Inventor Book Reviews

Complete Idiot's Guide to New Product Development

by Edwin E. Bobrow 1997, 307 pages, $16.95, ISBN 0-02-861489-5. Published by Simon & Schuster Macmillan Co.

There is now a small library of books available that claim to guide you through the steps for introducing a new product.  Many are designed as texts for college level business courses.  If you need good sound advice and guidance now, today, this book may be your ticket.  The author is the president of a 28-year-old management consulting company and he has the ability to translate the concepts and terminology involved into everyday language.

The book immediately makes two fundamental points.  One, for the the last twenty years the failure rate for new products has held at about 90%.  Two, whether the new product is created by a large corporation or a one person enterprise, all too often the product is created and then a market is sought.  This is the opposite of what the author advocates.  He stresses "find things (people) need to buy and then make them."

If the odds against new products is so great, why try? Because success can be highly profitable and it is more fun, more exciting, to lead than to follow.  In today's fast pace world you really have little choice; you generate new products or you sink.

As the book title indicates, it is the author's objective to keep you from feeling like an idiot when you try to understand the "nuts and bolts of new product development".  Each chapter contains boxes called "Buzzwords" explaining the terms that are in current vogue.  Also, boxes labeled "Jump Start" offer key information and the "False Start" boxes cite common mistakes.  Each chapter begins with an "In This Chapter" box summarizing what will be discussed.  Many examples from the business world are given in the "Prototype" boxes.  Each chapter ends with a brief "The Least You Need to Know."

The author notes in his chapter on market research that you should use it, but treat it as a model only.  He calls attention to IBM's introduction of the IBM PC.  Their marketing people predicted only 100,000 people, worldwide, would buy it! Today, of course, tens of millions of personal computers are in use worldwide.

In our increasingly technological world, inventors and entrepreneurs are often caught up in the "if you build it, they will buy it" syndrome.  They are then shocked to find their customers neither need it or want it.  Again, the author stresses listening to the customer.  You must understand how the customer perceives value.

A surprising number of new products are priced too low on the theory that a low price will generate high sales volume and thereby lower the per unit production costs.  In many cases "skimming" or setting a high initial or premium price might be a better strategy.  This does not deter "purchase leaders" and when the price is later lowered it gives the perception of high value.  Note that it is often difficult or impossible to later raise the price on new items.

The chapter on patents, trade secrets, copyrights, and trademarks is informative and up to date.  The author carefully notes patents are an "offensive right".  That is, you must sue to exclude others from using your patent.  He cautions regarding the difficulties of maintaining trade secrets and the difficulty of prosecuting an infringer.  He wonders if Edison would have died a more wealthy man if he had chosen to license some of his inventions instead of setting up companies to manufacture them.  The author estimates a typical independent inventor should be able to risk a $200,000 loss if he decides to venture instead license.

Incidentally under "Buzzwords", he notes "angels," or part-time private investors, are also called "doctors-and-dentists" because so many angels literally are doctors and dentists.

An interesting buzzword used by inventors is "ramifying".  That is the "process of modifying it in order to make it faster, cheaper, better, bigger, smaller, lighter -- whatever".

The author believes that as a nation we learned a powerful lesson in the 1980s.  Growth was then pursued by mergers and not by innovation.  This transferred wealth but did not create wealth.  Today we are returning to innovation and new product creation.

Read this book and you won't feel like an idiot when you read or hear new product discussions involving terms such as "scoping, beta version, skimming, positioning, ramifying, target consumer, PI advertising, cherry picking, four Cs, monadic testing, metrics", and others.

True, you could bring a product to market without knowing any of these terms or the concepts they describe, but that would be somewhat like doing business in a foreign country without knowing the language.  The book is easy to read, not mathematical, and for the low price involved you may well save hundreds of times its price by not taking the wrong paths.