Why is time to market so important, and how does it impact profitability?
Electronic products need to be on the market at the right time to maximize profits. Just think about it. If the product launches too soon, the consumers are not ready; if the product launches too late, it becomes outdated. What's more, if you wait too long to create the best product and your target users are happy with another product, it doesn't matter anymore.
This timing, known as the optimal market window, is the perfect time to launch a product, sell more, and maximize profits. Your product sales curve will gradually rise, reach a maximum, and slowly decline until the trend ends. If you start too late, it will translate into lower unit margins and higher NRE costs, but it could also be detrimental to your brand reputation. Furthermore, your sales will never peak optimally. On the other hand, if you start too early, you may never reach your target audience.
A good example is Microsoft’s SPOT Watch, the first smartwatch to send users weather and traffic alerts. The company launched the product in 2004, but production stopped in 2008 because the public was not ready for such technology.
However, the Apple Watch Series 1 launched in 2018 was an instant success due to the public's broad adoption of connected devices.
Reducing time to market impacts profitability by:
- Reducing costs - less time and resources spent producing your product translates into lower production costs, increasing your product's profitability.
- Increasing revenue - reducing the time needed to get your product onto the market means reducing the time required to bring in revenue, which translates into increased revenue capability.
- Increasing the potential market share - if customers do not have other solutions to choose from, the possible market share your company can reach is higher.
That is why the time to market is an important aspect to focus on to make the best use of opportunities regarding your product. This helps your company gain a foothold in the market.
5 tips to reduce time to market
As important as reducing time to market is, this aspect links to other critical elements regarding your product's market release, such as launching a product that performs as expected and ensuring it continues to do so after updates and modifications.
There are countless examples of products that did not perform as expected after their market release or after their first update due to software flaws, causing billions of dollars in loss for the manufacturing companies and sometimes even casualties.
When considering reducing your product's time to market, it is paramount to consider the stated aspects to continue increasing your revenues even after its first update.
Keeping all these in mind, read on to discover 5 tips to improve your product's time to market.
1. Use the right skill sets to test equipment prototypes.
When preparing to launch a product with novel technology, you must be ready for the unique challenges ahead: scarce public documentation, information privacy issues, and the rare skill sets needed for prototype quality assurance.
The rare skill sets needed for testing prototypes with novel technology imply that engineers involved must have a solid professional background, technical skills gained through experience, and the curiosity and passion for looking beyond what is required and approaching the prototype from an entirely new angle.
Such skills develop over the years, possibly decades, so the obvious choice, in this case, is to hire an external team of engineers to act as a natural extension to your development teams.
The upside is that such a team offers a unique approach since its members are not affected by "product fatigue."
At this stage of the process, it is also essential to focus on your product's novel technology and on the fact that all the testing should be privacy compliant.
We cannot stress enough how important it is to collaborate with a team with expertise in creating secured testing environments that assure your prototype's technology's complete privacy. Attention to this aspect helps you avoid a scenario such as the 2020 Zoom App security breach, when more than 500.000 account credentials were made available in dark web forums, either for free or for as little as 1 penny.
2. Make use of QA and conformance testing before launch.
You should always conduct quality assurance activities during production and after to ensure the product you designed and manufactured performs according to requirements. The QA team members must be expert engineers on all levels, such as performance, stress, regression, and conformance.
There are relevant examples of cases in which poor-quality assurance affected a product’s performance after its market release. One such example is related to iPhones - its users discovered in 2015 a bug that prevented the device from functioning normally, activated by sending a specific sequence of Unicode symbols and characters as a text.
QA and conformance testing before launch also prevents bugs such as the one that allowed people to tap into Zoom and Webex video meetings uninvited because a password did not protect the meetings.
If there is no in-house QA team, hiring an external team of engineers with the right skill set to test your product is the most efficient way of making sure you reduce time to market.
3. Follow an Agile development & testing process.
More and more businesses adopt the Agile methodology to improve their internal processes and delivery to their clients. Agile is not just a new buzzword but a revolutionary method that presents a variety of benefits:
- Improves time to market for products and services
- Enables live client feedback and its implementation, which translates into meeting client's needs accordingly and better quality for the product/service
- Improves customer satisfaction
- Drives higher productivity
- Improves communication with the client
In addition to these aspects, the Agile methodology also enables different teams to work better together. For example, teams found in different time zones, in other cities, or between partners.
Our experience with Agile allowed our teams of engineers to remain flexible and adaptable, able to implement feedback on the go to meet clients' requirements in the pre-set work schedule.
4. Make use of automation where possible.
The Deloitte Tech trends 2022 report revealed that 74% of IT and engineering leaders consider that automation helped them and their teams work more efficiently. Furthermore, 59% of respondents reported that they had reduced costs by up to 30% in groups engaged in process automation.
The report underlines how automation helps increase quality, and security, while reducing time to market, making it clear why 95% of the interviewed experts prioritize process automation.
One relevant example of how automation done right can reduce costs and improve workflows is Swedish Bank SEB’s virtual assistant. While in 30% of the cases the virtual assistant turns a ticket over to a human customer service representative, it is programmed to take this chance to learn and improve to assist customers in similar issues in the future.
5. Outsource to improve time to market and save costs.
In our experience of working with electronic equipment manufacturing companies, we have learned that they face a series of challenges that affect their products' time to market. One of these challenges is the lack of internal testing equipment services.
However, contracting a remote team rather than going through the hiring process will help drastically reduce time to market. And the explanation is simple: manufacturers do not have the necessary time to hire, train and nurture QA engineers with the right skill set for the requirements.
Creating an ecosystem of reliable supporting partners that can assist in rolling out innovations can speed up your product launch while ensuring it performs as expected.
A company's success depends on its capacity to reduce the time for new, innovative technologies. Time to market is a critical element in connecting consumers to your product as soon as possible to make sure you have the edge over competitors.