Editor’s note: The RTP Product Pipeline is a new feature for WRAL Local Tech Wire. Its purpose is to help entrepreneurs, business leaders, educators and inventors better understand the product commercialization process. Montie Roland and Thomas Vass are co-founders of The RTP Product Development Guild, Inc. Roland is also the president of the Carolinas Chapter of the Product Development Management Association. Their column appears weekly.
MORRISVILLE – Starting a product development guild has been a journey that has lasted about two and a half years. The first two years were mainly discussions. The last five months have mainly involved laying the groundwork for the guild. We have now moved into a mode where we are starting to recruit members and look at project submissions.
Tom Vass first mentioned the idea to me two years ago at Carolinas PDMA event. At the time, I really didn’t think much of the idea. It took several conversations for me to realize that the problem wasn’t with the concept, but rather in the articulation and execution of the concept. So we spent about two years, off and on, discussing the concept and refining how we articulated a complex sounding concept.
The Long Pitch
One of the critical questions in developing in the Guild is “why does the concept seem so complex?” The concept, in the simplest form I can come up with, goes something like this:
“Consultants, and other product design professionals, band together in a contractual organization. This aspect of the organization most closely resembles a volunteer fire department. Guild members pay quarterly dues and an initiation fee to join. Guild members are proudly displayed in the Guild directory which is available online and in a print format next year.
“Product champions submit project proposals to the guild in a structured format. The Guild evaluates each submission and picks the best submissions. The Guild looks for product concepts that are going to help launch product-driven companies. Products that combine technology from two different industries are given priority.
“Once a product concept is selected, the product champion becomes the nucleus of a seven member team. Project champions can be inventors, entrepreneurs, serial entrepreneurs, a designee from a start-up company, or a designee from an existing corporation that has a product concept that they would like to spin-off into a new company. Six of the seven team members are product development professionals. These members could come from disciplines such as industrial design, engineering, software, electronics, business management, marketing or sales.
“Projects run for six months. The goal of the project is to complete the fuzzy front end design of the product. At the start of the project, the Guild receives options for the client’s stock. These options can only be exercised upon a trigger event such as a sale or initial public offering (IPO). At the end of the project the Guild transfers a portion of those options to team members.
“Projects are structured so Guild members spend two to four hours per week on the project. The product champions (client representative) spend fifteen to twenty hours per week on the project.
“The team makes a presentation at the end of the project to selected angel investors and venture capitalists. This last step of the project is designed to help the client get funding for the next step in designing and then commercializing their product.
“The goal is to complete twenty six month projects per year (ten every six months). This would add twenty new, high-growth companies to the RTP area each year and significantly impact the local economy. This means that the efforts of approximately one hundred and twenty Guild members can help drive the future economy in the regional area for the next 10 to 20 years.”
Cutting to 30 Seconds
I am still struggling with how to present this in a 30-second elevator pitch. This is not an overly complex process when you consider the amount of work to be done. Sometimes I wonder if the previous presentation is trying to explain too much. Maybe the elevator pitch should go something like:
“The RTP Product Development Guild is a confederation of product design, and business, who work together to help local entrepreneurs and businesses commercialize their products. The Guild seeks to improve the regional economy in North Carolina by helping create now product driven companies.”
Salesmen reading this article are probably wondering why not just use the shorter version first. This is the difference between salesmen and product designers. Engineers and industrial designers often focus on how wonderful, and cool, the details are. A good salesman wants to convey just enough information to close the deal. They know that giving too much information is a possible way to talking your client out of doing business with you. The role of president of the Guild requires me to live in both worlds. This can be challenging at times. Product developers must always keep in mind that successful products find a balance between design and execution.
A Need for Consultants and Concepts
The chicken, or the egg, syndrome is alive and well at the RTP Product Development Guild. On one hand, we need a strong portfolio of consultants to attract product concept submissions. One the other hand we need strong product concepts to attract consultants. This means that there is going to be slow progress between now and the kick-off of the first project. We have spent the last month lining up product submissions and potential Guild members. The first inquiries about memberships are mostly coming from sales and marketing professionals. Another high interest area is the service providers. We have a class of Guild memberships that are designed to allow service providers to participate in the Guild without having to participate in a project team.
Another concurrent action item is to promote the Guild within the economic development community. North Carolina’s economic development community is heavily focused, and politically invested, in the mode of using massive tax incentives to bring existing companies to North Carolina. There are other efforts that focus on using the universities and community colleges as concentrators of innovation. The Guild believes that there is enough talent, dedication and ambition in the local community to create new product-driven companies. This “believe in the people” approach is counter-culture. The Guild isn’t relying on tax incentives or government grants to drive new products to market. We are relying on our members to work together and help lift new companies from the stage of “I have an idea” to the stage of “we just rented office space”.
Dreams are best pursued by the dreamer. It is hard to pursue someone else’s dream. Product champions rev up your dreams, because you now have a home.