Category Archives: Operations

Eliminate This Risk to Your Sales Momentum

traffic cone

Avoid the ‘out of stock’ pothole on your road to success.

By:  Andrew Johnson, Ph.D.

Your team has pushed hard to get a successful product launch.  There is intense focus on Sales & Marketing to take the ball now to close on ever greater numbers of sales.  There is nothing like being ‘out-of-stock’ to put a crimp in your sales momentum.  With a little bit of post-launch effort, the risk of this happening can be minimized.


  • Assemble a team made up of some of the technical people from your product development team, someone from Operations and a product manager.
  • This team will initially be tasked with the following:
    • For Consumables – Identify all critical raw materials.  These are key components like antibodies or other biologicals or chemicals that are critical for the proper functioning of your kit or reagent.
    • For Instrumentation – Identify components with particularly long lead times.

For consumables, pay especially careful attention to sole suppliers of a critical raw material.  What would happen if this company went out of business or decided to discontinue the product?  Alternatively, what would happen to your business if they doubled the price of this component?

Use Failure Mode Effect Analysis (FMEA) to  help you and your team assess not only impact of what delays in instrument components  or loss of a source for a key reagent would have but also how likely it would be for that to happen.  This will allow you to compile a prioritized list with the biggest risks to your business at the top.


  • For Consumables – Have the technical team find an alternate source for the critical raw material.  This alternate source might be more expensive but it is much better to have a validated alternative source than to run out of it when your demand is growing.
  • For Instrumentation – Make sure that your agreement with component suppliers include options for rush shipments.  Find out what the lead times and additional costs are for this.  With good Sales forecasting you should not need to exercise this option but it is good to have this in place (just in case).  Consider keeping some additional inventory of critical components to buffer risk.

You cannot eliminate all of these risks to your business but it is far better to know what they are and have contingency plans in place in the (hopefully) unlikely event that some of them come to pass.   Remember that some of these risks can be mitigated by solutions provided by your technical team and others using business tactics.

Picture Credit:  © Foto.fritz | Stock Free Images & Dreamstime Stock Photos

Six Steps to the Epiphany: Get This Right and Go Big

By:  Steve Haralampu, Sc.D. & Bill Skea, Ph.D.


Every technology company strives to offer the best thing since sliced bread. Achieve commercial excellence with these key insights.

Successful commercialization of a new technology has more to do with marketplace needs and product execution than with the technology itself.  The main factor driving success is the customers’ perception of value:  “What does it do for me?” and “Is it better, faster, or cheaper?”  Technology rarely sells for technology’s sake.  We will discuss some factors to consider during the commercialization process.  Although the concepts are generally applicable to all product development efforts, we concentrate on how these relate to the introduction of new tools for life science R&D and diagnostics laboratories, especially within startup companies or other small organizations.

Changing Priorities: Transitioning from Bench to Product Development
Product development and commercialization is a truly multidisciplinary activity, especially at the beginning of the process:  the product specification.  The focus should be on filling customer needs.  Traditionally, sales and marketing is the conduit to the marketplace, and they should be involved in defining what the customer wants, but too frequently they are the sole drivers. Scientists that develop novel technologies have unique insights into their potential for being revolutionary, and to see outside of the conventional box.  How a product is specified and developed also depends upon design and manufacturing constraints.  The main design constraints are product complexity, such as automation, which drives product cost and time to market; and design for manufacture and assembly (DFM/DFA), which also drives cost, and whether a product can be made or repaired.  Finally, the whole process is driven with money.  Finance must be at the table to assure that the product development and commercialization effort is affordable.  A product funded for 95% of its commercialization is still not a product.  Resources must be available to cross the finish line.  Therefore, an agile team of scientists, engineers, marketers and financers, each with the ability to wear many hats, and each with roughly equal input, drives a successful product commercialization effort, since each has a stake in the outcome.  Since the product development effort is usually a period of intense activity, and is an activity with which a small organization is not constantly involved, it makes sense to share some of the workload with external resources. Otherwise, at the end of the process, an organization can be stuck with excess headcount.

