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New product development research on applied tools and practices has typically
been associated with large, well-established firms, not start-up companies. In
this paper, we describe a simplified new product development process for new
ventures and detail its application to a consumer product over a two-year period.
The process illustrates how established firm NPD practices such as phase gates
and market planning can be successfully adopted by early-stage firms and
highlights practices that are critical to project success. The case also illustrates
that virtual team communication, CAD efficiency, and physical prototype
iteration are key drivers in the race towards successful commercialization.
Ó 2009 Elsevier Ltd. All rights reserved.
N
ew product development (NPD) is the set of activities that begins
with the perception of a market opportunity and ends with the pro-
duction, sale, and delivery of a product (Ulrich and Eppinger, 2004).
Successfully launching new products gets more difficult every year. Since the
1990s, the number of new consumer products hitting the shelves has skyrock-
eted by 59% (Schneider, 2002). Taking the amount of resources companies
spend on NPD and the short lifecycles into consideration, NPD is a very risky
proposition. Products typically have about six months to prove themselves in
the marketplace (Schneider, 2002), and in a recent study, the Product Devel-
opment and Management Association found that nearly 40% of all new prod-
ucts and services ultimately fail (Adams, 2004).
NPD is a risk for established firms but is even more so for early-stage firms with-
Corresponding author: out the resources to withstand a product launch failure. An early-stage firm can
Tucker J. Marion be defined as a business or organization that is newly created and begins to
t.marion@neu.edu operate.1 According to the U.S. Small Business Administration (SBA), firms
www.elsevier.com/locate/destud
0142-694X $ - see front matter Design Studies 30 (2009) 561e587
doi:10.1016/j.destud.2009.02.001 561
Ó 2009 Elsevier Ltd. All rights reserved.
with fewer than 100 employees are known to comprise more than 98% of all
businesses in the United States. The hallmark of new firms is innovative prod-
ucts or services, but unfortunately most do not sustain themselves long-term.
According to Census Bureau data, approximately 50% of new firms do not
survive past four years (Headd, 2003). Data suggest that effective management
of the development of new products in such firms is no less important e and
perhaps more so e than for mature corporations, given historically high
product and firm-level failure rates (Headd, 2003; Adams, 2004; Song et al.,
2008). In new firms, the successful launch and commercialization of the first
product have been shown to be critical to survival (Schoonhoven et al.,
1990). The NPD process is arguably the most important dynamic capability
within a firm (Nelson, 1991). Unfortunately, research relating NPD practices
and product design methods to new ventures is sparse.
In the next section we review related work involving NPD in new ventures and
introduce a simplified NPD process for use in the early-stage environment.
The process is simple and straightforward and can be tailored to meet the
needs of specific start-ups. The process focuses on step-by-step adoption of
practices and tools throughout the product development process, inserting
management decision points where appropriate. In order to illustrate the pro-
cess, the authors applied the method ethnographically during the two-year de-
velopment of a new consumer product e a desktop stapler. The results are
discussed with regards to the application of NPD practices, related engineering
tools, and key project drivers that surfaced during development. Finally, we
close with remarks about the simplified NPD process and outline areas of
further research.
However, are these NPD practices applicable to new ventures? We argue that
since early-stage firms developing physical products are short on resources,
need to commercialize quickly, and generate positive cash flow, they will
need to be efficient in their development process and adoption of NPD prac-
tices. We argue that intelligent deployment of NPD practices is paramount
Though early-stage firms have unique characteristics in that they are less ma-
ture and resource constrained e they do in fact experience similar develop-
ment needs throughout the development project as established firms,
pointing to the importance of NPD practices. A project can be defined as
a unique set of tasks with a beginning, an end, and a well-defined outcome
(PMI Standards Committee, 1996; Loch et al., 2008). A start-up is in essence
a project, which starts with an entrepreneur’s idea, obtains funding, follows on
agreed milestones, and ends through ongoing operations, closure, or a liquid
event such as an initial public offering (IPO) or company acquisition (Loch
et al., 2008). Given that a start-up is a development project, it will go through
a series of steps from idea to commercialization. Most likely, the start-up will
need a team of experienced people to guide the project from idea to commer-
cialization. During the project, there will be a need to manage the project in
a certain fashion, ensuring goals and milestones are met. The new venture
will need to understand, or try to predict the market and customer needs
where possible. The product will need to be appealing, both aesthetically
and in ease-of-use. If the business is going to be sustainable, a series of product
offerings will need to be introduced overtime, most likely leveraging the firm’s
core technology and R&D into a series of platform-based products. Finally,
the project will need to be financially managed to ensure positive product mar-
gins and measured cash flow during development and after launch.
