New Product & Services

1. New Product & Services NYU Spring 2007 Professor – David Goldsmith Amit Wellner

2. “With a poorly defined product and project, R&D engineering and design people waste considerable time seeking definition, often recycling back several times as the project parameters change” (R. Cooper, “Winning at new Products”). “Quality of execution of the predevelopment steps is closely tied to product financial performance. Successful products have about 75% more person days devoted to the predevelopment activities than do failures” (R. Cooper, “Winning at new Products”) Why do we need NPDP?

3. Mission, Vision, Goal Define: Vision, Mission, and Goal of the company

4. NP&S full cycle Mission Vision Goal Idea Generation Idea screen G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch Support and Measures (S6) G3 G4 G5 Raise Capital Financial Review Product & Market redness G6 End of life

5. Idea Generating • Objective: • Gather ideas form various sources • Activity: • Idea bank website • Rewards for selected ideas • Awareness campaign • Brain storming • Members: • Cross company employees Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

6. Idea screening criteria – Gate 1 • Objective: • Filter ideas generated periodically • Activity: • Ideas fit the mission, vision and goal • Rate and select ideas based on business value • Set time frame • Members: • Innovation group • Strategic group Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

7. Market ResearchStage 1 • Objective: • Market research • Activity: • Build a team • Assessment: market, technical, and financial • If new proposition formulates – revert them to Idea Generation Stage • Members: • Target Innovation group comprised of: project leader, marketing, business development, technology architecture Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

8. Gate 2 • Objective: • Defining the market margins assess profitability • Market projection • Activity: • Filters: Technology, Legal & Marketing • Risk assessment • Members: • Strategic group • Risk analysis • Legal • Chief technology Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

9. Business Proposal – Stage 2 • Objective: • Intense research and business case/ scenario • Activity: • Build a business case • Deep market analyst • Competitive analysis • If new proposition formulates – revert them to Idea Generation Stage • Members: • Target Innovation group Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

10. Raise Capital – DefinitionGate 3 • Objective: Assess risks and benefits of investment • Activity: • Determine whether the idea remains commercially viable after planning • Create a demo (if possible) • Get the money – critical phase • Members: • Strategic group • Senior management Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

11. What would happen if… • Hotmail - acquired by Microsoft (MSFT) in 1998 for about $400 million • Skype - acquired by eBay (EBAY) in September 2005 for $2.6 billion • MySimon - acquired by CNET (CNET) in 1999 for $700 million • Lycos - acquired by Terra Networks for $4.6 billion in 2000 • Netscape - acquired by AOL (TWX) in 1998 for $4.2 billion • GeoCities - acquired by Yahoo! (YHOO) in 1999 for $3.56 billion • Excite - acquired by @Home in 1999 for $6.7 billion ($394 per user!) • AOL - merged with TimeWarner in 2000 • Broadcast.com - acquired by Yahoo! in 1999 for $5 billion ($710 per user )

12. Development & Marketing Stage 3 • Objective: • Develop the product • Activity: • R&D - Start developing the product • Marketing • Find potential client. • Partners • Set pricing • Legal • Write patent • Contract – with partners • Members: • Product development team: Product manager, Marketing manager and Product technology manager • Legal department Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

13. Product & Market redness - Gate 4 • Objective: • Is the product consist with the definition at Gate 3? • Activity: • Check: • Product • Market • Financial state • Members: • Strategic group Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

14. Testing - Stage 4 • Objective: • Test and validate the project • Prepare for launch • Activity: • Test product: error fixing in development • Customer endorsement • Test market (Trial sell) • Financial analysis • Develop the operation plan and the market launch plan • Members: • QA team • Sale & marketing Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

15. Gate 5 • Objective: • Business evaluate • Activity: • Financial and market review • Members: • Senior management Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

16. Stage 5 • Objective: • Get ready… • Activity: • Create campaign • Advertising company • Members: • PR and marketing • Product development team Idea Generation G1 Market Research (S1) G2 Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch (S5) Launch G3 G4 G5

17. Launch • Objective: • Deploy product • Activity: • Customer support • Client feedback • Find new features • Members: • Operation • Product Manager Idea Generation G1 Market Research (S1) G2 Launch Business Planning (S2) Development & Marketing (S3) Testing (S4) Prepare to launch(S5) G3 G4 G5

18. Pro and cons for Stage gate process

19. ??? • Any questions? • שאלות ?