About this course
Welcome to Course 1 of Module 2, the second of three carefully curated modules within the scope of the Challenger project. All courses are designed and developed by professionals from prestigious VET providers.
You will work in a team during this module on a given challenge. Your tutor/role model, experienced mentors, and industry experts will support you throughout the phase.
Module 2 will build up on Module 1. By the end of this module, you will have acquired valuable insights and skills and be prepared to bring your own innovative journey to life in the subsequent Module 3.
- Module 1: Learning the basics
- Module 2: Applied Phase 1: Working on hands-on projects for business
- Module 3: Applied Phase 2: Creating your own innovations
All these courses are offered for free. If you registered for participation and handed in the group assignments to your tutor/role model, you will receive a confirmation of participation in the form of a digital badge. After completion of all courses of the module, you will receive an innovation certificate that will prove your experience and gained know-how.
The courses are aimed at learners in VET schools, bachelor students in universities, persons interested in developing their entrepreneurial mindset, persons interested in innovation and how to put ideas into practice, teachers/educators, industry experts, and community members.
Idea validation, key resources, data collection and analysis
This course covers Idea Validation, Key Resources, Data Collection, and Analysis. Throughout this program, you’ll delve into the crucial components of new product or service development, understanding the interplay between design, marketing, and production. By the end, you’ll be equipped to identify opportunities, assemble teams, and navigate the intricacies of creating value in the market.
Idea validation, key resources, data collection and analysis
To develop products and establish a successful company, it is necessary to integrate knowledge, skills and expertise from various fields. You do not have to have all the knowledge or skills, but you should know what knowledge and inputs you need and where to obtain them.
In entrepreneurship, these inputs (knowledge and skills areas) include:
- business and marketing skills
- industrial and graphic design skills
- product manufacturing capacity/production skills
These three areas need to work hand in hand. We must combine three aspects (design, marketing and production) to achieve the common goal of product creation and commercial success. The goal is to create high-quality and useful products which are commercially interesting, properly designed and have market potential. Of course, we don’t need to have a physical product. We can also develop services. By product, we mean physical products and services.
Idea Validation
Now you have to check your ideas and find out:
- If the idea has market potential, will people buy it or need it?
- If it is properly designed to be attractive to customers – will they like it?
- Whether it can be produced – how (what) will it look like?
We have come to the point where the interesting part starts. This is the first step to a successful business and can be your company’s starting point in the future.
Once you pop up with your idea, the final goal is to develop it into a commercially successful product/service.
So, not just any product, but the product with the market potential. To develop products like this, it is necessary to integrate knowledge, skills and experts from various fields. In creating a commercially successful product, we need to check the idea from different points of view.
The goal is to create high-quality and useful products that are commercially interesting, properly designed, and have market potential.
Look at your idea (product) from the perspective of:
- a marketing specialist (buyers need it and desire it, you can sell it, it has a story, …),
- a designer (design plays an important role in product performance),
- a product manufacturer (can be produced, manufactured).
You do not have to have all the knowledge or skills, but you should know what knowledge and inputs you need and where to find them.
You can find your colleagues and co-creators. They have a wealth of knowledge which can contribute to developing your idea into a commercially successful product.
The best way is to establish networks with them and work with them together. At the same time, you can help them with your knowledge. In this process of exchanging knowledge and sharing different perspectives on the idea, you can learn a lot of useful things (for example, from a designer’s point of view) without having to know the full range of tools and knowledge that designers have. It is enough to communicate with them correctly and include them when their knowledge is needed.
Knowledge changes quickly, and fresh ideas, experiences and advice from successful entrepreneurs will further enhance and refine your product development experience. Again, you must find your own resources (the companies and branches related to your idea). Companies and experts can help you with their experience and knowledge, applying it to your idea. There are many different ways you can include them – consulting and mentoring, problem-solving, and case studies.
You are free to choose you own learning path. Isn´t it great?
Be active, curious, responsible, persistent. Do not give up.
This is not an easy task, but it pays off.
TRY and TRUST.