A major consideration in the specification and design of a product is developing a strategy for how it will be manufactured and distributed.  Manufacturing entails investment in manufacturing space, equipment, and personnel.  This investment can be significant, and can be the burden that breaks an organization if product rollout is late, or sales do not meet projections.  There are many vendors that provide contract-manufacturing services.  Whether it is the whole product, product subsystems, or final assembly and packaging, the use of contract-manufacturers can significantly reduce financial risk in the early stages of a product’s life cycle.  Determining how vendors play into the overall manufacturing scheme can impact product design.  It can be extremely valuable to give your contract-manufacturing vendor a seat at the table during product development, to assure a design for manufacture, and to avoid surprises late in the game.

Associated with early-stage manufacture is a realistic sales projection, or a willingness to manufacture to orders.  Excess inventory of an expensive laboratory instrument ties up huge amounts of capital needed for an organization’s growth.  Maintaining financial flexibility during product rollout is important should it be necessary to redirect efforts into sales or applications development.

Six insights to keep you on the path to success
All of this is common sense, and most managers feel like they would never fall into any traps posed by the product development and commercialization process.  This does not seem to be the case, however, since there are so many examples of organizations that stumble, sometimes fatally.  Heeding the admonition, “Those who cannot remember the past are condemned to repeat it.” we give some real examples from which we can learn.

  • Technology Evaluation/Due Diligence Alone Is Not Enough

Even before a technology is approved for product development, before a startup is approved for funding, or during due diligence of an acquisition target, the projected product development process needs to be evaluated.  Sometimes inventors are so close to the technology that they do not recognize the marketplace landscape they are trying to enter.   This can be particularly true, for example, when a technology is developed by physicists and/or engineers and is to be applied to diagnostics.  It is typically not within their realm of experience to understand the technology alternatives or regulatory landscape.

      A clear sign of being too focused on the core technology is making the statement, “We have no competition.”  A core technology may be so revolutionary that there is indeed no competition that performs its specific task.  What can be unrecognized is that there are perfectly adequate alternative technologies for performing the task.  One team of inventors developed a methodology for detecting metabolic stresses within living cells.  Another established company had a similar physical product already on the market.  When the team was asked how they were better than this competition, their response was, “They’re not competition because they measure amplitude modulation, our invention measures frequency modulation.”  One needs to have very solid intellectual property protection if one plans to enter a marketplace and not expect competition when the method of data analysis is the only point of differentiation.  The technology is good, but the inventors did not adequately evaluate its potential versus competitive stresses.


  • Listen to the Customer (sometimes)

It is important for a product to be successful that it fulfills some unmet need of the customer.  Although this is true, end users do not always recognize their unmet needs, especially with regard to technologies that require a paradigm shift.  Therefore, asking sales and marketing to poll customers for their needs, tends to generate feedback that is incremental improvement of known product forms.  Apple, Inc. has been a leader in creating marketplace needs for its new products.

With respect to laboratory products, it is important to understand the customers’ workflow.  A product might do amazing things, but if it does it in a way that is not helpful, it will not be a success.  One company had an interesting platform for growing cells.  Their development team designed a product that compared a control to a test under a wide variety of environmental conditions.  This seemed logical to the design team.  However, research is normally done using plates with 24 or 96 wells, not just 2.  The company had a good idea, but its execution did not meet the most common workflow.

Small organizations tend to focus on the new technology.  A lot of this is driven by the fact that completion of the technology development is going on concurrently with the early stages of product development, and, after all, new technology perfection is what the small organization is all about.  One company developed a technology to separate proteins in a way that enhanced the research information obtainable once the proteins were further analyzed.  Unfortunately, that company did not provide the customer with an adequate way to retrieve the separated proteins from its product and into the downstream analyses.  Although the technology met customer needs, the overall product system execution was not useful in the laboratory workflow.

