Efficiency Meets Innovation: Decoding the Language of Product Development Success

Spending the past decade developing products and building businesses for entrepreneurs and innovators across startups, universities, and corporations, we have learned that understanding industry jargon and effectively communicating your needs to the players within the innovation ecosystem substantially helps you find the right support when needed. Thus, we have hand-picked the top 40 key jargons you need to master to bring your innovative product idea to life.

It is important to note that these jargons are not just words. They represent concepts and paradigms that provide you with a linguistic toolkit, opening doors to effective communication, confident decision-making, and seamless networking within the vibrant innovation ecosystem. This language has emerged in the dynamic world of modern business, where the need for innovation is being felt more than ever along with an urge to reduce time to market for new products and build disruptive yet resilient businesses that offer a disproportionate return on investment to investors, founders, and innovators alike.

Our mission is to empower you to introduce your technology products to the market faster and more efficiently than ever before. With that in mind, let us dive in.

A Deep Dive into Select Product Development and Commercialization Jargon

Let us imagine you want to develop a new kind of solar panel that is more efficient and affordable than the current ones in the market. Keep this picture in mind as we will come back to it throughout this article. Now, let's start with the most important word: Product!

A Product is an item created by combining various resources, components, or elements to fulfill a specific need or want in the market. It is something that is offered to customers for sale, use, or consumption, and hence it is tightly linked to the customers’ needs. A product typically serves a functional or practical purpose and provides value to its users. In a business context, products are the end result of product development efforts and are a means to generate revenue through satisfying customers' needs. In the solar panel example, the product can be a fully integrated 10 kW array of solar panels suitable for household users. You may have a 5-kW product for smaller households as well, and another 1 kW product that is plug and play suitable for portable use, say to power outdoor parties.

While products are highly customer-facing, technologies are not. Technology refers to the practical application of scientific knowledge, skills, and techniques to create tools, systems, processes, or solutions that enable the accomplishment of specific tasks or goals in a product. In essence, technology represents the know-how and expertise required to develop and implement novel solutions or methods in a product. In the example of solar panel products, the technology underpinning that product might be polycrystalline silicon, or perovskite cells, or a form of new materials that can turn sunlight into electricity.

So, Technology and Product are two different but related concepts. While products often incorporate technology, the key distinction lies in their nature and purpose. Technology is the underlying knowledge, methods, and innovations used to create products. Products, on the other hand, are the tangible outcomes or manifestations of technology, designed to address specific needs or problems. Technology provides the foundation for products, enabling their creation, functionality, and value. Technologies are a means to an end whereas products are the end goal. These two terms should not be used interchangeably.

The process of creating a new product or service, from the initial idea to the final product that is ready to be sold, is called Product Development. Product development typically spans over months or years and sometimes decades depending on the product and the target market. Many different types of skills are required to make up a successful product. It involves completely market-focused activities such as market research and product design, to very technical aspects such as manufacturing and testing and technology integration.

Innovation or Invention

Not all products are innovative, while some are. Product Innovation is the process of creating new products or services that are new to the market or that offer significant improvements over existing products or services. Product innovation may or may not include technology innovation. In the example of solar panels above, the portable solar panel product might be a product innovation, where there is literally no change to the technology.

We just talked about innovation, but how does it differ from invention? In its most practical sense, understanding what innovation is and what invention is a matter of choosing the right tools and mechanisms to protect your product and business from the ever-evolving competition. Invention is the creation of something new, while Innovation is the practical application of that invention. Inventions can be completely useless, but innovation must add value in a way that people would want to give up something (such as time, money, attention, etc.) to access it. Some say, invention is the creation of a new idea, while innovation is the process of bringing that idea to market. Inventions are typically protected through patents, but innovations are typically protected through know-hows and trade secrets.