Do not worry if you fail at first attempt, you have learned a lot from it.
Below are some basic questions for each area to help you get started.
Marketing Aspect
If there is no need for our product and we cannot sell it, it is certainly not a commercially successful product. How to find this out?
A good place to start is to ask yourself the following questions about your idea/product:
1. How is it different?
Your underlying business idea doesn’t need to be original but establish unique selling propositions (USPs) if you want people to buy from you rather than your competitors. You have to offer something new. Is your proposition solving a problem? Are you filling a gap in the market or building on an existing offer?
2. Is there a market, and is it big enough?
Thorough market research is needed before moving forward with your business idea. You need to ensure that there will be sufficient and sustainable demand to support your business and enable it to thrive.
3. What is the business model?
How will you charge your customers, and what for? Can you think of additional revenue streams? Research is vital to determine whether your business model is viable; this should include an analysis of how your competitors have structured their businesses.
4. Is the price right?
Having a winning product or service is not good if your customers cannot afford it, but you need a decent margin for a sustainable business. Talk to your potential customers to find out whether your pricing is feasible.
5. What will stop others from copying you?
If you have ever watched Dragons’ Den (an entrepreneurship challenge—a reality TV show in the UK), you have certainly heard this question: ”What is to stop a big company from coming along and stealing your idea?” Have strong USPs (such as exceptional customer service) and protect your intellectual property.
6. Do you know your customer?
Arm yourself with as much information about your target customers as possible, and listen to them at every opportunity. What does a typical customer look like? How do they behave? What do they most value from a product or service like yours? Where can you find them? What marketing methods do they respond to?
7. Can you make a profit?
How much will it cost to produce your idea (considering manufacturing or supplier costs, salaries, overheads, office equipment, etc.)? How much can you sell your product or service for, and how much do you need to sell to make a profit and not only to cover your costs? Is this achievable?
8. Do you have sufficient funding to get the venture?
You need enough cash to support yourself and your business until it becomes sustainable. If you don’t have the funding in place, can you raise it?
9. Do you have the necessary experience, attitude and skills to pull it off?
Even if you have the best idea in the world, without passion, drive, commitment, and vision, you are still likely to fail.
10. Is there scope for growth?
Can you upgrade your idea and diversify by adding new products or services, entering new locations, or improving your original proposition?
Different models can be used to answer these questions. We need complex knowledge and recognition of theoretical models and their occurrence in practice.
If marketing is not your area, find experts who can help you with useful knowledge.
Design Aspect
Good design is not just what looks good. It must also perform, convert, astonish, and fulfil its purpose. It must take into account both – aesthetic and functional aspects.
These are some actions which can serve as starting points to get a valuable and reliable evaluation of a design:
1. Do not ask, “Which one do you like best?”
A successful design communicates an idea. It doesn’t matter if someone “likes it” more than another. A pretty ad may look great but may not communicate the desired message. Instead, you should ask which one communicates the idea more clearly.
2. Do not ask specifics such as “Do you like these colours?”
This is a personal preference, and just because someone prefers blue to green, that does not mean this is the right choice for your design.
3. Lay the design in front of them. Do not say anything. After a while, ask a few questions, such as:
“What is this design’s single (or primary) message?”
“What was the first thing you looked at?”
“What do you remember about the design?”
4. Watch the viewer’s eyes.
Where do they look first? How do their eyes move around the product? Good design should guide the user so that they get the main message upon a quick scan without reading the whole copy.
5. If possible, sleep on it.
When things look different to what you expected, the most common reaction is, “No, that’s not what I was thinking”. Give it a day; it may grow on you. We all expect how something looks, so it is easy to get a negative impression. It is important to trust your designers. You do not want to say no to a concept better than what you were expecting just because it differs from your expectations. Instead, ask yourself if it represents the brand and communicates the message effectively.
The designer has an important role in product performance.
Good design is not only beautiful and not only a brilliant idea – it must be appropriate.
Design is too important to handle alone and requires too much responsibility to be trusted to designers only. Good results can only be obtained by working closely with all team members (marketing, design, and production).
