Managing Your Startup's New Product Development Projects

Practice Your Skills with Simulation-Based Training

Avraham Shtub, Michael Rich;0

• Publisher: WSPC
• Year: 2019
• eBook ISBN: 9789813277564
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Teaching new product development is not an easy task. Part of the difficulty is the one-of-a-kind nature of these projects.

This book and the software that comes with it (Project Team Builder) present a unique approach to the teaching and trainin

Chapter 1

Introduction

This book is, essentially, a self-help manual describing the steps necessary to manage and complete a New Product Development (NPD) project. Following this will put you on the right path to avoid the initial mistakes, which could lead you in the wrong direction. You will avoid wasting time, money and effort.

We will deal with both an initial new idea, the “light bulb” moment, when the concept of something totally new hits you and you are on your own, wondering what to do next as well as if you are working for a large organization, part of a team.

You may also have identified a new market not yet exploited by anyone else. This book will also describe the processes involved when you are helping to develop a new product for your company from within a larger, established organization, with experienced teams involved. You could be a member of such a team and at whatever level you are involved, the essential knowledge this book will be providing will help you fit in and contribute successfully.

We will help you to define your objectives and what you will learn as you progress through the various stages developing any new product. Very importantly, you will find what is possible and what is not and avoid getting bogged down in the “not” — avoiding wasting time, money and losing your way.

It is essential that you take careful notice of these indicators which will prevent you making serious and potentially expensive mistakes. In this respect it is very important to avoid getting into the mindset of thinking “let’s go ahead with it and see what happens”; because if you haven’t got the processes right from the start it really will fail.

An example of a successful project was software developed by one of your authors to manage the reception and administration of a dental office. This was, at the time (start of the 1980s), an identified market gap ripe for exploitation and the recent availability of small desktop stand-alone computers, with easy to use software which made this possible. The primary objective was to maximize the return of patients for regular checkups and hygiene treatments. Included in the software was billing and letters to communicate with patients plus adding in other features in response to customers’ suggestions and needs (more about this in later chapters). The other objective was, when the author’s own office software was running smoothly, using the de-bugged software to sell versions of this to other dentists.

We will be using this as an example to illustrate features in the first few chapters of this book.

Starting something new can be very daunting, but it doesn’t have to be if you follow the simple and logical stages outlined in this book. It describes step by step procedures leading to ultimate success.

The stages cover the critical factors involved to achieve success; how to build up a successful organization, using the right people for each stage, discovering and exploiting potential customers’ needs and expectations, picking the right projects to pursue and building quality into the product to ensure customer satisfaction.

Further stages cover other NPD processes involved: the overall scope of any project, scheduling progress to meet defined time-tables, budgeting, avoiding risk and enhancing the probability of success.

In general, shortcuts are to be avoided at all costs. Missing out any stage in a planned process can easily invalidate further stages down the line, thus giving rise to mistakes and ultimate failure. The example given above is a very brief summation of what will be described in the various chapters of this book.

We (the authors) will be writing this using everyday language and will not be scrambling your brains with too much technical jargon. There will be some used, obviously, to illustrate and expand important concepts, but we will try to keep these to a minimum appropriate to getting the important information across to you.

We hope this will be of use to you in your work and we wish you every success in your endeavors.

Chapter 2

Critical Success Factors in New Product Development

This chapter will guide you through the steps to develop and carry out the project your “light bulb” moment has given you.

It is essential that you curb your initial enthusiasm and not rush in, getting too far ahead, too soon. The first action you have to take is research. Research into whether someone else has already thought the same as you. You have to:

(1)Check all national and international databases to find out if there are existing patents on “your” idea, or any closely resembling “your” idea.

(2)Similarly, check that you will not be infringing anyone else’s trademarks, which would conflict with ones you want, or need to register.

(3)Check the web using a good search engine that a similar idea is not being developed, or a competing product is not available on the market.

Doing this could save you much time, effort and money at a later date. The consequence of this is that as soon as you have the idea and have developed it sufficiently you must guard against its possible theft (possibly by encryption) as soon as you can before potential competitors learn about it. The same applies for registering a trade mark.

As much of your early development work may be recorded electronically, it is essential that you put in place defenses against cyberattacks. Competitors attempting to steal your ideas as you develop them are an ever present danger against which you have to be on your guard. An investment in good, reliable anti-virus and anti-hacking software is never wasted and should be kept up to date and used regularly. Also back up your codes on a regular basis and keep the backups in a safe place.

Other than taking backup discs off-site, as one of your authors did in the early days of PCs, using the password-protected Cloud would be a very useful and secure substitute.

You should also have a good idea of your “target audience”.

(1)Who will buy what you develop?

(2)For more about this see Chapter 4 — customers’ needs, expectations and value.

(3)Is your start-up invention completely new or a development of an existing product? (A very good example of a completely new idea is comparing a cell phone with a landline only based handset.)

(4)Are you aiming at your domestic market only or internationally, or both?

(5)In this context much research will have to be done so that your new invention will not only be in conflict with your own domestic market’s rules and regulations or, if your aim is international, then the same applies to other countries as well.

Research will also be needed to determine your most likely competitors and what they charge for their product.

