90% of Electronic Product Developments Never Launch: Here's Why
The process of developing a new electronic products is not easy, with around 90% of products failing to reach market. While this statistic might be daunting, it reflects how complex modern development can be. Whether you’re an established manufacturer exploring new opportunities or a startup with an innovative idea, understanding why products fail is key to avoiding the same fate.
In today’s fast-moving world of electronic products, you’ll need more than just technical innovation to be successful. You’ll need to understand the market, meticulously plan your finances, and time things just right. Over the years while helping our clients, we’ve observed some common mistakes being made. These include, poor planning, misunderstanding of the market and incorrect resource allocation.
Embedded Tech Podcast | Episode 2
TL;DR
Success in electronic product development is brutally difficult, with 90% of products failing to reach market. The key isn’t just technical innovation – it’s about avoiding common pitfalls through proper market research, realistic budgeting (think six figures minimum – GBP), and strategic timing.
If things go wrong, you’ll likely overspend, not meet your market needs, or botch the prototype-to-production transition. If you get it right, you’ll do your research early, secure adequate funding with contingency, build a strong team, and continually test your product in the market. Remember: fail fast, fail cheap, and focus on solving real problems for real customers.
Contents
This article will examine key factors that can help your electronic product development do well, drawing from 17+ years industry experience. By understanding potential challenges and preparing for them, you can significantly improve your chances of success when launching your electronic product to market.
Understanding the Electronic Product Development Failure Rate
The main reason a product fails is lack of knowledge of the development process, leading to continuous mistakes throughout. While even experts can miss the mark, their experience typically enables them to fail earlier, resulting in less of a financial impact.
Product development operates within a triangle of constraints:
The Triangle of Product Development Constraints
These three factors constantly compete with each other. For example, cutting down on unit cost often requires more development time for cost engineering. Similarly, improving the technical spec can also increase both unit, electronic component and development costs. Products that target lower prices often need more development investment to keep manufacturing costs down.
The most important thing to understand is that product failure is rarely due to technical problems – instead it boils down to how your product will slot into the market. Many startups fail simply because they don’t have customers. We usually see this when inventors are too emotionally attached to their ideas, without conducting proper market research.
A critical question every developer should be able to answer is: “Can you name your first customer?” This means naming a real person or company that will genuinely buy your product, not a theoretical buyer.
Who Is Your First Customer?
The Critical Role of Market Research
Market research should begin with this question: “What problem does your product solve?” If you can’t clearly define the problem, you’re already at risk. It’s important to understand how other products currently solve this problem and how much customers are willing to pay for a better solution.
Research should then progress through several stages before you can kick-start your electronic product development:
Stages of Research Development
Companies that launch products in sectors they know well, typically perform better, but it can still be helpful to hire an impartial market research firm to avoid confirmation bias. They can provide important objective feedback, even if it’s not what you want to hear.
A common issue with market research is excessive secrecy. While its true that protecting intellectual property does matter, the reality is that having an idea represents only about 10% of the challenge – the other 90% involves actually doing the work. This means development, investment, and marketing. Don’t let the fear of someone stealing your idea, stop you from getting invaluable feedback in the market.
Intellectual Property (IP) Strategy
While patents can be valuable, they’re only as strong as your ability to defend them. Small companies often struggle to protect patents against larger competitors, mostly due to the high legal costs. Consider these approaches to IP protection:
What Do Successful Companies Focus On?
This goes both ways: conducting patent searches is still important. You’ll need to check you’re not violating existing intellectual property.
Here are some defensive strategies you might want to consider:
- Conduct patent searches to avoid infringement
- Document innovation processes
- Consider basic IP protection methods
You can also protect your product with the following market-based protection strategies:
- Maintain market leadership through continuous innovation
- Build strong brand recognition and develop customer loyalty
- Move quickly to establish market position
Sometimes, larger companies may invest in or partner with smaller firms to access their patents, providing the resources needed for defence. However, most successful companies focus more on execution and market leadership than extensive patent portfolios.
Market Entry and Timing
Market timing can make or break an electronic product development launch. One example of where we’ve observed involved a wireless energy monitoring device, developed before IoT became popular. Despite winning an award from Shell, the product struggled because consumers didn’t understand why it was necessary to track the energy usage of multiple appliances. Eight years later, such explanation would have been unnecessary.
