Companies and entrepreneurs contact Compass Electronics Solutions nearly every day looking for a product development partner. Many believe their idea is going to be groundbreaking, a blockbuster, a novel innovation the world has never seen for an audience that didn’t know they wanted it.
While this enthusiasm is a key ingredient in getting a product to market, it is unfortunately often paired with limited knowledge of how to develop that product into a viable, market-ready solution. So what should a person with a great idea do in preparation for contacting a product development partner? Read on to see five indicators product development organizations seek out as evidence that an idea is ready to make its way to market.
Indicator 1: How Well Do You Know Your Own Product?
Conversations with prospective clients typically start with standard questions about their product. What are you trying to build? Is it realistic for us to think we can make it? Has it been done already? If so, how does this improve on existing designs? Are you going to infringe on an existing patent? These questions allow for a better understanding of whether the new device can realistically make an impact in the market.
Tess Tibbs, Inside Sales Lead at product development and manufacturing company, Compass Electronics Solutions, notes two early positive indicators that can point toward a potential partnership with a prospective client. “One indication is to ask to get a signed NDA in place before we start discussions. Another is if they have specific files or materials about the project they are willing to share. These help assure me that they’re serious, and not just trying to contact a bunch of firms to find out whether they’ll offer any help.”
Warning signs can also pop up at this stage: an “over-sketched” product that shows intricate detail about assembly and functionality can be a sign that the product has not been designed for efficient manufacturing. Also, a tendency to narrowly focus on the product’s benefits and innovative features can indicate they haven’t thought enough about who will actually buy the product and how they will use it. Which brings us to the next indicator.
Indicator 2: Do You Know What End Users Want?
A thorough understanding of the market, market size, and end-users is key to launching a successful product. Understanding what the total available or serviceable available market for the product may be, and how that differs from what a client could expect to capture in the first push into that market, illustrates that the company or entrepreneur wants to use whatever funds they have wisely.
“Doing market research is like purchasing insurance for your future money. Good product development companies either provide these services or know how to help a prospect interpret research findings,” Tibbs says. “Do you have a good understanding about what—and how many—people will want to buy what you’re making, and will they want it at the price that you’ll assign the product? If the data proves otherwise, you need to think about whether you need to pivot or even kill the project.”
If a prospect spends most of their time telling anecdotal stories—a recent entrepreneur told Tibbs all about his friend, who had done research in a market adjacent to that which his product would belong—then they likely have not done any market research. It’s also a red flag to see a prospect insist their idea faces little competition in their desired market; a cursory search will often reveal several viable substitutes already on the market.
Indicator 3: How Far Along Are You?
Getting a sense of how far along in their project a prospective client already is helps product development companies understand the size of the remaining task, a requirement for determining scope, cost and timing. This question also helps determine how serious the prospect is about making the product a reality, and if the person who initially seeks help is really the person with decision-making authority relating to the project.
Asking this question can also indicate the prospective client has been putting substantial time and energy into developing the product. “My ears perk up if the prospect offers up that they have a prototype, or working prototype, already, that has been tested to some extent,” Tibbs says. “I also look for certain buzzwords that people are clearly using in the correct context, like, say, ‘I need help with Design for Manufacturability, or ‘I need to do some troubleshooting.’”
This vetting question invokes other indicators, too, in the sense that a promising prospect has done some research and determined the scope of their projects and the features they have outlined, and that their minimum viable product has been stress-tested. That will affect the budget for what is needed later in development.
Indicator 4: What Is Your Budget (or Path to Funding)?
This might seem like one of the first things to ask in conversations; if a prospect doesn’t have money, what’s the point of talking to them, right? That’s actually not the case! Many product development companies want to ask this question right away. The answer they receive, however, is often more complex than it might seem and can also get the relationship off on the wrong foot.
“I don’t want to ask right away unless I absolutely need to. I want to hear them say what they have. What I may do is call them to ask them this, to take away their opportunity to have time to make something up,” Tibbs says. “But this question is not only for, ‘Do you have any money?’ It’s also for figuring out if you have a strategy for getting money if you don’t have any right now.”
More prepared prospects usually approach conversations with, if not a secured budget, then a plan for acquiring funding. The existence of a business plan can be important to show how serious someone is about their project. Has it been vetted with a bank? Has all the necessary information been gathered to go to a venture capitalist and ask for project funding?
Indicator 5: What Is Your Desired Timeline to Market?
Most prospective clients, good and bad, want to get a product to market “as soon as possible.” On rare occasions, the company seeking product development will be much further along in their product development sophistication. They might say, “I have an understanding that it’ll probably take 3-4 months to get through beta prototyping, and I’m realistic about what that might mean for our launch date.” These prospects usually flip the question and ask what timeline they should expect.
Asking about desired timeline gives a sense of whether a prospect’s expectations are realistic and what the product development company needs to do in order to educate them about a feasible timeline to market. Development companies must continuously pivot and adjust to clients’ knowledge and expectations to ensure they’re aligned to meet them wherever they are in their product lifecycle.
“More sophisticated product developers will also come to us with what they envision for the next version of the product, or an idea of where future iterations of the product may take them,” Tibbs says. “That makes it easier for us to determine whether we can really help them.”
Are You Ready?
Contract product development and electronics manufacturing is, first and foremost, a business. Companies in this space naturally seek out projects and partners that make sense from a business perspective. But they don’t want to waste your money. And they don’t want to waste both the prospective client’s and their own time. Asking these questions is a form of risk mitigation for both the prospect and the product development company.
Tibbs sums up the Compass Electronics Solutions approach to partnerships like this: “I think of it from the customer’s perspective as, one, this company is willing to educate me and, two, inform me that they aren’t just here to take my money. They understand the pitfalls of what will be out in front of a prospect if they continue down a blind path. Our best customer engagements are always built on trust. It’s my job to start building that trust from the first conversation.