5 Tips for Outsourcing Product Development

If you're a non-technical entrepreneur, outsourcing product development may be the only way to go.

learn more about John Teel

By John Teel • Sep 9, 2016


Opinions expressed by Entrepreneur contributors are their own.

If you're an entrepreneur, developing a new physical product, you may think a large product design firm is the answer. They can develop your product from start-to-finish, and you don't need to worry about the details.

If you aren't technically-minded, the enticement of using a company that magically turns your idea into a finished product is even more appealing. However, anything that sounds too good to be true usually has its downsides.

Here are five tips to consider when outsourcing the development of your new product.

1. Retain control of your product, and constantly be learning.

Your product is your baby, and when you hand it over to a large design firm, you no longer have as much control. You came up with the idea, passionately pursued your vision, and now, you're ready to bring it to life. If you subtract yourself from the process at this critical moment, you won't get what you envisioned, and you'll probably regret it.

You need to guide the project; push it forward; and always stay in the loop. This definitely doesn't mean you have to do everything yourself, but you need to remain in control of each step.

You won't understand the development process, when you hand everything over to a design firm, and you won't build the skills you need for the future.

Fortunately, you can develop a product, even if you're non-technical. The best way is to add a technical expert to your team as a co-founder. This also means that you must be the one to tackle the non-technical side of your project, which means mainly sales.

2. Implement checks and balances to reduce your risk.

Some big design firms handle every step of product development because they have many engineers on staff that check and rectify problems. However, this level of service comes with a high price tag.

Consequently, many entrepreneurs rely on freelancers. This means you're relying on one person for product development, and no one checks their work. You can get around this issue by hiring multiple freelance engineers.

If a doctor told you that you need major surgery, you might ask for a second opinion. Similarly, getting a second opinion on your product's design reduces your risk during the development process. This is standard procedure for new products developed by major companies.

Almost every time, other engineers will find issues. Regardless of the skill of an engineer, when complexity increases, so does the risk of errors. Use a review process to lower risk.

Implementing a design review process may also open up the possibility of hiring offshore developers. Normally, I don't recommend offshore developers if you don't have the skills necessary to accurately review their work. But by hiring an independent engineer to review their work, the risk can be reduced to a reasonable level. This strategy could possibly save you thousands of dollars.

3. Hire specialized engineers.

You don't want an engineer considered a jack-of-all-trades, but instead you want to hire specialists with specialized expertise for each aspect of your project. After all, you wouldn't want your family doctor to perform brain surgery.

When you want to bring a new electronic product to market, it's very involved. Complex electronic products often require many specialized engineers. For example, for an electronic product you may need to hire the following types of people.

  • Circuit design engineer - designs the circuit schematic diagram.
  • Layout engineer - designs the printed circuit board (PCB) based on the schematic.
  • Firmware/test engineer - programs the microcontroller and tests the electronics.
  • Mobile app developer - develops custom mobile apps.
  • Industrial/3D design engineer - develops the case or enclousure.
  • Mechanical engineer - needed if your product requires moving parts.

Related: 9 Essential Tools for Agile Product Development Teams

4. Don't put all your eggs in one basket.

Putting your project in the hands of one engineering firm or one freelance engineer increases your risk in other ways too.

Your freelancer may not complete your project, and they may take all the valuable details of your project with them. Freelancers come and go on a continual basis. Many engineers only do freelance work between full-time jobs, so if your freelancer gets a new job you may lose them.

Design firms fold too, and when they control every aspect of your project, it will be a major setback for you. When you hire multiple engineers you have less to lose. It's much easier to replace one of several engineers than to start from scratch.

Related: How to Hatch Your Golden Egg: The Keys To Product Development

5. Manage product development to save money.

Hiring a single engineer or firm for your product development can also increases costs. Rates for engineers vary depending on their specialties. For example, circuit designers may charge more than firmware programmers or PCB layout designers.

When you hire one engineer, or a single design firm, they'll probably charge you the highest rate. If you use specialized engineers, you will pay lower fees during some steps of development, and this could save you thousands of dollars.

Related: The 7 Steps of Effective Product Development

A successful product development process must include you. Push beyond your comfort zone, and learn. Don't ignore this valuable opportunity to develop new skills, and challenge your fears. The rewards include improved self-esteem, better business savvy, higher profits and a significantly increased chance of success.

John Teel

Founder of Predictable Designs LLC

John Teel is president of  Predictable Designs a company which helps entrepreneurs bring new products to market. Teel was formerly a senior design engineer for Texas Instruments where he created electronic designs now used in millions of portable devices (including some from Apple). He is also a successful entrepreneur who developed his own product, had it manufactured in Asia, and sold in over 500 retail locations in three countries. Download his free cheat sheet for developing your new hardware product.

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