March 1, 2021

The Importance of Product Market Fit and Competitive Differentiation with Kevin Mako

The Importance of Product Market Fit and Competitive Differentiation with Kevin Mako

In part 3 of our Masterclass Series on "Building a Strategic Marketing Plan for Your Business," host Eric Dickmann talks with Kevin Mako, Founder and President of MAKO Design + Invent and host of The Product Startup podcast, about finding product-market fit and competitive differentiation for your products and services. Kevin Mako is the Founder and President of MAKO Design + Invent, the pioneer firm for providing world-class end-to-end physical consumer product development tailored to inven...

Apple Podcasts podcast player iconSpotify podcast player iconYoutube Music podcast player icon
Apple Podcasts podcast player iconSpotify podcast player iconYoutube Music podcast player icon
Season 4

In part 3 of our Masterclass Series on "Building a Strategic Marketing Plan for Your Business," host Eric Dickmann talks with Kevin Mako, Founder and President of MAKO Design + Invent and host of The Product Startup podcast, about finding product-market fit and competitive differentiation for your products and services.

Kevin Mako is the Founder and President of MAKO Design + Invent, the pioneer firm for providing world-class end-to-end physical consumer product development tailored to inventors, product startups, and small manufacturers. Est 1999, Mako Design is a 30-person team with offices in Austin, Miami, San Francisco, & Toronto, has developed over 1,000 products for clients, and has earned over 20 awards including Red Dot, Inc5000, Entrepreneur360, Indigo Gold, Creative Pool Gold, Best Places to Work, Lux Magazine Best Design Firm in North America, and many others.

Kevin lectures at the Masters of Engineering program at Ryerson University is the host of the Product Startup podcast and is a keynote for The Make48 TV Show on PBS & Amazon Prime. He sits on a number of entrepreneurship and education boards, invests in small service-based businesses, and holds the Duke of Edinburgh Gold Award designation.

For additional resources on this episode and from our other episodes in this Masterclass Series, visit https://fiveechelon.com/masterclass

For more information about Eric Dickmann and The Five Echelon Group, visit https://fiveechelon.com/

For more information about Kevin Mako and Mako Design + Invent, visit https://https://www.makodesign.com and to listen to The Product Startup Podcast, visit https://www.productstartup.com/

Episode #54

Send us your questions or comments

Buzzsprout - Let's get your podcast launched!
Start for FREE

Marketing Automation with HubSpot
Try HubSpot’s all-in-one marketing software to simplify campaign management and drive new leads.

Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.

WEBVTT

00:00:00.490 --> 00:00:00.850
Kevin.

00:00:01.060 --> 00:00:03.161
Welcome to the virtual CMO podcast.

00:00:03.190 --> 00:00:04.780
I'm really glad you could join us today.

00:00:05.560 --> 00:00:06.940
Eric great to be on the show.

00:00:07.480 --> 00:00:13.211
Hey, this has been fun because this season we decided to do a master class format.

00:00:13.570 --> 00:00:18.400
And really walk through the elements of building out a strategic marketing plan.

00:00:18.611 --> 00:00:23.681
So in the first episode, we talked a little bit about what that means, why strategic marketing plan is important.

00:00:23.981 --> 00:00:34.091
And then we talked about really your target market and ideal customer profile and why it's so important to narrow down that focus and figure out who you're really selling to.

00:00:34.301 --> 00:00:41.170
And I'm excited as we get into part three here to really start to talk about product market fit and competitive differentiation.

00:00:41.441 --> 00:00:43.901
So to kick things off here, I'd love it.

00:00:43.901 --> 00:00:50.021
If you could just share with the audience a little bit of your background and why this is such a great topic to get into with you.

00:00:50.890 --> 00:00:51.250
Sure.

00:00:51.401 --> 00:00:55.091
Very excited about this topic, especially with product market fit.

00:00:55.720 --> 00:00:59.320
I've worked with over a thousand hardware product entrepreneurs.

00:00:59.831 --> 00:01:03.011
Uh, many of those with services tied to them and built my own service business.

00:01:03.070 --> 00:01:04.391
Uh, doing that.

00:01:05.320 --> 00:01:10.870
Essentially our company does world-class consumer physical consumer product development.

00:01:10.960 --> 00:01:11.441
Adventurous.

00:01:11.471 --> 00:01:11.831
Got it.

00:01:12.010 --> 00:01:15.730
Gadgets, that sort of thing, but tailored to smaller businesses.

00:01:16.031 --> 00:01:21.400
A small manufacturers, small product developers start up, entrepreneurs, inventors, et cetera.

00:01:22.031 --> 00:01:34.180
And, um, that was, uh, kind of just a crazy high school concept I had back in 1999 that I started in, uh, went to university, um, incorporated halfway through university, then went to.

00:01:34.540 --> 00:01:39.400
Uh, another university over in Hong Kong to study supply chain management and all that sort of stuff.

00:01:39.850 --> 00:01:42.070
After I was done at both of those, I Mmm.

00:01:42.581 --> 00:01:55.751
Turned down the investment banking management consulting job offers to essentially try this business and, uh, you know, left it under the premise that like, please leave the door cracked open for me in case I completely fall on my butt.

00:01:55.930 --> 00:01:58.480
I was$50,000 in student debt at the time.

00:01:58.480 --> 00:01:59.081
Oh, my.

00:01:59.141 --> 00:02:00.700
it was a terrible idea at the, at the time.

00:02:01.840 --> 00:02:03.611
Some of the best ideas are the worst ones.

00:02:03.611 --> 00:02:04.031
Right.

00:02:04.480 --> 00:02:05.531
Yeah, exactly right.

00:02:05.531 --> 00:02:06.820
And I, you know, keep in mind too.

00:02:06.850 --> 00:02:09.371
So when I started this, this is 1999.

00:02:09.790 --> 00:02:12.941
So that was, uh, right@the.com.

00:02:13.270 --> 00:02:18.070
Bubble bursting and exploding and everything going chaotic when I started in high school.

00:02:18.131 --> 00:02:19.211
So that was a bit discouraging.

00:02:19.270 --> 00:02:23.471
And then when I finally took the plunge in 2007, things were booming and then bam.

00:02:24.131 --> 00:02:25.091
The mortgage crisis hit.

00:02:25.721 --> 00:02:25.871
All right.

00:02:25.901 --> 00:02:28.781
So I've been through two recessions now and starting this business.

00:02:28.781 --> 00:02:31.510
So anything's possible for those who are starting a business today.

00:02:31.961 --> 00:02:32.920
That's good advice.

00:02:32.920 --> 00:02:37.871
You know, we've had a crazy year in 2020 with the COVID crisis and 2021.

00:02:37.901 --> 00:02:40.751
Is kicking off as a strange year as well.

00:02:41.020 --> 00:02:45.040
And you're also the host of a podcast, the product startup podcast.

00:02:45.251 --> 00:02:47.741
So is this really the shark tank of podcasting?

00:02:48.520 --> 00:02:49.540
Yeah, this is interesting.

00:02:49.540 --> 00:02:53.411
I actually, I'm fairly new to the hosting side of podcasting.

00:02:53.441 --> 00:02:54.341
I took it over.

00:02:54.640 --> 00:03:00.640
It was kind of leading, um, leading essentially podcast for consumer product development, which is great.

00:03:01.061 --> 00:03:09.311
Uh, and, uh, I took it over at episode 55 and I'm only five episodes in on the hosting side of things, but it's already been great.

00:03:09.640 --> 00:03:19.420
I'm talking to a lot of professionals in the industry and essentially getting their advice for small manufacturers and startups to essentially scale build and scale their product businesses.

00:03:19.811 --> 00:03:23.230
Um, which is very interesting for me for today's topic, which is.

00:03:23.800 --> 00:03:25.420
Product market fit.

00:03:25.811 --> 00:03:30.161
Um, you know, I started myself very small and fighting through that exact challenge.

00:03:30.221 --> 00:03:32.020
Uh, you mentioned episode one, episode two.

