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Specifying a new designAirBorn Electronics provides custom manufactured electronic circuitry. The information provided here is intended to help you specify your new design. Probably the best way to use this information is to print this document, then write in the margin of your printed copy.
Give your project a name
You'll probably be using this name a lot in the future - If you keep your project name short, it'll save you time! If it's 7 letters long, and unique enough to do a text-search on, you've got a real winner.
Describe your project (Opening Statement)
Examples
We are actually doing things a little backwards here, but the natural way to list things is to Name your project, then Describe your project. In fact, at the risk of sounding patronizing, successful projects are invariably originally conceived by first recognizing the market need that the project will satisfy, then finding the particular market the project will service, then describing the project, then giving it a name.
Describe your projects market
Describe the market need your product fulfilsExamples
Again, we risk sounding patronizing... we are not writing an economics text book here, but if you can't identify a market need for white elephants, then it's best to think twice before committing your resources to producing them.Describe your sales modelThe traditional wayMake something, then sell it - this is the method we concentrate on below.Outsource production - this doesn't need a seperate category, these days you really have to outsource manufacture at some point. It is not hard to manage, the best way is to start with as much outsourced manufacturing as can easily be arranged. If you find the prices that you are paying are too high, find an alternative manufacturer - or manufacture yourself. Most successful business relationships revolve around letting your suppliers make money - but making sure your own company does the same, and preferably on a similar timescale. The advantage of using AirBorn Electronics for your design work is that you will get top quality, well documented designs, and you will own the design. That allows you to pick another company to outsource to with only a few weeks downtime. If you have the outsourcing manufacturer do the design work - and believe me they will push very hard for that - then you will never own your product. They will. Sell the RefillsYou can also make something then 'sell the refills' - this is the sales model used for most low cost PC printers - and could, for instance, be used by our air freshener example. Being conservative, it makes sense to try and cover your manufacturing and overhead costs on the unit sale, with perhaps a small profit. If you make most of your money on the refills, you have a continuous income stream, the most desirable situation.LicensingLicensing - a tricky one most easily handled by a large organisation. It is harder to sell, harder to police, but lucrative with little downside risk. Be wary of developing a product where your potential customers are much larger in business size than yourself, unless you have substantial entrepreneurial flair, excellent sales and negotiation techniques, and a piranha of a lawyer where you have sufficient funding to match. In years gone by, the classic example was to try and sell something to a car manufacturer - you just could not expect to profit from it. You had to sell 'aftermarket' and try to move quickly, but if the gadget was really effective sooner or later you could expect it to become the 'new feature' on next years model of car, - without you getting paid for itI would suggest that exactly the same situation now applies to Toys and mobile phones - you just cannot hope to sell to the market encumbents without deep pockets for expensive legal services. You will notice I have not used the word patent at all until now - I think a patent without a lawyer is like a gun without bullets. Ofcourse you need the patent, but unless $2000 an hour does not scare you (the going rate for a top patent protection lawyer in Sydney), you might consider easier ways to your living. Try to find the exceptions - for instance it might be next to impossible to profit from your idea to, say, make a barcode scanner for a mobile phone - but it may be quite straightforward to produce an aftermaket iphone app that could do that function. Subscription modelThis is the usual breadwinner - become a service company. Normally the product is a delivery mechanism for the service - and the subscription allows continued access to the service. Again, mobile phones are an excellent example - I mean you don't honestly think those phone calls cost the telecom companies anything to provide, do you? Their costs plateaued soon after the mast went up in the air. There are many, many opportunities in this field. You do need to carefully analyse the psychology of your market to set the pricing. More especially with a younger market it can pay to keep the upfront costs low, and make the offer enticing. Overall, the secret is to make the costs affordable, then find some way, any way, to get the people to sign up. Surprisingly, once they are signed up, there is often reticence to un-sign, if the cost is 'low enough not to worry about'. The cost just keeps being debited to the account.The writer has issue with the practices of some companies using the subscription model, however those practices are very relevant to profits, so I feel an obligation to share those of which I am aware. The point is, the subsciption model can be very lucrative in unforseen ways. One method is 'Bait and Switch' - the supplier offers an excellent deal, then at some point in time makes the enticing offer unavailable, replacing it with an offer more profitable to the supplier. Surprisingly, many stay, dependent on when and how the switch is made. A standard technique is the pricing of extras. It works both ways - for instance a telecom company might headline their offer with "Call for as long as you like - pay only for 1 hour" - but in reality the average call is 3 minutes long, so the impact on their profit is low. Conversely, many ISPs offer internet access, up to X Gigabytes, for a monthly subscription of, say $30. However, beyond that, 2X gigabytes may cost $112, and 10X $850. In reality most useage will be far below the X gigabytes, but when with some clients it does go higher, it often goes a lot higher (perhaps most normally through malware or naive downloading). In both cases the supplier has more knowledge of customer behaviour than the average customer themselves, and has carefully crafted their pricing to be less transparent, but more enticing. The key driver of customer satisfaction in service industries is customer support - if you resolve problems quickly and efficiently you gain customer loyalty, even despite your pricing. Okay, back to the electronics - Estimate the production volume
If the client is still unwilling to disclose market information, perhaps the best course of action is for the client to file for a provisional patent to protect the intellectual property, and then engage the subcontract design house.
The types of specification points or clausesThe best way to arrange a specification is as a list of bullet points, or clauses. Bullet points have the advantage of being clear and concise. A specification should describe all the required attributes of the project - make a separate, if attached, wish list. When writing a specification it is important to distinguish between required and desired. Think carefully before you state a desire as a requirement - if you specify that the project is to be no larger than a mobile phone, be sure that the market really warrants that feature, because it may cost you a substantial amount to achieve.A specification reads like a list of project features, describing the unit, and will usually include: These points are expanded upon in Specifying a new design: Technical ingredients
An example of the distinction between the required and the desirable: The size of an electronic project is frequently described as a requirement when it is more often just desirable that it be as small as possible. Economical prototypes and niche market products are rarely as miniature as mass produced consumer electronics.
The specification is a terse point-by-point document with a brief opening description. It often helps to attach a plain written description of the project which is more general, and describes the way the project works more from the perspective of how it is used.
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Some clients believe that identifying their market, the market need and the market volume to a design subcontractor is tantamount to giving away a market opportunity. A design subcontractor is likely to produce poor results if this important information is kept hidden. Experience shows many products fail to gain market share because the client never really got the designers in tune with the market. Also from experience, the only situations in which I have seen design and manufacturing subcontractors "steal" a clients product idea (atleast in Australia) is when the client fails to pay for the work!
Review your specification to ensure it describes the project clearly and succinctly. The specification should describe the project, as you need it produced. The specification can be followed by a wish list - desirable features or possible extensions. Possible extension might include a connector for I/O expansion.