  • Customers Don’t Like to Read Instructions

Once a technology is demonstrated and shown to be useful, the technology development must focus on making that technology execution robust.  An inadequate technology execution is when:  failure rates are high, and it takes a skilled practitioner in the technology to recognize the failures, but when it works, it’s great!  Technology developers need to realize that they probably have an extraordinary skill at getting things to work, while the customer may not be willing to invest this kind of time to come up on the learning curve.  Technology developers deal with the technology 100% of the time, customers deal with most technologies only a fraction of the time as part of a larger workflow.  Therefore, they cannot focus on the nuances of running a finicky product.  A technology needs to be simple (sometimes requiring significant automation to conduct the difficult tasks) and needs to work reproducibly and flawlessly.  One company’s product was based on an array of test sites.  Each test site had >99% reliability, but since there were 41 test sites on the product, and each needed to work for the product to have worked, there was only a 65-70% chance that the product worked.  This was unacceptable in most laboratory situations.

  • Beware: The Misguided Cost Estimate

Especially with regard to the micro- and nanotechnologies being developed today, product cost estimates that drive the business plan can be based on faulty/excessively optimistic assumptions.  One company developed a rather extraordinary biochemical sensor that was based on a silicon chip only 0.2 x 0.2 mm.  The materials cost for the sensor was only cents.  Micro- and nano-scale products use very little material because of their size. The fault in the analysis was that the nanosensor still needed to interface with a macro world.  The product cannot be a box of grain-of-sand-sized sensors.  A housing to allow a customer to handle the sensor, along with the appropriate plumbing to get the sample prepared and to the sensor cost as much as an alternative sensor technology for the base application they chose.  The core technology probably still has great potential, but an application needs to be found where its small size is the advantage, and enables sensing in places unattainable by the alternative technology.

  • Product Design is a Predictable Task, or is it?

Many aspects of product design are predictable.  It is merely the engineering task of finding OEM components or designing custom parts and fitting these together in an operable system.  What could go wrong?  Missing cost targets, inappropriately setting priorities, or inadequately integrating systems are frequent issues.

Engineering design is fun for those involved, but sometimes it is hard to know when to stop. Over design with too many features can make a product too expensive, and/or unreliable.  Some features are just annoying.  One company decided to have its product send a stream of text messages to the operator’s cell phone updating the instrument’s status.  This sounded novel and useful, but in practice was just annoying.  That same company decided to custom design most of its mechanical components.  This approach was in some cases expensive, but more importantly did not leverage the knowledge base of OEM suppliers.  Consequently, some components did not perform as expected, which ate up valuable development resources to debug components that could have been purchased with proven performance.  Too much time was spent resolving issues that could have been purchased, and defocused the team from its core technology and applications development.  This company failed.

We are accustomed to seeing sculpted cases used in consumer products around us.  It is an attractive concept to create products with an eye-popping “look”.  This is possible for products manufactured by the thousands, but sculpted skins for products manufactured by the hundreds can be surprisingly expensive.  This is an example of an inappropriate priority in a resource-limited environment, and where paint might be a better alternative.

The product design effort is not complete with a final set of product blueprints.  There is still substantial work to be done producing support materials.  The user manual is not just a set of step-by-step instructions for the customer, but is also a legal document that is used to support safety testing and certification.  It has a particular format and set of regulatory requirements.  Another neglected aspect of product design completion is product packaging.  One company had great success beta testing its product at the university located across the street from their headquarters.  The same could not be said for beta tests at major research centers halfway across the country.  Placing the instrument in a shipping crate was not sufficient protection.  Beta testers received product, with screws missing (loose in the shipping container) and critical components out of alignment.  Needless to say, these beta testers were never converted to customers.

  • Transitioning from Prototype to Manufactured Product

The main pressure of an organization is to get income as early as possible, and to manage cash flow.  This drives some compressed schedules, and encourages cutting some corners.  Sending a product design to manufacturing too early can have profound consequences.  When a design flaw is detected in the design phase, it may be expensive to fix, but it is preferable to fix it before the flaw is replicated by the manufacturing process.  Just think about the costs associated with retrofitting multiple products in inventory, or in the field in comparison with taking the time to assure the design to manufacturing is correct.

