From Idea to Product Dr Ian McKay
We help SMEs to harness the benefits of european research funding through: • concept development • consortium generation • writing and evaluation of applications for grant funding from regional and national bodies, and the EC • development of intellectual property management and exploitation strategies
Classic product life cycle Development Introduction Growth Maturity Saturation Decline Sales Time
Why innovate? Sales Effects of Extension Strategies Time
Key steps ‘From Idea to Product’ • Idea generation • Product screening • Concept testing • Business and financial analysis • Product development • Test marketing • Commercialization
Idea generation Where do ideas come from? • Market research – identifies gaps in the market • Monitoring competitors • Planned research and development (R&D) • Luck or intuition – stumbling across ideas • Creative thinking – brain storming, scenario analysis • Horizon scanning – what will people be using/wanting/needing 5,10, 20 years hence?
Product screening FABU analysis • Features • Advantages • Benefits • U-Appeal Pick the winners... ...but remember the rest just in case!
Concept testing Get people together to test their response to the new product or service concept: • Focus groups • Exhibitions • Trade fairs • Internet - webinars, blogs, etc. but remember – protect the intellectual property first!
Product development Development of a new product involves: • Design (for manufacture) • Prototype development and testing • Packaging and branding • Positioning • Usage testing and feedback • Marketing and advertising and ultimately (and this is very important) SALES!
Management of product development All elements of product development must be managed carefully: • Designs – version control • Intellectual property – protection and maintenance • Prototype development – in house or...? • Marketing, advertising and sales and most important of all for SMEs: • Cash flow!
Piezotag – the high performance, low cost Tyre Pressure Monitoring System (TPMS)
Piezotag idea A device that measures tyre pressure and temperature for: • Passenger and commercial vehicles: • two wheelers, cars, buses, vans, trucks • aeroplanes and provides the following benefits: • Health and safety – reduced accidents • Increased energy efficiency • Improved vehicle performance
Piezotag advantages • Generates it’s own power – piezoelectric effect • RF transmits from wheel to single aerial every 6s • System has lower component count than current devices
Piezotag Ltd • Started life as an EU-funded CRAFT project in Jan 2000 • UK patent application filed in Oct 2001 • Grant Thornton engaged in 2003 to assist with fund-raising process • Balance of funding supplied by: • Advantage Early Growth Fund (regional funding) • Business Angels • Company incorporated in 2004
The market for Piezotag • Passenger vehicles 120 million units p.a. • Commercial vehicles 40 million units p.a. • 10% market share for Piezotag = 16 million unit p.a. • At €10 per unit = €160 million p.a.
The business model Piezotag Ltd will NOT produce the units. Instead manufacture will be licensed either: • by non-exclusive licences at €1 million per licence or • by non-exclusive licenses attracting €1 per unit manufactured in royalties
Piezotag Ltd – current position • Three patents granted in Europe • One patent granted in USA • Patenting progressing in seven other countries outside the EU • Licensing deal currently being negotiated with VW-AUDI
Diesel Do Nicely (DDN) A timely solution to an expensive problem
Misfuelling Putting petrol into a car that should take diesel • UK alone 120,000 reported incidents p.a. • Cost of repair between €200- €4.500 per vehicle • Expensive for individuals and corporately Solutions: • Audible • Mechanical
The DDN idea A barrier to misfuelling : • Easy to implement • Retro-fit • More effective • No moving parts • No electronics • A simple barrier... ...the petrol nozzle simply won’t fit!
History of DDN ‘From Idea to Product’ • Project started with personal funds in 2005 • DDN Ltd incorporated in 2006 • First prototypes created late 2006 • First substantial funding (€75k) from friends and business associates in Jan 2007 • Testing commences with fleets e.g. UK police • Second tranche from business angels (€375k) in Aug 2007
DDN Ltd – current status • Unlike Piezotag – DDN will probably not license the manufacture in Western Europe but will sub-contract it there • First patent application made in Feb 2006 – grant anticipated in Jan 2008 • A further five applications have been made • The first, relatively modest orders have been received • Three major fleet purchasers are interested now
Conclusions ‘From Idea to Product’ • Having ideas is the easy part • New product development takes a lot of time - even a simple idea like DDN’s has taken nearly two years to get close to market, Piezotag has taken nearly eight • It is very important to protect intellectual property as early as possible • Be nice to your friends and family – you may need their money!
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