00:03:32.501 --> 00:03:33.311
That was the big battle.

00:03:33.311 --> 00:03:36.550
Back in the day, everybody told me, you know, that product market fit.

00:03:37.121 --> 00:03:38.920
Um, would never work.

00:03:39.580 --> 00:03:43.300
Any high quality firm, let alone have the size that we are today.

00:03:43.360 --> 00:03:44.770
30 people for offices.

00:03:44.770 --> 00:03:46.691
They said it, you know, if you want to grow to that scale.

00:03:47.350 --> 00:03:50.770
Um, You'll never, you don't work with inventors.

00:03:50.770 --> 00:03:51.850
You don't work with startups.

00:03:52.061 --> 00:03:54.431
You know, avoid them like the plague.

00:03:54.941 --> 00:03:56.980
Uh, This is you.

00:03:57.161 --> 00:04:02.741
90% of, of, of, of the business from those firms was for fortune 500 clients.

00:04:02.830 --> 00:04:04.691
It's all about those big revolving contracts.

00:04:04.721 --> 00:04:06.700
And anyways, I didn't take their advice.

00:04:07.211 --> 00:04:12.161
Um, and luckily, uh, you know, I didn't fall on my face too badly anyways.

00:04:12.191 --> 00:04:14.830
Not much that I, you know, at least not to the point that I couldn't stand up.

00:04:15.431 --> 00:04:18.971
And fight another day and we grew this company to where it is today.

00:04:19.331 --> 00:04:20.591
Um, but a lot of this.

00:04:20.980 --> 00:04:32.290
Not only from my own journey, but from the thousand plus consumer product clients that, that we've now developed for you really get to see some of the things that work.

00:04:32.740 --> 00:04:34.600
And don't work in product market fit.

00:04:34.600 --> 00:04:36.490
So very excited to talk about that today.

00:04:36.641 --> 00:04:36.821
no.

00:04:36.880 --> 00:04:39.011
That's the first thing that I want to drill down into.

00:04:39.040 --> 00:04:56.771
I mean, you have a unique perspective here because you get to see a lot of fledgling products, people who are coming to you for design expertise, and I'm sure after a while, after you've seen hundreds of these products, you began to develop a little bit of a gut instinct as to whether this product has a chance of being successful or not.

00:04:56.980 --> 00:05:05.800
What are some of the common themes that you see in products that both look like they're going to have a likelihood of success in some of the ones that don't.

00:05:07.300 --> 00:05:10.781
Well, if were to talk specifically about product and product features.

00:05:10.870 --> 00:05:14.380
Um, because there's really two sides to a product business succeeding.

00:05:14.740 --> 00:05:18.281
There's the people and then there's the product itself.

00:05:18.430 --> 00:05:18.701
Right.

00:05:18.730 --> 00:05:24.581
And, and obviously that all integrates with the market and timing and all the rest, but really it comes down to.

00:05:24.911 --> 00:05:27.940
The, the, the people executing on this and the product itself.

00:05:29.141 --> 00:05:35.350
If I'm going to drill down on one, um, uh, essentially theme to the product itself.

00:05:35.350 --> 00:05:38.891
And we can talk about people, uh, on, uh, you know, after this part.

00:05:38.891 --> 00:05:40.630
But the first thing first is.

00:05:41.591 --> 00:05:41.860
Something.

00:05:41.891 --> 00:05:43.091
I like to call it.

00:05:43.120 --> 00:05:44.591
It's a slogan at our company.

00:05:44.591 --> 00:05:48.190
When we're doing design work, we call it brilliantly simple design.

00:05:49.091 --> 00:05:52.990
And this comes around to the concept of MVP, minimum viable product.

00:05:53.380 --> 00:06:02.201
I can tell you without a doubt, the single greatest product reason for failure that I see is people try and be too many things to too many people at once.

00:06:03.550 --> 00:06:08.980
That makes so much sense because we talk a lot on this show about casting too wide, a net.

00:06:09.430 --> 00:06:15.281
And saying that, you know, Everybody in a certain industry as a potential customer.

00:06:15.521 --> 00:06:16.841
And that's just not true.

00:06:16.870 --> 00:06:18.821
Uh, especially for a young business, right?

00:06:18.821 --> 00:06:21.610
There's no way that you could even Mark it to an entire industry.

00:06:21.610 --> 00:06:23.591
So you need to narrow down that focus.

00:06:23.591 --> 00:06:27.461
You need to be much more intentional with where you're going with your product.

00:06:27.730 --> 00:06:29.170
And it sounds like what you're saying.

00:06:29.411 --> 00:06:36.761
It's the same thing is, is people don't have a narrow enough view of, of what that product is really targeted for or to.

00:06:37.990 --> 00:06:43.480
And for whatever reason, um, You'll we've all heard the adage, right.

00:06:43.661 --> 00:06:48.461
The more niche you are, the bigger your business will actually be, especially in the beginning, especially.

00:06:48.490 --> 00:06:55.360
And even if you're an established company been around for 50 years, your midsize firm, you've got a strong brand presence in your industry.

00:06:55.571 --> 00:06:56.980
If you're creating a new product.

00:06:57.401 --> 00:07:00.221
That is a whole new business, essentially on its own, right?

00:07:00.221 --> 00:07:01.120
That is something new.

00:07:01.151 --> 00:07:03.130
You are pioneering something or another.

00:07:03.581 --> 00:07:14.891
And even if that's the case at that early at that, that early stage, even if you have that experience, especially when it comes to physical products, but in many other products, it's far easier to start niche.

00:07:15.071 --> 00:07:19.480
Start narrow, really hit a pain point for a very specific niche demographic.

00:07:20.141 --> 00:07:22.750
As strong as you can in that one window.

00:07:22.750 --> 00:07:30.521
And although you think you may be alienating the other parts of the market, Um, although you'll be losing certain key customers that you think might make sense.

00:07:30.821 --> 00:07:32.350
It's far easier to make sales.

00:07:32.350 --> 00:07:39.581
If you can really hone down who that our customer is, and then create a product really, that only satisfies that person.

00:07:40.240 --> 00:07:41.740
And the reason for this is twofold.

00:07:42.040 --> 00:07:50.951
When it comes to hardware and off, of course this is in software and in many ways in services, um, The more complicated the product is the exponentially more expensive.

00:07:50.951 --> 00:07:53.740
It is to develop, but not just more expensive to develop.

00:07:53.951 --> 00:07:55.571
It's going to have more defects.

00:07:55.870 --> 00:07:59.081
It's going to have increased confusion in the market.

00:07:59.350 --> 00:08:00.821
It's going to have worse reviews.

00:08:00.821 --> 00:08:09.281
It's going to be more difficult to manufacture, which means it's going to have more manufacturing issues down the road, increased warranty, claims or re return claims.

00:08:09.701 --> 00:08:12.370
And all of that comes around essentially to community review.

00:08:12.880 --> 00:08:23.951
It's far harder to absolutely nail a top-notch product to a broad market than it is to nail a very niche, very clean, brilliantly, simple, you designed product to your niche market.

00:08:24.461 --> 00:08:26.141
And the best part about all this is.

00:08:26.350 --> 00:08:27.341
If you go niche.

00:08:28.331 --> 00:08:29.831
When you actually execute on that.

00:08:30.490 --> 00:08:43.451
You can then use the user feedback to create that Holy grail, that Ferrari version, that over the top feature rich version that you were originally intending, except the difference will be one you've learned a tremendous amount from that.

00:08:43.900 --> 00:08:51.071
Execution of that first product and two, you've got a huge level of real user feedback, validating your ideas for the next one.

00:08:51.280 --> 00:08:58.961
I can assure you that it will not be the exact same model that you originally thought you wanted to create as your, you know, full feature rich version.

00:08:59.230 --> 00:09:00.370
If you wait down the road.

00:09:01.331 --> 00:09:10.211
You know, I've dealt a lot with technology companies and software products, and the whole idea around a minimally viable product makes a lot of sense, right?