However, we must know that design is a sophisticated and demanding process. The designer has a wealth of knowledge and experience that he uses to develop products from a designer’s perspective.
Regardless of the evaluation method, one must keep in mind two things:
First, there are countless ways to tackle design problems. At the core of successful evaluation lies the repetition of potential solutions throughout the product design process. The task is successfully accomplished if based on consistent criteria and clearly set goals.
Second, we do not always need elaborate criteria to tell us what good design is – sometimes, we just know. In other words, design evaluation is not always based on objective criteria. At the heart of evaluation, a competent designer is up to the task.
If design is not the area of your profession, look for experts who can help you with useful knowledge and include them in your team.
Production Aspect
Even a good idea is useless if it cannot be produced in a way that benefits the user.
This is, therefore, a key question at this stage. Can we produce this? Who can produce it?
What is the best material to use? Etc.
Again – find the team members. Who can help you with that? Entrepreneurs from the labour market? Which one of them?
The process of bringing a new product to the market can seem long and daunting, which might be enough to put you off getting started. However, by breaking it down into 12 steps, you may see that it is not so difficult to turn your great idea into a final product.
12 Steps from Product Concept to Manufacturing
Step 1: Product Concept
This is where you begin to flesh out your basic idea. Think about what you want your product to be, its purpose, and who will use it. Create sketches and notes of your initial concept.
Step 2: Research
There are two important things to research at this stage. The first one is demand. If your product is meant to solve a problem, you should ask yourself if many people are looking for a solution to that problem. Can you see a gap that needs to be filled? Secondly, are any similar products already out there? Even if there are, it does not necessarily mean that your idea will not succeed. But how will you improve on what is already available?
Step 3: Product Design Development
At this stage, you can begin to develop your product design. There are several things you must consider:
- You should have a firm idea of your product’s function.
- Think about how strong and long-lasting your product will be.
- How reliable is the product?
- What will be the manufacturing costs? Does this allow room for profit without a price tag that will put the potential buyers off?
- Think about the complexity of manufacturing; how many parts is each unit made of?
- Is your product for a single-use or long-term use?
- What materials do you need to produce it? This may also require further research.
Step 4: Research and Development of the Final Design
Keep changing your design as much as necessary. Include dimensions and materials, and develop the design to a high standard, including all the important details. If your product is made of multiple parts, decide on a minimum number of different parts to keep down the manufacturing costs and speed up the assembly.
Step 5: CAD
Computer-aided design. This process uses 3D rendering software to produce a computer model of your final design. This can help reveal any potential issues that were not evident from the product design itself. Take this opportunity to return to the final design stage and deal with the problems.
Step 6: CAM
Computer-aided manufacturing. This is where you see a physical prototype of your product manufactured by a computer-guided system.
Step 7: Prototype Testing
Make sure your testing is thorough and critical. Do not be afraid, to be honest with yourself about any problems or flaws in your design. This can only help you improve the design in your end product. If necessary, go back to step 3 and apply the necessary changes.
Step 8: Manufacturing
If prototype testing does not reveal any problems that need to be resolved, it is time to manufacture the product. Now, you must decide on materials, batch numbers, and the manufacturer itself. Think about how to keep your costs low and, at the same time, maintain the desired quality. This way you will maximise your profits.
Step 9: Assembly
Some important choices to make at this stage may involve further materials, such as glue. You should think about the costs; however, do not forget that using low-quality materials may negatively affect your sales. Do not let the quality of the product slip away by cutting corners.
Step 10: Feedback and Testing
When your product has been manufactured and assembled, you can continue testing it rigorously. There are many ways to do this: you can assemble focus groups, ask your family or friends about it, etc. In any case, make sure you always take note of the feedback and allow for free and honest criticism. You should also allow for further development of the product and continue improving it.
Step 11: Product Development
Consider returning to the product development phase if you need to make important improvements or address any unforeseen issues. Even though your manufacturing company should have pointed out any serious issues with the product before. Take your time and make it right.