Within each phase, the activities required to complete that phase (e.g., mar-
ket segmentation) are listed as individual steps e 15 in all e where each step
has a deliverable attached to it such as the development of a market segmen-
tation grid or industrial design concepts. There are several aspects of NPDES
that are differentiated from Cooper’s fast-track and other generic processes
(Ulrich and Eppinger, 2004). First, this process seeks to provide early-stage
firms, in a simple and straightforward manner, access to the widely re-
searched methods and tools that are typical of NPD within established firms.
Cooper’s fast-track was designed for low complexity projects, not new ven-
tures. Another difference is that this process can be easily truncated to elim-
inate steps that are not required given a certain start-up’s environment,
product, and level of experience. For example, a simple consumer product
may focus more on market research and industrial design and eliminate steps
such as implementation of detailed design tools. Finally and most impor-
tantly, the process denotes definitive actions and deliverables at each step,
as opposed to generic processes that call-out ‘product design’ without suc-
cinctly outlining what should be completed during the Product Design phase.
This provides the entrepreneurial team with a step-by-step guide throughout
the process. In the next section, each step and case study application are re-
viewed in detail.
the success of their initial stapler, the 2e15 sheet capacity 1000 model. Given
the inventor’s limited resources, they decided to contract outside design firms
for the first time. One of their desired line extensions was a high-capacity sta-
pler that could handle 100þ sheets of standard office paper. In developing this
product, PaperPro contracted a product development firm located outside of
Philadelphia, PA near their headquarters. During the initial design phases, the
core team would meet weekly, and communicate daily using electronic mail
(e-mail). This new product, internally code named the 3000 stapler, was devel-
oped using the NPDES process from project kick-off until manufacturing
tooling was completed.
Step 1 e Formulate Product Idea (April 2005, external project cost to date:
$8560 (initial deposit)): The initial idea for the 3000 stapler was for an
Step 3 e Define the Product (April 2005, external project cost to date: $8560
(initial deposit)): As mentioned in Step 1, the project started out as the
2100 executive model. The mission of the product was to be (1) priced compet-
itively, (2) look high quality, (3) have a PaperPro family resemblance, (4) be
recognizable as a stapler, and (5) have superior functionality. The 2100 was
planned to be a line extension of the existing high-capacity 60-sheet stapler
(the 2000 model). The 2100 would ideally use the same or similar internal com-
ponents, with a different cast metal exterior. It was estimated that the sheet ca-
pacity due to the stiffer housing would increase capacity to well over 70 sheets.
Concomitantly, initial product planning was being performed on a larger
100þ sheet platform, internally called the 3000. Since 100 sheets would neces-
sitate a different staple, sheet capacity tests commenced using the 2000 stapler
as the base platform.
Step 4 e Perform Market Research (April 2005, external project cost to date:
$8800): Competitive analysis and benchmarking were performed early in the
Decision Gate 1 (end of April 2005, external project cost to date: $9800): One of
the main criteria discussed during Decision Gate 1 was whether or not a rapid
firing mechanical stapler would be able to penetrate 100þ sheets. There are
120-sheet staplers on the market, but these all require 35þ pounds (15.9 kg)
of force, which is applied slowly to press a staple through the sheets. Since
the PaperPro mechanism ‘fires’ the staple into the paper, there was concern
that this could become a ballistics problem, and at the beginning of the project
it was unclear if the leg of an ordinary staple could sustain such an impact.
During the initial project phases, the existing 2000 stapler was tested with var-
ious types of staples (e.g., some with longer legs, others with thicker gage
steels). The test results were promising. In testing the 2000 model stapler
with a high-capacity staple, the stapler penetrated all 100 sheets and did not
deform during penetration. This testing proved that it was possible to rapid
fire a staple into 100 sheets of paper.