00:09:10.211 --> 00:09:16.990
Because you can do beta testing, you can incrementally roll out a new features, especially in this era of software.

00:09:16.990 --> 00:09:21.041
As a service, it's very easy to sort of make steady progress on a product.

00:09:21.280 --> 00:09:27.671
But if you're in the physical space, if you're designing a physical product, it isn't that a little bit more difficult.

00:09:27.671 --> 00:09:31.990
How do He successfully create that minimally viable product.

00:09:32.230 --> 00:09:39.461
If it's something that requires a machine line, you know, to create and mold and all the different things that go into a physical product.

00:09:40.270 --> 00:09:42.581
Well, you know, two things interesting about that first.

00:09:43.000 --> 00:09:47.921
Uh, look at how the best product development companies in the world let's use Apple as the broad example, everybody loves to use.

00:09:48.581 --> 00:09:48.850
So.

00:09:50.110 --> 00:09:51.191
Every year they make a new phone.

00:09:51.581 --> 00:09:55.990
These are the best designers in the world and they don't roll out all of their features every year.

00:09:56.140 --> 00:09:56.471
Hmm.

00:09:56.890 --> 00:10:00.010
They've had many features in the hopper for years.

00:10:00.130 --> 00:10:01.721
It only recently became waterproof.

00:10:01.900 --> 00:10:04.990
We've had waterproof technology and electronics since the early two thousands.

00:10:05.051 --> 00:10:05.380
Hm.

00:10:05.801 --> 00:10:09.791
It could have easily been waterproof out of the gate, which is obviously upsetting in some.

00:10:09.850 --> 00:10:15.581
Ways to, for those of us, me included whoever put our phone and rice bags, the reality is.

00:10:16.421 --> 00:10:19.510
You know, they they've even a company like Apple with all their reserves.

00:10:19.571 --> 00:10:21.400
You always have a fixed budget.

00:10:21.821 --> 00:10:23.831
You always have a certain scope.

00:10:23.831 --> 00:10:32.380
And if you really want to execute well on the things that are most important to your customers, losing focus is going to lose credibility on those features.

00:10:33.010 --> 00:10:33.160
Right.

00:10:33.221 --> 00:10:37.571
The other thing that's interesting when it comes to hardware is the hardware world is changing.

00:10:37.780 --> 00:10:38.110
Hmm.

00:10:38.681 --> 00:10:42.701
The traditional method of hardware is spend years developing a product.

00:10:42.760 --> 00:10:48.010
Maybe have many of those features in go through all these rounds of prototyping, all this sort of stuff.

00:10:48.071 --> 00:10:50.801
Then you tool up for hundreds of thousands or millions of dollars.

00:10:51.130 --> 00:10:52.421
Then you're released that product.

00:10:52.421 --> 00:10:53.831
And you sit on that for five years.

00:10:53.831 --> 00:10:54.400
Plus.

00:10:55.750 --> 00:11:00.791
Products, even at the small level are changing because technology and manufacturing is changing.

00:11:00.941 --> 00:11:02.980
It's getting really interesting and very fast,

00:11:03.010 --> 00:11:05.471
Things like 3d printing and that sort of thing.

00:11:05.681 --> 00:11:05.890
of that.

00:11:06.311 --> 00:11:06.610
All of that.

00:11:06.760 --> 00:11:10.961
Using that technology actually to apply to manufacturing, you can do short runs of 50 units.

00:11:11.020 --> 00:11:13.571
Many of our clients do we start with 50, a hundred units.

00:11:13.780 --> 00:11:15.760
Use that go to market test.

00:11:15.760 --> 00:11:17.350
Some things change.

00:11:17.561 --> 00:11:19.061
Go do our next series.

00:11:19.120 --> 00:11:19.451
Right.

00:11:19.990 --> 00:11:20.650
That second.

00:11:21.311 --> 00:11:24.551
Product's going to be better than the first one, because of all this user feedback.

00:11:24.551 --> 00:11:29.980
If, if nothing else, then you actually tool up maybe on your third production run when you're starting to hit those bigger volumes.

00:11:30.581 --> 00:11:34.780
That could be scaled up or scale down depending on how they are, how small you're looking to launch.

00:11:35.020 --> 00:11:38.081
But the reality is manufacturing is becoming much more fluid.

00:11:38.321 --> 00:11:41.980
You look at some stuff with Autodesk is doing right now with iterative design.

00:11:41.980 --> 00:11:46.211
Whereas you can design a shoe customed to you as the user.

00:11:46.451 --> 00:11:47.860
Nobody else in the world has that shoe.

00:11:47.890 --> 00:11:54.160
And that thing gets to you within 90 days, this sort of feedback loop is only going to become more and more real time.

00:11:54.280 --> 00:11:55.630
So we can actually apply.

00:11:56.410 --> 00:11:57.311
Two hardware.

00:11:57.400 --> 00:12:00.760
Like it has been, you know, you think of agile development and agile.

00:12:01.120 --> 00:12:03.431
Uh, technology around development.

00:12:03.431 --> 00:12:05.321
Amazon obviously does an incredible job of that.

00:12:05.380 --> 00:12:07.780
Rolling out a change every second and testing it or more.

00:12:08.260 --> 00:12:11.260
Um, we can actually start applying that to hardware.

00:12:12.370 --> 00:12:13.150
You know, it's interesting.

00:12:13.181 --> 00:12:22.150
You used Apple as an example, which on a marketing show is used a lot, uh, primarily because they do so many things well, but I just saw a picture the other day.

00:12:22.150 --> 00:12:29.561
I think it was on Twitter where it actually showed some of the early prototypes of the Apple watch and this thing wasn't even a wearable device.

00:12:29.561 --> 00:12:32.711
It was, you know, a screen that looked more closer to an iPhone.

00:12:33.071 --> 00:12:36.341
Uh, but what they were trying to do is get that functionality, right?

00:12:36.370 --> 00:12:39.341
They weren't pouring everything into a form factor just yet.

00:12:39.520 --> 00:12:40.900
They were experimenting with it.

00:12:40.900 --> 00:12:45.791
They were trying it, they were giving it to people internally trying to figure out what was working and what wasn't.

00:12:46.120 --> 00:12:57.311
And I think a lot of people forget that there's a lot of work that goes on behind the scenes, even with a physical product, because there isn't the same beta testing, if you will, that you can have for a software product, but.

00:12:57.701 --> 00:13:06.100
You shouldn't just be releasing a product to market without having some degree of, of testing and trial and error and making sure it actually does what you expected it to do.

00:13:06.250 --> 00:13:06.701
Absolutely.

00:13:06.850 --> 00:13:09.490
And the simpler, the easier your job is going to be to do that.

00:13:09.821 --> 00:13:17.350
And it know, like we've got a global marketplace now more than ever, and increasingly, so, especially with everything that's going on.

00:13:17.681 --> 00:13:18.221
So.

00:13:18.610 --> 00:13:22.480
Even if your product's niche, you now have the whole world as your oyster.

00:13:22.541 --> 00:13:25.541
So you'd rather have a tiny piece of the VR.

00:13:25.721 --> 00:13:36.071
Of a bigger pie, which is niche, which was everybody needs to have what you have because you've so you've so carefully curated the exact feature sets that that specific customer group wants.

00:13:36.461 --> 00:13:40.750
You're far better to hit those people and then figure out how you're going to expand to other demographics or.

00:13:41.201 --> 00:13:56.350
Uh, Eric, I know something you and I have talked about before is you may find that there's other markets out there that you didn't know about, or you didn't foresee, or you didn't see use cases of your product or pivot points of your product that might be exponentially more scalable than the first thing that you saw.

00:13:56.591 --> 00:13:57.071
Again.

00:13:57.341 --> 00:14:00.821
This all comes back to that concept of iterative development.

00:14:01.780 --> 00:14:02.201
Yeah.

