Step 2  –  Defining Product Requirements

After the “Bright Idea”, the next step is a “List” of product requirements attributes, and goals.  The “List” (known by many names) is really the Product Requirements Document or Engineering Specification.  Are those titles too sophisticated?  Maybe, but it’s a necessary document — as a guide for the process.  Referring back to this engineering specification will keep you on track and out of the weeds.

Below, is a collections of things to consider.  It’s long, but plow through it. It’s important.  While not all items apply to every product, consider each one.

Note:  A definitive list of requirements is not necessary to begin the process because the list will refine as you go.  However, the better the engineering specification at the beginning, the easier it is to complete the next steps — without backing up and wasting both time and money.

The Best Use Of This List

Copy these questions, and write an answer for every one.  Additionally, write down everything else that pops in your mind while you’re doing it.  The more complete the list, the more it will help later.

After making lists of product requirements you can format the information into an engineering specification.  Compile and format the new document in any way that works for you.  Just realize the new document will grow over time when you learn more, so build the document in a way that it can expand.  You will refer back to it often.

Considerations for Product Definition:

1. Who will use the product?  (Is it the end customer?)  Who will buy the product (the “real” or “buying” customer)?  Notice the very important difference.  Sometimes they are the same, yet sometimes they are not.
   
   For example, think of a widget made for a hotel.  The “buying” customer is the hotel purchasing agent.  The end user may be the staff or the hotel guest.  It does not matter what the staff wants if you can’t convince the purchasing agent to buy it.

   Understanding the customer(s), all of them, is important for success in both design and marketing.

2. What are the customer requirements?  Consider life span, product function, strength, rigidity, flexibility, product look, feel and performance.  Consider complementary products and how their changes affect your product.
   
   A widget made for use in a car, for instance, may not work in all cars and its usefulness may diminish with the next model year.
3. How much will the product cost?  It is important to know how much a customer will pay for the product because you must produce it for much less.  Typically, a product on the shelf is manufactured for 1/4 to 1/6 of the price you pay because of mark-up and margins for all the people that handle it.  Additionally, when making the requirements list, there should be a specific cost goal — like less than $5.  It is not enough to say “make it “make it as cheap as possible.“  State the specific cost goal.  (The goal may change as you learn more, but it must remain specific.)
   
   One important note with respect to cost:  Cost and price are two different things, and a good business plan will make the most of price without regard to cost.  The discussion above is specifically to make sure your cost (& appropriate markups) align with your customers desire to purchase.
4. How many widgets do you expect to sell, and in what time frame?  The quantity drastically affects both the cost of the product, and the processes to make it.
   
   Quantity is King with respect to cost.  Almost always, the more you make, the cheaper each piece is.
5. How will the product be sold?  At Walmart?  Or through a distributor?  In Magazines?  Or through TV advertisement?  Is it complete for the customer?  Or will the customer assemble it?  How is it packaged?  All these things affect both the cost and the design in many ways.
6. What is the timing?  Some products are time sensitive.
   
   A toy, for instance, is on the shelf in October to sell for Christmas.  Summer seasonal items have a specific shelf time.
7. What is the expected life of the product?  Will this product sell successfully for many years?  Or will it sell like wildfire for just one season?
8. How is the item marketed?  Items to consider include:  Presentation, Weight, Packaging, Shipping, Colors, Sizes, etc..
9. Usability — often forgotten — includes how the product interacts with those who use it.  There is a whole field of Human Factors or Industrial Design that deals with how products interface with humans.
   
   You have probably purchased things that fail the “Intuitive Test” (my words for “Can I figure out how it works?”).  Those are the things people complain about, and you don’t want that.  This is big for software and website design, but it’s also important for gadgets, toys, and anything else a human interacts with.
10. What is the expected use? — and perhaps more important, what is the expected misuse or abuse?  How can the product be made to accommodate these expected situations?
11. What product safety issues are relevant?  Are there safety concerns with misuse?  In what ways is it possible for the product to fail?  And what are the consequences?
    
    This area of study is FMEA or Failure Mode and Effects Analysis.  All potential failure modes MUST be considered carefully — and documented — especially in our demented, sue-happy society.

    This discussion on product safety leads to additional questions like — What kinds of Product Liability Insurance will you need?  Take some time and think through these issues.

12. What are the hard points of the “Bright Idea”?  Identify the points that cannot change?  What areas can change (if you need) to better meet other, more important requirements?  Product Design and Engineering are “The arts of trade-off’s”.  Give a little here, take a little there as a balance in optimizing the product requirements.
    
    For example, gold is the best electrical conductor, but the price of gold usually does not fit in cost requirements.  The trade-off is to use a different material that also conducts well, but costs much less.
13. Will the product have a warranty?  If so, what will it cover and how will you handle claims?
14. Are there governmental regulations or certification requirements?  This will depend on the product and how (or where) it is sold.  The industry may dictate this.  Consider certifications like CE or UL (or some other).  OR, certain standards like ANSI.  Look carefully into what or who governs the use of the product.
15. Are there legal concerns like patent infringement, or intellectual liability issues?
    
    Note:  If you see that your product will have legal concerns, address them up front, and carefully document what you do about it.  Get professional help where necessary.  Inventors often look at patents, but not at risks or exposure.  Don’t let it stop you, just do the homework.
16. Will the product have social concerns like disposability or recyclability?
17. Give thought to manufacturing issues like cost, time, material, size, weight, complexity, manufacturing location, etc..  Government regulations may limit these choices — like material properties.  (These issues are addressed in depth in the design process, but a good feel for what is expected up front is helpful and should be in your engineering specification.)
18. Where will the product be made?  Though this question really should not be answered prior to looking at things like “how many” and “what processes”, please identify how you feel about ON SHORE and OFF SHORE manufacturing.  Knowing how you feel about different areas of the world such as Mexico, Indonesia or China is important.
    
    Note:  There is a trend in recent years (especially in the USA) to farm out all sorts of manufacturing to low cost producers of the world such as Mexico or China.  Some companies do this quite successfully, others struggle.  It is our experience that manufacturing overseas requires a lot of hand-holding and the extra costs to do so are very often forgotten.  More about this in Step 6 – Production later.

Concluding Thoughts . . .

The Product Requirements stage of the process is often skipped or skimped early on.  It’s a mistake that may result in delays, backing up, higher cost and a longer time to completion.  Make a good document, then refer back to it often to avoid redoing or missing things.

From a Product Development standpoint, defining “requirements” is one of the most important steps.  It happens, one way or another, like it or not — on purpose, or by accident — before the product launches.  The way you do it, and when you do it will certainly influence the final outcome.

My suggestion?  Do it early, as complete as possible, then revise as necessary.  Yes, it will take time in the beginning, yet it will streamline your processes and save headaches later.

Finally, having a proper engineering specification in hand is the best way to document your design if your intentions are to sell, license or patent the end product.  It’s also a great way to show potential investors that you know the product requirements and therefore know what you’re doing and where you’re going.

Next Up:  Step 3  –  Info & Planning