Creating a Product
I am writing this article to really go over the steps that it takes to create a product from scratch and then bring it to market. I'll include tips that I have learned along the way and if they can be helpful then amazing!
- Prototype - Here is where your idea turns into something tangible. It is one thing to talk about something that excites you, but it is another to actually get that something created. You may be able to create this yourself or you may have to hire a prototyping company. Depending on the complexity of the product this may cost you a lot. Just remember in this step really break down what you are trying to do into small manageable bites. You can always add more to a product line later, just need to start with something first.
- Manufacturing Sample - Once you have the prototype and feel that it represents what you would like to actually see on the market you will need to find a manufacturer. For me the prototyping company recommended the manufacturer. You can then present your prototype to the manufacturer and then can begin work on a sample.
- Minimum Order - This is referred to as the MOQ and will all depend on what type of product you are going to produce. Here is where you will need to raise some money so that you can actually have your product created. This is where the fun is and when you will soon be able to hold that idea in your hands.
- Small Release - Now that you have your product in hand it is time to start selling some of them. This is a big step which will most likely require a website, I recommend a platform such as Shopify, and then a small marketing effort just to get your early adopters in there.
- Feedback (Pricing, Audience, Features) - Brace yourself because this is when you are really going to learn if you have something. You may stay on this step for a while since it is going to take some time to at least find that initial price point. This will definitely change during the life of your product, but an initial price will get you moving. This also includes what audience you may be looking at and also what need your product does or does not meet.
- Fulfillment and Logistics - Since we are dealing with a physical product you will need to actually get it boxed up and shipped to your customer. I highly recommend doing it yourself for at least the beginning phases. It can get very costly to pay for housing of your inventory if you don't move it fast enough. This step is also where you will learn how to fulfill orders and also take care of your shipping account and to an extent handling customer service and returns. You will get returns even if you have created the most amazing product on the planet.
- Versioning - With the first release and with actual customers you are going to learn a lot of what you could have never imagined. This is where you are going to learn about things that need to be changed for your next order. You will learn what didn't work and what you can change for the next run. Try not to get too stuck here and really just address the critical issues you may find. You can always repeat this step many times during the lifecycle of your product.
- Marketing - This will become one of the biggest and most crucial steps especially turning your product into an actual business. It is one thing to just sell something, but it is another to actually build a fully running business. Here you will learn your cost to acquire a customer and this will also affect how you may price your product moving forward. I recommend starting some of the marketing on your own until you reach a point that you can't take it any further. There are some amazing digital marketing companies out there.
- Profitability - If you can manage to get to this step then congratulations! Chances are you are now selling and seeing the growth of your business. Here is where you can start to figure out what costs you can cut. Maybe you have some high interest loans, maybe you can get the cost of goods down, perhaps there is a better shipping carrier for your packages. You will start to learn a lot about P&L's and how much they will drive what you are doing with the business.
- Scaling - You have now proven that you can do what you dreamed about. Now you need to take the model that you have working (product, marketing, price, quality, etc.) and start to grow it. This is going to also involve increasing your team and starting to delegate more and more of the responsibilities to others.
These are some of the items I believe to be helpful in really breaking down the process. Just remember as you are working on whatever that is going to cost money, probably a whole lot. Just be prepared for that. As far as investors, if you can snag up some money in the process to fund this then by all means. Do try and give up as little equity as possible, especially in the beginning where points will not be worth that much. (For example if you value your company at $3M then you would be selling 1% equity stakes for $30K of an investment)