A good deal of my career was spent running sales and marketing operations for producers of high tech capital equipment for the electronic component and circuit board manufacturing industry. I knew that most of the best new product ideas came from customers and prospects who asked us to build what they needed. However, at the level of idea there was no way to know whether new products would create sufficient demand to justify producing them.

So, we wrote a specification sheet for prospective new equipment and presented it to customers They contributed their opinions, enhanced the idea, and indicated their interest in buying the new equipment. However, I knew not to place much reliance on their “interest.”

The next thing we did was build a prototype of the new equipment to prove the concept. It didn’t need to be pretty. It just needed to be able to perform to the specs that customers said they wanted. When we had a working prototype we would have a model-maker make it look like a fine, precision machine. Then we took pictures of the model for our product sell-sheets with the final version of the specifications.

Next, we went out and sold the machines, which we explained did not exist yet. We asked for non-cancelable purchase orders and, in return, we guaranteed that the machines would perform in accordance with the specifications on the sell-sheet. We also specified that we would either build the machines within a given time period or recind their orders.

Only about 30 percent of the customers and prospects, who originally said that they would buy the machine as soon as we offered it, actually did.

However, we usually sold enough of the new machines to break-even on the first production run. So,, we built them – plus a few extra to use as demos for on-going sales to the rest of the market. Most of equipment that we developed that way became high volume, high profit products.

A good deal of my career was spent running sales and marketing operations for producers of high tech capital equipment for the electronic component and circuit board manufacturing industry. I knew that most of the best new product ideas came from customers and prospects who asked us to build what they needed. However, at the level of idea there was no way to know whether new products would create sufficient demand to justify producing them.

So, we wrote a specification sheet for prospective new equipment and presented it to customers They contributed their opinions, enhanced the idea, and indicated their interest in buying the new equipment. However, I knew not to place much reliance on their “interest.”

The next thing we did was build a prototype of the new equipment to prove the concept. It didn’t need to be pretty. It just needed to be able to perform to the specs that customers said they wanted. When we had a working prototype we would have a model-maker make it look like a fine, precision machine. Then we took pictures of the model for our product sell-sheets with the final version of the specifications.

Next, we went out and sold the machines, which we explained did not exist yet. We asked for non-cancelable purchase orders and, in return, we guaranteed that the machines would perform in accordance with the specifications on the sell-sheet. We also specified that we would either build the machines within a given time period or recind their orders.

Only about 30 percent of the customers and prospects, who originally said that they would buy the machine as soon as we offered it, actually did.

However, we usually sold enough of the new machines to break-even on the first production run. So,, we built them – plus a few extra to use as demos for on-going sales to the rest of the market. Most of equipment that we developed that way became high volume, high profit products.