Successful Commercialization with Design to Cost

Successful commercialization of new products or inventions is what every inventor desires. So why is it so hard to obtain success? Is it lack of finances or manufacturing capability? Is the market slow, or is there a problem getting the product to market? Maybe, but more likely the inventor or the new product company failed to do the necessary up-front analysis of the product that would indicate whether or not it could become a commercial success. The new product or invention did not have the right stuff starting out. So how can you determine if your product can become a commercial success?

Design to Cost sets up the right steps, up-front, that will help with successful product commercialization. The first step in analyzing a new product is where it sits on the technology and market curves. Are there gaps in the technology curve that can be developed to support a new product? Can the gaps be filled within the time frame needed for the invention or new product? Are there gaps in the market curve that could be filled by the new product? Do these gaps represent sufficient revenue flow so that the product can be made into a profitable business?

Even more fundamental: what does it cost to make products of similar complexity? What are the costs associated with products that are already in the market? You set price goals for your product based on what else is in the market. How does the cost of similar products compare to what you are planning to build? Once you have broken down both, modeling both your costs and those of similar products, you can evaluate whether or not you can make a profit. If your cost model indicates a low profit margin, can you still make the revenue your company deserves? If your cost model is higher, and you are not making a profit at all, then maybe you need to plan a breakthrough. How to succeed with all of this is detailed in Design to Cost.

Dr. Granville Ott & Richard Arnold