who genuinely believed Lean could allow him to do in six months what global scale companies haven't achieved in ten years. With a team of two.

LooneyTunes said:
The UK sadly currently lags other parts of the world when it comes to support for startups/scale-ups. Partly cultural, partly legacy (not many people out there who have been there before). It’ll change over time, most likely as innovators spin-off from growing firms and either spawn more startups or add much needed advisory capacity to the ecosystem (which, I agree with Grrnbang, is critical).
You'd hope it'd improve, but some of it seems pretty embedded to me. We're very scared of failing around here. In the US, a string of failed startups behind you is almost a badge of honour. In the UK, one failed business is a mark of shame. The funding around startups reflects that. Not much risk taking.

We're getting more startup hubs, shared workspaces, accelerators, but they're pretty pedestrian. Too many people worried about their mortgages, and most networking is more interested in finding new clients (one client at a time) rather than founding and scaling businesses. I don't know how the pandemic is going to change that (it's killed off the shared workspaces around here, certainly for the rest of the year).

LooneyTunes said:
On the IP topic: people often overlook the fact that solid execution of processes can trump the codified IP itself, to the extent that knowing the how can be more important than the what. I’d argue that few companies are going to win over the next 10 years by focusing on the traditional views around IP and traditional delivery models...
Agreed. IP doesn't create a business.

Tuna

19,930 posts

283 months

Wednesday 22nd July 2020
quotequote all
LimaDelta said:
Thanks Tuna. At the moment my timeline looks like this:

Develop prototype - prove concept - patent - raise funding - manufacture/product launch.

Am I thinking about this the wrong way? The way I see it is that the business does not really exist until we are at least at step 2, maybe 3? I have access to a few personal trainers and there are a few academic papers which demonstrate the benefits of this type of training, though there is no product which actively uses this method.

I have another product I'd also like to bring to market. It is much simpler and cheaper, but relatively niche (and completely unrelated to the other product) and will be marketed directly to my current industy. I'm thinking that it might be a good idea to run with this idea first, and use it as a learning exercise before going for the big one. Any reasons not to do that?
It's hard to focus on two different businesses at once, but if one takes off...

In the IT world, the gurus would tell you to completely invert your business plan. Figure out what it is you're selling (one off equipment cost? subscription? support? add-ons?), produce a sales pitch (find a mate to do some concept drawings, work out a rough cost) and check it makes sense in a business plan (if you can sell 5 to every independent gym in the UK, how many are you going to have to make, how much money will you need up front to manufacture, and will that generate enough profit to run a company of the right sort of size?). This is all fag-packet maths and guesses, but helps you eliminate the basic mistakes (not a big enough market, it's way too expensive, you need a vast factory...).

But then, before you've spent months building things, go and talk to a client about it. They might tell you they only have so much budget for equipment, or they buy everything on lease, or they purchase through a specific supplier, or they have no more room for equipment, or they don't see the point in your new idea... All that feedback can change the product itself, or the way you advertise it, or how you sell it.

If you have a handful of customers who are saying "we want something like this, take our money!" - then build a prototype with them. They can help you test it, refine it, improve it. One gym who gets evangelical about your perfect product will make selling to the next so much easier.

The point is, researching your market, understanding who you're selling to and how they evaluate the stuff they buy, who your competitors are and what's actually important when you're pitching your product is all key to selling stuff - and can be done before you lift a single tool to build things. That makes early engagement cheap and feeds into adjusting your big idea to fit what the market actually wants rather than spending a couple of years in the shed building something and only later finding out that you can't sell enough to pay the debt you've racked up.

That's the theory at least. Many businesses are built different ways, so you have to figure out what suits your circumstances and the sort of business you're building.

Smiler.

11,752 posts

229 months

Wednesday 22nd July 2020
quotequote all
Some sound advice already.

I've been moving into fabrication design & manufacturing over the last decade to the point where the electrical system I've been working on for over 18 months is about to go to prototype build.

Being able to model in 2D/3D CAD, all of the items & components was a massive benefit. Developing a relationship with fabricators, suppliers, assemblers etc has been also been key. Most are happy to sign an NDA. Your product will need

It's been a long, hard, all-consuming slog though, especially since December.

