News

Obsolescence or why all good things will come to an end

6 June 2018 – 5 min read

Quite regularly we get design requests where the client has a working product that has come to the end of its manufacturing life. Typically components are getting harder to source and the manufacturer starts raising flags that they may not be able to continue production with the current design. Sometimes there are temporary design shortages but more often components are being phased out by the component manufacturer sending end of life and last order purchase notices.

What do you do when your product reaches end of manufacturing life?

When these flags first come up it is a good idea to assess the remaining product life and plan for a replacement design while there is still supply of the current product. Often the end of production can be managed to allow enough time for designing a replacement.

However we have seen many cases where obsolescence has been ignored until the supply shortage became apparent and pressing. You can imagine that short term design solutions made under time pressure rarely provide a smooth transition from a trusted product to the next generation of tested reliable products.

How long should you expect an electronic product to be manufacturable and serviceable?

The trend with many products is that today’s products will have a shorter life cycle than their predecessors. How much that affects your products depends very much on the application.

While we strive to design products that can be built for many years to come, the lifecycle of the components we use will ultimately require design changes in the future. In many cases we look for component manufacturers that provide assurances that components will be available in the future. For critical elements like microprocessors we may be using parts with 10 year supply guarantees. However especially with new technologies sometimes forecasting availability is not easy. For example, we recently experienced an unexpected shortage of capacitive components – some of the basic building blocks we rely on but usually do not see as problematic to source.  While often attractive and cheap we tend to stay away from components that are commonly used in short lifecycle consumer products like mobile phones.

What does an obsolescence replacement design look like?

Some clients are happy to apply some ‘bandages’ to rescue a design by addressing the component shortage with alternative parts and local changes. This is often a short term fix that requires more bandages on the hybrid design later on. We believe that a redesign should address the functional requirements in a similar way as a complete new design would. After all you don’t want to carry over decades old design elements into your latest product. The best chance to create a product with a similar life than the predecessor would be to design with up to date components that also likely outperform their predecessors and reduce complexity.

What other reasons could lead to a re-design?

While obsolescence is often the trigger for a re-design, ease of manufacturing may be another precursor for a product upgrade. In many cases the designs we replace are based on through-hole components that need to be placed by hand onto the PCB. The labour cost of the build is therefore significant and we can improve on this by re-designing the product with surface mount components that can be machine placed and provide a more economical production process.

Occasionally we get products for re-design that have shown problems with electromagnetic interference (EMI) or were affected by power quality issues. Either the product itself was affected by EMI or power issues or it interfered with other equipment. Amazingly even products that have been in service for some time can fall into this category. In some cases it takes a while to determine the cause of a disturbance and identify the device that was causing the problem. Often we can ‘rescue’ the core design while improving the resilience and reducing emissions.

So if you are looking at an aging product that has manufacturing problems or is not living up to expectations in other ways, why not have an assessment to determine your options? In many cases it makes good business sense to start a re-design that will breathe new life into your product. As well as lower production cost, retain proven functionality, add new features and improve reliability.

 

Finance your product

23 Mar, 2018    5 min read

How do so many start-ups get the funding to start developing a product? There are many different types of funding and they can all be suited for different purposes:

  • Bootstrapping / Self-funding
  • Government grants
  • Seed / Investors / Accelerators
  • Crowd Funding

 

Bootstrapping

Bootstrapping is a great way to fund your product and stay in control. Putting your own money behind a product makes it your own; as long as you don’t have to get a second mortgage.

If you’re not willing to back it with your money why should investors spend theirs?

Pro’s

  • You choose what direction to take your product

Con’s

  • Personal risk
  • Often it can only take you so far (for most of us) before the money runs out

 

Seed / Investors / Accelerators

There are many investors that exchange money upfront for a share in your company. The best ones also come with resources, either experience to add to your team, networks to use, or an accelerator program to help grow your company.