00:14:02.230 --> 00:14:12.551
And, you know, we talked a little bit before, as well about this idea that many times, um, founders and startups, they look at their product is something truly revolutionary.

00:14:12.551 --> 00:14:13.961
This is going to change the world.

00:14:13.961 --> 00:14:16.150
This is so different than everything else out there.

00:14:16.451 --> 00:14:23.620
And yet it's really just incrementally different than things that are already there, uh, in the marketing world.

00:14:23.770 --> 00:14:28.510
Uh, there's a consultant that puts together this huge map of all the logos of the people that are in the.

00:14:28.541 --> 00:14:29.410
Marketing space.

00:14:29.591 --> 00:14:38.620
And you can see year after year, this has gone from, you know, dozens to hundreds, to thousands to, you know, you can barely read the logos anymore because it's so packed.

00:14:38.921 --> 00:14:44.500
And I will tell you that many of these companies are just doing something slightly different than their competitor.

00:14:44.711 --> 00:14:46.091
It's not revolutionary.

00:14:46.451 --> 00:14:52.030
I can't really name a single product up off the top of my head that I would say in marketing has become revolutionary.

00:14:52.390 --> 00:14:56.140
They certainly help, but they're different in that becomes challenging.

00:14:56.380 --> 00:15:00.971
Uh, on the product side to then figure out where is your fit in a market?

00:15:01.181 --> 00:15:05.770
You can't sort of say, I'm going to come up with this product and I'm going to take over the industry as a whole.

00:15:05.921 --> 00:15:07.900
Where is that, that pathway?

00:15:08.110 --> 00:15:24.701
When you talk to, uh, startups, do you find that they have a clear vision of where they want to go with that product or do they need to really take in that first round of customer feedback to say, this is how we're finding value with that product to truly understand their niche?

00:15:25.660 --> 00:15:33.850
I'm going to go out on a limb here and say that all product startups, no matter how well defined they've done your, your episode one and your episode two in this, in this series.

00:15:34.211 --> 00:15:40.870
Even if they've done a fantastic job of that was very much helps that will, that will substantially increase your marketing success.

00:15:41.291 --> 00:15:50.291
Um, when you look at our step three here, in terms of product market fit, Everybody can benefit from a small lawn and you won't have a big launch.

00:15:50.770 --> 00:15:57.341
You will not have a massive global launch that within the first month you've saturated your entire market.

00:15:57.400 --> 00:15:58.211
That is impossible.

00:15:58.240 --> 00:15:59.171
No matter how big you are.

00:15:59.561 --> 00:16:00.100
So.

00:16:00.941 --> 00:16:11.980
Realistically speaking, no matter what way you look at this, your first launch is going to probably be your launch is going to be smaller than your, your first production run smaller than your second year, third year, fourth, and so on as your product.

00:16:12.311 --> 00:16:18.520
Gets that user feedback gets that community review gets that community approval and so on.

00:16:18.760 --> 00:16:18.971
Right.

00:16:18.971 --> 00:16:23.500
So, um, and something interesting, you mentioned there about a small iteration.

00:16:24.100 --> 00:16:28.181
In hardware, 99% of new patents issued.

00:16:28.510 --> 00:16:33.821
Or more nowadays are combinations or improvements of existing technology.

00:16:34.211 --> 00:16:39.701
It's very rare that it entirely new technology is, is created in the mainstream.

00:16:39.760 --> 00:16:40.900
In any case, it does happen.

00:16:40.961 --> 00:16:45.400
Obviously new technologies created every day, but that's a tiny, tiny piece of the innovation market.

00:16:45.671 --> 00:16:47.110
Innovation is improvement.

00:16:47.770 --> 00:16:50.410
And a tiny improvement is actually spectacular.

00:16:50.740 --> 00:17:03.971
Really valuable to a brand, especially if they can isolate like your episode one and two, if you can isolate that customer solve that pain point slightly better than that competitor or that alternative product, you have a major market edge.

00:17:04.240 --> 00:17:05.980
You only need to be slightly better.

00:17:06.280 --> 00:17:10.451
All things else equal, obviously slightly better for them to choose you over the competing product.

00:17:10.840 --> 00:17:15.520
So you're better to isolate that one or two major improvements.

00:17:15.971 --> 00:17:22.090
Um, and do very well at those, then figure out how to expand from there, which will give you your next innovations and your next motivations.

00:17:23.141 --> 00:17:25.931
I think, you know, we're doing a live stream of this show today.

00:17:25.990 --> 00:17:32.590
Uh, we're live streaming it to Facebook and YouTube and to Twitter, but you think about, you know, a company like Facebook, right?

00:17:32.590 --> 00:17:36.881
It started out as a, as a way to meet people on college campuses.

00:17:37.151 --> 00:17:39.580
And for a long time was restricted just to students.

00:17:39.881 --> 00:17:49.810
Uh, and now today it's this huge, uh, platform advertising conglomerate, where you can do live streams as well as connecting, you know, they've, they've continually pivoted and.

00:17:50.080 --> 00:17:54.641
And changed and added incremental features to make that platform more robust.

00:17:54.641 --> 00:17:57.461
They certainly haven't stood still over time.

00:17:57.730 --> 00:17:59.621
And I think that's, that's so important.

00:17:59.770 --> 00:18:16.661
And when you talk about companies like Apple, you know, one of their keys to success has been their focus on design, everything from, you know, their web presence to their stores, to their packaging, and obviously their products and their user interface.

00:18:16.961 --> 00:18:22.570
Uh, how important do you think design is to the success of a product?

00:18:23.891 --> 00:18:25.990
Um, my opinion aside.

00:18:26.351 --> 00:18:29.141
Uh, I'll just make it something really interesting.

00:18:29.141 --> 00:18:30.191
That's happening in the industry.

00:18:30.191 --> 00:18:32.500
We have a ton of customers who have.

00:18:32.980 --> 00:18:36.131
Very strong technologies for their hardware products.

00:18:36.371 --> 00:18:40.300
They're like the best batteries or, or the best enclosure or whatever else.

00:18:40.300 --> 00:18:47.050
These things that are never seen by the, the, the, the end consumer, um, stuff that goes in the back of trains, all this sort of stuff.

00:18:47.500 --> 00:18:53.050
We have dozens of these types of clients that are coming up to us and saying, okay, we have the best technology in the industry.

00:18:53.951 --> 00:18:55.090
How do we make it sexy?

00:18:56.260 --> 00:18:57.101
How do we make it look good?

00:18:57.310 --> 00:18:57.820
Yeah.

00:18:58.060 --> 00:19:01.060
The reason is it's because you're sitting there at a trade show.

00:19:01.691 --> 00:19:04.990
At, well, maybe not this year, but in a digital trade show, let's call it.

00:19:05.381 --> 00:19:19.721
And there's three products and yes, on this very detailed technical specification document that you have, you are the best and you have all these reasons why you've created this hardcore technology, but when I'm standing there and looking at three pieces, the one that looks good, it's going to catch your eye.

00:19:20.951 --> 00:19:28.060
And it's such a simple, low think about the amount of effort and time and history has taken to make like such incredible technology.

00:19:28.661 --> 00:19:38.681
And yet for such a quick, simple, cheap project, especially like if you're using a firm like ours or something that it's a very easy exercise to take a box and make it a nice, clean, modern looking.

00:19:38.951 --> 00:19:40.750
High quality, 2021 bucks.

00:19:41.651 --> 00:19:47.830
Very simple exercise, relatively cheap to everything that's gone into building the actual technology and gives you that instant snap.

00:19:48.310 --> 00:19:49.631
Um, wow.

00:19:49.631 --> 00:19:52.030
Factor that hero factor, that halo effect.

00:19:52.451 --> 00:19:54.461
Um, of a product, right?

00:19:54.461 --> 00:20:02.141
So now that we're seeing that across industries, of course, if you trickle down to those industries, which are consumer facing, it's almost like a baseline.