Inevitably, some flaws in product design go undetected until the product is stressed in the marketplace.  One company did not make it that far.  They experienced too many bumps in the road during product development, so they were running out of money.  The product still had severe flaws.  They decided to launch the flawed product because investors promised that they would provide more capital if the company demonstrated they could sell product by the end of the quarter.  The company’s management thought that selling flawed products would buy them enough time to fix the product later. Unfortunately, customers were not willing to pay full price for a product that virtually did not work.  No products were ever sold.

Two clichés come to mind:

  • You only have one chance to make a first impression. 
  • If we don’t have enough time to do it right, why do we have enough time to do it twice.


In Conclusion
Nearly every function within a company has a vested interest in the success of product commercialization.  The commercial product is the physical manifestation of years of work, and is what will bring reward to the development team.  The product development task requires teamwork between corporate functions that typically do not have much interaction.  Lack of appreciation of the constraints of a given function by team members leads to disaster, e.g., specifications/expectations that cannot be met by the technology or by the design team; specifications that cannot be supported by finance; designs that are difficult to manufacture; executions customers do not want; etc.  The commercialization process is capital intensive, and has very little leeway for errors.  Product commercialization uses unique skills and experience not needed 100% of the time within an organization.  Outsourcing is a great option to minimize risks during this critical growth function.

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What You Can Learn from an Orchard about Growing your Business


Approach building your company like planting an orchard. Be sure that you know what your customers want today but also a few years down the road as well.

By:  Andrew Johnson, Ph.D.

What does growing apples have to do with building a life science company?  It turns out that there are a lot of similarities if you look closely.  A successful orchard requires a huge investment in planning (what variety of trees, how much of each, etc.), effort (a lot of work before the first harvest), finances (cost of land, labor, farm equipment etc.) and time (trees need a number of years to mature before your first harvest) to become successful.  The successful orchard keeper needs to have a good assessment of what types of fruit his customers will want in a few years and also how he can differentiate his own business from other orchards in the area to compete successfully.  The leadership of a strong life science business needs to think in the same terms.  What need will your offering(s) fulfill in the future and why will customers come to you rather than to your competitors?  With an orchard, once you plant the trees, you are now committed to your view of the future market for your products and now everything is about nurturing your trees until you have your first harvest.  With a startup, once you have selected a product and/or service, all of your efforts will be to get it successfully to market.  The orchard keeper cannot rip up trees next year if he thinks that the market for his fruit has changed.  Likewise, most startups do not have the funds (or time) to scrap a product offering once they are working to get it to market.  The lesson here is, make sure to spend enough time to understand your market, your customers and how you will successfully sell and then commit to a laser-like focus for getting that offering to market as soon as possible.

Tips for Building a Strong Startup:

  • Plant Trees:  Build your company for strong and steady future business.  Whether you are offering a platform, service or a one-time sale of a large instrument, referrals are the key to efficiently growing profitably.  Winning new customers is costly so getting referrals from happy customers is like harvesting apples in the fall.  The time, effort and investment you put into winning strong early customers will pay off as they share their experience with your future customers.  Building a scalable infrastructure that consistently and efficiently delivers the goods that delight your customers will insure success in the long run.
  • Build a Barrier to Entry:  It takes a while to plant and nurture an orchard.  However, once your trees have matured, you will have happy customers coming on a regular basis.  Building strong relationships with key opinion leaders, establishing preferred vendor status with organizations and establishing your company as a market leader in the technology is a lot like planting new trees.  There is a lot of prep work up front and the rewards are not immediate but once you have done this, this makes it very difficult for competitors to come into the market later.
  • Plant some Pumpkins Too:  As a startup, you need to start generating revenues as soon as possible to prove out your business.  Your team will need to put a lot of focus on getting your first sales and creating happy customers.  Many startups make the mistake of neglecting to build in some time for creating a scalable and profitable business.  You will be planting and harvesting an annual crop like pumpkins to do this. Developing a product road map that contains both near term (pumpkins) and long term (apples) offerings will allow you to get to market faster and get the insights you need to insure a better outcome with your later prospects. However, the key here is using what you have learned about your customers, their wants and needs and enthusiasm for your offering to build an infrastructure that will allow you to maintain the high level of customer satisfaction that will lead to referrals from your customers (See first point – Plant Trees).

