5 Things Every Entrepreneur Should Do Before Product Development

“This should be pretty easy, right?!” If I had a dime for every time a potential client uttered those words, I’d have a big stack of dimes. 

It’s a common misconception that the path through product development is easier or less risky than is usually the case. I understand this mindset —  I had the same thoughts when I first started working in this industry. I couldn’t understand why the engineering and design teams I was working with were being so conservative with their labor and material estimates. That was my perspective until I saw, in hindsight, all the potential pitfalls that occur on a “simple” product development project. 

I’m jumping ahead, though. Let’s start at the beginning. 

Having an idea for a product is easy. Having an idea for a product that will gain market acceptance is harder. Having an idea for a product that aligns with market demand and business goals while also being well-designed, engineered, and launched in a timeframe that meets both market and business demands is difficult. Proper thought and planning are required for success. Otherwise, you will waste countless hours and dollars chasing an elusive idea that has little chance of achieving market success.

Here are some considerations that can help entrepreneurs better prepare for the rigor of a product development effort and ultimate product success.

1. Create a Solid Business Plan

“Always plan ahead. It wasn’t raining when Noah built the ark.” Before any project kickoff or CAD work is done, plans need to be made. When it comes to product development, this couldn’t be more true. 

The first thing that your company needs is a solid business plan. Often, overzealous entrepreneurs get so excited about their idea that they fail to check the rudimentary boxes covered in a basic business plan. 

Essential questions to consider: 

• How will the business make money? 

• What is the target market size? 

• What is the operating budget? 

• How will you reach your customers? 

• What sets your device/platform apart from the competition? 

• What are your companies’ strengths and weaknesses? 

Drafting a business plan forces you to address critical components of your organization, which can either confirm or expose, whether the idea is a good or bad fit for your company. 

2. Start Small and Focused

Another common misstep is thinking too far ahead. Almost all successful companies were started on a foundational platform and evolved with the changing business climates and opportunities. 

When Jeff Bezos was out fundraising for Amazon in the mid-90s, I’m sure he didn’t say that one of his revenue streams would be to produce an Emmy award-winning comedy series about a Jewish, female standup comic set in New York City during the 1950s. They would have laughed him out of the room (insert rimshot here). 

But what started as a website to sell books online morphed and grew over time and ultimately became the multipurpose business platform that Amazon is today (including producing, The Marvelous Mrs. Maisel, which has won 16 Emmy Awards to-date and nominated for another 20 in 2020). 

3. Create a Specific Goal for Your Early Prototypes

When you’re preparing to build a prototype, what’s the business goal? 

Are you trying to build a cosmetic prototype to dazzle investors so they’ll write you a check? Are you building an early-stage proof-of-concept (POC) to prove out a technical aspect or prove your idea has merit and can thus continue down the path of development? Or are you building a functional prototype to get feedback on usability? 

Each of these scenarios has a different utility and needs a diverse set of solutions. It's essential to identify the goal of early prototypes to make sure you’re fighting the right battle.

4. Know Your Company’s Capital Runway

“Why does it cost so much?!?” Another stack-of-dimes question that I hear when an estimated labor and materials proposal is presented to the client. This is a clear indicator that you need to revisit your business plan and answer the question: how much capital will your company need to meet critical milestones along the development path? 

A common challenge  entrepreneurs face when developing products is that the capital runway is not long enough, and the business crashes before the product gets off the ground. 

A good business plan will help you definitively answer how much budget you’ll need for product development. But if it doesn’t, you’ll need to go back to the drawing board. 

Oftentimes, engineering and design firms make the catastrophic error of being overly optimistic when quoting projects. In other words, if a project estimate has a budget range of $250-500k, they invariably give the client a $250k proposal estimate and then have to sheepishly go back to the client six months later and inform them that the budget was actually closer to $500k (those are always fun discussions). 

Now, that’s not to say that if everything goes smoothly and according to plan, that projects don’t come in on the lower end of the range.  It just means that product development is a complex process and as a result, it’s better to have realistic expectations and plan for the worst so that you’re pleasantly surprised when efforts  come in below an original estimate.

5. Gut Check Yourself

“If it were easy, everyone would do it.” 

Product development and entrepreneurship are not for the faint of heart. It rarely works perfectly the first time, it usually takes longer than anticipated, and invariably there will be a lot of second-guessing by both you and your development team. 

However, if you go into the process with a well thought out plan and have taken proper precautions to identify — and mitigate — the highest risks early on, product development can be a very rewarding (both emotionally and financially) experience. 

Conclusion

The Product Creation Studio team has successfully designed and developed hundreds of products over our 21 year history. While every product and experience is unique, the above steps will position you and your product for success both in the development process and beyond. Once you have the above information figured out, please reach out — we are excited to help you make your product idea a reality!