Develop the value proposition – the most critical step before designing a new product.

You are a very intelligent engineer. You have a killer idea for a product. You have discussed it under non-disclosure with several respected colleagues and they agree that it solves a significant problem and will take the market by storm. You have worked endlessly to file for technology patents, develop a business plan based upon your theories and premises, seek investment funding, rent office/manufacturing space, built prototypes, test the product, and ultimately build the widget of your dream. Now you are ready to launch and reap the emotional rewards and financial benefits of a selling a commercial product. Sound familiar? All too familiar, I’m afraid.

In this scenario your chances of success are slim. Why, because the most important step in launching a successful product is missing. I left out this factor because it is a most common mistake made by entrepreneurs and one that may never allow your product to succeed, no matter how elegant in design.

Long before you open your CAD program and product design tools (which is what you love to do) you need a concise understanding of the problem your product solves, how it solves the problem better than what’s out there already, who is most impacted by the problem your product solves, how much is the solution worth to the end user in terms of dollars, and will they be willing to pay it. In other words, you need to develop the value proposition for your invention and test it before you build the product.

Creating a winning value proposition is no small task, but one that is critical to your success. The value proposition takes into account product alternatives, process workflows, end user biases and preferences, critical capabilities and features, functional specifications, packaging requirements, environmental concerns, and pricing. There are many ways to gather this quantitative and qualitative information, including broad market surveys, telephone surveys, face-to-face meetings, and fee-based research from business analyst groups. Many organizations are well qualified to help you in the process. And while your cash is short at this point, it is an investment in both time and money that you absolutely need to make.

With a strong value proposition in hand, you will understand your market and will have clearly identified and defined your target audience; you will understand the product capability requirements, product lifecycle expectations, end user interface, and useability design considerations. You’ll also know the price point that the market will bear and give you guidance in building a cost effective product that meets your profit margin objectives. This information will also help you build a stronger business plan and help you secure investment capital. And finally, when you are ready to launch, your sales professional can develop a winning competitive sales strategy. And don’t forget, it is vital that you hire a sales professional to close the deals. More about that later.