More and more companies are discovering this Lean innovation either Lean startup can help them better streamline their innovation processes. Especially for totally new product development, the application of Lean innovation principles results in a more efficient and successful innovation pipeline.
In part 1, we introduced our blog series, the writers and structure of the blog series. In part 2, we discussed the basic principles of Lean Innovation and IP Strategy. In part 3 we took you into our (fictional) business idea and went into it part 4 further in our voyage of discovery. In part 5 we have set up a number of experiments, and we are satisfied with the results!
In this part 6 we will get started with a physical product and learn from the feedback from our customers.
Our next steps are now to:
Build a prototype
To further develop the technology and - if this is valuable to us - to record it in a patent application
To start looking for partners who can carry out the production for us
Attract investment funds
We have invested our savings in developing a prototype. The most important challenge is the jumping mechanism. We want energy to be built up, which can then be released by the user for a nice jump. Energy conversion is nothing new in itself, but it appears to be a real challenge for the scooter. Ultimately we find a smart way, in which we can store energy in a spring by means of a rocker mechanism, which can be released quickly when pressed on a pedal. That is unique for scooters!
Experiment with the prototype
It also works! We are therefore setting up a new experiment. With our first prototype we go back to the group of young people to whom we showed the first sketches. They are real early adopters, they think it's cool that we involve them in product development. They test our prototype and make a number of suggestions for improvements. A number of them fit the big picture and we therefore immediately include them in our specifications for the first batch. And most importantly: the young people are enthusiastic. We have given them the opportunity to register for the first delivery at a discounted price (€ 275 instead of € 375), and 60% of this group has registered! They have even made a deposit of € 50. This also validates this experiment.
We are now confident that this technology will catch on, but we particularly see that it will give us a head start on the competition. That is why we record the technology in one patent application. We submit an application in the Netherlands. This patent application costs us € 6.000, so we are ready for the next three years in the Netherlands.
Our patent attorney indicates that we must decide within a year whether we also want protection in other countries. To record Europe and the United States, for example, we have to count on another € 10.000. Fortunately, we don't have to make this investment yet.
But these are not the only costs. In order to actually be able to produce this model at an acceptable cost (we will probably do that in China, we already have contacts!), We need a considerable amount. In our case we arrive at an amount of € 400.000. With this we expect to be able to finance the production, distribution, patent and marketing costs of the first year. That means that we have to quickly look for investors.
We decide to start a crowdfunding campaign via Kickstarter to set up. After all, with this we immediately check in a different way whether our idea has 'traction'. Perhaps there are parents who would like such a board for their children ... We have different packages, where we expect investments of € 50 to € 500. As a reward for an investment of € 50, people receive a t-shirt and a discount voucher of € 100 for the purchase of a scooter. As a reward for an investment of € 500, the investors will receive a scooter as soon as it is produced and we will also repay € 200 within a period of 3 years.
The campaign is catching on! We will collect the required amount within 2 months! This includes 500 people who have invested € 500, so we have to take that into account in production.
We find a reliable partner and start with small-scale production. After 6 months, the first batch of 1.200 pieces will be delivered. The first batch will be sold exclusively via the Internet (after the first copies have been sent to our investors and youth group).
Here too we set up a number of experiments. Our main goal is to learn:
Is there enough demand?
Do people buy our product?
Who buys our product?
How do they buy our product?
What do they think of our product?
What are the teething problems?
We get some You Tube vloggers to feature our Fantoytic board in their vlog. That way we come into the picture with our target group. We then set up a social media campaign, specifically aimed at young people.
Our product is selling well! We sell 2 pieces within 500 months. We actively look for feedback on what works well and what doesn't work, and we discover a number of teething problems. We improve our design on these points and order a second, larger batch after 1,5 months! We succeed in selling our scooters and continuously improving our product.
It appears that European young people are particularly interested. Sales in the US market are disappointing. Young people don't really see the product there, apparently. We therefore consciously choose to apply for protection only for Europe. That saves costs.
We have been able to demonstrate that we product market fit but now it is time to start growing! More about this in the next section.