Guild Building 101 The Rise of Expectations and Elevator Pitches

Starting a Product Development Guild has been a journey that has lasted about two and a half years. The first two years were mainly discussions. The last five months have mainly involved laying the groundwork for the guild. We have now moved into a mode where we are starting to recruit members and look at project submissions.

Tom Vass first mentioned the idea to me two years ago at Carolinas PDMA event. At the time, I really didnt think much of the idea. It took several conversations for me to realize that the problem wasnt with the concept, but rather in the articulation and execution of the concept. So we spent about two years, off and on, discussing the concept and refining how we articulated a complex sounding concept.

One of the critical questions in developing in the Guild is ?why does the concept seem so complex The concept, in the simplest form I can come up with, goes something like this:

Consultants, and other product design professionals, band together in a contractual organization. This aspect of the organization most closely resembles a volunteer fire department. Guild members pay quarterly dues and an initiation fee to join. Guild members are proudly displayed in the Guild directory which is available online and in a print format next year.

Product champions submit project proposals to the guild in a structured format. The Guild evaluates each submission and picks the best submissions. The Guild looks for product concepts that are going to help launch product-driven companies. Products that combine technology from two different industries are given priority.

Once a product concept is selected, the product champion becomes the nucleus of a seven member team. Project champions can be inventors, entrepreneurs, serial entrepreneurs, a designee from a start-up company, or a designee from an existing corporation that has a product concept that they would like to spin-off into a new company. Six of the seven team members are product development professionals. These members could come from disciplines such as industrial design, engineering, software, electronics, business management, marketing or sales.

Projects run for six months. The goal of the project is to complete the fuzzy front end design of the product. At the start of the project, the Guild receives options for the clients stock. These options can only be exercised upon a trigger event such as a sale or initial public offering (IPO). At the end of the project the Guild transfers a portion of those options to team members.

Projects are structured so Guild members spend two to four hours per week on the project. The product champions (client representative) spend fifteen to twenty hours per week on the project.

The team makes a presentation at the end of the project to selected angel investors and venture capitalists. This last step of the project is designed to help the client get funding for the next step in designing and then commercializing their product.

The goal is to complete twenty six month projects per year (ten every six months). This would add twenty new, high-growth companies to the RTP area each year and significantly impact the local economy. This means that the efforts of approximately one hundred and twenty Guild members can help drive the future economy in the regional area for the next ten to twenty years..

I am still struggling with how to present this in a thirty second elevator pitch. This is not an overly complex process when you consider the amount of work to be done. Sometimes I wonder if the previous presentation is trying to explain too much. Maybe the elevator pitch should go something like:

The RTP Product Development Guild is a confederation of product design, and business, who work together to help local entrepreneurs and businesses commercialize their products. The Guild seeks to improve the regional economy in North Carolina by helping create now product driven companies.

Salesmen reading this article are probably wondering why not just use the shorter version first. This is the difference between salesmen and product designers. Engineers and industrial designers often focus on how wonderful, and cool, the details are. A good salesman wants to convey just enough information to close the deal. They know that giving too much information is a possible way to talking your client out of doing business with you. The role of President of the Guild requires me to live in both worlds. This can be challenging at times. Product developers must always keep in mind that successful products find a balance between design and execution.

The chicken, or the egg, syndrome is alive and well at the RTP Product Development Guild. On one hand, we need a strong portfolio of consultants to attract product concept submissions. One the other hand we need strong product concepts to attract consultants. This means that there is going to be slow progress between now and the kick-off of the first project. We have spent the last month lining up product submissions and potential Guild members. The first inquiries about memberships are mostly coming from sales and marketing professionals. Another high interest area is the service providers. We have a class of Guild memberships that are designed to allow service providers to participate in the Guild without having to participate in a project team.

Another concurrent action item is to promote the Guild within the economic development community. North Carolinas economic development community is heavily focused, and politically invested, in the mode of using massive tax incentives to bring existing companies to North Carolina. There are other efforts that focus on using the universities and community colleges as concentrators of innovation. The Guild believes that there is enough talent, dedication and ambition in the local community to create new product-driven companies. This ?believe in the people? approach is counter-culture. The Guild isnt relying on tax incentives or government grants to drive new products to market. We are relying on our members to work together and help lift new companies from the stage of ?I have an idea? to the stage of ?we just rented office space?. Dreams are best pursued by the dreamer. It is hard to pursue someone elses dream. Product champions rev up your dreams, because you now have a home.