We said products sometimes include modern technologies (at least this is the category of products we are interested in). The systematic and methodical search for a suitable existing technology that could be secured to create your ideated product is Technology Scouting. This could involve searching through scientific literature, patent registers, contacting IP (Intellectual Property) and technology reach institutes such as universities, attending trade shows, researching startup hubs, holding targeted interviews with industry leaders, reading industry publications, networking with other professionals, or more. The purpose of technology scouting is to reduce the development risk and time of a new product by leveraging from existing technologies and a body of knowledge. Sometimes IP scouting and startup scouting might also be in the scope of scouting. IP Scouting refers to finding IPs (Intellectual Property) suitable for licensing or acquisition or other commercial arrangements, and Startup Scouting refers to finding a startup suitable for partnership or acquisition or other commercial arrangements.

When doing scouting, it is important to do technical due diligence for highly promising technologies you find. Technical Due Diligence is the process of independently validating claims and the legitimacy of a promise. As such, technical due diligence (also referred to as DD) is the step before a potential partner or investor makes a major commitment towards your innovation. DD can take the form of light DD or deep DD. Light DD is when you are presented with a series of questions, and you are asked to answer those questions. At this stage, the quality of your innovation will be assessed based on the response you provide. Deep DD can involve duplicating your product, sending your product to independent labs, and many more activities to independently confirm the performance of your product or benchmark it. The level of DD that is conducted by various prospective partners largely depends on the level of investment or commitment you ask the prospective partner to make. The higher the commitment you ask for, the deeper the DD.

Let’s Talk Market

Talking about a product without a market is almost meaningless. Thus, we conduct Market Research to learn about a market before seriously deciding what product to develop. Market research is about understanding your customers and the market you are entering. This involves researching market-related information such as how much people are willing to pay for a potential product, what features are important to them, what other companies are offering that serves and solves the same problem, how many people might buy a product, who else they are buying from, and many more. The best market research is the type that is done independently of your intended product. There are many techniques to use to make sure the results of the market research are unbiased and are not skewed towards a certain outcome. There are many products that are very cool and many important problems that need solving, but do not get solved because the market is too small for them or the problems are not significant enough to make people give up something (time, money, attention, etc.) to have it resolved. That is why we call customer problems that are worthy of solving Customer Pain Points.

Once we research a market and identify a customer pain point to solve, we need to ideate a product that can solve that pain point. This process is called Product Ideation. This is the activity you undertake to ideate one or more products that might solve customer pain points you discovered during your market research. To effectively ideate a product, you need constraints. Some of those constraints can come from market research, some from business strategy, some from Intellectual Property assets you have access to (or do not have access to), existing systems the product needs to integrate with, cost considerations, and many more. It is important to be aware of constraints as you ideate. There are several techniques that can be used to manage this ideation process, such as Design Thinking.

Design Thinking is a very powerful technique and can be used across many aspects of building businesses and developing products. Design Thinking is a human-centered approach to problem-solving and innovation. It emphasizes empathy for end-users and their needs, and it often involves multiple stages: empathize, define, ideate, prototype, and test. During the ideation stage of Design Thinking, teams generate a range of ideas by considering the problem from various perspectives, challenging assumptions, and exploring unconventional solutions. This process helps to uncover insights and discover new opportunities for product development.

A strong product is not enough for market success, it must be coupled with a strong business. Venture Design is the process of designing a business, which involves designing the business structure, business model, business strategy, capital structure, and many more business-related aspects that feed into the viability of technology-based businesses. The term "Venture" refers to the inherent high-risk, high-reward nature of those businesses we are targeting here, and Venture Capital are those financial firms that offer capital (funds) to ventures in the form of investment for venture owners to build and scale their ventures. While venture capital is not the only source of funding for your venture, it is one of the better-known sources in the startup ecosystem. A fun fact is that "Venture" is a short form of "Adventure".