00:20:02.141 --> 00:20:07.990
Now, if you're creating a product in 2021, and it looks like it was made in 1995, You're gonna have a rough ride.

00:20:09.490 --> 00:20:11.711
You know, No continue.

00:20:12.371 --> 00:20:12.641
No, no.

00:20:12.851 --> 00:20:13.451
That's it.

00:20:13.451 --> 00:20:22.240
No, I was gonna say, um, the next episode after this is, we're going to start talking a little bit about building a brand story and the messaging that you develop around that.

00:20:22.510 --> 00:20:35.381
And one of the interesting things that I've heard from one of the guests that I had on my show, a Michael Solomon, is that we tend as, as companies, we tend to live in our own little bubble, our own little world.

00:20:35.800 --> 00:20:45.520
And what Michael Solomon suggested is that consumers buy things because they want to see how they fit into their lives.

00:20:46.060 --> 00:20:47.830
We don't buy things in isolation.

00:20:47.830 --> 00:20:49.391
So here's a kind of a dumb example.

00:20:49.391 --> 00:20:53.471
I'm sitting here at my desk, I've got computers and lights and microphones and everything.

00:20:53.471 --> 00:20:54.790
I've got a lot of things plugged in.

00:20:55.030 --> 00:21:05.681
If I go look at that power strip underneath, you've got one or two products that take up four outlets because they've put this huge brick of a power supply right on the end of their power cord.

00:21:05.861 --> 00:21:17.590
And so it doesn't take into consideration that you're going to plug in anything else, but this one device, whereas you have other things that, you know, have a very small plug in a Plugin and you can plug in something underneath it.

00:21:17.770 --> 00:21:27.760
That may be a dumb example, but the idea is, is that things, products aren't purchased and used in isolation they're often used in conjunction with other things.

00:21:27.971 --> 00:21:35.230
And I think one of the elements of good design is how your products work with others on the software side, it's all about integrations, right?

00:21:35.951 --> 00:21:40.090
Does your product integrate with the commonly used tools that would be in that space.

00:21:40.361 --> 00:21:46.300
And I would guess that from a consumer product standpoint, these are some things that you have to consider as well.

00:21:47.171 --> 00:21:47.980
Really good point.

00:21:48.221 --> 00:21:49.270
Um, you know, that.

00:21:49.721 --> 00:21:55.060
The thing that's kind of overlooked, is it, uh, everything evolves and if.

00:21:55.990 --> 00:22:00.520
Some things that were obvious, you know, I think, I think of something simple, like the wheel, right?

00:22:00.520 --> 00:22:03.790
Obviously after that, we almost created while this is an obvious way of doing it.

00:22:03.790 --> 00:22:06.191
But before the, we always created, boy, that was a pain.

00:22:06.881 --> 00:22:11.951
So we see these things happen now in design, that happens at an accelerated rate and so much behind the scene.

00:22:12.280 --> 00:22:25.661
Every year we've got designed, like even just internally at the firm design libraries, best practices, integrations, collaborations with other products, hundreds upon hundreds of hundreds of techniques that are now obvious that two years ago were not.

00:22:26.260 --> 00:22:34.451
So if you have a product which has many different elements to it, even if it's a relatively simple product, like you said, even the plug is a pain point.

00:22:34.601 --> 00:22:36.911
The plug has evolved the USB cable.

00:22:37.240 --> 00:22:44.471
Like anybody, if you're not using the latest USB three and you have to plug in that USB cord and figure out if it's up or down.

00:22:45.520 --> 00:22:48.550
Well, now you can just plug it in straight either way, right?

00:22:48.641 --> 00:22:57.580
Even that tiny evolution is helping those pain points, but the reality is your product needs to evolve with the times because otherwise, when you add a number of these pain points up, if you have a product that's.

00:22:57.941 --> 00:22:59.651
20 years old or 10 years old.

00:23:00.010 --> 00:23:03.431
There's all these obvious things that the consumer see that you don't.

00:23:04.211 --> 00:23:09.401
And that's why it's very important to actually have those best practices to revitalize it with, which is its own innovation.

00:23:09.401 --> 00:23:11.500
And in itself, that's the next evolution of the product.

00:23:11.861 --> 00:23:13.451
The best companies in the world are doing it.

00:23:13.901 --> 00:23:15.070
So you showed as well.

00:23:15.340 --> 00:23:22.510
You know, something interesting about that simplicity too is as a design firm, the more complicated a product is the more money we make.

00:23:22.750 --> 00:23:23.171
Hmm.

00:23:23.290 --> 00:23:25.211
yet I can't help, but tout enough.

00:23:25.601 --> 00:23:31.540
To keep the product is absolutely simple and clean and direct and modern as possible.

00:23:31.810 --> 00:23:39.280
Because I know that that's what leads to actual product success itself when it comes to a launch in many ways of that we discussed here on that show.

00:23:39.641 --> 00:23:50.381
So, if you talk about that, W what you just mentioned there about evolution of a product and making sure it integrates well with others and it's up to best practices and all that combined with keeping it clean, focusing on that product.

00:23:50.560 --> 00:23:53.921
It's almost an easy way as well for you to take that next step.

00:23:54.070 --> 00:23:59.171
Whether you're a startup coming up with your first product, it's gonna be very difficult because you're learning everything on the fly.

00:23:59.621 --> 00:24:01.721
So that's step one.

00:24:01.721 --> 00:24:03.371
And for sure, you gotta keep it simple clean.

00:24:03.671 --> 00:24:10.510
If you've been in the game for 50 years, you still need to keep it simple and clean because whatever evolution you came up with or whatever improvement you see.

00:24:11.050 --> 00:24:14.320
You have to first focus on ensuring that you have done that, right.

00:24:14.681 --> 00:24:21.790
And done that to a modern standard and got consumer feedback and review before you actually roll that into your, your full line.

00:24:21.941 --> 00:24:25.810
Even if worst case scenario, you want to launch everything at the same time, do it behind the scenes.

00:24:25.961 --> 00:24:31.840
Um, Eric, like you mentioned earlier, uh, do it in prototyping and user tests and all that sort of stuff.

00:24:31.871 --> 00:24:36.310
If you really have to launch everything or you're full fledged thing out of the gate, still use this method.

00:24:36.340 --> 00:24:38.201
Still apply this method in your development.

00:24:38.320 --> 00:24:40.480
Just have it happening behind the scenes before you go Click.

00:24:41.381 --> 00:24:59.830
You know, it made me think, as we're talking here, how much design can also fall into that category of competitive differentiation and, you know, staying on the topic of plugs, I guess for a second is it might not look like it, but I actually do shave and I have an, a Rocco shaver.

00:24:59.830 --> 00:25:01.961
you know, which is for, you know, under the beard.

00:25:01.961 --> 00:25:03.431
And then I've got a new Rocco shaver.

00:25:03.431 --> 00:25:08.201
That's a beard shaver, and that I have a hair clipper, all three from Norelco.

00:25:08.951 --> 00:25:13.361
All three of them use different chargers with different plugs.

00:25:13.421 --> 00:25:14.560
They're not interchangeable.

00:25:14.651 --> 00:25:19.211
So I literally have a box of plugs and they all look very similar, but they're all slightly different.

00:25:19.691 --> 00:25:27.790
And I look at that and I say, you know, again, you look at something like Apple, they came up with a lightening adapter for their phones, every phone use the same one.

00:25:27.941 --> 00:25:33.580
So you knew if you went over a friend's house and say, I need to charge my phone while you just grabbed their, their plug and you plug it in.

00:25:33.580 --> 00:25:33.851
Right.

00:25:34.090 --> 00:25:39.550
That was actually a competitive differentiator, I think because they made some of that stuff.

00:25:39.550 --> 00:25:40.750
So interconnected.

00:25:40.780 --> 00:25:45.070
And you just know if you stay in the family, you're stuff is going to work together.

00:25:45.280 --> 00:25:50.500
How do you look at things like design as becoming a competitive differentiator for companies?

00:25:51.221 --> 00:25:53.050
So Erica is brilliantly brought that up.