Montie Roland is President of the Carolinas Chapter of the Product Development Management Association. Roland is also President of Montie Design, a product development and prototyping firm in Morrisville, NC and the RTP Product Development Guild. You can reach Montie by email at: montie@montie.com

Fuzzy Front End: A Critical, But Often Neglected Part of Product Design

The term “fuzzy front” end is used by product design professionals to denote the product definition stage of the project. This important stage in product development is often neglected. In this podcast well talk about what the “fuzzy front end” is and why it is important.

You can listen to the podcast by clicking here.

Montie Roland is President of the Carolinas Chapter of the Product Development Management Association. Roland is also President of Montie Design, a product development and prototyping firm in Morrisville, NC and the RTP Product Development Guild.

RTP Guild Proclaims October as RTP Product Development Month

by Tom Vass, Vice-President, RTP Product Development Guild

The RTP regional economy has a unique set of economic strengths in technology innovation. The basic platform for all the strengths comes from the population of scientists and engineers who live in the region. Raleigh tops America for PhDs per capita for a metro city.

The RTP is geographically the largest research park in the world and is home to more than 130 R&D companies, employing nearly 40,000 workers. The RTP is home to IBM, GSK, Cisco Systems, DuPont and Sony Ericsson.

The high number of PhDs, and the location of large high tech corporations sets the stage for technology commercialization in distinct product areas. Our focus at the Guild is on product development because that leads to new venture creation which leads to new markets.

New markets are essential for wealth creation because persistence in the status quo distribution from current markets of wealth tends to lead to economic stasis. We suspect there is a mutually reinforcing relationship between wealth creation and new product creation, meaning that the more of one leads to the more of the other.

However, this relationship is perfectly symmetrical, which means that the longer the status quo of current markets remains constant the longer the existing distribution of wealth will stay the same. The result will be lower rates of innovation and new product development.

New products do not get created without a lot of effort, and our basic business model addresses how to help entrepreneurs commercialize their ideas. Our approach to new product development is different than the existing players in the region.

We focus attention on independent entrepreneurs who are not affiliated with the tech transfer programs at the local universities. We also target small engineering and manufacturing firms, and spin-offs from the R&D efforts of the larger corporations. We suspect that many of the 40,000 workers in the RTP have great ideas that could turn into great products if they follow the business development model of the RTP Product Development Guild.

During the month of October, we are going to target product development in the 4 areas we think will be most beneficial to regional economic growth. Each product area shares a common technological platform in both design and production, even though the end market users of the products are different.

On each Wednesday evening of October, we will host an educational seminar at our facilities in Morrisville, N. C., to introduce our model to budding entrepreneurs in each product area.

Our selection of product areas are:

1. October 10. Consumer technology products for the mass retail market.

2. October 17. Health monitoring and home health care products.

3. October 24. Sports and recreational equipment.

4. October 31. Homeland defense products.

We will charge a small admission fee, and our seating is limited to the first 20 entrepreneurs who register to attend. We are soliciting the participation of individuals and small companies who are curious about our business model of advice for commercializing technology.

We think that participants will gain benefits from meeting each other, and listening to how others are going about the process of commercializing their product ideas. If the RTP Guild model seems attractive, then the next step would be to apply as a project candidate for one of the Guilds product development teams.

While commercializing technology is a great objective, we think that the bigger goal for each entrepreneur is to win the Guilds prestigious annual award for the RTPs Most Disruptive Product Technology, presented in March of each year. But, you cant win the prize unless you get in the game.

Registration for the October events is at: www.rtpproductguild.com

Local Product Design Community, Changes at Home

by Montie Roland, President – Montie Design

Product design in the RTP area is nothing new. Entities that vary in size from the smallest startup to the largest multi-national companies are engaged in a daily business of product development. These companies dont practice the art and science of product development in a vacuum. They rely on an infrastructure of local vendors that provide a variety of services and products.

Since moving into our new office space where we added an embedded machine shop, and becoming a part of the RTP Product Development Guild, the Montie Design business model has changed dramatically. The biggest change is how much tighter we have integrated with the product design community around us. Our firm has relied on the services of other vendors for years, so in itself this is nothing new.

