product development - entrepreneurship 101
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Entrepreneurship 101
Product Development Basics Steve Carkner
Nov 2011
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Send Feedback
• My 4th year giving this presentation.
• Take notes on what you would like to see added, improved, etc.
• Send to [email protected]
• Thanks!
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Introduction to Steve Carkner
• 25 Year product development experience • Award winning designer, products featured in
Popular Science, Smithsonian, Science & Tech Museum, and many more…
• 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
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Introduction to Panacis
• Focus on energy storage systems (batteries). • Roots in 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 – 3 Years in a row • Deloitte Technology Green 15 Company
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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
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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
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The “V” Model of Development
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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
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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
• Who pays
• What is YOUR capability in the area
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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
• What is YOUR capability in the area
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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
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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?
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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?
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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.
I hope this matches your business plan! Entrepreneur’s Note: Cheaper is very rarely a viable
business model
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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
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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
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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
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Customer / Market Reqs. – non technical
Flashlight is: • Durable and light weight for the Road Warrior
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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
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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
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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
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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.
You (should) know your market and target better
than anyone else. Make sure everyone is going in the same direction.
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Customer / Market Reqs. – non technical
A good plan inspires confidence inside your team.
• Everyone wants to do a good job • Plan gives people a focus, something to be proud of, it
is a great feeling when you overhear other team members quoting your market focus plans “we are going to be the lightest, brightest, best”
• Next up – How to measure when the job is complete
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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?)
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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?)
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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?)
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Product / Engineering Specification – technical
Should answer “how” for many of the previous functional requirements
• Achieve weight requirement by use of small AAA batteries
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AAA 12 Grams
AA 23 Grams
Product / Engineering Specification – technical
Should answer “how” for many of the previous functional requirements
• Achieve weight requirement by use of small AAA batteries
• Does this impact other customer or market requriements such as availability of batteries, operating costs, run-time.
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AAA 12 Grams
AA 23 Grams
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.
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Test and Verification Specifications – technical
Should answer “prove it” for the previous functional and engineering specification requirements
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Test and Verification Specifications – technical
Should answer “prove it” for the previous functional and engineering specification requirements
• Test can be simple – Weigh it!
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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!
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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
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Test and Verification Specifications – technical
A good test plan will be used for years into the future, possibly after the original authors have departed from the company
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Test and Verification Specifications – technical
A good test plan will be used for years into the future, possibly after the original authors have departed from the company
Verify that existing suppliers continue to meet the requirements
Verify new suppliers (lower cost, geographic changes, etc.)
Deal with obsolete components and suppliers
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Test and Verification Specifications – technical
A good test plan will be used for years into the future, possibly after the original authors have departed from the company
Verify that existing suppliers continue to meet the requirements
Verify new suppliers (lower cost, geographic changes, etc.)
Deal with obsolete components and suppliers Software upgrades (a whole different
presentation can be made on this) 37
Detailed Design
Finally – it is time to actually start designing the product!
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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!
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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
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Suggested Tactic
Item # Description 5part@n Schematic Revision Level
PCB Revision Level
Mech Revision Level
Category How Fixed or Suggested Fix Open / Verify / Closed
Date Opened
Who open it?
Date Closed
Who close it?
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Customer spec does not explain what Charge Enable signal is used for or if it can be ignored, we plan to ignore it. 0.0 0.0 0.0 Electrical
This has been clarified, signal is absolute requirement. Second procesor added to design to handle it. closed 26-Nov-07 Steve Feb-08 Rene
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Cells have too much free movement inside housing and will easily tear connectors or slam into circuit board. New design required here. 0.0 0.0 1.0
Mechanical
Manufacture carrier boards that are taped to the cells to restrict free movement and support tab structure. Pot batteries into case. CLOSED 26-Nov-07 Eric May 23-08 Eric
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LCD Display angle is incorrect, designed for 6-oclock view, should be designed for overhead view 0.0 0.0 0.0 Electrical
Increase drive level to LCD by clocking the COM pin at 180 degrees to the segmet pin. This dramatically increases contrast and looks great. closed 26-Nov-07 Rene 11-Mar steve
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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”
Integration, Test and Verification
This is the Collection phase • This portion of the program is the MOST
underestimated in terms of time and costs
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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”
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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
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Integration, Test and Verification (cont)
• It will NOT work the first time
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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
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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
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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
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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
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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
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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
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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)
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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)
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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.
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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
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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
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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
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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!
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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
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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
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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
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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
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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
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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
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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
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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
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That’s It
• Wake Up…
• Any questions?
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Steve Carkner President Panacis Inc. 613-727-5775x727 [email protected]
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Please send any feedback you have to me, I would like to keep improving this presentation!