00:25:53.590 --> 00:26:01.570
That's actually for, for listeners out there that are established or mid-size manufacturer or those who are kind of planning their brand.

00:26:02.141 --> 00:26:06.490
Um, this is called, this is called brand or product continuity brand continuity.

00:26:06.941 --> 00:26:09.580
This is one of the easiest, lowest hanging fruits.

00:26:09.641 --> 00:26:09.941
This.

00:26:10.330 --> 00:26:15.250
You know, if your, if your product is, is God like old, archaic visual, look, that's an easy one to fix.

00:26:15.671 --> 00:26:26.411
Uh, if you, if your products look or function relatively differently as if it would be hard to tell one adapter from the other, uh, which, which product or which brand that belong to.

00:26:26.681 --> 00:26:34.391
Uh, whether it's low, whether it's colors, whether it's design language, that again is also something very easy to fix, but brand continuity essentially.

00:26:34.931 --> 00:26:45.040
You take those products that you have and make sure that if somebody sees those products and don't see the logo, no matter what way they're looking at those things, they should always know that is an Apple product.

00:26:45.461 --> 00:26:55.810
I'm quite certain that almost anyone out there, whether you're looking at an iPad and iPhone, a heck of Apple comes out with a car, I'm pretty sure you'll be able to look at it and say, that's an Apple product without seeing the logo.

00:26:56.111 --> 00:26:57.250
Knowing that that's the case.

00:26:57.641 --> 00:26:58.661
So brand continuity.

00:26:58.691 --> 00:27:00.101
You've already got this, this great.

00:27:00.520 --> 00:27:02.830
Uh, customer base, you've already got these great products.

00:27:03.070 --> 00:27:03.580
It's very simple.

00:27:03.580 --> 00:27:05.740
Just go in and buy a design language.

00:27:05.740 --> 00:27:08.141
If you have the design capabilities, in-house great.

00:27:08.141 --> 00:27:21.490
If not hire an outside firm, this is a fairly simple process to go through, clean up your line, modernize it at the same time, come up with any of those, you know, low-hanging fruit, that one or two key features that you have, uh, at the same time and then make sure your brand.

00:27:21.820 --> 00:27:26.651
Uh, through the product, through the product design language, all looks the same.

00:27:27.131 --> 00:27:30.851
One other thing you mentioned in that as well is a competitive edge.

00:27:31.421 --> 00:27:32.770
Which has a bit of a separate topic.

00:27:33.550 --> 00:27:43.181
Again, that's one of those things that if you look at kind of modern design, It's very easy for experienced professionals, especially a team of professionals to look at something.

00:27:43.931 --> 00:27:50.381
And look at the competitors and find dozens of improvements, tweaks, fixes that you could potentially use.

00:27:50.381 --> 00:27:55.181
And of course that again, you'll trickle it down to the one or two that you really think are the main fix.

00:27:55.451 --> 00:28:03.550
But you mentioned earlier in the call of being stuck in the bubble, one of the most difficult things for a company to do, or a brand manager or a VP.

00:28:03.790 --> 00:28:09.851
Uh, or a product lead or whatever it else is, took, truly understand both the pitfalls of their product.

00:28:10.691 --> 00:28:11.740
With their customers.

00:28:12.131 --> 00:28:15.040
But even more difficult to understand as a potential opportunities.

00:28:15.911 --> 00:28:36.611
So that's where yes, you need to kind of work a little bit outside the box, create some new thinking and get some fresh ideas and suppression integration either from your client base or from outside support or whatever else to try and figure out what those missing opportunities are for the evolution of your product or your brand, or a secondary version or a different version or whatever else.

00:28:36.671 --> 00:28:39.161
Um, there's going to be a new market for that product.

00:28:39.490 --> 00:28:42.580
Uh, or a new type of product that will serve your existing market.

00:28:43.810 --> 00:28:43.990
Yeah.

00:28:43.990 --> 00:28:51.371
You know, you mentioned, um, just how, when you look at a product, you might be able to tell this is an Apple product or whatnot.

00:28:51.401 --> 00:29:03.490
I would argue that, you know, if you went to a website and the logo wasn't there, or if you walk by a store, You would still know that you're entering an Apple store or an Apple website because they've kept that design aesthetic across.

00:29:03.790 --> 00:29:08.290
And I really think that has become a competitive differentiator for them.

00:29:08.651 --> 00:29:14.621
And for many of the businesses I deal with, you know, who our software technology businesses.

00:29:15.101 --> 00:29:22.631
A lot of times their differences, their user interface, their simplicity, their ease of use the, the ease at which a software allows you to get something done.

00:29:23.020 --> 00:29:29.141
So then what do you say to a young company that says, well, we just can't afford good design right now.

00:29:29.141 --> 00:29:31.480
You know, we'll, we'll, we'll make it prettier later.

00:29:31.510 --> 00:29:33.550
We'll invest in that box later.

00:29:33.701 --> 00:29:35.770
Uh, we'll fix the UI later.

00:29:35.980 --> 00:29:39.040
Um, that can be almost fatal to accompany.

00:29:39.040 --> 00:29:39.401
Right?

00:29:40.000 --> 00:29:44.381
You know, but it it's, it's very, it's tough, but not impossible.

00:29:44.411 --> 00:29:46.540
Like there are examples of.

00:29:47.080 --> 00:29:52.300
Um, you know, a handful of very experienced, very talented people that can get together and do it all themselves.

00:29:52.780 --> 00:30:04.810
That's okay, but you really have to be honest with yourself if you have that skillset in-house and what is going to be the net effect, because you know, one of the beautiful things about a simple launch, whether it's hardware or software.

00:30:05.171 --> 00:30:13.300
Is that if you have kept it really simple, you're audience is relatively small and you've solved a major pain point, meaning they're going to be raving fans.

00:30:13.480 --> 00:30:16.181
So that's like your one opportunity as a startup to come out.

00:30:16.661 --> 00:30:17.560
And come out, swinging.

00:30:17.861 --> 00:30:18.310
Yes.

00:30:19.240 --> 00:30:24.820
The problem is, is if you come out with mediocrity, your business may be dead in the water forever.

00:30:24.881 --> 00:30:28.750
This is very different than a firm that has multiple products and, you know, long established.

00:30:28.750 --> 00:30:30.490
They can come out with a dud, not ideal.

00:30:30.520 --> 00:30:31.601
I still highly.

00:30:32.201 --> 00:30:33.340
Recommend against that.

00:30:33.820 --> 00:30:34.961
You should be doing it right.

00:30:35.050 --> 00:30:37.030
That's a mistake, but you can weather the blow.

00:30:37.181 --> 00:30:39.340
If you're a startup and your first, first, product's a dud.

00:30:39.580 --> 00:30:41.080
How are you going to raise investment money?

00:30:41.141 --> 00:30:42.881
How are you going to get that second buyer on board?

00:30:42.881 --> 00:30:45.070
How are you going to re-engage that customer base?

00:30:45.280 --> 00:30:47.651
How are you going to fix the reputation?

00:30:48.221 --> 00:30:49.871
Of all the negative reviews.

00:30:49.901 --> 00:30:52.540
Even if you come out with that next version that fix all those problems.

00:30:52.570 --> 00:30:53.260
Now you've got.

00:30:54.040 --> 00:31:00.040
50 bad reviews online of the first one that you released, people are just going to assume that's following through with the brand.

00:31:00.371 --> 00:31:03.461
So it's almost arguably more important than earlier stage.

00:31:03.461 --> 00:31:09.790
You are in the development process to ensure that you're doing it correctly, whether or not that means outside help is another.

00:31:10.000 --> 00:31:11.290
As a, as another topic.

00:31:11.590 --> 00:31:15.580
Um, but realistically speaking, just be absolutely sure that that thing's coming out.

00:31:15.760 --> 00:31:18.941
Um, as a quality product, doesn't have to be featured.