The new offices opened in June of 2007. Approximately one month later, we were joined in the office by Brandon Lisk and 101Machine. The office space included a shop and office area big enough for both companies. The rationale for having them in the same space allows both companies to offer more vertically integrated services. Consulting firms operate with remote (across town) vendors every day, but being in the same building allows a greater level of cooperation and coordination, thus relieving pressure from clients to have an in-house machine shop.

What I didnt expect was how it would change the Montie Design business model. Once 101Machine was up and running, clients began expecting that Montie Design would do several things. The first was to handle the prototype builds directly. Previously we would design the product and create the documentation. Then we would recommend a machine shop and get a quote. The client would then take that quote and issue a purchase order directly to the machine shop (or other vendor). Now clients expect us to manage the prototype build and handle the billing so they just have to create one purchase order. This arrangement makes it more convenient for the client and gives us a higher level of control over the process. However, it also added a new layer of administration that we have accommodated for. As a result, we have begun issuing purchase orders to vendors and tracking them. This was a big change for a small, but growing, company. It was a welcome change because it has allowed us to offer a broader range of services that arent directly tied to the number of billable hours. It also requires tighter financial controls because of the larger, and more complex, cash flow requirements.

Not all prototype parts and pieces can be economically produced by a single machine shop. An example was a group of physically large parts that were beyond the normal capabilities of 101Machine. Barnes Machine, in Apex, was able to very cost effectively produce these parts in a very tight time frame. This was a case where we were able to produce a set of prototype parts in an off-site location as a service to our client. JMC Machine is another example of an off-site vendor (also located in Apex). We have worked with Glenn Berry and Howard Nystrom for over a decade to produce parts for customers.

We also work closely with ADR Hydrocut to create complex, flat parts. ADR Hydrocut has two water jet cutting machines. The water jet process uses an extremely thin column (fifteen times the thickness of a human hair) of water mixed with an abrasive to cut complex shapes out of sheets of just about any material. Their business model relies on quick turnarounds of parts. This means that you can usually order a part and receive it within five to ten working days. One of the advantages of our current office location is the close proximity to ADR Hydrocut. This proximity and close working relationship with the owners, Al Ely and Ron Harris, allows us to work hand-in-hand with them, which is critical on projects with tight time restrictions.

The value of the relationship with JMC Machine and ADR Hydrocut has gone far beyond any one project, or one customer for that matter. The personal relationships with the owners of these companies have lasted for over a decade. These are people that I call friends. As it is always critical to not confuse friendship with what is best for the firm, or the customer, I find it wonderful to be able to work with a group of friends whom you can trust.

So how does all of this tie into the subject of a design community? Much of our success as a design firm is related to the availability and performance of the vendors that support us. Without the vendors behind us, we could not serve our customers at the level to which they have become accustomed. Adding a level of vertical integration has allowed us to expand our services, but at the same time has highlighted our need for quality relationships with reliable vendors. Relationships such as these help form the backbone of the product design infrastructure that is such a vital part of product design successes in the Research Triangle Park area.

Grand Opening / Pig Pickin’ / Product Design Vendor Street Faire

Hey All,

I just wanted to let you know that our Grand Opening and Expo is coming soon. Please take an afternoon out to enjoy good food, tour our new facility, and meet local product design/prototyping vendors. The event is free.

See you there.

Montie

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Event: Grand Opening / Pig Pickin / Vendor Day for:

Montie Design

101 Machine

Better Business Advice

RTP Product Design Guild

Date: Saturday, 4 Aug 07

Time: 3:00 until 6:30

Location: 400 Dominion Dr., Suite 101, Morrisville, NC 27560

Description: Join us in celebrating the co-location of:

RTP Product Design Guild
Montie Design
101Machine
Good Business Advice

Stroll through the various outdoor vendor booths including:

Montie Design – product design
101Machine – prototype machining
Good Business Advice – business ansurance and financial mgmt
RTP Product Design Guild – community-based design
Pioneer Strategies – public relations
Fineline Prototyping – rapid prototyping service bureau
ADR Hydrocut – waterjet cutting house
Applied Technologies – product design

Bring your family and join us for an afternoon of fun! Please dont hesitate to send any questions to: montie@montie.com

Register (free) at: http://productdesignguild.eventbrite.com/

Next Carolinas PDMA Chapter Event with Bob Luddy

Morning Fellow Product Designers,

I thought this event might interest many of you.