Step 12: Final Product
Now, you have successfully taken your product from the concept to the final product. It is time to turn your attention to marketing and the practical side of getting it into the hands of the customers. The more you sell, the more you can afford to invest in manufacturing larger batches, which means a larger profit next time.
The questions showed that the three areas (marketing, design and production) are intertwined. Even in terms of design and production, we can find issues that are basically marketing issues.
You must understand these three concepts of perceiving a product and how they are related to each other.
It is important to find and use the right sources of knowledge that complement your own and that you gain new skills and insights through the experience of working with others.
Do you know the product in the picture below? This is Juicy Salif by Philippe Starck.
How do you think you would answer the questions above about this product (in terms of marketing, design and production)?
Key Resources
As an entrepreneur, there are so many things you need to consider when starting up a new business. But of all these things, the 5 essential factors you need to focus on during your startup planning that will guarantee a successful launch of your new business are;
- Team
- Product
- Market
- Business Model
- Capital
Let’s take a closer look at each of them.
TEAM
Successful startups are not created by an individual but by a team. The first essential element of your startup planning is people. Your startup idea will not automatically come to life; you need people to make it happen.
A good startup team, according to Entrepreneur Magazine, should comprise the following people:
- The visionary and dreamer. Typically, the core founder has the vision that leads the rest of the team.
- The customer champion is someone who steps into the user experience role and ensures that the product gives buyers exactly what they need and want.
- The innovation architect. This programming-savvy member is supposed to tie together the right technologies to build the product and keep the company on top of industry trends.
- The rainmaker is the financial and business wizard who assesses the company’s viability and profitability and monitors the burn rate.
PRODUCT
Your startup is only as good as the problems it is being created to solve in people’s lives. Your product/service is the solution your startup created to the problems in the lives of your target customers.
There are certain criteria this product/service needs to meet to qualify as a viable product/service:
- Uniqueness: the product/service your startup has created must be significantly differently than all the existing options currently in the market. Why? Because no one needs another “me-too” brand. To get the market’s attention, you gotta stand out from the crowd!
- Usefulness: the product/service your startup wants to offer her target customers must be capable of meeting their needs and solving their problems. In other words, it must be useful to the buyers. Why? Because people don’t buy products/services, they buy utility – the solutions in your products/services.
- Market
A clear understanding of the people with the problems your product/service can solve is crucial to your startup’s success. If your product/service is great, BUT there’s no market for it, you’ve failed. So, to ensure there’s a ready market for your product/service, you need to clarify the following:
- Market Size: what’s the total addressable market? That is, what’s the total number of potential buyers/customers/users for your proposed product/service?
- Growth rate: how fast or slow is this market growing? Is there an opportunity for expansion?
- Demography: these are the average or typical characteristics of your target market. These characteristics might include age, annual income, educational attainment, type of occupation, region of the country they live in, or number of individuals living in their household. Demographics help you understand who buys your product or service.
- Psychography: these characteristics go beyond the external to focus on your target customers’ psychology, lifestyles, and behaviors. Psychographics can include such factors as where your target customers like to travel on vacation, the kinds of hobbies and interests they have, the values or opinions they hold, and how they behave. Psychographics helps you understand why they buy.
BUSINESS MODEL
Your business model is the fourth essential element of your startup planning. It describes the rationale for how an organization creates, delivers, and captures value.
The business model is like a blueprint for implementing a strategy through organizational structures, processes, and systems. Without one, your startup cannot succeed! A good business model design, according to the greatest book ever written on the subject, business model generation should cover the following 9 building blocks, which form the four main areas of a business: customers, offer, infrastructure, and financial viability.
This is:
1: The Customers:
- For whom are we creating value?
- Who are our most important customers?
2: Value Proposition:
- What value do we deliver to the customer?
- Which one of our customer’s problems are we helping to solve?
- Which customer needs are we satisfying?
- What bundles of products and services are we offering to each Customer Segment?
3: Channels:
- Through which Channels do our Customer Segments want to be reached?