Pro’s

  • ‘Smart money’ – if done right comes with an investor with experience and connections
  • There can be substantial funding available

Con’s

  • Done in exchange for equity – don’t give too much % away early
  • May have conditions – i.e. getting expensive patent for IP protection when not necessary for your product

 

Government

There are several grants and assistance for start-ups and businesses from the government. This come in many different forms but can be really useful to fund growth, particular R&D tax incentive. Many grants often match up to 50% of expenditure.

Pro’s

  • Does not take equity (some exceptions)
  • Free money – with limited strings attached (depending on grant)

Con’s

  • ‘Dumb money’ – doesn’t come with expertise or connections
  • Not always available for all business structures (i.e. trusts)
  • Situational – pick the right available grant, not all will be applicable
  • Grant applications – can take time and effort away from your product
  • Can be restrictive on what the funding is spent on

 

Crowd

Popularised by Kickstarter, crowd funding provide the opportunity to get funding straight from your customer before the development is finished. Finding customers to pre-purchase your product is an excellent way to validate your product.

Pro’s

  • Customer validation
  • Helps product recognition
  • No equity

Con’s

  • Significant marketing effort is required for a successful campaign
  • Locks you into defined product/look & feel/functionality
  • Must scale fast
  • Have to price your product before you discover possible hidden costs

 

There is no one size fits all solution when it comes to getting funding. One tried and tested method is to bootstrap your product in the early stages. Develop something – often a proof of concept prototype – to prove your product to investors. This will allow you to get more funding for smaller equity than just an idea.

Then use investors for not just funding but connections and expertise to build a business. Use both investors and government funding to develop a field test prototype and test it with your customers.

Once you have a defined product use crowd funding to both market your product and provide funding for quantity production.

 

Turnkey Projects in Product Development?

21 Feb, 2018    2 min read

You would have heard of the term Turnkey Project or turnkey for short. The image behind this is a proud house owner receiving the key to the new house and everything has been done. All there is left to do is to turn the key and walk in.

What associations does this raise in product development? Especially when you are looking to develop a new product. Do you expect the product development company to take your order like a drive through?

“One custom designed product please” – “Thank you sir – it will be ready in 6 months”

And then drive away and come back to get the keys at the end of the process?

Well here is the catch: In essence a turnkey project is a contract where the contractor supplies the design and is ultimately also responsible for the outcome.

Sounds good, right? Unless you realise that this can by nature not be a custom design.

Turnkey is when you contract a builder for a house that you selected from a number of designs. Maybe you get to choose the colours of the walls and tiles or spend extra on a luxury fit-out package but that is the extend of variations allowed. Also the design belongs to the builder and you can’t stop it if the builder sells you neighbour the exact same house.

Looking at this scenario none of the product development clients we have ever met wanted a product from a catalogue. They had their own special product in mind that was unique. They wanted to keep things secret and at the end of the process own the design. That is the opposite of turnkey. We call it called custom design.

But here is the real point why “turnkey” is so strangely attractive to some:

It implies that you can walk away from a custom design and still get your product in the end.

In my experience every project where the client disconnects during the development process is doomed to fail. Someone needs to be the product manager. In charge of all areas that will make this product fit for purpose. The best results come from a driven and enthusiastic project champion looking to commercialise a great product and a development team that can work along at the same pace.

So let’s call things by their right names from now on.

Turnkey is buying from a catalogue.

Custom design is getting your idea build – but you have to be the project champion.

Which option is for you?

 

How to ensure quality without breaking the bank

7 Dec, 2017    3 min read

When it comes to the quality of your product, your first instinct is to ensure the highest standard possible. The only way to guarantee this is to test every feature in production before it is given to a customer, right?

When it comes to production testing in Australia, the general rule of thumb is every minute of testing costs $1. So if you are making a low-cost electronic that you want to retail for $30, then 10 minutes of testing is unrealistic. Say goodbye to your profit margin.

However, it is vital that you provide your customer with a reliable, quality product. After all, the happier a customer is with the quality, the more likely they are to recommend it.

There are two levels of testing; design and production. Design testing should be completed as rigorously and as detailed as necessary. This is the right time to test all features and functions of your product before you go into production.

