Chapter 6New Product Design OverviewIntensifying competition and the increasing importance of innovation boost the importance of:Product and service developmentProtecting developed products and servicesNew products and servicesAre reconfigurations of what already existsOften are extensions of existing platformsShould be unique in multiple waysHave increasingly short life cyclesThe timing, price, and costs of new products and services are all importantEntrepreneurs typically must engage in new product development several times (often continually)Once a product is a concept it must still be validated through:Technical and market feasibility analysis: preliminary research to determine if the product exists and its potential application to solve a problemIntellectual property and regulatory requirements: determine potential for property rights and plan for patent protection. How regulation will affect the processProduct Development ProcessesProduct development processes are iterative and may not occur sequentiallyMultiple versions may be necessary ( but entrepreneurs should try to minimize reworks and delays)Ideas are discarded or nurtured as the process unfoldsSteps include concept development, feasibility analysis, prototype development and testing, and launchInnovation pipelines can address the uncertaintyInnovation pipelines also dilute resources, perhaps:Hindering execution and slowing developmentLeading to less innovative and reliable product offeringsLimiting market research and increasing failure ratesLack of resources can lead to 5 very common problemsPoor execution: Critical analysis are often not includedTime-to-market increases: bottlenecks and backups that cause work to be done in haste and often have to be redoneFirst-to-market missed: missed opportunities to enter market with no competitionProjects made simpler: dumbing-down of projects due to resource scarcityTeam morale decline: Lack of resources and increasing pressure leads to more team stress and lowers moraleProduct development is generally challenging, time-consuming, expensive, and frustratingDue to this, most cooperation’s have a separate research and development department in order to minimize the negative effects that may occurImproving New Product DevelopmentEntrepreneurs should establish and adhere to criteria to help determine when to:Being new projects and expand existing onesEnd ongoing projects prior to completionCustomer feedbackCan increase the likelihood of product successHelp entrepreneurs find unintended uses for designsOutsourcing aspect of product developmentAdvantages: save costs (including time) and take advantage of other organizations’ skillsDisadvantages: may increase costs (including time) and expose entrepreneurs’ ideas to outsidersEntrepreneurs should consider value creation and value capture throughout product development3 fundamental strategies to enhance success chancesDesign right the first timeShorten time-to-marketOutsource some product development tasksNew product FailurePrinciple reason to new product failure is lack of good market and industry analysisInnovators can create value but must be able to CAPTURE value or their returns will be tapped by imitators and others down the value chainDespite all the benefits of info and technology new product success is still about 60%Intellectual Property RightsIntellectual property rightLegal rights associated with unique resources and capabilitiesReflected in patents, trademarks, copyrights, and trade secretsEstablish exclusivity (i.e., who is allowed to use the resources and capabilities)Critical in modern economies (due to importance of intangible assets and the growth in competition)Understanding intellectual property rights helps entrepreneurs:Protect their own resources and capabilitiesPatentsPatentsProtect original and useful inventions for a specific timeUtility: patents for items producing a tangible outcomeDesign: patents for items’ aesthetic featuresBusiness method: patents for ways to produce and deliver products and servicesCriteria for patentsPatents are for new or substantively improved machines circuitry, processes, goods, and chemical compositionsThe item must be useful (yet not natural), novel (not infringe on others’ patents), and non-obviousImportant considerations for patenting decisionsWill the patent outlast the economic life of the inventionWhat are the downsides of exposing critical knowledge?Is the patent protectable (where and at what costs)?Provisional or Non-provisional?Provisional: 1-year patentNon-provisional: 20-yearNon-provisional patents are required for all patents and start from the filing of the patentTrademarks, Copyrights, and Trade SecretsTrademarksProtect items that identify a business, product, or service(symbols, words, designs, sounds, colors, etc.)The trademark is valid as long as the item is used commercially and is not part of generic vernacularCopyrightsProtect original creative works ( visual art, music, writing, computer programs) in tangible formCopyrights exist without registration, but registering creates public records and increases protect-abilityTrade secretsOften informally protected, though some formal protection involving specific parties is possibleMay involve items entrepreneurs choose not to or cannot patent or protect via copyrights and trademarksChapter 7Building Founding Teamsmost ventures founded by teamsnew ventures require many resourcesteam members can supply resources directly and can affect the venture’s access to additional resourcesteam members can share the intense workload required at startupdifferent perspectives may promote better decision makingthe founding team should reflect resource needsoften, there is a lead entrepreneur with more ownership than other founders haveteam members’ compatibility is important but may be difficult to assess before they work togetherwhen startup effort is collective, with a team that displays diverse capabilities, the new venture is more likely to be innovative and carve out a unique niche for itselfLOOK AT FIGURE 7.15 factors that are significant in team compositionHomophily (similarity)Functionality (skill diversity)Status expectations (cultural bias)Network constraints ( social contracts)Ecological constraints (geographic distribution)Consideration for different types of teamsHigh technology teamsBureaucracy can be especially problematicTeams should contain both technical expertise and business expertiseSuffer