Managing Partner Tucker Marion will be presenting his new research on start-up innovation outsourcing at the Research and Development Management Conference in Manchester, England between June 30 and July 2.  For more information on the conference please visit: http://www.rndmanagement.info/. The research paper, “Outsourcing Innovation: A Guide for Start-ups”, focuses on lessons and best practices for maximizing the effectiveness of using outside resources to bring your product to market.

The research abstract is below

This paper explores the beneficial impact of outsourcing on new venture innovation development efficiency and effectiveness.  The relationship of outside firms on innovation commercialization is highlighted, with an additional focus on the enabling role service providers such as rapid prototype fabricators and quick-turn manufacturers perform.  We synthesize our research into five distinct lessons, which form a guide for new ventures in selecting and implementing these external resources.  The first lesson is optimizing your firm to allow easy integration of outside resources.  In our study, the most successful firms leveraged a network of outside providers by keeping internal head-count low, and migrating to a software-like agile development processes.  The second lesson is strategically selecting partners that provide more strategic long-term assistance as opposed to only discrete development resources.  These firms help connect channel partners, customers, and new investors.  The third lesson is managing the innovation process through agile milestones, not onerous procedures.  Maintaining a balance between flexibility and discipline is a pathway to success for the new venture.  Next, the ability of the firm to quickly and inexpensively source and have solutions fabricated for internal and external customer testing is essential to an efficient process.   These fast solutions place concepts quickly in the hands of the development team and potential customers – speeding the process to market through rapid vetting of successive iterations.  Finally, the use of quick-turn manufacturers and assemblers can also help the new firm gather important sales data without having to invest large amounts of capital on costly inventory – helping the new venture preserve precious financial capital while capturing data needed for full commercialization.  These guiding lessons not only contribute to applied management knowledge, but outline phenomenon that require further detailed empirical investigation in the space of new venture innovation development.

For additional information on how Flashpoint Development can be your outside innovation experts please contact: info@flashpointdevelopment.com

Inventors, entrepreneurs, and new ventures are always looking for an exit strategy for their idea. Do I sell my company? Am I an IPO candidate in the future? While those questions for the fortunate few may be asked after several years of sustained, continuous growth – there are two import ‘exit’ questions, which face the new entrepreneur much earlier.  The question is: do I make the product myself or license it? Many inventors and entrepreneurs dream of the easy out : “I have an idea, I’ll patent it, and license it. Simple.” Visions of beach vacations while collecting lucrative licensing fees dance in the entrepreneur’s head. However, the reality is much different. The likelihood of licensing a product or technology in the early stages of development is very small. Many spend copious amounts of money securing patents – ready to license, only to find no one is interested.

But, there is hope out there for the inventor, entrepreneur, and new venture. A company in New Hampshire has been helping people license their inventions to large, established firms. That company is the Big Idea Group, or BIG. BIG started in 2000 to bridge the innovation process between the inventor and the big firm looking to commercialize new innovations. For inventors, BIG offers Roadshows, Idea Hunts, and even accepts general submissions. Their intent is to help find that one in a thousand invention that is perfect for Black and Decker for example. For large, established firms, BIG offers Innovation Challenges where their network of over 13,000 inventors submit ideas on open idea challenges. A recent challenge was held for Staples. BIG helped Staples design a public invention contest for office supplies to help differentiate Staples products from commodity goods, drive traffic into stores, and generate positive PR. In the first year, the contest generated 8500 entries, received national U.S. media coverage, and led to the launch of four innovative products.