Let’s Talk Phases of Product Development

Not all technology products are ready for design and manufacturing. Many innovative products that are required for the sustainable growth of humanity do not exist currently. That is where Research and Development (R&D) is required. R&D is two words with two different meanings that have been combined in the Australian innovation ecosystem. Together, they loosely refer to the earlier stage of product development and often correspond to technical angles of a product rather than business and market angles. The reason they are combined is probably that a product in this phase is not capable of generating revenue for the business owners. However, they are distinctly different concepts, as described below.

Research vs Development vs Engineering vs Manufacturing

Research is the process of gathering and analyzing information to solve a problem or answer a question. It refers to the earlier stages of product development where the underlying technology hypothesis is being tested and researched. It is largely technical and lacks commercial insights or input and often follows a linear progression of technology. Organizations such as universities are well-equipped to help you with this part of product development, although many startups and innovators do this part themselves while leveraging from public sector infrastructure.

Development is the process of turning research findings into new products or services. Development is inherently a commercial activity and thus requires a good understanding of the target market, business model, target costs of manufacturing, customer behavior, manufacturing requirements, and more. Product development firms such as Scimita are best equipped to propel this phase of product development. Development requires skills in dealing with many complexities and uncertainties under financial and time constraints. Hence agility, speed, and rigor of decision-making coupled with commercial acumen have critically influenced the viability of the products they yield.

When R&D is done (or largely done), we enter the Engineering phase. Engineering is the process of designing and building later-stage and more mature technologies that are intended to operate within a narrow range of operational scenarios in a way that they are compliant with various industry-specific standards and regulations. Therefore, engineering applies more to products than technologies. Engineering itself has multiple phases such as concept, basic, front end, and detailed engineering. Engineering firms are best suited to conduct this task. Some engineering firms also offer procurement and construction services that are more relevant for bigger plants and certain industries.

After engineering, it comes to Manufacturing. Manufacturing is the process of producing products on a large scale and is the latest stage of product development. Manufacturing has different meanings depending on the industry and manufacturing volume, and depending on the industry and business strategy, different types of manufacturing arrangements are favored. For example, in the electronics industry, manufacturing can be done through Contract Manufacturing, while in the chemical industries, it is typically done through partnerships. Contract Manufacturing is essentially outsourcing the manufacturing process to another company that has substantial manufacturing assets, such as quality control systems, required standard compliance, machinery, skilled manufacturing labor, insurances, component supply chain relationships, and more.

The research, development, engineering, and manufacturing phases of a product often overlap and are iterative. For example, research findings can be used to inform development activities, and engineering designs can be modified based on manufacturing feedback. Thus, product development and scaling firms such as Scimita are ideally suitable to help you in this front because they have the experience and relationships to succinctly bring the right skills to the product development journey at the right stages.

How About Some Regulation and IP?

Before launching your product to your target market, you need to ensure your product is compliant with applicable regulations and standards. Hence the need to be on top of regulatory requirements. Regulatory Requirements are a range of requirements imposed by the government or their delegate authorities to ensure the safety, integrity, and fairness of your product. Regulatory requirements widely vary between different markets and jurisdictions. For example, in Australia, NSW's EPA is stricter than Victoria's EPA for some applications. It is critically important that you are aware of regulatory requirements that are relevant to your product. Working with product development firms that have a track record in your target market is important to minimize the risks of your products in this regard. This is probably one single angle that, if not understood early in the business strategy and product development, can have a devastating effect on the viability of your product. Remember, dealing with regulatory requirements effectively means meeting the expectations of the people who are sitting in an organization where their main job is to protect the public. So, it is an inherently subjective process. We advise, if possible, developing and launching a product in markets where minimum regulatory requirements exist (if there is an option to do so, of course).

While investing so much time and effort in building a business, it is wise to protect it from competition effectively, hence Intellectual Property Protection. This is probably one of the most important and yet least understood terms. Let me simplify it for you. IP protection is all about how you can legally slow others down in replicating your product or your business. That is it. Sometimes you can achieve this by not telling anyone how your product works (i.e., keeping it a trade secret), and other times it is by asking the government to make it illegal for others to do what you do (i.e., registering patents, design rights, trademarks, etc.). Which one is the right one for you? Good question. That is a different topic that we will write about in the future with our IP strategist partners.