Montie

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Event: New Product Development in the Entrepreneurial Enterprise

Date: 14 Jun 07

Time: 6-8:30pm

  • Networking & Registration 6 – 6:45 pm
  • Presentation and Q&A 6:45 8:00 pm
  • Pizza and drinks will be served

Location: MCNC auditorium in RTP, NC

Speaker: Bob Luddy, President, CaptiveAire and founder, Franklin Park Industrial Center

Co-Hosted by: CED

New Product Development in the Entrepreneurial Enterprise

Unless your business changes, your business will die. Changing means developing new products. But what new products? Why one product over another? Where do you begin?

Learn what inspired Robert Luddy, lifelong entrepreneur and president of Raleigh-based CaptiveAire Systems – the nations well-respected manufacturer of commercial kitchen ventilation equipment. Luddy founded CaptiveAire in 1976 on $1,300 capital. Today, CaptiveAire employs 650 people in four plants and 57 offices in the U.S. and Canada. It is continually voted ?Best In Class? by industry dealers and consultants, according to Foodservice Equipment & Supplies magazine. INC. magazine has repeatedly named CaptiveAire one of the 500 fastest growing private companies in the nation. In North Carolina, CaptiveAire is among the 100 largest private companies (Business North Carolina magazine), and it is the 10th fastest growing private company in the Raleigh Triangle (Triangle Business Journal).

Learn and discuss with Bob:

  • How you can revolutionize your industry.
  • Keys to competitive success.
  • How to navigate the challenge of offering increasingly higher-quality products at the lowest cost.
  • Bob will cover these and many other topics, including responding quickly to market demand. Please join us to exchange points of view, build relationships with your peers and as gain insights from our speaker:

    Robert Luddy is a lifelong entrepreneur. At the age of 20, while attending LaSalle University in Philadelphia, Bob opened a fiberglass manufacturing business and worked at night. In 1967, Bob sold his company and was drafted into the military. In 1976, Bob settled in Raleigh, and with $1,300 capital, he opened Atlantic Fire Systems in a one-room facility. Recognizing the demand for high-quality kitchen ventilation equipment, Bob purchased a sheet metal shop in 1981 and transformed it into CaptiveAire Systems, Inc. CaptiveAire is now the nations largest manufacturer of commercial kitchen ventilation systems, with sales reaching $180 million in 2006. In addition to CaptiveAire, Bob Luddy drives other economic development in the area. Bob founded and developed the Franklin Park Industrial Center, which has drawn over 15 entrepreneurial businesses and hundreds of jobs to Franklin and Wake counties.

    Questions? Send an e-mail to montie@montie.com

    PDMA Event on 22 Feb in RTP, NC on Intellectual Property

    Intellectual Property – The Top 10 Things You Need to be Aware of When Developing and Bringing a New Product to Market

    The Carolinas Chapter of the Product Development and Management Association invites you to kick off its 2007 professional program and tackle the important issue of intellectual property with Tracy-Gene Durkin, Director of renowned Washington-DC IP law firm Sterne Kessler Goldstein Fox.

    Using case studies, Tracy will highlight the problems that arise when intellectual property issues are not considered in advance and fully integrated in the product development process. She will cover topics including joint development, protecting product configuration, and protecting IP internally, critical dates to keep in mind in the patent process, and proper documentation of invention dates, among others.

    We will have in-house perspective as well from a Durham-based organization that helps pharmaceutical and biotechnology companies.

    Please join us to exchange points of views and build relationships with your peers as well as gain insights from our speaker:

    Tracy-Gene G. Durkin, is a director in and heads the Mechanical Patent and Trademark Group of Sterne Kessler Goldstein Fox. She has over twenty years of experience obtaining and enforcing worldwide intellectual property rights, including utility and design patents, trademarks and copyrights. Ms. Durkins client counseling experience includes helping clear new products and trademarks for use in the marketplace, selecting appropriate IP protection, and enforcing such protection through mediation, litigation and licensing. Ms. Durkin has spoken internationally on topics such as design patents, IP audits, mediation, IP protection on the Internet, and trademark co-branding and licensing for non profit organizations. She is Chair of the Industrial Design Committee for the American Intellectual Property Law Association (AIPLA) and a member of the Industrial Designs Committee of the Intellectual Property Owners Association.