This timing challenge can be seen time and time again, in historical product developments. Here are some more well-known examples:
- Apple’s iPod wasn’t the first digital audio player, but it was released when the market was ready. It also had effective marketing and a lot of capital behind it.
- Early smart meters struggled to explain their value proposition before people began to focus on saving energy. They only took off when energy saving gained momentum.
At the other end of the spectrum, the EV home charger market shows that joining late can also be an issue. New companies now face strong competition and need increasingly unique selling points to do well in this space.
What's The Optimal Market Entry Timing?
Only large companies, like Apple or Microsoft, typically have enough investment to create entirely new markets through a “technology push.” Therefore, most SMEs should focus on “demand pull”. This means entering existing markets and solving problems that people are already aware of.
Funding and Financial Planning
A crucial piece of advice for electronic product development is “take twice the money you think you’ll need.” Even with thorough risk analysis, you’ll still come up against unexpected challenges. And, of course the cost of failure increases significantly as development progresses, which means it’s far better to fail early, if failure is inevitable.
By nature, engineers often want to start building immediately and can’t resist getting stuck-in. But you’ve got to start with extensive, paper-based planning and research before you go any further. These steps include:
- Validate the concept before significant investment
- Identify potential issues early
- Create detailed financial projections
- Support funding applications
And when it comes to funding applications, strategies to consider are:
- Grant funding: Valuable not just for the money but for the validation process
- Development phases: Understanding which costs come when
- Contingency planning: Having reserves for unexpected challenges
- Budget constraints: Even large companies often have strict budgets for new products
Even if you don’t necessarily need a grant to get started on your electronic product development, the grant application process forces companies to conduct thorough market research and justify their business case, which forms a key part of the initial planning. While receiving a grant doesn’t guarantee success, the discipline required to secure one can help validate your concept.
Building the Right Team
If you want to be successful, you must understand your own capabilities and skill gaps – no one can do it all. The best place to start is with a skills matrix to identify:
- Core competencies needed throughout the product lifecycle
- Temporary skills required for specific development phases
- Areas where permanent staff are needed versus outsourcing opportunities
For transitory needs (like app development), it’s worth considering contractors or outsourcing. For long-term requirements, make sure to look at permanent staff or equity partnerships in start-ups. The key here is to match the permanence of the role with your hiring approach.
Product Development Key Considerations
The Prototype to Production Journey
Many entrepreneurs underestimate the gap between prototype and mass production. Your device may appear 80% complete at the prototype stage, but often only represents 10-20% of the work required for production. When you are transitioning to the production phase, you’ll likely require multiple design iterations, to optimise your design for manufacturing efficiency and cost.
There are three key electronic product development stages:
Proof of Concept | Prototype | Production Design |
|---|---|---|
Demonstrates technical feasibility | Should be designed with production in mind | Optimised for manufacturing efficiency |
Often ignores production realities | Closer to final product specifications | Includes production testing considerations |
Useful for early funding and validation | Used for market testing and validation | Meets all regulatory requirements |
May have significant limitations in size, battery life, or cost | May still need optimization for manufacturing | Cost-engineered for target market |
When planning for cost and timescales for your electronic product development, ensure you’re factoring in the testing phase – electronic production testing requirements vary significantly by industry:
Basic Consumer Products | Industrial Products | Medical Devices |
|---|---|---|
EMC testing only | Extended durability and safety testing | Years of regulatory testing and validation |
Understanding these requirements early will help with your financial planning and inform timelines. When you are transitioning to the production phase, you’ll often require multiple design iterations, to optimise your design for manufacturing efficiency and cost.
Measuring Success
So, you’re moving through your electronic product development cycle, but you’re not sure how you’re doing? This is why you need a way to measure your success. You should implement success metrics throughout the electronic product development process by setting clear targets for each development stage:
Early Design Stage | Development Stage | Pre-Production Stage |
|---|---|---|
Market validation metrics | Technical performance metrics | Manufacturing cost targets |
Technical feasibility confirmation | Cost targets | Quality metrics |
Initial customer feedback | Timeline adherence | Regulatory compliance |
Financial model validation | Customer feedback on prototypes | Market testing results |
It’s much better to regularly test your product in market throughout development instead of developing in isolation. Each development gate should include specific, measurable criteria for moving forward, and companies should be prepared to pivot or stop if these targets aren’t met.