Now Let’s Cover Feasibility and Scale

Now you have identified the product you want to develop, know your business strategy, selected your market, etc., how would you know you can sell that product profitably? In other words, how do you know you have a feasible product? Feasibility Economic Analysis (AKA feasibility study) is what you need to do. This analysis is about showing the feasibility of your product using a well-educated calculation of production costs on paper (or Excel) and using a range of well-considered assumptions and estimations. Hopefully, when you do that and compare your costs with your potential sales prices, you can demonstrate that you have a surplus, which means your product is potentially economically feasible, with room for some error in calculations (typically +/- 20%). The feasibility of many products depends on their production scale, with the cost of production dropping as the production scale increases (also known as the Economy of Scale). There is a misconception that if your cost of production is too high, you can bring it down with scale. This is not necessarily true, and it depends on the factors that affect the costs such as the technology that underpins your product, and market needs, and many more. What is almost certain is that a requirement to increase product scale to have a feasible product most likely means a requirement for the biggest market demand for your product and a higher pre-revenue investment you need. Smart product design, a wise choice of technology, and compatible business models can be effective remedies for this potential challenge that every innovative product faces.

At earlier stages of product development, it might not be possible to do a feasibility study. There is just not enough information to build your study on. Thus, we play with words and do a Pre-Feasibility Study. Pre-feasibility Economic Analysis is similar to feasibility economic analysis in nature, but with more assumptions and done earlier in the product development journey. The error margin here is typically +/- 40%, but it is still a very valuable activity as many lessons can be learned from it, especially if this is being done using Digital Twins. We highly recommend doing this activity as soon as possible in the product development journey. A Digital Twin is a computer model that replicates the behavior of a product reasonably well. This is the best thing you can do to accelerate the product development cycle in a risk-managed manner. Thus, we recommend using product development firms that have core skills in developing digital twins in your target industry. Scimita has such capacity in energy, materials, and circular economy industries.

A critical figure that can be the outcome of pre-feasibility and feasibility economic analysis is the Minimum Viable Scale. The Minimum Viable Scale is the minimum production scale at which your business can be cash flow positive because of sales of your product. This is a very important concept that must be considered very early on in the product development and commercialization journey. Getting this wrong can change everything in your business, and your early investors might become very unhappy with you.

A Minimum Viable Product (MVP) is a version of a product that contains the minimum set of features required to satisfy early customers and gather feedback. The primary goal of creating an MVP is to quickly launch a functional product into the market, test hypotheses, and collect user insights. This approach allows businesses to validate their product idea, gain a better understanding of customer needs, and make informed decisions about further development based on real-world usage and feedback. The design of the MVP must include key business hypotheses; otherwise, the MVP might give false positive feedback (making you think you have validated your product or business while in reality, you have not).

A Bit on Sustainability

If you are building a business or a product that relies on strong environmental promises to its customers, you need to do a Life Cycle Analysis. Life Cycle Analysis (AKA LCA) is evaluating the environmental impact of your product throughout its entire life cycle, which includes production, use, and end-of-life management, which may include recycling. In short, you would want to demonstrate that after your product is used, you have a lesser environmental footprint compared to before your product is used. For example, it does not make sense to use solar panels to produce electricity if the life cycle emissions of the solar panel from production, use, and end-of-life treatment are more than, say, a natural gas power plant. Many factors can affect this analysis, including the location where the technology is deployed and how the product is manufactured.

Sustainability and circularity analysis fall into the same category. While Sustainability Analysis objectively analyzes the economic, environmental, and social impacts of your product in a broader sense, Circularity Analysis is a way to look at the flow of materials and energy through your product. It can help businesses make their products more sustainable by reducing the use of resources and waste. Your circularity analysis could look at how much energy is used to make the product, how much waste is generated during the manufacturing process, and whether the materials used can be recycled or reused. This is a growing area of interest, and consumers are becoming more conscious about the decisions they make to increase the level of circularity they can achieve in their lifestyle.

