Building 2000 units of a product, part 1: sourcing COTS parts – Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From Dragon Innovation Blog

There are many phases of engineering development before you get to a looks-like, works-like prototype. At this phase, the product looks like and works like a final product. Hopefully it has been designed with the final manufacturing techniques in mind.  Like many modern day hardware companies, you probably went the extra mile in validating your market before scaling up your operation. You have probably run a successful crowdfunding campaign. You now have a 1000-2000 unit preorder that you now need to fulfill.  How do you go from the prototyping techniques you have been using to date to sourcing and building a small lot of this scale?

At 1000-2000 units, this is considered a low volume production run. This is a very tricky quantity to build, especially for consumer electronics products with a low cost-of-goods-sold (COGS). In fact, Ben Einstein of Bolt VC famously calls this quantity the “uncanny valley of manufacturing” in his awesome talk about prototyping (see Slide 41).

What’s involved in a 2000-unit build?

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Scaling customer development: crowdsourcing the research – Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From The Huffington Post

In the seminal book “The Four Steps to the Epiphany”, Steve Blank introduces the concept of “customer development” – get out of the building and interview customers. While this is not a new concept – product people with user-centered design training have always done this – this is a huge development in startup-land, where technology used to run amuck.

Challenges with sample size

There is one small problem with customer development. It relies on qualitative research techniques like detailed interviews and observation, which are time consuming and costly.  Additionally, these techniques involve deep interactions with a few individuals, and you always run the risk of talking to the wrong people about the wrong problems.

How do you know whether you can trust your results? One way is to increase sample size – but given each interaction can take a couple of hours all-in, trying to get to 100 conversations quickly becomes daunting.

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Three go-to techniques for primary market research – Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From The Huffington Post

When Steve Blank wrote the book “The Four Steps to the Epiphany”, he brought a sea change in the way technology entrepreneurs do business.  Rather than plow ahead with a technology-led process, most entrepreneurs have embraced “customer development”.  Getting out of the building and doing primary market research has saved a great many startups from solving the wrong problems, and repeating the mistakes of projects like Google Glass.

You don’t know what you don’t know

When you are just getting started, the first thing to do is to admit that you don’t know what you don’t know. You have hypotheses about your target market and end users, but you don’t know if your intuition is right.

What you need to do at this stage is “problem research”. This is the phase in primary market research where you try to understand the problem. The technique that is central to the Lean Startup movement, MVP (minimum viable product) testing, is all about “solution research”, which I will cover in a separate post.

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The store as a showroom: having your cake and eating it too – Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From The Huffington Post

In 2005, I was shopping for an acoustic piano. Back then, piano shopping worked like this: Go to a showroom. Play every instrument. Pick one, and negotiate a price. Have it shipped to your house. Everyone understood that a piano store does not maintain much inventory on site.

Apparel shopping was completely different. Shoppers went to the store, tried things on, then paid and left with their purchase in a shopping bag.

The changing face of apparel retail

Fast forward to 2016. Piano shopping is still much the same, but apparel shopping has changed. While store sales still account for a majority of retail revenues, online sales for apparel has been growing explosively.

Nielsen found that in 2015, almost half of U.S. shoppers (41%) had bought clothes online in the last six months, and roughly 12% had made a mobile apparel purchase. Citing Morgan Stanley, Business Insider reported that Amazon has a 7% share of the apparel retail market, and will comprise a 19% of the market share by 2020. Another article cites a Cowen & Co. report which predicted that Amazon will overtake Macy’s by 2017.

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Robots are moving in to our homes, but there’s no killer app – Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From The Conversation

Not too long ago, robots were giant, caged things, mainly found in automotive manufacturing lines. Social robotics was a new field of research pursued by the best and brightest in university research labs.

In the past few years, however, it seems that social robots have finally come of age. All of a sudden, the market is teeming with products. Some are distinctly humanoid.

The rise of social robots

Softbank Robotics’ Nao, Pepper and Romeo all have a head and two arms. With their stylised designs, they deftly avoid the “uncanny valley” of human-machine interfaces (realistic enough to look human, but non-human enough to look spooky).

Others are more subdued in their anthropomorphism. Blue Frog Robotics’ Buddy sports an animated face on a screen, and scoots around on wheels. Jibo is yet more subtle in its ability to evoke humanity, with its stationary base and a head that can turn and nod.

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