May 04, 1998, Issue: 1005 Section: OP-ED


Time to ditch the old development recipe

Susan Ayers-Walker And Rob Walker

Bringing a new product to market was once a linear process that was overseen at every step by countless layers of management reviews. The results inevitably were long in coming; in many cases, projects missed the market window or fell short of expectations.

If you're still living that scenario, it's time to change.

Today's product-development recipe calls for developing a product in less than a dozen months using multitalented and sometimes multinational partners, all weighing in with their respective strengths, sharing the risks and reaping the rewards.

Consider the successful story of the Rex personal information appliance. Developed according to today's recipe and announced to favorable reviews just before the last Comdex, the credit-card-sized device holds up to 3,000 names, addresses and phone numbers, as well as appointments and notes, and retails for about $150. Small but talented Starfish Software (Scotts Valley, Calif.) provided the concept and application. The much larger Citizen Watch Co. of Japan supplied the advanced display technology and handled high-volume manufacturing of the hardware. And Franklin Electronic Publishers (Burlington, N.J.), with many distribution channels at its disposal, markets the units under the respected Rolodex brand.

Rex's developers successfully followed the new recipe, which calls for these basic ingredients: - The right mix of partners. Small entrepreneurial companies are often the ones creating the exciting product concepts or software apps. They have great motivation but typically lack everything else-funding, marketing, manufacturing and distribution channels-needed to hit a market window or compete with established companies. On the other hand, large companies may lack the motivation to try new ideas, or their bureaucracies may stifle in-house creativity. -

Then there are companies that specialize in adding creativity, branding or opening sales channels. They're experts in end-use markets and know how to command mind share. -"Skin in the game." Every partner must agree to deliver its piece of the product, share the risk and get in on the action via royalties, equity investments or high-volume production. Traditional, arms-length customer/supplier relationships will no longer cut it.

- Brand-name cachet. It sure helps if the product can be marketed under an internationally known brand name, especially one that rings of quality, utility and long-time reliability. Witness Rolodex and the Rex. - Good cooks. This is an oft-overlooked business-development issue that calls for some creative matchmaking. Large companies typically have some in-house business development resources. Small startups can turn to various avenues for creative networking, such as the MIT Enterprise Forum and the Venture Group at Stanford University, plus business-development companies, "angels," consultants and venture capitalists who specialize in funding and introducing synergistic partners. -

The incredible pressures of competition will inevitably force companies into more partnerships based on market advantage and core competence. This is as true for engineering-based companies as it is for brand marketers. -Susan Ayers Walker and Rob Walker last year founded Walker Research Associates (Menlo Park, Calif.), which provides customized marketing and management services to new technology companies and emerging businesses.

Copyright (c) 1998 CMP Media Inc.