Once your product is made and you're ready to put it on the market, understanding the manufacturing and distribution process can be a huge learning curve for founders. Unfortunately, it's also an incredibly important thing to learn if you're interested in success.
Recently, Techstars hosted a panel of industry players, including Jacqueline Ros, CEO of Revolar, John Vaskis, Head of Hardware, Technology, and Design Sales at Indiegogo, Tim Paulus, VP of Sales at Arrow and Cory Hooyman, Innovation Lead at Target, to discuss product-based startups and the oftentimes tumultuous path to market. Here's a summary of their insights:
Creating a Product Is the Easy Part
Most product-based startups are product-obsessed – as they should be. However, many times this gets ahead of the important questions starting with, “Will anyone purchase this once I build it?” Then if someone is willing to purchase it, “Will I actually be able to manufacture it, finance it, and provide customer service for it?”
You should always be asking these questions before pulling any irreversible triggers. Considering these questions earlier in the process ensures time and money are not wasted on product development.
Buyers Treat Their Positions Like Small Businesses
When approaching a buyer about your product, it’s best to remember that they treat their product line like a small business. You must make a business case for why they would take your product over the other hundreds of products marketed to them everyday.
Preparation is key in any deals with business. Be ready for this conversation and provide proposals for win-win situations.
Treat Your Vendors Like Cofounders
For most product startups, you’ll most likely rely heavily on component vendors for the bulk of your product. It's a good practice to treat these vendors like cofounders, because they'll be a big part of your business.
Vendors control the flow of products to your company. Choose them wisely, they can literally make or break your company.
You Will Always Need More Money
While this may be the case for most startups, it's especially true for product-based startups. Lots of money must be spent with vendors, retailers, R&D, and marketing. before you even launch a product and hope to see revenue.
If you’re seeking venture capital to fund your product, you’ll always need more than you think. Make sure you raise enough to provide the runway needed for success.
Read more about taking your product to market at Tech.Co