Photo by Boitumelo Phetla
The majority of new products fail, despite the good intentions and aspirations of the entrepreneurs behind them. There are multiple reasons as to why, but without the right product research upfront, entrepreneurs risk investing thousands of dollars without any reliable data as to whether their idea is viable, manufacturable or in demand – all to achieve the necessary margins to run a profitable business.
Many try it and never do it again because they lost money, had unreasonable expectations or got stuck somewhere in the process. Predictive analytics, better data around product engineers, and supply chain AI is helping entrepreneurs be more efficient, choose the right ideas and partner with the best resources.
If entrepreneurs want to compete by bringing the right product to market at the right time and cost to be profitable, they need to become more efficient and have good data. This is especially important for entrepreneurs hoping to bring a physical product to market.
“For SaaS entrepreneurs or any entrepreneur in the digital realm, they aren’t having to source parts from around the world or find a manufacturer in China,” says Henrik Johansson, co-founder and CEO of Gembah. “They may source engineering talent, but they are not producing a physical product that requires a variety of resources.”
Product entrepreneurs minimize upfront risks when they have better data and answers around the viability of a product, where waste exists, and how to produce products efficiently. New innovation around how to use AI to simplify the complex product development process removes the manual work required to find these resources so that product entrepreneurs can bring products to market faster, better and more affordably.
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Predictive Analytics For Market-Fit
The use of predictive analytics can now enable users to model scenarios and virtually test the market before they continue to invest in development. This due diligence can save them incredible amounts of money and time, helping them avoid common mistakes.
“Predictive analytics helps entrepreneurs assess a product idea or concept before investing the money to actually make it,” says Johansson. “It can identify consumer trends, market readiness, product viability and more.”
For instance, predictive analytics technologies can show search frequency ratings (SFR) from popular eCommerce sites to demonstrate how often a search term or keyword is searched for on a daily basis over time. Product innovators can also use predictive analytics to see how pricing is moving on a product over time so they can assess competitive trends and pricing pressure, and to determine whether the COGS and margins are there.
“By looking at the competitive landscape through the lens of an AI, an entrepreneur
can determine how hard it is to get to the top of page one on Amazon or other online platforms,” says Johansson. “This qualitative and quantitative research is essential to determine whether a creator or entrepreneur should continue to develop a product idea or if certain modifications would make the product viable.”
In other words, predictive analytics helps entrepreneurs determine the “should” before they hit “go” and invest money.
Machine Informed Engineer Selection
When it comes to money, the manufacturability of a product is as big a part of the decision to develop a product as anything else – and often the most expensive. It costs money to design and manufacture prototypes, so the fewer iterations, the better.
Sophisticated entrepreneurs are now using AI to not only find the most appropriate designers/engineers for the product, but they can leverage it to identify issues with design files that could lead to roadblocks and unnecessary costs.
“AI optimizes design specifications and minimizes disruptions and costs associated with difficult designs that are more expensive to manufacture,” says Johansson. “This cuts waste and ensures the finished product will have the necessary margins for profitability.”
Perhaps one of the biggest challenges physical product entrepreneurs face is finding the ideal designers and engineers for a product. The better the fit, the faster they can develop products. Products are more likely to be successful with a comprehensive research phase and excellent, specialized designer/engineer talent.
“It’s common for entrepreneurs to find designers and engineers based on referrals or from firms who assign designers based on availability,” Johansson continues. “But these people don’t always have specialized experience with their product or product type. The result is time-consuming back-and-forth editing and poor design choices that could have been avoided had they worked with a designer and/or engineer with specific product experience.”
Utilizing AI can help entrepreneurs avoid common pitfalls, as well as guide them to the best possible design team based on experience-related data.
Smarter Supply Chains
COVID-19 and the recent winter storms in Texas revealed the vulnerability of supply chains. Entrepreneurs recognize they need to diversify their supply chains if they want to maintain adequate stock without incurring additional costs. AI helps identify supply chain vulnerabilities and waste before they become problems and then suggests alternative options as to the next best action.
Advanced analytics can also help entrepreneurs be more efficient with shipping and logistics. For instance, it considers weather and climate issues, as well as global market volatility and demand.
“A resilient and sustainable supply chain is able to adapt, eliminate waste and leverage opportunities for continual improvement,” adds Johansson. “That could be in efficiency, cost reductions, disaster recovery and/or responsiveness.
“AI is evolving, and the opportunities to leverage AI to improve processes are endless. We are just now capitalizing on some of its capabilities. As we find new ways of integrating AI into the Gembah platform, we expect it will reinvent product development.”
With respect to the legal industry, AI is making legal service providers’ jobs easier in multiple ways, including through document preparation and population, research, analytics and communications.
“Some up and coming legal tech companies are showing AI as helping with client retention and responsiveness, and voice enabled AI platforms are making it easier to cut out a live attorney interaction and improve with backlog,” says Rose Bowlus of Rose Bowlus Law, specializing in commodities, securities and financial services.
Bowlus also believes that AI can help low-income and minority product entrepreneurs overcome historic barriers to entry. “AI can help identify and measure biases,” says Bowlus.
“Obtaining data on how low-income and minority entrepreneur created products have performed in certain industries can be key to identifying disadvantages and to help create strategies to even out opportunities.”
Bowlus adds, “AI can be most useful in enhancing a product or service, especially when data about such product or service is abundant.”
With so many entrepreneurs taking years and tens or even hundreds of thousands of investment dollars to bring a product to market, the failure rate is that much more surprising. By utilizing AI and predictive analytics, they should see greater product success.
“It’s an exciting time to be a product entrepreneur,” Johansson concludes. “AI will no doubt remove barriers, minimize risk, identify unseen opportunities and speed up time-to-market.”