Success in electronic product development requires a balanced approach combining: technical expertise, market understanding, and business acumen. By fully understanding and preparing for these challenges, you can improve your chances of joining the successful 10% that make it to market.
Main Takeaways
The 90% failure rate in electronic product development highlights the many challenges you’ll face when trying to introduce your product to market. But, don’t let this stop the ideas; instead, it should motivate you to work smarter and more strategically.
To succeed, you’ll need more than technical excellence. You’ll also need to:
- Know the market well
- Plan realistically with both finances and resources
- Enter the market at the right time
- Continuously seek customer feedback
- Put together a strong team based on your own skill assessment
Perhaps most importantly, it requires the foresight to test early and often, and the courage to pivot or stop, based on market feedback. While it’s not going to be easy, understanding and preparing for challenges significantly improves your chances of success.
Remember that even products that ultimately fail, still provide valuable learnings that can help future successes. If you fail, the key is to: fail fast, fail cheap, and learn quickly from these experiences.
By approaching electronic product development with this mindset and following the strategies outlined in this article, you can work to position your product among the successful 10% that make it to market.
Ready to Join the Succesful 10%?
deep expertise, proven processes, and the right tools and technologies.
That's where ByteSnap comes in. Our expert design engineering team has helped countless electronic products from concept to market success. With 17+ years of experience navigating the complexities of electronic product development, we understand the challenges you're facing. .
Whether you're looking to validate your concept, optimise your prototype, or prepare for production, our engineers can help you avoid costly mistakes and get you to market quicker.
Take the first step toward electronic product development success – schedule a call with our design engineering team today. We'll discuss your project requirements and explain how we can help transform your electronic product idea to life.
FAQs - Navigating Electronic Product Development
1. What are the most common challenges in electronic product development?
The most common challenges in electronic product development include poor planning, not understanding the market, and misusing resources. These factors lead to a higher chance of product failure, which currently sits around 90% of all electronic products.
2. What's the best approach to electronic product development for a successful product launch?
The best approach involves a balanced strategy combining technical skills, market knowledge, and business acumen. It’s important to conduct thorough market research and focus on solving real problems for real customers. Also, secure enough funding with backup, build a strong team, and keep testing the product within the target market. The key is that if your new product is going to fail, it’s better to do so quickly and cheaply.
3. Why is early planning important in electronic product development?
Early planning is important because it helps avoid common problems such as poor resource allocation and misunderstanding of the market. Creating a comprehensive plan from the beginning can significantly improve the chances of your product being in the successful 10% of products that make it to market.
4. What strategies can lower your risks during electronic product development?
To lower your product’s risk of being unsuccessful, set clear goals for each development stage and then measure success against these targets throughout the process. Be prepared to pivot or stop if these goals aren’t met. Regular market testing and validation are also important strategies for reducing product risk.
5. How do you manage costs effectively during electronic product development?
Realistic and practical budgeting is essential, beginning with a minimum budget in the six-figure range (GBP), i.e. minimum of £100,000. It’s important to secure enough funding with a separate contingency as back up, and to stick to your cost targets throughout the development process. Take a look at ByteSnap’s How Much Does It Cost article to get you started.
6. What role does testing and validation play in successful electronic product development?
Testing and validation are a very important part of your development strategy. Products should be regularly tested in the target market, throughout the development cycle. Never just develop in isolation. Each development stage should have clear, measurable goals that must be met, before moving forward.
7. How do I get started with my electronic product development project?
To get started, you should first conduct thorough market research to validate your product idea. Then, secure adequate funding and gather a strong team with the right skills to bridge any gaps in your technical and business knowledge. Finally, develop a clear plan with measurable goals for each stage of development. For more information, take a look at ByteSnap’s Electronic Design and Software Development Services.
Founded in 2008, ByteSnap Design is an award-winning embedded systems design consultancy, offering a comprehensive range of services across the electronic product development lifecycle.
A highly skilled team of over 40 hardware and software engineers, our expertise spans several sectors, including IoT, automotive, industrial, medical, and consumer electronics.
The engineering consultants on the ByteSnap Editorial Team share their knowledge and practical tips to help you streamline your product development and accelerate designs to market successfully.
With their deep technical expertise and practical experience, they aim to provide valuable insights and actionable tips to guide you through the complex world of electronic product design and development, to help you bring innovative, reliable, and secure electronic products to market quickly and cost-effectively.