This will be relevant in relation to what you aim to charge and will have to be considered in line with what rivals charge for something similar, your financial resources and your budget. Budget, and its management as the project proceeds, will be discussed in detail in a later chapter.

•Can you do it cheaper than the competition?

•If it is more expensive, will it give better value for money?

•Will “your” start-up invention have features which others of a similar nature are lacking?

•Is it a product which has superior features compared with what other similar products have?

•Will it give a buyer improved benefits compared with other products of a similar nature?

•Will these justify a higher price compared with competitors?

•If so, will these give you a distinct commercial advantage?

All these are questions which have to be answered (assessed) objectively, without you being so enthusiastic about your new idea that you become deluded into thinking that they are not important.

If there is a similar product, perhaps buying one, using it, taking it to pieces and finding out its strengths and weaknesses (known as reverse engineering), with a view to developing a better one of your own (without infringing their patents), would be a good place to start.

What this all means is that before you can do anything to develop your new idea there is much preliminary research to do.

Assuming it appears to be clear to starting the project, then it is necessary to decide what resources you will need to do the work. They will be part of all the Critical Success Factors (CSF) which will affect the success or failure of your project. These will be of different, but essential, kinds:

(1)Management Oversight: It is essential that you establish the person to be in overall charge of your project and everyone working for you understands this.

(2)You must have an organization structure defining each person’s job description and working parameters so there isn’t any costly idle time for any of the workers.

(3)This also means that there is less likely to be duplication of effort by workers doing the same job twice over, thus wasting time, effort and money.

(4)You should have done a Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis to identify relevant factors which could affect your project.

(5)Planning the stage by stage implementation of the project is best done in small segments as far as possible to avoid “scope creep”, which would detract from the planned timetable for the completion of the various stages of the project.

(6)Small segments would give you tighter control over the budget for each segment (and overall the final cost of the project) and avoid the temptation to drift into “scope creep”, which would adversely affect other parts of the project as well as the budget.

(7)Clearly defined objectives and goals: sales revenues, sales profits, market share, marketing strategy, keeping costs to the minimum possible without compromising production.

(8)Money — funding (see below for more about this and obtaining patents), budget (to be discussed in a later chapter)

(9)People — how many are needed, with the skills necessary relating to your start-up and how much will they cost?

(10)Have you identified the kind of staff skills you need and how are you going to attract them to help build your organization?

(11)Will you have to train staff to help you develop your invention?

(12)If so, how long will this take before you can start production and generate sales to produce the cash flow needed to be able to pay them and your suppliers and your financial backers before you even make a profit?

(13)In that context, have you enough starting (working) capital before sales revenue starts to flow?

(14)In the contexts of the last two points (12 and 13) it cannot be emphasized too strongly that cash flow is “the name of the game” and the principal reason for a new business to fail is the lack of adequate cash to keep running until it gets established and self-funding.

(15)Premises — even if you are starting in your own garage, at a later stage, hopefully, you will need to expand; you have to decide on the size of accommodation you want, allowing for some leeway so that, if you do become busier, being too cramped doesn’t affect the manufacture and production of your product.

(16)Do you have a plan to market (advertise) your product and before this have you identified your actual potential customers (more about this in Chapter 4)?

(17)Have you decided on a time frame within which you want to finish the project and start selling your product?

(18)Have you given any thought about how you would actually sell and distribute your product — physical distribution, online, through an agent?

(19)Having sold your product, have you established how your customers are going to pay for it: payment with order, on receipt, or even a line of credit and how would you enforce the latter two of these methods? Will you be using an online payment platform to secure customers’ payments?

(20)Are you going to be the Project Manager, leading the whole team or, without deluding yourself, have you the knowledge and capacity to handle all the aspects of the project?

(21)Or should you find someone who could do it for you?

Many questions and a long list you have to get through before you can even begin your new start-up. All these questions are part of the Critical Factors which will affect the success or failure of your project.

In the case of one of the author’s own software development projects, only some of the above factors applied. First, it was developed many years ago, well before the advent of Windows. Your author called it Dental Office Systems (DOS) which, uncannily, was similar to the platform used to ‘carry’ the program developed.

This was Microsoft’s MSDOS 6.2 operating system and a software program called dBASE II was used on top of this to develop a suite of units linked together to comprise the whole. This was developed, run and saved onto floppy disc drives. The “texts” of the programs for dBASE II were written using the plain text editing version of a very early word processing pro...

Table of contents

• Cover
• Halftitle
• Series Editors
• Title
• Copyright
• Dedication
• Preface
• About the Authors
• Acknowledgements
• Contents
• Chapter 1 Introduction
• Chapter 2 Critical Success Factors in New Product Development
• Chapter 3 Mapping the Organization and Its Innovation Maturity
• Chapter 4 The Voice of the Customers’ Needs, Expectations and Value
• Chapter 5 Portfolio Management — Selecting the Right NPD Projects
• Chapter 6 Quality and ISO
• Chapter 7 Scope Management
• Chapter 8 Scheduling
• Chapter 9 Resource Management
• Chapter 10 Budgeting
• Chapter 11 Risk Management
• Chapter 12 Execution and Control
• Chapter 13 Summary
• Appendix A The DOS System
• Appendix B Planning and Executing the Galenus Drug Locker and Dispenser Project — The Project Team Builder
• Index