A revolution in product development has occurred in recent years as the result of the globalization of technology. Almost anyone with an idea can now act on it and find the needed resources to turn it into a product, particularly with help from efficient and experienced manufacturers. It used to be that only the large companies had access to the Asian factories, but now almost anyone can use these resources. China has revolutionized the process with its entrepreneurial mind-set, can-do attitude, manufacturing expertise, and huge industrial centers that build products for much of the world.
Some regions of China specialize in the manufacturing of small consumer electronics, others in computers, phones, audio, major appliances, power tools, and even paintings. Within each area are all the suppliers that provide support with components and expertise. That also means that even small product companies can take advantage of economies of scale to produce products at very low costs, often using the same manufacturers as their competitors.
This infrastructure enables small companies like Pono to be much more effective than if they had to fend for themselves. Instead they can focus on and invest in the product definition, design, engineering, sales, and marketing and rely on companies in China for manufacturing. This phenomenon of low-cost, efficient Chinese manufacturing has been responsible for the success of thousands of hardware startup companies that employ millions around the world. It’s an alliance that has worked well. In fact, China’s manufacturing efficiencies have resulted in more high-paying jobs in this country for those in the creative, engineering, and marketing areas, because they can rely on China to set up assembly lines, train a workforce, and manage the complex logistics of building products.5
PRODUCT DEVELOPMENT STEPS
Product development involves several phases, from crafting a concept all the way to manufacturing. You define clearly what you want, then design, prototype, test, and refine it until it meets all of your requirements, including fulfilling a market need—always a challenge, because that needs to be done a year or two in advance of sales.
A LOT OF MONEY
The other requirement for developing a product is having the financial resources to fund it. And with hardware you need a lot of money, not only for the development but for building prototypes and tooling and buying parts well in advance of production and months before being paid by customers. Funding has been made a little easier with crowdsourcing platforms, where contributions are solicited from the public to support the effort. It’s often a much simpler option than trying to convince investors to put money into your company.
But with crowdfunding you need to be able to provide a definitive cost and schedule much sooner than normal to get the support for your campaign—many months before you really know. As a result, most projects underestimate the cost and overpromise the delivery date.
EXCITEMENT
Still, developing products can be very exciting. It’s much like embarking on a long trip with just a rough sketch of the route but few details along the way. There are invariably surprises and unexpected issues that come up. You sometimes take the wrong turn, and other times hit a dead end. But if you keep your eye on the destination, it can be a lot of fun.
With most products, you’re managing several parallel development activities: mechanical, electrical, and software, each independent yet interlocking. All must come together in the end and work seamlessly with each other. And, more times than not, you don’t know all of the problems that will arise until after you have actually shipped the product to hundreds or thousands of customers!
The personal reward comes from transforming an idea into a product that millions will buy and use. I had gone through this process for more than a hundred products, and while some had problems that seemed like they’d never be solved, almost every one was. Where there was a failure of a product, it was most often in attracting customers, rarely with its design or the ability to be made.
Neil’s product would be the culmination of all I had done up to that time. I was confident because I had done this so many times before, had made many mistakes along the way, and had learned from them. But this product was one that could not have any mistakes because of its high visibility and importance to Neil’s reputation. We’d have one chance to get it right.
5 James Fallows, “China Makes, The World Takes,” The Atlantic, July/August 2007, https://www.theatlantic.com/magazine/archive/2007/07/china-makes-the-world-takes/305987/.