Trade Secrets

Product demonstrators - the proof of the pudding

By S.J. Zammattio

Have you ever worried about buying a piece of furniture or personal item from the internet? The specifications seem correct and the photos look great, but what will it really be like when it arrives? If you understand this, perhaps you can imagine what it's like for an investor who is entrusting a large chunk of cash to a small team with an interesting proposition.

For a startup, it becomes increasingly difficult to secure funding without physical proof of some kind. Investors, like all of us, respond positively to a tangible implementation they can experience in person and relate to.

This is why all startups (and new products) need some kind of demonstration vehicle. Ideally you should be like a window salesman - when you want to sell the product, you pull out the miniature demo window that potential buyers can experience for themselves. This kind of sales tool is very effective, as the customer can immediately judge the quality of the product and put to bed any worries about the product and its utility. It gives the customer confidence in the product and largely eliminates difficult and time-consuming question and answer sessions. Unfortunately in the high-tech world things are rarely as easy; usually there are years of development and many hidden complexities involved in putting together a product prototype which is close to final product.

The roadmap to a good demo

As the product matures, the demonstrator will have to grow accordingly, and may become more complex and hence more expensive - and possibly less reliable. Having a demonstrator roadmap will help make decisions about which investments are required to build the infrastructure needed to follow that roadmap. When creating this roadmap, there are many things that must be considered. As the target audience for the demonstration grows you will have less opportunity to explain the technicalities and will have to focus much more on justifying the business case for the product. Early stage investors are likely to use third party due diligence agents, who have more technical knowledge. In later funding rounds investors will look for reassurance in the validity of the business model, customer traction rather than the unique benefits of the product.

So what makes a good demonstrator? What sort of issues might you encounter in development?

A good demonstrator shows the core technology at work in a manner that is clear, concise and appropriate for the target audience. It also needs to be supported by a presenter who understands the demonstrator in depth: there is nothing more unconvincing than a presenter who can't get the demo to work or who can't answer a straightforward question. When demonstrating, having some concise signs saying what the demo is and listing key features and benefits are very useful to members of the audience; a single page information sheet can help too.

Early demonstrators are often based around generic measurement equipment (oscilloscopes, lab equipment, etc.) as the aim is usually to illustrate an operating principle; for example the demonstrator may be operating under lab conditions in isolation or in a simulator. Later on the demonstrator needs to be closer to real product and illustrate more commercially orientated features. It should be much more self contained and robust as it may have to travel much more; for example a system that interacts with other standard product components in a self contained portable package.

Designing the demonstrator

When designing your demonstrator you need to consider the following issues:

• What is the one key message the demonstrator has to convey?
• Is the message conveyed in a manner that is clear and concise enough for the target audience?
• How convincing will it be? Will it blind them with science?
• What will people remember the next day, your tie or your technology?
• How reliable will it be?
• What doesn't it show (the audience may spot missing elements!)?
• What else can it show?
• Does it open any issues with your business strategy or development?
• How much will it cost to develop?
• How much risk is there in the development?

The last two questions are often thorny issues. Most demonstrators are easy to cost in terms of materials and are usually affordable, however, there can be large hidden costs in support equipment, services and man-hours. Expensive lab equipment can be hired or bought second hand; you should consider these options carefully to make sure you get the best value from the option you choose.

As you are likely to be breaking new ground it is difficult to estimate the man effort required, as the demonstrator can sometimes reveal key issues with the base technology that were not known before. Often there are strange effects, like the kit only working with a certain combination of equipment or under certain conditions. Solving these teething problems can consume man-hours and resources at a horrendous rate. Issues like these can really test the quality of your staff, equipment and suppliers.

Plan for the unexpected

What dependencies are there in the creation of your demonstrator? Do you need a custom widget from company X or a special processing run from company Y? Are these resource dependencies provided on a purely commercial basis or is there some goodwill involved? The former can be expensive and the latter unreliable. Your team may be willing to work 24/7 to get the kit going but if they rely on a third party for essential widgets or services your demonstrator may be at serious risk when the deadline begins to loom. Sometimes even seemingly simple things like the availability of a memory chip or field-programmable gate array (fpga) can lead to problems.

When following your demonstrator road map, naturally you will always have the previous demo kit (that has been carefully preserved since the last demo) to fall back on. Disasters do happen, be prepared - the author once had a supplier lose half their factory in a fire during the production of his components, hence slipping the schedule by a few months. Documentary evidence must be kept of early versions that have proved to produce the required functionality, just in case the final version is not reliable enough or misses the deadline. A certain amount of paranoia about ensuring reliability and having a fall back ready is warranted, even if you are not presenting on 'Tomorrow's World'!

If useful, you can present a mock up or concept demo. But beware: no matter how tempting, never fake a demo. Your intentions may be good but consider what happens if you never get the technology to work and investors discover that they based their investments on a fake demo? Remember that the founders must sign warranties, and if investors feel duped, the founders could lose the company and more.

There is one other major benefit of demonstration systems; they give you the opportunity to get real traction with the production environment and the market. The requirement for progressively more realistic demonstrators will force you to begin equipping your company with the facilities required to produce the final product and will bring to the fore technical, commercial and production issues. A good demonstrator roadmap will teach you and your staff many things about your target product and market. This essential education will help take your concept through to viable, manufacturable product and hence ensure the success of your company.

The Chilli recommendations

The Chilli recommendations for a demonstration platform:

• Have a clear objective for the demonstration, don't go down the blind alley of showing off all the widgets
• Don't blind them with science
• A demonstrator may start off being similar to the prototype, but remember they satisfy two different objectives (commercial vs internal engineering)
• Summarise the key points on a single page for the audience to take away with them
• Have a roadmap for your demonstrator
• Determine and manage the risk in terms of suppliers, lead times, spare parts, etc
• Don't fake it
• Try to keep the cost low, in case you need to build more than one when doing a roadshow

Any comments on this article? Email the editor at Editor@TheChilli.com

© Chilli Publishing Ltd 2003

04AUG2003