Also during this decision gate review with management, the possibility of co-de-
veloping two similar products was discussed. Very preliminary industrial design
concepts were presented to the CEO and the PaperPro development team. One
of the concepts e a ‘heritage’ looking model (see Figure 6) that was designed to
be a larger, more substantial version of the existing design themes e captured
the CEO’s attention. He made an executive decision to immediately stop devel-
opment of the 2100 model and concentrate all resources to develop only the
100-sheet 3000 model.
Step 7 e Develop Customer Needs (end of April 2005, external project cost to
date: $9800): Once project direction was resolved and preliminary testing
Quality Function Deployment (QFD), focus groups, surveys, and customer in-
terviews were not performed due to constraints in resources: money, time, and
personnel.
Step 8 e Implement Design Tools (May 2005, external project cost to date:
$10 800): As a basis for product design, PaperPro stipulated that all CAD
be performed using the latest SolidWorks revision level, which was the 2005
and 2006 versions during development. All team members were required to up-
grade to the same software revision level. Next, a file-transfer-protocol (FTP)
site was established, with password access for all team members. All CAD files
for the 3000 were stored on this site, with file revisions being categorized by
date. Several design tools and methods were used during the project, including:
The tools are described in more detail as part of the discussion of Step 11.
Step 9 e Ideate Concepts with Industrial Design (May 2005, external project cost
to date: $11 800): Industrial design was used extensively during the project. In-
dustrial design intensity has been shown to have a positive impact on corporate
performance (Gemser and Leenders, 2001). Veryzer (2005) noted that involv-
ing industrial designers earlier in the development process can result in designs
that are more innovative, better thought out, and more complete. At this step in
the project, after the CEO decided on the ‘Heritage’ design, the development
Step 10 e Select Concepts (May 2005, external project cost to date: $12 000):
This step can include a formal concept selection matrix, as proposed by Ulrich
and Eppinger (2004) for instance, or based on tools such as QFD (Step 7) and
the resulting analysis of customer needs and product attribute ratings. For the
3000, at a development team meeting in early May 2005, PaperPro’s manage-
ment picked the Heritage Uber Fusion Curves design (bottom left in Figure 8)
as the overall ‘design guide.’ Industrial design would again be performed during
Step 11 to modify the shape for production. In terms of engineering, as a result
of the positive testing results from the 2000 60-sheet stapler, the development
team decided that the existing mechanism could be reused yet scaled to handle
100þ sheets. It was reasoned that this would be a less risky approach as the ex-
isting mechanism was already in use on the 2000 and had proven reliable.
Moreover, the existing architecture was covered by PaperPro’s IP. Meetings
were held in mid-May 2005 on the appropriate scaling (see Figure 9). The de-
velopment team decided that the best scale size would be 10.1000 (25.7 cm) by
5.8700 (14.9 cm) (the second expanded silhouette) in Figure 9 e the existing 2000
is the smallest silhouette (8.6000 (21.8 cm) by 5.0000 (12.7 cm)).
Step 11 e Initiate Detailed Product Design (May through July 2005, external
project cost to date: $32 000): Product design began in earnest at the end of
May 2005. As a starting point, the new 3000 model was based on the existing
2000 CAD models, and all components (e.g., base, handle, and housing) were
scaled to the agreed upon dimensions. Critical to the function of the stapler is
the main power spring, which is a pre-loaded leaf spring that undergoes defor-
mation via a handle-actuated lever. At its maximum rise, the lever releases the
main power spring, which drives a striker into the staple and through the pa-
per. The main power spring is shown in Figure 10 as the curved (red) horizon-
tal line. The other major components e lever, handle, main power spring, and
striker e are shown in Figure 11.
A first step in scaling the 2000 was to quantify the output force of the main
power spring. As a control, the power spring in the 2000 was analyzed using
COSMOS finite element analysis (FEA). The CAD model of the spring was
then thickened to gauge the impact on the FEA output force result. Concur-
rently, the force required to staple 100 sheets of paper was investigated using
existing staplers and results from FEA, with the hope of being able to quantify
the amount of spring force needed. A spring force curve was then developed,
which is shown in Figure 12. Based on this graph and the FEA testing, an ini-
tial series of spring shapes and thicknesses were designed.