    Who Should Attend

    Product managers, engineers, designers, and business managers. This event qualifies as 2 Professional Development Hours toward PDMAs NPDP recertification.

    Date Thursday, February 22nd, 2007

    Time Networking & Registration 6-6:45 pm; Presentation and Q&A 6:45 8:00 pm; Pizza and drinks.

    Location MNMC Auditorium, 3021 Cornwallis Rd, Research Triangle Park (Durham), NC 27709.

    Fees $20 members, $35 non-members, $10 students and volunteers. $10 additional for walk-in. Cash or check only. Fees include handouts.

    Registration Online at http://pdma.eventbrite.com

    Go Here for Funds for Your NC Startup!

    Afternoon All,

    Here is your chance (press release below) to get a grant to help fund your start-up in NC.

    Their website is www.ncidea.org.

    Happy Hunting!

    Montie

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    NC IDEA seeks grant applications from entrepreneurs and early-stage companies
    08-21-2006

    RESEARCH TRAINGLE PARK, N.C. NC IDEA is seeking grant applications from North Carolina entrepreneurs and early-stage companies focused on information technology, medical devices or material sciences.

    NC IDEA is a private, non-profit organization dedicated to helping establish and develop early-stage companies through the commercialization of research innovation. NC IDEA plans to award $150,000 ?proof of concept? grants to help bridge the gap between innovative ideas and venture capital funding. The grants are designed to prepare companies for equity funding, accelerating the creation of new North Carolina companies and jobs.

    NC IDEA is accepting online applications through its Web site (www.ncidea.org) beginning today, Aug. 21. Grants of up to $50,000 per company will be awarded in December.

    The grants support business activities that validate potential markets, reduce business risks, and advance projects to the point at which they are suitable for consideration by private equity investors. Preference is given to companies that have not previously received equity financing. An entrepreneur who has not formed a company may apply, but company incorporation is required prior to the awarding of grant funding.

    Bridging the Innovation Gap
    Many new technologies are not successfully transferred out of universities and research institutions because of a funding gap between government and private equity support. Research funding typically does not include support for business development activities or development of product prototypes suitable for mass production. Yet, venture capital funds typically do not invest in companies until they have a product and are already generating revenues from customer sales.

    The NC IDEA grant program provides a novel source of assistance to bridge this gap. Earlier this year, NC IDEA awarded $225,000 in grants to seven early-stage North Carolina companies.

    “NC IDEAs grant program offers young pre-venture companies an opportunity that cant be found elsewhere,” said Josh Whiton, chief executive officer of TransLoc, which received an NC IDEA grant in the previous cycle earlier this year. Dr. Nimmi Ramanujam, a professor at Duke and project manager for previous grant recipient Illuminus, agreed. ?There are no other sources of early funding that can be sought to address these issues,? she said.

    In addition to funding, NC IDEA and its strategic partners facilitate access to business and technology leaders who will mentor and guide entrepreneurs to help them overcome research, product development, sales and product adoption hurdles. NC IDEA collaborates with the Council for Entrepreneurial Development (CED), The North Carolina Technology Association (NCTA), the North Carolina Small Business and Technology Development Center (SBTDC) and Southeast TechInventures.

    The initial ?pre-proposal? applications must be submitted online by Sept. 15. Approximately 12 to 15 companies submitting ?pre-proposal? submissions will be selected to participate in a subsequent full proposal submission and review period from Sept. 15 through Oct. 27. This process will include submission of a more in-depth proposal and prioritized budget for use of grant proceeds, and potentially a presentation from the company to a NC IDEA Grants Program advisory committee.

    About NC IDEA
    NC IDEA provides grants, loans and traditional venture capital to help young companies between seed funding and Series A financing. The non-profit company further supports these companies by leveraging strategic partnerships and alliances to help companies through research phases, business challenges and growth goals. NC IDEA is committed to supporting North Carolinas economic development by ensuring young, innovative companies grow, create jobs and become contributing business leaders. For more information, visit www.ncidea.org. Media Contact: Scott Yates, Largemouth Communications (for NC IDEA), 919-649-6621, scott@largemouthpr.com.