Let’s Not Forget Commercilization and Competition

We talked a lot about products, but how about making money? This is called Commercialization. Commercialization refers to the last stage of a product's development; it is when a product is launched to its target market and the product owner receives a commercial return, monetary or otherwise. Commercialization is a relative term and may mean different things and can take different forms. For example, if you are a researcher, the commercialization of your research might mean licensing the IP you have created to another company to exploit. If you are the company who licensed that IP, commercialization for you might mean embedding that IP along with other IPs you acquired from other sources into a reliable and customized technology that you can further sell to product developers. If you are that product development firm, commercialization for you means integration of the technology you bought into a product and selling it to your target market. Thus, commercialization is complex and multifaceted in nature, and your commercialization strategy must be part of your venture design and at the forefront of your mind early on.

When you map out a market for competition, you must also map out the technology landscape. Technology Landscape refers to the overall picture of technologies, tools, platforms, and trends that are relevant within a particular industry or field. It encompasses the existing and emerging technologies, their capabilities, limitations, and potential impact. Understanding the technology landscape is essential for businesses to make informed decisions about adopting and integrating modern technologies into their products or services and to stay competitive in the market. You do not want to start developing a product that becomes obsolete by the time you have finished your development, or the market has shifted such that your product is not relevant any longer, or the competition has shifted and much better products are now in the market.

While doing technology landscaping, we recommend using TRL (Technology Readiness Level), CRL (Commercial Readiness Level), and MRL (Manufacturing Readiness Level) to map out the landscape. Technology Readiness Level (TRL) is a measure of how mature a technology is. It is a scale from 1 to 11, with 1 being the least mature and 11 being the most mature. TRL 9 represents a technology product that is available in the market. Commercial Readiness Level (CRL) is a measure of how ready your technology is to be commercialized. It is a scale from 1 to 9, with 1 being the least ready and 9 being the readiest, which is a commercialized product. Manufacturing Readiness Level (MRL) is a measure of how ready your technology is to be mass-manufactured. It is a scale from 1 to 9, with 1 being the least ready and 9 being the readiest. How to use these metrics is a whole different topic that we will address in the following articles.

We recommend you use these metrics to track your progress during your innovation journey as they will affect the way you develop, manufacture, and market your product. We will discuss these in more detail in our next article.

A thorough market analysis and technology landscaping must inform you about two other critical business metrics you should care about a lot: your technical value proposition and your commercial value proposition. The Technical Value Proposition is a statement that outlines the unique technical advantages or benefits that a product or solution offers to its users. It focuses on the specific features, functionalities, or technical capabilities that differentiate the product from its competitors and provide value to the customers. This proposition is usually aimed at technical stakeholders or decision-makers who are concerned with the technical aspects of the product. The Commercial Value Proposition is a statement that highlights the unique business benefits and value that a product or service brings to its customers. It emphasizes how the product addresses the needs and pain points of the target market, leading to improved efficiency, cost savings, revenue generation, or other tangible business outcomes. The commercial value proposition is typically aimed at business decision-makers and stakeholders who are concerned with the financial and strategic impact of the product.

Embracing the Jargons

Congratulations on completing this article. We understand that there is a lot to absorb and learn here. The terms and concepts discussed above represent just a fraction of the language used in the world of product development and commercialization, yet they are essential. As experts in product development and commercialization, mastering these terms enables us to communicate more efficiently and effectively, saving valuable time, identifying development and commercialization risks, and staying strategic and focused during the development journey.

Of course, becoming proficient in the art and science of developing new products involves much more. By mastering this language, you are refining your ability to perceive innovation opportunities, allowing you to exchange information with greater ease. This proficiency gives you a competitive advantage that transcends mere funding and resources, encompassing the strategies you employ in your innovation endeavors.

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