Take Home Points:

  • Start building relationships with key opinion leaders and strategic partners early (even before the launch of your first product or service).
  • Use the insights you gain of your customers’ wants and needs from early sales to guide your efforts as you scale the business.  (e.g. if you will start selling using distributors, make sure that you build in an infrastructure (tech support, technical inside sales, social media outreach, etc.) to maintain the level of support and service that your customers valued in the early days).
  • Everything you do and every interaction you have with the public will shape your brand.  A strong positive brand can be a powerful barrier to block your competitors.  Clearly identify the brand identity you would like to have and make sure that you and everyone in the company reinforce this in everything they do and with every interaction with the public.

Picture Credit:  © Sofiaworld | Dreamstime Stock Photos & Stock Free Images

New Globalization Trends = New Startup Opportunities

globe over water

Issues of outsourcing and insourcing become especially critical during the growth phase of any startup.

By:  Michael Kaiser

For at least two decades, if not more, globalization has become the ‘karma’ for social, economic and political discussions.  And yet, the “jury is still out”.

What Is Globalization?
The impact of technology on globalization as been extensively reviewed and will continue to be so for the simple reason that technology is developing faster than globalization. I have chosen two slightly different interpretations of globalization:

1. Globalization refers to processes that increase world-wide exchanges of national and cultural resources. Advances in transportation and telecommunications infrastructure, including the rise of the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities.

The term globalization has been in increasing use since the mid-1980s and especially since the mid-1990s. In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people and the dissemination of knowledge. Further, environmental challenges such as climate change, cross-boundary water and air pollution, and over-fishing of the ocean are linked with globalization. Globalizing processes affect and are affected by business and work organization, economics, socio-cultural resources, and the natural environment.  Globalization | Wikipedia

2. The tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasing the interconnectedness of different markets. Globalization has had the effect of markedly increasing not only international trade, but also cultural exchange. The advantages and disadvantages of globalization have been heavily scrutinized and debated in recent years. Proponents of globalization say that it helps developing nations “catch up” to industrialized nations much faster through increased employment and technological advances. Critics of globalization say that it weakens national sovereignty and allows rich nations to ship domestic jobs overseas where labor is much cheaper.  Globalization | Investopedia

Outsourcing and Insourcing
One of the key roles that globalization played for the United States, and one that generates to this day intense pro- and con- arguments is the issue of outsourcing.  Its negative impact on the manufacturing industry of the country has been thoroughly discussed and needs no repeating.

Now some good news have emerged for the opponents of outsourcing, and simply put, is the opposite: insourcing. In the December 2012 issue of The Atlantic magazine James Fallows and Charles Fishman explore this trend in separate articles that point with examples to a return of manufacturing in the United   States.

But can it be argued that outsourcing was always a negative one-way process, and thus represented all that was bad about globalization? The fact is that insourcing was already visible in the automotive industry of the country, with Toyota, Hyundai, BMW, Mercedes-Benz and other foreign car manufacturers establishing advanced manufacturing facilities in several states. The same was the case with some foreign pharmaceutical companies like Roche and Novartis who built large R&D and manufacturing facilities.

In both industries, automotive and pharmaceuticals, insourcing represented a two-way street in favor of the local and national economies, to the benefit of contractors, parts manufacturers and clinical research organizations.

There is no doubt that the wave of outsourcing in the last two decades led to irreversible losses to the number of manufacturing employment all over the US, including household needs and clothing; the reason was the cost of local manufacturing vs. foreign ones. Countries like China, India, Mexico, Brazil, Thailand, Viet Nam and other emerging economies eagerly answered to the demand for cheaper (but brand name) products. The US was not the only client, the European Union was not far behind and so were a limited number of Latin American nations. It was clear that globalization led to a major socio-economic shift, and more significantly a political one between the US and China, the latter emerging as the single most important competitor and provider to nascent and developed economies.