The lever and striker were investigated next for their robustness and scaled
appropriately. This included lengthening and strengthening the lever and
adding material to the striker. The revised 3000 CAD model was completed
in July 2005. A comparison between the 2000 and 3000 designs is shown in
Figure 13.
After the initial design and analysis were completed, a design review was held
in early August, and prototypes were subsequently manufactured in China.
These included stereolithography (SLA) parts and stamped components
made exactly to CAD specifications. It took approximately four weeks to re-
ceive the prototypes, and testing commenced in September 2005 on the initial
prototypes. The initial prototype housing was a clear plastic SLA (in order to
see the mechanism in action and verify component geometry). As expected, the
SLA housings began to fail after several firings due to the high internal forces.
However, at this time 80þ sheets were stapled, verifying the use of a new
heavy-duty staple, the 23e13 (longer staple legs for 100 sheets and a thicker
wire gage). After a day of testing, the design team decided to begin CNC ma-
chining a bronze housing to simulate the structure of the production unit, as it
would utilize a cast zinc housing. The CNC-machined housing was received
two weeks later in October 2005. Unfortunately, the unit was not dimension-
ally correct and had to be machined again locally. In mid-November, testing
began on the improved bronze housing model.
A Goodman fatigue analysis was performed to determine that the striker was
insufficient to handle the required stresses. A full team project meeting was
held in November to review the testing and next steps, which included:
(1) redesigning the striker thickness to be double that of the existing version
(the Goodman analysis showed this to be well within the expected lifecycle
range),
(2) increase the main power spring force by 10%,
(3) study and modify the handle and lever to reduce effort,
After completing the analyses, the CAD model was modified to reflect the de-
sign changes. The rapid prototypes were completed in January 2006. As with
the bronze housing, the zinc-casting prototype had to be post-machined locally
to meet specifications. Testing on the 3rd round was completed by the end of
January 2006, and subsequent revisions based on this testing are detailed in
Figure 15. The improved double thick striker did not fail, and 93 sheets were
successfully stapled. The handle force was now at 17 pounds (7.7 kg).
Based on prototype testing and review of the CAD models by the PaperPro
development team, it was decided to clean up any additional issues with the
design and finalize it for the hand-off for tooling construction. A final, 4th ma-
chined housing was constructed in China for testing during tooling
construction.
Decision Gate 2 (March 2006, external project cost to date: $48 000): In early
March 2006, a management review was held before initiating tooling for the
3000. The team felt that additional time and cost developing and testing
non-production level prototypes were not advancing the project and that rapid
advancement would instead come by tweaking samples from production tool-
ing. Hence, the project moved forward to Final Design and Launch.
Step 13 e Define and Refine Product Specifications (May 2006, external project
cost to date: $49 000): The functional specifications of the finished product
were unchanged from the initial list of customer needs (see Figure 7). These
targets remained constant and were a challenge throughout development, par-
ticularly the cycle life of the striker. For each individual part; material, finish,
and color specifications were developed and input into the CAD model. In
support of the CAD models and associated Bill-of-Material (BOM) informa-
tion, PaperPro’s manufacturer was given dimensioned drawings to be used as
a guide during tooling construction and debugging.
Step 14 e Finalize Design (May through June 2006, external project cost to
date: $52 000): As a result of tooling samples, the design continued to be re-
fined throughout the remainder of 2006. An example of feedback between
Step 15 e Initiate Tooling Development and Prepare for Launch (June 2006,
project cost to date: $54 000): By early 2007, small tweaks were being made
to the production tooling. An Excel-based issue list (including both design
and manufacturing issues) was used to track manufacturing tooling issues
by PaperPro’s development team. Denoted in the issue list was a description
of the issue, potential solution, and features that would be changed in the con-
trol SolidWorks file (CAD model).
The main design issue at the time of tooling debugging was striker failure,
which was failing at approximately 3000 cycles, well below specification.
The contracted design team was asked for input to resolve the issue in January
2007, and they recommended their original double thickness striker as origi-
nally designed before cost engineering (Step 12) necessitated a redesign.
Some modifications were made to the design to improve stress concentrations
that improved life to approximately 5000 cycles, and PaperPro management
decided this was sufficient due to the lower projected usage of the 3000 model
versus lower capacity staplers such as the 1000. Lifecycle and jamming testing
was performed extensively in the spring and summer of 2007 to verify function
before launch. During this period, pre-production units were given to sales
representatives in the U.S. and Europe. The 3000, officially named the Paper-
Pro StackMaster, reached production in the third quarter of 2007 and is now
sold worldwide. A photo of a production unit is shown in Figure 17.