FlashPoint has had a relationship with BIG since 2004. In April 2004 an inventor approached FlashPoint to help try and commercialize his product, a new type of personal flotation device. It was designed to replace the life jacket through a very comfortable and easy to wear automatically inflating belt. It was tested and certified by the Coast Guard – it really worked as promised. Actually a sad story – the inventor had spent his life savings on the project – gone through a divorce, and was living in near poverty, exhausted and desperate. I was sold on the product, and committed to the inventor to work for a percentage on sales if we could get it to market. We developed marketing materials, detailed commercialization plans, and hit the road to try to sell it. We presented the product to BIG and they were excited too. In fact, they agreed to sponsor an airing of 5,000 units on QVC. We were on our way. Unfortunately, when we tried to line up the manufacturing, the inventor’s contract manufacturer did not have the capacity to fabricate the units. We found another supplier but the inventor could not raise the funds for the QVC inventory. We tried to secure angel investment, but we could not get a deal closed. All investors were not happy 7 years had elapsed on the patent, and had concerns with the inventor. So we had to fill BIG in on the bad news. As with many failed inventors and inventions – there are often sad stories behind them – and many what ifs. A lesson to be learned – do not spend all of your life’s savings and run out of funds and energy before you get to market. Have a clear commercialization strategy and do not hope for the best once you have a patent and a prototype. As with manufacturing, once you have a functioning product does not mean it will be successful.

So, check out BIG – if you have the right idea in the right space – your potential for successful licensing may be improved. BIG is currently on the lookout for high-potential micro-businesses.

Good job!  You have read the NPD Planning Post and realize that to complete a prototype you may need outside expertise and the sooner you line it up the better.  This post will give a quick run through of a assembling those experts.  We use several different sites, depending on the type of expertise we need but this morning I used www.guru.com so I will focus on that today.  Registering for Guru as an employer grants you access to search for freelancers depending on their area of expertise.  Although this method may provide some results eventually, posting the project for freelancers to peruse delivers results quickly.  Once a project is posted, you can invite specific freelancers to bid.  The posting process begins with selecting the area of expertise required to complete the section of the project.  Then you get to the project description.  Here are some tips for the project description.

• Catchy title describing skills and project
• Quick description of who you are and what you are doing
• Don’t give direct contact information
• Describe type of work and what other aspects of the project need to be integrated
• Don’t go into detail about what the project entails, that comes later
• Ask questions like hourly rate, fixed bid projects, examples of similar projects etc.

The desired response from the project description is an available consultant in the necessary field that works with your pricing structure and has some experience with a similar project.  Quotes from this stage are useless because you haven’t provided enough information for the consultant to accurately quote the project.  Send the top tier of responders an NDA.  If they don’t want to sign it and you care about that (we do) then don’t work with them.

After you have recieved the NDA, send out the Spec Doc (See Spec Doc and T5+2 Post).  The spec doc will be questioned and you must work through those issues.  This is not an opportunity to shy away from the potential issues with your product.  Some consultants may want money upfront to look through and critique the spec doc, we don’t participate in this type of arrangement.  Hopefully now you have shrunk the list of consultants to a few good candidates.  Some projects this is like 50 responders, 10 top tier, 6 NDAs, 3 Final candidates.  Now you must evaluate the options based on price, lead time, location and  any other variables that are necessary for this project.  Make your pick and work with it.  It is also important to let the other candidates know that you have chosen someone else and provide a quick reason why.  Now you have an expert and are on your way!

You have a product in mind, but don’t want to develop it maybe you need to
• Focus on the market
• Go to your Job
Or your product needs
• Expertise you don’t have
• Someone who has done it before

You can’t do it alone, so who do you go to? Product development firms can be very different in outcome and price. The larger more established firms deliver a production ready looking prototype for a large bill while small product development firms deliver an almost working prototype for minimum costs.

Match your expectations with your budget.

TO DO: Write up a concept description. It can be short or long, technical or not, include drawings from a napkin or a CAD file. Talk to a few product development firms about the possibility of doing the project. You may want some confidentiality so inquire about a NDA or confidentiality agreement. Once you feel comfortable with a few firms, send out the concept description and wait for questions that will lead to a schedule and budget proposal.

Sam Ruback is the Product Development Manager at Flashpoint Development. Sam would love to hear your feedback or comments about the post and your thoughts may be posted! sam@flashpointdevelopment.com