Why is it important to develop prototypes as a small business?

Hey everyone, my name is Ian Peterman. I'm CEO and founder of Peterman Design Firm, and on today's episode, I want to talk to you about why developing prototypes as a small business is so important. Now, before I jump into those, every product should be prototyped. This isn't just about small businesses. Big companies need to do it. Everyone that's launching a product should be prototyping their product. It's part of the creative process and it's part of how you are able to launch successful products and really avoid some easy-to-fall-into pitfalls that without a prototype, you're not gonna be able to see. And so I just wanna make sure that it's clear up front, Everyone, if you're not a small business, still you should be doing this. You should still watch this while— and these things will still apply to you. But it is especially important to small businesses because you can't afford to not do it. It's gonna cost you. You don't have the money typically or the time to waste on products that aren't prototyped. So the first thing I want to talk about is idea validation. Validating your idea is really important. You know, big company, you definitely have to validate the idea. You have different stakeholders that are going to want to know that the product idea is valid, it will work, it's needed, things like that. But when you're a startup, if you don't validate your idea as something that's possible, something that you can do, that is going to be something you're able to actually implement and launch, it can be company-killing. Big company, you have a budget, you're— they, you know, big companies launch multiple products, and the number of ideas that get started are large, and the ones that actually make it get launched, and, and you see those What you don't see behind the scenes is all of the ideas that go through a validation process and are killed immediately because they're not something that is going to work or doesn't match the company, what the company is trying to do, you know, its brand, or it doesn't even match its customers necessarily. And so as a startup, you have to do this because it is the difference between your company success— being successful, launching a product that is successful and you wasting all of your time and your beginning life as a small business on something that is not going to produce the results that you actually are looking for. And this is why when I work with clients, I always, always recommend going through a feasibility and roadmapping process with us because it allows us to be able to look at a product and say, yeah, it's valid. Yes, it can be done, and here's what we should be aware of. The next thing that is a reason that— the next reason that it's so important to develop a prototype as a small business is user testing. If you're a small business, you probably don't have a huge amount of product, and so you have to be able to test your product against users, because you probably haven't launched 5 products really similar to this already. It's not likely your first, you know, your third product in a family. You want to have that user testing, and user testing is going to tell you, does it do what it's supposed to do? Do your customers, especially if you use user testing through your own customers, it'll tell you, do your customers that you currently have care about it? Does it help them? That user testing is going to also give you a wealth of information that everyone else goes after, right? But bigger companies, they can skip some of the user testing or they can invest a lot of money into really intricate and detailed user testing processes. You don't need to do that. You just need to get some user testing, get it in front of people, get their feedback, you know, use NDAs if you need to get people to come in and look at it. Don't worry, big companies do that all the time. That's how, that's how they get feedback. I've been some, some of the people that have been pulled in to test, you know, in big companies, they, they bring in more expert-level people a lot of times, but they also bring in the average user. So get that feedback, get feedback from users on your product because it will allow you to develop a product that is better fitting to your exact customers and will make sure that your users are really happy with that product because you don't have this big bandwidth to survive a bad launch. You want to make sure that your product fits your user perfectly. The next reason that is really important for developing prototypes for a small business is if you're looking to get funding, it is far easier to get funding if you have a prototype than than if you don't. Granted, you can always go after angel funding, and there's definitely people out there that put money into companies that are at the idea stage. Maybe the idea has been validated but not prototype stage. But developing a prototype is really something— it allows you to put something tangible, especially in the physical product world, being able to put the physical model of the product in the hands of a potential investor, even better, a fully functioning one, will let that investor actually experience your product. And, you know, whether you're getting funding through traditional means, you know, venture capital or angel or anybody else like that, or whether you're getting funding through your friends, family, you can hand them a prototype they're going to see it. They're gonna be able to see the product, experience the product, and connect better with it. And people that understand a product are gonna be more likely to invest in it. People don't typically invest in things that they don't understand or know. And so you're able to bridge that gap really quickly by having a prototype. Next thing I wanna talk about is it is required for crowdfunding. Even if the platform says that they'll allow you to put up a product that's not fully prototyped, don't do it. You need to have a prototype for crowdfunding. So if you're a small business and you're looking at crowdfunding as an option, prototyping is an absolute must for you. You have to develop prototypes, ideally multiple prototypes, finished prototypes, fully functional prototypes, so that will give you the actual device, the actual product that you can show and you can make videos of, you can do photographs of, you can show that it actually works, and that will make it so your crowdfunding campaign is far more successful than if you had nothing to show. The last thing I want to talk about that can be a huge benefit of having a prototype is presales. So granted, crowdfunding is technically a type of presales, but in the land before there was crowdfunding, and even today, you can do that by going to shows and conventions and getting demo models in front of people and having events, having pop-up events. And while I know we're still in the middle of a pandemic and things haven't completely kind of gone back to normal, Eventually people will want to do those kinds of events and those things will open up again. And by having a fully functional prototype that you can show people, you can get people to agree to presell. They'll put down a certain payment. They'll, you know, put down a partial payment or they'll pay in full. You can also get presales with businesses. So that means you can get your product in front of a company and say, here's my prototype, here's the product, this is what it's going to look like inside the packaging, here's a prototype of the packaging. Will you agree to purchase, place a PO if these are able to be delivered per these specs? Will you write a PO saying that you will pay for these products and you'll buy X number? And that kind of presale where you actually have a company write a PO and say, we will order X number at this cost. Those are— that's so valuable, you can take those and get loans from banks against those because those are guaranteed purchases. They're signed, you know, it's a PO, it's been signed, it's been approved. It just has a future date and maybe some stipulations of, you know, devices have to have these features, it has to be, you know, within these requirements. So they might have some product specifications attached to it, but you can go get that, and that will allow you to get funding to produce the product. And as a small business, being able to have that as a resource can be a huge benefit and be able to put you in a place where you're actually able to go into production quicker, or you're able to produce more and be able to take advantage of some discounted rates by doing a higher volume. And so actually be able to increase your own profit margin by getting those pre-sales, especially the ones that are written from a company that you can show is, you know, this is, this is real. I have sales. People actually want this. This isn't just me looking at it and saying, oh, this is great. Let's, let's have you go into production and give me a loan to be able to produce these. And it also gives you peace of mind as a small business, which is something every small business could use more of in knowing that I have people who actually wanna buy this product. I'm not just producing it to hope that someone is going to buy it or hope that my marketing's good enough for people to find it. I have presales and this is really happening. So hopefully this has given you some really key insights into why it's so important small businesses develop prototypes and large businesses need to do this as well. But as a small business, you really wanna make sure that this is put together and you have the right prototypes so that you can be as successful as possible. Hey, thanks for watching. We really appreciate our viewers. And if you haven't subscribed yet, please do subscribe to our channel so you can get more great videos like this in your feed. And like the video. If you want to learn more about the Peterman Design Firm, please check us out on our website, petermanfirm.com. You'll find link and information in the description. And of course, we're on all social media as well, so check us out there. All right, thank you. Thank you.