The 3000 project took 14 months from inception until tooling was initiated.
This included three rounds of prototype construction and testing. During
The total cost of development, including PaperPro’s internal resources was ap-
proximately $125 000. The cost of high-volume injection molded tooling was
approximately $120 000. A graph of project costs by month is shown in Fig-
ure 18, highlighting the three major rounds of testing and design modification.
Note that the spikes in project development costs are directly related to CAD
engineering hours, which were the largest project cost. A breakdown of the
outside engineering firm project costs is shown in Figure 19 (not including Pa-
perPro’s internal person-hours). As seen, CAD accounted for the majority of
the person-hours on the project; the second largest expense was the creation of
US-based prototypes. All Chinese prototypes were created by the manufac-
turer at no cost to PaperPro.
4 Discussion
In this paper, we examined the application of a simplified NPD process for
early-stage firms termed NPDES. The process consists of three phases, fifteen
steps, and two decision gates. In order to simplify and tailor the process for
new ventures, the number of gates was limited and emphasis was put on up-
front planning, industrial design, concept development, and the use of design
tools. The impetus for the design of this NPD process was simplicity and
straightforwardness for easy application within the often chaotic start-up en-
vironment. As such, the layout of the NPDES intentionally does not include
aspects of concurrent processes and spiral development; however, it should
be noted that some of the steps did, in fact, occur concurrently. In future work,
variations of the NPDES process may include concurrent steps in the hope of
reducing development duration further.
The simplicity of the process facilitated its acceptance at PaperPro while giving
them a step-by-step guide to follow and review in management meetings. A
critical aspect of the NPDES process was the two decision gates. These helped
shape the project significantly, including focusing only on the 3000 model in
Gate 1 and optimizing the design based on cost constraints in Gate 2. The pro-
cess also delayed heavy expenditures on detailed design until after the concept
and functionality were properly vetted. However, new venture management
and design teams should be cautious in the implementation of onerous proce-
dures, as research has argued that rigorous stage-gate processes can hurt the
performance of novel new products (Sethi and Iqbal, 2008). NPDES seeks to
foster a proper balance between process flexibility and discipline.
The NPDES process allowed PaperPro to integrate core NPD practices in a log-
ical fashion, including an emphasis on pre-development market planning, the
application of industrial design, and a focus on cost engineering. The use of the
market segmentation grid and competitive research allowed PaperPro to visu-
alize its entire product strategy versus the competition, and direct future in-
vestment decisions therein. Industrial design pushed them to explore many
design alternatives before selecting their top concept. Additionally, several
of the design elements explored would be featured on future product variants.
The use of cost modeling and analysis during the process helped guide deci-
sions and material choices. Given the high percentage of costs determined dur-
ing the early stages of design, it is imperative that firms track and base
development decisions on these product and set-up costs. Evaluating produc-
tion costs during development can provide the engineer with good design
guidelines during the decision making process, particularly when these are
linked to a set of production activities (Bras and Emblemsvag, 1995;
Over the course of the case, there were several important drivers other than the
core NPD practices, which played a critical role in project outcomes. These in-
clude virtual team communication strategies, CAD efficiency, and physical
prototype iteration.
These communication improvement steps included having the entire team on the
same SolidWorks revision level. Additionally, all CAD files were transmitted
5 Concluding remarks
Very little research has investigated the process by which early-stage firms de-
velop new products as such firms are often too busy trying to survive. The
main drive for this paper was to apply NPD practices to an early-stage firm,
and propose a tailored process for that function. Developed to give chaotic
Acknowledgments
We would like to thank the principals of PaperPro for their willingness to
share information and adopt the NPDES process during their new product de-
velopment process. We acknowledge support from the National Science Foun-
dation under Grant Nos. IIS-0325402 and DMI-0133913. Any opinions,
findings, and conclusions or recommendations in this paper are those of the
authors and do not necessarily reflect the views of the National Science
Foundation.
1. http://dictionary.cambridge.org/define.asp?key¼start.up*1þ0&dict¼P.
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