Product Feasibility Studies

The Three Factors determining success or failure for a new electronics product

We talk to lots of people with ideas for a new electronic product. Some of them are non-starters, some will do okay and a small few could become game-changers. However, there are three factors that will impact the success of your new product – with most thought going into just one of them.

1. Product development

This is where most entrepreneurs spend all their time. How can they make their product as good as it can be? What functionality needs to be in the minimum viable product (MVP) or prototype? What’s the development path from there?

Of course, this is a critical part of the success of your product. Putting a poor product onto the market is a quick way to lose your shirt.

Product development is not an easy process. If it was, we wouldn’t exist. Getting the specification right, the electronics and firmware fully functional and the manufacturing happening cost-effectively and efficiently takes time and money. There will be multiple iterations of the design which often changes with early user feedback and as requirements crystallise. The electronics will need at least one update as components sometimes don’t do what their datasheet claims. There can be tweaks to ensure boards fit properly within enclosures and radio antenna are matched and fettled for performance – with power supply, products are expected to last longer and longer from batteries that haven’t changed in years.

However, you have to get this right, or you have no future.

2. Money

We’ve already alluded to this in the cost of development. But let’s look at it in more detail. We are assuming that you haven’t got unlimited resources and haven’t won the EuroMillions in the last few weeks.

The Money Stages in product development

1. Development: it costs money to develop a product. This will, almost certainly, need to be your money because investors rarely invest based purely on an idea. Some may invest at the design stage, but most will expect you to have, at least, a working prototype before they hand over any cash. You will need to invest your own money (or family/friend’s money) to get to the point where external financing is likely.
2. Manufacturing: setting up the manufacturing takes further investment. Tooling up is not a cheap process and needs to be paid for.
3. Inventory: you need stock to be able to sell. That stock must be made by your manufacturer and, again, they will expect to be paid up front. You must fund that inventory from the first raw materials order to the point the cash starts flowing inward.
4. Sales: Hurrah – money is flowing in rather than out, but that doesn’t mean you’re out of the woods. Is there enough coming in? If there is more flowing out than you have available before the money flows in, you’re in trouble. Cashflow is the biggest killer of businesses – bar none!
5. Positive cashflow: by this we mean there is more money available than is needed. Your bank balance starts to move back towards the black. Let’s hope this continues.

Related blog: TBAT Funding Strategy Checklist

3. Marketing

This area is normally left until there is something to sell. That is a huge mistake. It should start from day one, alongside product development where MVPs are regularly tested with potential customers to form the product from their feedback.

Marketing is the process whereby you make your target audience aware and interested in the product. Getting people interested will help sales once you have a product. After all, the sooner the sales start, the sooner there is cash flowing back into the business

Use marketing to get people actively excited

Talking about the product is no good. Talking about how the product solves a problem is good. You want people waiting with bated breath for the launch of your product. Carefully crafted marketing will do that for you.

If you wait until you have a product, you are delaying the success of your product and you don’t want that.

You need to remember all three of these points

If you get these three right, you have a product on the market with an audience looking to buy. If you’ve only concentrated on the product development, you’re still a long way off.

Do you need help with a new electronics product?

If you would like to know more about how Ignys can help you make your new electronic product a success, get in touch today.