China and…
It cannot be ignored that the demand described above had a beneficial effect for the elephantine supplier that China became across the globe (and to a lesser degree two other BRIC countries, India and Brazil).  The local demand for the goods that it was producing for its clients changed Chinese society in a way that could not be predicted in the early 1990’s. A plethora of entrepreneurs and foreign manufacturers from General Motors and Apple to Italian and French clothing emerged
in response to its emerging middle class demand for Western goods. Chinese tourists started slowly showing up, in a manner reminiscent of the Japanese tourists in the late ‘50s and early ‘60s. But there was a significant difference: information technology in the form of internet, mobile phones, tablets, etc. which the Chinese eagerly adopted, a form of cybernetic tourism. But let me dispel the notion that all is roses, and for that no one better than James Fallows, not only in last December’s article, but in his many previous ones during his years in China as a reporter for The Atlantic magazine. His description of the brutal working conditions in many manufacturing facilities, even like the Foxconn one, is sobering to say the least.

As Charles Fishman describes in his article, the return of General Electric’s important home appliances business to their original Ohio base became necessary because the cost of outsourcing to China had reached a higher level than manufacturing in the United   States. (The Insourcing Boom | The Atlantic)

James Fallows explains why insourcing is returning back to the United States:

“Through most of post–World War II history, the forces of globalization have made it harder and harder to keep manufacturing jobs in the United States. But the latest wave of technological innovation, communications systems, and production tools may now make it easier—especially to bring new products to market faster than the competition by designing, refining, and making them in the United States. At just the same time, social and economic changes in China are making the outsourcing business ever costlier and trickier for all but the most experienced firms.

For Americans, the most important factor is the emergence of new tools that address an old problem. The old problem is the cost, delay, and inefficiency of converting an idea into a product. Say you have an idea for—anything. (For me, the list would start with silent leaf blowers, which I’d give to all my neighbors as gifts.) Before you can earn the first dollar from the first customer, you have to decide whether the product can be built, at what cost, and how fast, so you can beat anyone else with the same idea.”  Mr. China Comes to America | The Atlantic

This is not a case of a business analogy of “The China Syndrome”, the eponymous 1979 movie with a cast led by Jack Lemmon, Jane Fonda and Michael Douglas. Rather one should see insourcing as a corrective issue at a time of global financial dislocation, and the notion that China is folding its arms should be immediately discounted from this analysis. As a matter of fact, and paradoxically so, the American insourcing trend frees China to further develop and provide its global customers with its own line of automotive, appliances and other products, very much like Japan and South Korea have done in the past and up to the present time.  For China, the legendary Middle Kingdom, this will be a very different challenge to its present role as the global outsourcing destination.

The Other One
Another case of outsourcing and insourcing is India. Together with its neighbor China, they are the two most populated countries in the world, with an increasing middle class that looks to the US and Europe as their standards of social and economic improvement. The advantage that India had over China was its use of English in all its scientific and business endeavors, but China is rapidly meeting the challenge in that area as well. America may have outsourced clothing and other cotton and synthetic materials, but it insourced a gold price from India: software expertise in the thousands and thousands. India’s domestic industry did not fold its arms either and was able to provide its own manufacturing of heavy equipment and automotives. The Tata conglomerate acquired that British treasure, the Rolls Royce car and generic pharmaceuticals where manufactured by dozens of Indian companies, who in turn moved some of their manufacturing facilities to, yes, you guessed, the US.

As far as globalization in general is concerned, its future development will be measured by how well advanced and emerging economies and societies interact with each other and how they manage contrasting socio-political theories.

Suggested Reading

Note: A personal “Thank You” to Andrew Johnson, Ph.D., for referring me to The Atlantic articles listed above.

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The Startup Product Manager’s Dilemma: Getting the Right Product by Ignoring Some of Your Customers

By:  Andrew Johnson, Ph.D.

swiss army knife

Make sure that your product offering has all of the features that it needs to be successful but no more than that.

