Innovative new products are the fuel for the most powerfulgrowth engine you can connect to. You can grow without newproducts–AT&T sold essentially the same telephones for decadeswhile becoming the world’s largest telecommunications concern–butmost small companies will find it difficult to grow at all, muchless rapidly, without a constant stream of new products that meetcustomer needs.
If you decide to develop new products as part of your growthplan, you’re in good company. Small companies contribute at leasthalf of the major industrial innovations occurring in the UnitedStates, according to the SBA. At the same time, approximatelyone-third of all new products are unsuccessful, and in someindustries, the percentage of failures is much higher. The way toincrease your chances of coming up with good ideas is to follow thetested track to new product development success.
New product development can be described as a five-stageprocess, beginning with generating ideas and progressing tomarketing completed products. In between are processes where youevaluate and screen product ideas, take steps to protect yourideas, and finalize design in an R&D stage. Following aredetails on each stage:
1. Generating ideas. This stage consists of two parts:creating an idea and developing it for commercial sale. There aremany good techniques for idea creation, including brainstorming,random association and even daydreaming. You may want to generate along list of ideas and then whittle them down to a very few thatappear to have commercial appeal.
2. Evaluating and screening product ideas. Everybodylikes their own ideas, but that doesn’t mean others will. Whenyou’re evaluating ideas for their potential, it’s important to getobjective opinions. For help with technical issues, many companiestake their ideas to testing laboratories, engineering consultants,product development firms, and university and college technicaltesting services. When it comes to evaluating an idea’s commercialpotential, many entrepreneurs use the Preliminary InnovationEvaluation System (PIES) technique. This is a formal methodologyfor assessing the commercial potential of inventions andinnovations.
3. Protecting your ideas. If you think you’ve come upwith a valuable idea for a new product, you should take steps toprotect it. Most people who want to protect ideas think first ofpatents. There are good reasons for this. For one thing, you willfind it difficult to license your idea to other companies, shouldyou wish to do so, without patent protection. However, getting apatent is a lengthy, complicated process, and one you shouldn’tembark on without professional help; this makes the processexpensive. If you wish to pursue a patent for your ideas, contact aregistered patent attorney or patent agent.
Many firms choose to protect ideas using trade secrecy. This issimply a matter of keeping knowledge of your ideas, designs,processes, techniques or any other unique component of yourcreation limited to yourself or a small group of people. Most tradesecrets are in the areas of chemical formulas, factory equipment,and machines and manufacturing processes. The formula for Coca-Colais one of the best-recognized and most successful tradesecrets.
4. Research and development (R&D). Both tasks arenecessary for refining most designs for new products and services.If you’re already the owner of a growing company, you’re in a goodposition when it comes to this stage–most independent inventorsdon’t have the resources to pay for this costly and oftenprotracted stage of product introduction. But that’s not to say ifyou don’t have a business, you can’t find the resources toundertake this task. There are plenty of ways to get the job donecheaply.
R&D consists of producing prototypes, testing them forusability and other features, and refining the design until youwind up with something you think you can make and sell for aprofit. This may involve test-marketing, beta testing, analysis ofmarketing plans and sales projections, cost studies and more. Asthe last step before you commit to rolling your product out,R&D is perhaps the most important step of all.
5. Promoting and marketing your product. Now that youhave a ready-for-sale product, it’s time to promote, market anddistribute it. Many of the rules that apply to existing productsalso apply to promoting, marketing and distributing new products.However, new products have some additional wrinkles. For instance,your promotion will probably consist of a larger amount of customereducation, since you will be offering them something they havenever seen before. Your marketing may have to be broader than theniche efforts you’ve used in the past because, odds are, you’ll bea little unsure about the actual market out there. Finally, you mayneed to test some completely new distribution channels until youfind the right place to sell your product.