00:31:19.391 --> 00:31:21.070
But absolutely unquestionably.

00:31:21.070 --> 00:31:22.871
It has to be top grade in terms of quality.

00:31:23.861 --> 00:31:32.711
You know, I don't know how familiar you are with this example, but you know, recently there was this launch of this short form video content website called Quimby.

00:31:33.371 --> 00:31:38.141
And it had some of the biggest names in Hollywood behind it that we're producing content.

00:31:38.320 --> 00:31:48.280
And the idea was, you know, well, if you're sitting on a subway, you've got 10 minutes in between stops, you could watch your short form video and, you know, we'll charge a subscription fee and this'll be great.

00:31:48.280 --> 00:31:49.840
We've got a lot of big names behind it.

00:31:50.141 --> 00:31:58.151
It was a flop, you know, the investors lost millions and millions of dollars on this thing, even though you had some really smart people behind that.

00:31:58.451 --> 00:32:03.040
And I would argue that validates a lot of the principles that you're talking about today.

00:32:03.310 --> 00:32:04.661
They, they went big.

00:32:04.780 --> 00:32:06.250
Uh, they went broad.

00:32:06.490 --> 00:32:18.401
Uh, they did an idea that seemed good on paper, but really hadn't been tested in the marketplace to know how people were going to consume content, or even if they wanted this kind of a service.

00:32:18.760 --> 00:32:21.760
And it flopped, there was really no chance of recovery.

00:32:22.421 --> 00:32:22.810
Yep.

00:32:22.931 --> 00:32:32.381
And, you know, what if it's, uh, whether it's hardware, software, and you want to try the let's call it hack approach, which again, rarely works, but it occasionally does.

00:32:32.740 --> 00:32:35.381
If you want to try the hack approach, take the methodology.

00:32:35.381 --> 00:32:38.411
I mentioned about earlier for the bigger companies and just do it privately.

00:32:38.861 --> 00:32:40.330
Do not launch publicly with this thing.

00:32:40.601 --> 00:32:47.770
So if you're going to hack it through and get your, you know, rough prototype and you're going to try and pre-sell it to some people sell it to friends and family.

00:32:48.040 --> 00:32:53.441
Get their honest feedback, ideally, which is also a bit tough, but really search for honesty there.

00:32:53.800 --> 00:32:56.980
Um, try and keep it off of social media and whatnot.

00:32:57.490 --> 00:33:00.250
But, you know, that's a really difficult way to do it.

00:33:00.760 --> 00:33:06.221
You're going to be far more successful, just finding the right investor that believes in you to help you do it properly.

00:33:06.401 --> 00:33:13.750
Then you are trying to hack it through and go through, you know, refer, lease rounds to eventually get to the point where you can.

00:33:14.111 --> 00:33:16.270
Um, do it properly or whatever else.

00:33:16.510 --> 00:33:19.510
So, you know, you're looking at chicken or the egg here.

00:33:19.540 --> 00:33:20.621
Well, this one's easy.

00:33:20.681 --> 00:33:26.621
Just if you really can't afford it financially to do it properly, get somebody on board that can help you with that.

00:33:26.830 --> 00:33:28.750
Or if you absolutely have to.

00:33:29.201 --> 00:33:30.760
Do it in, in, in the privacy.

00:33:31.000 --> 00:33:35.830
Uh, the public market's not going to see and just essentially call it your R and D right.

00:33:37.030 --> 00:33:40.060
When you design a product, especially a physical product.

00:33:40.270 --> 00:33:52.121
Again, you know, if we have this understanding that there's probably something similar in the marketplace day, that this is a variation of an improvement and upgrade, how much attention do you pay on the competitor's product projects?

00:33:52.151 --> 00:33:53.351
Our products, I'm sorry.

00:33:53.711 --> 00:33:58.601
And the reason that I say that is because sometimes we can be a little closed minded, right?

00:33:58.601 --> 00:34:10.300
We can look at the world, uh, based on what's already there today instead of taking the blank canvas approach and saying, if we completely rethought this from the ground up, maybe we could do it in a better way.

00:34:10.570 --> 00:34:10.840
Do you.

00:34:11.081 --> 00:34:18.911
Do you see that there's too much focus on looking at what others are doing and then tried to do it differently versus that blank canvas approach.

00:34:19.661 --> 00:34:22.451
I'll tell you the worst thing that we get that happens more often than not.

00:34:23.050 --> 00:34:25.510
People come and they say, okay, here's our competitor.

00:34:26.141 --> 00:34:27.070
And I got an idea.

00:34:27.340 --> 00:34:31.090
We're going to make it better and it's going to be cheaper and we're going to spend less on development.

00:34:31.121 --> 00:34:31.481
Hmm.

00:34:32.170 --> 00:34:32.681
Pick one.

00:34:34.510 --> 00:34:35.590
There it is.

00:34:36.760 --> 00:34:43.420
I'll tell you the first step that you can do, um, is never look at a competitor and say, we're going to do it cheaper.

00:34:43.541 --> 00:34:43.900
Hm.

00:34:44.440 --> 00:34:48.340
Unless you're actually changing something, which arguably is an improvement.

00:34:48.521 --> 00:34:55.990
Even if it's a reduction in features, it's an improvement to a specific, let's say demographic, you're going to more narrowly target a piece of that audience.

00:34:56.411 --> 00:35:09.041
And that in turn is going to make it cheaper because the reality that most people, whether it's software, hardware, again, if you think that you're going to do something simply because it's cheaper, you're fighting against a company, who's done it for many years.

00:35:09.190 --> 00:35:11.440
There's a reason they're charging the price that they're charging.

00:35:11.920 --> 00:35:22.090
Maybe there's a chance that they're gouging a bit and yeah, there is some margins, but let me tell you, as soon as if you do become a real player, it's very easy for them to flip the switch and, and, and, and reduce their prices.

00:35:22.090 --> 00:35:23.800
And all of a sudden, if that was your competitive.

00:35:24.280 --> 00:35:26.710
Uh, advantage you now just lost it overnight.

00:35:27.550 --> 00:35:32.141
You're far better off as a far easier road to improve something.

00:35:32.351 --> 00:35:36.820
Even like we talked about earlier, even if it's something, uh, something small.

00:35:37.391 --> 00:35:42.400
And understand really what your value is, which goes back to your episode one and episode two.

00:35:42.400 --> 00:35:43.931
How have you figured out that?

00:35:44.021 --> 00:35:52.871
Okay, my small improvement or my small change, or even my small reduction to make a slightly different product is going to really hit the nail on the head of this consumer segment.

00:35:53.170 --> 00:36:01.840
And then you do everything you can do to make that a quality product or service or website or app or whatever it is to ensure that you're hitting that demographics, that you can win in that demographic.

00:36:02.081 --> 00:36:06.431
Without competing on price because that's very hard, almost impossible thing to do.

00:36:07.090 --> 00:36:10.061
And I would even argue that one of the goals should be, how could you charge more for it?

00:36:10.061 --> 00:36:10.300
Right.

00:36:10.300 --> 00:36:13.871
You know, you, you want to build those margins up and have a premium product.

00:36:14.110 --> 00:36:17.590
Not be in the commodity business and selling the, the low cost product.

00:36:17.590 --> 00:36:18.971
That's a, that's a tough road to hoe.

00:36:19.541 --> 00:36:20.530
Margins are key.

00:36:20.650 --> 00:36:28.300
Every product we look at where in the hardware space, obviously it's different in, and, uh, you know, software as a service and whatever else, but the same principle applies.

00:36:28.661 --> 00:36:37.360
Uh, when we look at a product, if we're manufacturing that thing for a dollar, we want to be selling it to the end consumer for four to$5, five times the price.

00:36:37.900 --> 00:36:42.731
That's not because they're getting ripped off it's because if your manufacturing cost overseas is a dollar.

00:36:43.331 --> 00:36:50.440
It's probably two to$3 and all the distribution, marketing, uh, logistics, et cetera, to get it to that end buyer.