Figuring out what you first product or service is going to look like, how it will be priced and how you will sell it is at the top of the ‘to-do’ list for the Product Manager of a startup.  As an experienced startup product manager, you have been very careful to balance the enthusiastic advice and suggestions of the founding team with the wealth of feedback that you have gotten from potential customers in the field.  After getting all of this input, you will rarely have an obvious answer to the ‘What is it?, Who wants it? and How much would they be willing to pay for it?’ questions.

Don’t listen (only) to your Sales or Operations colleagues
Everyone on the team wants what is best for the company but you should be wary of your Sales and Operations team members.  From an operations stand point, the fewer the options the better for them.  They are looking to provide the best product at the lowest manufacturing cost with the highest quality.  Every different version of a product or additional set of features introduces complexity into meeting their goals.  On the other hand, your Sales team, as good representatives of your customers and their wants and needs, will want to have as many versions as possible so that they have the ‘perfect’ solution for every one of their customers.  Simply stated, you need to consider both viewpoints as you determine the final feature set or version options of your initial product offering.  The correct answer, of course, is somewhere between 1 and 100 versions or feature sets.

Determining the right number
You may not get this exactly right but you need to be close.  This is why you need to lean toward determining the smallest feature set of your offering that will be compelling to a large enough number of customers.  Another way of looking at this is that you need to determine what product your development team will most easily and quickly be able to produce that is commercially viable.  Running a well-managed alpha evaluation (see ‘Alpha Evaluations: Going from Great Science to Great Products’) will help you to know if you have got the right offering for your launch or if you will need to make changes.  Steve Blank defines this as the High-Fidelity Minimum Viable Product.

“Minimum Viable Product:  (The) simplest minimum viable product (i.e. a website with the core features implemented, a demo version of a physical product)…”   Steve Blank – The Startup Owner’s Manual

Why go small?
Until you have your first sales with paying customers (free or hugely discounted placements don’t count), you will not know if you have got the right product.  The best feedback that you will ever get is from paying customers.  If everybody tells you that you have a great product but nobody will actually buy it, you have the wrong product.  If only a few people will buy your product or after an initial burst of enthusiasm from ‘early adopters’ you find it difficult to grow your sales, you do not have the right product for the customers that you are targeting.  Going small at the beginning will allow you to get valuable feedback from paying customers as early as possible and limits the amount of effort and resources that could be wasted if your first product to market is not quite right.  This allows you and the team to make changes and/or additional features that will allow you to start winning the sales that your great product deserves.  By keeping the initial offering limited, you will still have the resources to make the changes you need to end up with a winning product.

Selected Tips for Getting the Right Product

  • When talking with potential customers, be sure to determine which of their suggestions for your product or service are ‘needs’ and which are ‘wants’.  Your first product should include the smallest configuration or feature set that will satisfy the majority of the consensus ‘needs’ you learned from this group.
  • Use the ‘wants’ and ‘nice to haves’ from your outside feedback to help you to develop a ‘Product Roadmap’ to guide you with future releases of your offering.
  • Make sure that the issue that your product or service aims to fix is compelling enough for people to want to ‘pay to have it go away’.  A product that is just more convenient may not be seen as worth the additional cost by your future customers.  Your discussions with them should focus as much or more on the problem you aim to fix as you do about your proposed ‘fix’.
  • Have an upgrade strategy worked out in advance of your first product launch.  You need to make sure that your earliest customers will have access to the latest versions of your offering that still makes sense for your Revenue Model.  This will help you to deal with any push back from your first customers who may wish to see your product proven by others first.  Being able to offer the chance to be the first one on the block with a viable path for access to future upgrades and releases will significantly help you to deal with this sales issue.

Highly Suggested Reading:

The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company’, By Steve Blank and Bob Dorf, K&S Ranch Publishing Division, 2012.

Picture Credit:  © IbanMontero | Dreamstime Stock Photos & Stock Free Images