- How are we reaching them now?
- How are our Channels integrated?
- Which ones work best?
- Which ones are most cost-efficient?
- How are we integrating them with customer routines?
4: Customer Relationships:
- What type of relationship does each of our Customer Segments expect us to establish and maintain with them?
- Which ones have we established?
- How costly are they?
- How are they integrated with the rest of our business model?
5: Revenue Streams:
- For what value are our customers really willing to pay?
- For what do they currently pay?
- How are they currently paying?
- How would they prefer to pay?
- How much does each Revenue Stream contribute to overall revenues?
6: Key Resources:
- What Key Resources do our Value Propositions require?
- What Key Resources do our Distribution Channels require?
- What Key Resources do our Customer Relationships require?
- What Key Resources do our Revenue Streams require?
7: Key Activities:
- What Key Activities do our Value Propositions require?
- What Key Activities do our Distribution Channels require?
- What Key Activities do our Customer Relationships require?
- What Key Activities do our Revenue Streams require?
8: Key Partnerships:
- Who are our Key Partners? Who are our key suppliers?
- Which Key Resources are we acquiring from partners?
- Which Key Activities do partners perform?
9: Cost Structure:
- What are the most important costs inherent in our business model?
- Which Key Resources are most expensive?
- Which Key Activities are most expensive?
CAPITAL
This is the essential element of your startup planning. How much do you need to start your new business? Do you have this money? If not, where will you get it?
There’s no denying it, every business needs money to run. So, the availability of it or lack of it can mean success or failure for your startup.
Data Collection and Analysis
Considering all the above, collecting a lot of data is necessary to develop a successful business idea. Let’s check the idea from different angles.
We can decide to review already-known data and search through various databases (secondary research) or prepare our own research questionnaire or interview (primary research), with the help of which we can collect data and feedback directly from our potential customers.
You have to know well:
- the competition,
- the market,
- potential customers, their habits and characteristics…
Be creative and self-initiative. There is never too much data.
Course materials
ADDITIONAL MATERIAL / LINKS
- Brown, T. (2008). Design Thinking. Harvard Business Review (6), 84-92.
IDEO (2011). HCD – Human Centered Design Toolkit. www.ideo.com
- Startup Planning: 5 Things You Fundamentally Need to Start a New Business
https://www.naijapreneur.com/2014/11/10/startup-planning
– The Design Thinking Process:
– What Is Design Thinking?
– The Explainer: What Is Design Thinking?
– What is Design Thinking? (2019) | AJ&Smart
– Design Thinking E-book
https://www.agencyq.com/design-thinking-ebook
– How Design Thinking Improves the Creative Process
https://www.gsb.stanford.edu/insights/how-design-thinking-improves-creative-process
– What is Design Thinking and Why Do Entrepreneurs Need to Care?
https://www.americaninno.com/boston/what-is-design-thinking-and-why-do-entrepreneurs-need-to-care
– Paper Beats Plastic
– Why the Lean Start-Up Changes Everything?
https://hbr.org/2013/05/why-the-lean-start-up-changes-everything
– What Makes Organizations More Creatively Competitive?
https://zine.ideo.com/downloads/Zine-IDEO-no1-YouCanPrototypeAnything.pdf
- REMEMBERING STEVE JOBS …
REMEMBERING STEVE JOBS: How You Can Change The World As An Entrepreneur
Assignment
This assignment needs to be completed as a team effort. Your tutor or role model will guide you through the assignment. Please reach out if you require support. The final assignment should be submitted to your designated mentor.
Once your course is complete, your tutor or role model will confirm your completion and instruct you to upload the results to the platform to receive permission to obtain a badge. Upon completing all six courses within a phase, you will receive an innovation certificate for that respective phase.
Briefly describe your idea
My idea:
Check whether it has the market potential by answering the questions below:
A: How is it different?
B: Is there a market, and is it big enough?
C: Do you know your customer? Describe your target group.
D: Can you make a profit?
E: Is there scope for growth?
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them.