00:36:51.251 --> 00:36:51.431
Right.

00:36:51.431 --> 00:36:52.811
Everybody's taken a cut these days.

00:36:52.811 --> 00:36:53.981
Amazon takes a major cut.

00:36:54.010 --> 00:36:54.971
Everyone takes a cut.

00:36:55.271 --> 00:37:02.710
So you need to build that into your margin so that you have room leftover to create, uh, your, your business around that product.

00:37:02.740 --> 00:37:05.170
You need to ensure that the profit is there.

00:37:05.380 --> 00:37:08.231
Do not, again, this comes down to doing it for cheaper.

00:37:08.590 --> 00:37:12.851
Um, if you're doing it for the same price, but you're twice the cost, that's also the same.

00:37:12.971 --> 00:37:14.170
You've got a problem, right?

00:37:14.170 --> 00:37:19.721
So if you're twice the cost, you need to be twice the price as the competitor or more so you can build an extra value in there.

00:37:20.590 --> 00:37:28.001
The whole margin game is so interesting to me because obviously once you start to get some scale, little tweaks can make a big difference.

00:37:28.240 --> 00:37:36.911
Uh, you know, back to our Apple example, you know what the latest iPhone, I know they left out the charger and of course, leaving out the charger, saves them some money.

00:37:37.121 --> 00:37:42.880
But the hidden thing that I didn't even think of was that it allowed them to change the design of the box.

00:37:43.090 --> 00:37:48.010
The box is now an inch less thick than it was before that allows them.

00:37:48.041 --> 00:37:51.880
To get X number more iPhones on a pallet, which allows them to get X.

00:37:52.210 --> 00:37:56.201
Number of more pallets on the plane, uh, you know, which reduces their shipping costs.

00:37:56.380 --> 00:38:02.471
And it just has this trickle effect, uh, that can really impact margins in a significant way.

00:38:02.650 --> 00:38:05.530
And I think it's really fun to go through those kinds of discussions.

00:38:05.561 --> 00:38:21.880
And maybe it's not the thing you think about when you're releasing your first version of the product, but as you're going through, you know, getting rid of unneeded features that people aren't using or figuring out ways to do things around the manufacturing process or the packaging or whatnot, there are so many areas of potential improvement.

00:38:22.721 --> 00:38:23.260
Absolutely.

00:38:23.590 --> 00:38:26.681
Start with one size, not one size fits all.

00:38:26.891 --> 00:38:28.990
Start with one demographic.

00:38:29.411 --> 00:38:34.960
Start with one quality class, start with one feature, all these things kind of combined together, right.

00:38:34.960 --> 00:38:36.851
To keep it really simple, really niche.

00:38:37.300 --> 00:38:39.490
Um, you know, and that, that, that.

00:38:40.001 --> 00:38:41.081
One of the big things.

00:38:41.110 --> 00:38:42.911
When we talk about that, I'm going to make it cheaper.

00:38:42.940 --> 00:38:44.771
You know where it's going to say, I'm going to make it universal.

00:38:44.920 --> 00:38:49.391
So I'm going to create this product or this website or wherever that it has all these customizations.

00:38:49.391 --> 00:38:51.041
So anybody can basically use it.

00:38:51.311 --> 00:38:56.740
Customizations or multiple sizes, uh, or, or for compatibility.

00:38:56.771 --> 00:38:57.670
That's another big one.

00:38:57.760 --> 00:38:59.621
I'm going to make this compatible.

00:38:59.681 --> 00:39:00.070
So, okay.

00:39:00.070 --> 00:39:03.130
I want to do it simple, but I'm also gonna make a compatible for the future.

00:39:03.550 --> 00:39:05.501
All of those things are ridiculously expensive.

00:39:05.710 --> 00:39:11.351
If you want something to be forward compatible, like truly forward and backwards compatible, whether it's software, hardware.

00:39:11.951 --> 00:39:12.880
10 X your budget.

00:39:13.630 --> 00:39:18.880
Because a tremendous amount of thought and consideration has to go to India every possible.

00:39:19.690 --> 00:39:27.760
Or I say every major likely scenario, both backwards and forwards to how that product is going to integrate over the years that isn't major exercise.

00:39:27.940 --> 00:39:34.510
So forget forward and backwards compatibility, forget making it size, adjustable, forget customizations for again, all these extra features.

00:39:34.990 --> 00:39:39.371
Um, keep it to the bare bones when that, and then you build the credibility.

00:39:39.371 --> 00:39:41.831
You've gained the revenue you've learned from it.

00:39:41.860 --> 00:39:44.291
You've got your audience, then you'll crush it after that.

00:39:44.351 --> 00:39:45.221
No question about it.

00:39:46.030 --> 00:39:51.851
I'm truckling because, uh, I, I'm a fairly slim guy and I'll go to the sale rack at the department store.

00:39:52.030 --> 00:39:56.411
And you know, the only shirts that'll be left are the double XL slim fit.

00:39:56.740 --> 00:40:01.960
And I think to myself, is there really that much demand for a double XL slim fit shirt, you know?

00:40:02.380 --> 00:40:04.420
It seems to be a kind of contrary.

00:40:04.690 --> 00:40:09.550
And it makes me think about, you know, what you're saying is sometimes you just don't need all of those choices.

00:40:11.320 --> 00:40:13.001
Kevin, this has been a fascinating discussion.

00:40:13.030 --> 00:40:20.440
I think we could talk about it for hours, but I want to give you a chance to talk a little bit about where people can find you on the web and a little bit more about your podcast.

00:40:21.101 --> 00:40:22.030
Yeah, I actually that's.

00:40:22.061 --> 00:40:31.001
That's the, uh, you know, the thing that's most interesting to me right now, um, w we've just got some great guests coming onto the podcast, so it's a, of course it's free and it's easy to check out.

00:40:31.271 --> 00:40:34.840
I'm just going to product startup.com and.

00:40:34.900 --> 00:40:37.811
Uh, less than for advice on a hardware product development.

00:40:38.291 --> 00:40:39.490
That's uh, that's pretty much it.

00:40:39.701 --> 00:40:46.181
Um, if you're interested in our company, of course, you can go to our website to macro design.com, M a K O design.com.

00:40:46.510 --> 00:40:52.661
Uh, we've got over 900 blog articles, all organically written by us on product development from, from end-to-end.

00:40:53.050 --> 00:40:55.001
Uh, client journeys, all that sort of fun stuff.

00:40:55.001 --> 00:40:58.510
So feel free to check that out, but I would encourage anybody in the hardware space.

00:40:58.871 --> 00:41:08.831
Uh, check out that podcast because we are doing everything we possibly can to get the best and most unique, a very powerful and impactful guests on the show.

00:41:08.831 --> 00:41:11.831
Just to talk about how to build and scale.

00:41:12.130 --> 00:41:13.090
Uh, product businesses.

00:41:13.601 --> 00:41:14.981
It's not easy being a startup.

00:41:14.981 --> 00:41:25.210
There are so many challenges that you have to deal with, uh, you know, across your organization that any help that you can get from people who have been there or going through some of those same challenges, I think is a, is truly valuable.

00:41:25.451 --> 00:41:31.090
And I've really appreciated your insights today on this whole idea of product market fit and competitive differentiation.

00:41:31.331 --> 00:41:33.731
I think it's a, it's some really good insight for the audience.

00:41:33.731 --> 00:41:34.960
So I appreciate your time today.

00:41:35.740 --> 00:41:36.251
Thanks, Eric.

00:41:36.340 --> 00:41:37.451
You're a fantastic host.

00:41:37.481 --> 00:41:39.431
Great questions is really enjoyable to do this.

00:41:39.641 --> 00:41:39.940
Thank you.

00:41:39.940 --> 00:41:40.990
I really appreciate that.

00:41:40.990 --> 00:41:41.590
Thanks again.

00:41:42.101 --> 00:41:42.490
Take care.

00:41:42.490 --> 00:41:48.777
Transcribing...