valuation when an entrepreneur
might have little to show can be
tough. Consequently, start-ups
often have to compromise by overpromising
the upside to investors
or understating the total likely
investment required. This ultimately
harms the entrepreneur’s reputation
when the team is ‘found out’ and can
lead to a dreaded ‘down round’ or
even prevent follow-on investments.
As an alternative, founders
frequently try to advance their
developments before taking
investment; but without proper
resources, progress can be glacial.
Or, they scale down their dreams
to make the pre-money process of
‘pulling themselves up by their own
bootstraps’ more viable.
For some projects there is no
simple way to cross this chasm
and it may be better to opt for an
early investor that is not focused on
immediate financial return: family,
friends, philanthropists, university
incubators, or government.
NMOATN AIDGEINNTGI FAYLILN TGH/E UNCERTAINTIES
Most entrepreneurs who have
© konradbak - stock.adobe.com
Spotting problems
early and better
understanding the
challenges ahead are
crucial in staying on track
and limiting the cost and
consequences when
things don’t turn out
raised public funding (for
example through Innovate
UK) will have prepared a ‘risk
register’ but in an R&D context it
is usually more helpful to consider
‘uncertainties’. In other words,
examining what it is that you just do
not know yet.
A well-deployed uncertainty
register equips the entrepreneur
to pilot the optimum development
route, to identify skills and
experience gaps within the team,
and to decide where best to focus
scarce resources. The register
should consider all uncertainties
on the road to commercial success,
including expectations on what
stage of the development each
uncertainty will be resolved, by
whom, and how.
FAILING TO PLAN FOR
CHANGE
Even if an entrepreneur has
carefully determined their MVP
and has a good idea of who will
buy their product, why and how, a
focus on the highest priorities can
sometimes cause product features
to be deferred to later product
versions when, with hindsight, they
would have saved time and money
overall.
For example, the need for ‘over
the air’ (OTA) software updates is
often seen as functionality that can
be deferred to help save shortterm
development cost. However,
incorporating the flexibility of an
OTA update capability can greatly
increase the resilience of the R&D
programme to solve some of the
(almost) inevitable unexpected
behavioural issues that can occur
with a system’s early firmware
releases.
It is worth investing in some
light-touch product roadmapping
and ‘platform thinking’ to ensure
the initial launch product/MVP can
be evolved rather than binned for
subsequent release generations.
NOT THINKING
TPHRROODUUGCHT ION
RAMP‐UP
Most developments
follow a progressive
scale-up in production
volumes: from a handful
of prototype units
through to higher volume
manufacturing.
The bill of materials cost
is usually relatively unimportant
when the mission is to build a single
proof of concept unit, but it becomes
critical when you want to sell a million
units for $20 each. Most design for
manufacture stages tend to focus
on manufacturing larger volumes at
the lowest possible marginal cost,
with the tooling investment spread
across high volume production.
But the budgets required either
for a fully tooled product or to
scale up the processes used for
prototype manufacturing are likely
to be prohibitive at the intermediate
volumes needed for field trials or
year one production. If the business
plan calls for a few hundred or
thousand units at reasonable cost,
then this needs to be carefully
planned and budgeted for.
We hope the ideas discussed
above will be useful and will
help even the more experienced
entrepreneur to navigate around the
inevitable hurdles and roadblocks
on their road to commercial
success. Good luck! !
as planned.
MARCH 2020 | WWW.EUREKAMAGAZINE.CO.UK 15
/stock.adobe.com
/WWW.EUREKAMAGAZINE.CO.UK