Production testing only needs to test that the manufacturing and assembly of the product was successful. The key to achieving the right balance is identifying the fundamental features of a product that need to be tested.

There are a few shortcuts to improve testing with reduced cost. For countless clients we have created a test jig to reduce testing setup time. We have also developed custom software specifically written to speed up the testing procedure. This allows crucial testing to be done in a much shorter time frame.

Reducing test time is often done using some level of automated testing. This can add significant cost in the short term that needs to be balanced with quantity, the more units the cheaper it is per unit.

So if you are building 50 units it might be cost effective to get the product tested manually. If you start producing 50 000 units it becomes a different story.

It is important to balance the thoroughness of testing with the risks of the product. Risk breaks down simply into: Probability x Damage caused. The more severe the consequences of a failure, the lower you need to make the chances of it happening. This can often be done with more rigorous testing.

A $5 pair of headphones might only have 1 in every 50 tested. However, if your product is a $30 000 safety critical system, then spending 20 minutes testing is reasonable.

Getting testing right is an important part of the production process. This goes hand in hand with getting the right design and manufacturing partners. The last thing you want is to recall a poorly manufactured product.

Quality control will give you piece of mind that all your customers are getting the same high quality product.

How do I know my product will sell?

8 Nov, 2017    2 min read

The most important part of defining a commercially successful product is to not focus on the product. Focus on the customer, specifically on the customer’s problem.

The reason people buy products is to solve a problem. If your product addresses a ‘pain point’ for the customer, it has value to them. The best way to ensure your product will sell is to validate with the customer.

Customer validation should be done throughout the product development process. Doing as much as practical in the early stages will validate your problem and shape your product.

Go talk to your customers. Find out how painful their problem is. What is a solution worth to them? You don’t want to develop a $50 product for a $5 problem.

Once the problem is understood then the solution can be defined, your product. Go back to your customer, propose your solution to them and get feedback. Find customers who will pre-purchase your product, people willing to put money down for your product is the ultimate validation.

The next step is to build a prototype and get your trial customers to use it. Does it satisfy their problem? Does it create any new pain points itself that you can address? Or can you move forward with confidence.

Continue to iterate and get feedback.

Move forward and build your product, but seek feedback directly from the users. The only way to be sure that your product will sell: is to sell it to your customers. However sell the solution early before your product is finished and take your customers and users feedback on-board.

Understand your customer’s problem and make your product the solution, not just a great device.

Finding the Right Team

17 Oct, 2017     2 min read

How do you find the right people to work with you on your electronic product development?

Do you work through exaggerated claims on websites, matching them with your lists of technical requirements, to find the best fit for your team?

We think there is a better way.

What you and your team need to achieve depends on a range of factors and differs for every development project. Let’s talk about the things that stay the same.

In a nutshell, you want someone you can work with easily and that you trust to deliver the outcome. Typically, the outcome would be a commercially successful product that your customers love and that generates a good return on your investment.

Warren Buffet once said, “I learned to go into business only with people whom I like, trust, and admire”. While I am unsure about the context of that quote, there will be a point where you will have to resolve problems. And at this point, I much rather deal with likeable and trustworthy people than some technical genius with limited interpersonal skills or an angry and unreasonable customer.

Another aspect in successful electronic product development is risk management. Again, someone brought this to a point: “Risk comes from not knowing what you are doing” – yes, WB again, and while I apologise for the repetition, I fully subscribe to the content. Progress comes easy when you are on a known path. Sometimes there are no known paths and that is when we need to climb up a tree and look into the direction of our goal to find a way. This could be called necessary research to reduce development risk. Most importantly though, we need to communicate and share the risk so expectations remain aligned.

So if you are looking to develop an electronic product – or anything else for that matter – there is more than the technical expertise. Look for partners you can trust and that are easy to work with. People that know what they are doing and are not afraid to communicate openly even when times are tough. Someone who won’t promise to deliver an outcome they can’t possibly achieve.

And that is why we love to develop successful electronic products with clients that share our passion for creating useful products and for working together towards a rewarding conclusion.

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