Then there's my day job.

hehe

LooneyTunes

6,781 posts

157 months

Wednesday 22nd July 2020
quotequote all
LimaDelta said:
LooneyTunes said:
On the IP topic: people often overlook the fact that solid execution of processes can trump the codified IP itself, to the extent that knowing the how can be more important than the what. I’d argue that few companies are going to win over the next 10 years by focusing on the traditional views around IP and traditional delivery models...
So are you saying that if you do it right the first time, you don't need to worry about people (inevitably) copying? First to market and all that?
Not quite. More that you can write a specification for something (a product or service) then that usually only takes you so far. Two different entities attempting to deliver against the spec may work in slightly different ways that, although seemingly aimed at the same outcome, may give meaningfully better outcomes (e.g. in quality/price/customer experience). Think of it like two chefs cooking the same recipe in different kitchens... good chance you'd be able to tell the difference. Getting little details right can make all the difference and make your product/service hard to replicate.

Right first time is a strange one (and bear in mind that physical products aren't my thing). When it comes to the product, sometimes "good enough" is good enough. Aim for product perfection first time and there's every chance you'll 1) never get/be too slow to market; or 2) miss the target completely. Iteration is usually important. When it comes to customers, especially consumers, failing to deliver "right first time" from a service perspective doesn't necessarily put you on the path to success! In spite of this many early stage companies/new product developers focus on the "viability" of the product from a technical perspective rather than the "saleablity" of the product.

First to market is an interesting concept too (and not something that I believe is automatically a good thing). Sometimes better to learn what works (or doesn't) and then improve your offering... other times you need to land grab and iterate/build quickly. Depends on many factors.

Tuna said:
LooneyTunes said:
The UK sadly currently lags other parts of the world when it comes to support for startups/scale-ups. Partly cultural, partly legacy (not many people out there who have been there before). It’ll change over time, most likely as innovators spin-off from growing firms and either spawn more startups or add much needed advisory capacity to the ecosystem (which, I agree with Grrnbang, is critical).
You'd hope it'd improve, but some of it seems pretty embedded to me. We're very scared of failing around here. In the US, a string of failed startups behind you is almost a badge of honour. In the UK, one failed business is a mark of shame. The funding around startups reflects that. Not much risk taking.

We're getting more startup hubs, shared workspaces, accelerators, but they're pretty pedestrian. Too many people worried about their mortgages, and most networking is more interested in finding new clients (one client at a time) rather than founding and scaling businesses. I don't know how the pandemic is going to change that (it's killed off the shared workspaces around here, certainly for the rest of the year).
Agree with all that. People need to see innovation being worthwhile for both society and the individuals involved to want to do it. We've not had enough UK success stories yet to make people see it as a real possibility. The failure thing will change when you have entrepreneurs prepared to take more risk on other startups (and invest/mentor them). "Failure" isn't bad if you've figured out why it didn't work. Suspect every entrepreneur has had things not work out as planned at some point, the successful ones maybe had a bit more runway when they worked out what they needed to do...

As for many people being worried about mortgages, that's normal. The risks associated with startups aren't for everyone. To make them palatable you need to go from risk to calculated risk... figure out how much you can mitigate and whether the residual risk is at a level you can bear. Sometimes that can mean, for example, balancing whether to take earlier investment rounds (and dilution) with the expectation of higher pricing if you hold out longer. The choices you make can manage risk, but rarely take it away completely.

Grrbang

724 posts

70 months

Wednesday 22nd July 2020
quotequote all
Tuna said:
The funding around startups reflects that. Not much risk taking.
One of the worst losses from Brexit that doesn't get discussed is the loss of ERDF funding. So much of it has gone into helping innovative cash-poor startups to get a headstart in business create jobs. ERDF funding enables risks to be taken. Much of it is targeted at poorer regions of the UK. I am sceptical that our government will hold to its promise to match it.

Grrbang

724 posts

70 months

Wednesday 22nd July 2020
quotequote all
Tuna said:
The funding around startups reflects that. Not much risk taking.
One of the worst losses from Brexit that doesn't get discussed is the loss of ERDF funding. So much of it has gone into helping innovative cash-poor startups to get a headstart in business and create jobs. ERDF funding enables risks to be taken. Much of it is targeted at poorer regions of the UK. I am sceptical that our government will hold to its promise to match it.