WBSP070: Grow Your Business by Mitigating Financial Risks Through Experimental Design and Additive Manufacturing w/ Kevin Mako

In this episode, we have our guest Kevin Mako. He discusses how experimental design and additive manufacturing can help mitigate financial risks with innovative projects. He also discusses several technologies and trends that have been driving faster innovation in the manufacturing sector. Finally, he discusses what financial executives look for in a pitch and how engineering workflow changes with additive manufacturing methodology.

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About Kevin

Kevin Mako is the Founder and President of MAKO Design + Invent, the pioneer firm for providing world-class end-to-end physical consumer product development tailored to inventors, product startups, and small manufacturers. Est 1999, Mako Design is a 30-person team with offices in Austin, Miami, San Francisco, & Toronto. They have developed over 1,000 products for clients and has earned over 20 design. And business awards including Red Dot, Inc5000, Entrepreneur360, Indigo Gold, Creative Pool Gold, Best Places to Work, Lux Magazine Best Design Firm in North America, and many others.

Kevin lectures at the Masters of Engineering program at Ryerson University. He sits on a number of entrepreneurship and education boards. He invests in small service-based businesses and holds the Duke of Edinburgh Gold Award designation. Kevin has over 100,000 followers on social media. He does keynote speaking all over the world for audiences between 100 and 1,500 people. He is also the host of The Product Startup Podcast.

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Kevin Mako 0:00  

Well, what features do we think could be revolutionary? What could be the next hot product that’s really going to put us back into the light. Or help us just shore up the fact that we are a leader in this market vertical, and you’d be amazed at how much information if you do this process properly, how much information you can gather right there.

Intro 0:22  

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies. So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast, where scalable growth using business systems is our number one priority. Now, here is your host, Sam Gupta.

Sam Gupta 0:57  

Hey everyone, welcome back to another episode of The WBS podcast. I’m Sam Gupta, your host, and principal consultant at a digital transformation consulting firm, ElevatIQ.

With new trends such as additive manufacturing and experimental design, it’s never been this easy. It’s never been easier to launch and disrupt our hardware product category. The traditional manufacturers that are slow and are not taking advantage of these trends run a risk of being disrupted. And becoming irrelevant in their market. The new trends require manufacturers to get inspired by the newer disruptive companies from their markets. And corporate intrapreneurs by changing their internal R&D, workflows, and capabilities. 

In today’s episode, we have our guest, Kevin Mako. He discusses how experimental design and additive manufacturing can help mitigate financial risks with innovative projects. He also discusses several technologies and trends that have been driving faster innovation in the manufacturing sector. Finally, he discusses what financial executives look for in a pitch and how engineering workflow changes with additive manufacturing methodology. 

Let me introduce Kevin to you.

Sam Gupta 2:04  

Kevin Mako is the Founder and President of MAKO Design + Invent, the pioneer firm for providing world-class end-to-end physical consumer product development tailored to inventors, product startups, and small manufacturers. Est 1999, Mako Design is a 30-person team with offices in Austin, Miami, San Francisco, & Toronto. He has developed over 1,000 products for clients. And has earned over 20 design and business awards including Red Dot, Inc5000, Entrepreneur360, Indigo Gold, Creative Pool Gold, Best Places to Work, Lux Magazine Best Design Firm in North America, and many others.

Kevin lectures at the Masters of Engineering program at Ryerson University. He sits on a number of entrepreneurship and education boards, invests in small service-based businesses. And holds the Duke of Edinburgh Gold Award designation. Kevin has over 100,000 followers on social media, does keynote speaking all over the world for audiences between 100 and 1,500 people, and is the host of The Product Startup Podcast.

With that, let’s get to the conversation. 

Hey, Kevin, welcome to the show.

Kevin Mako 3:15  

Sam. Great to be here. Thanks for having me

Sam Gupta 3:18  

It’s my pleasure. And I am super excited to dig into your background. But before we do that, do you want to kick things off with your personal story and your current focus?

Kevin Mako 3:31  

Sure, happy to. My quick story here is that today we do essentially high-end product development, world-class physical product development for inventions and gadgets. But tailored to small manufacturers and small businesses. So generally, companies under 100 employees, for the most part, and all of that started when I was in high school or 20 years ago, with that very concept. 

I’m one of those businesses that didn’t really ever pivot the same goal then was the goal that we have now. And it was obviously very difficult, and being started in high school incorporated in university to two degrees, went to business school, and then the other at Hong Kong University. 

After that, I went full time into this and turned down the investment banking management consulting jobs to take the long shot at this. But well, begging them to keep the door cracked open, crashed, and burned, which was likely probably back in 2007. I did this full time, and the market just collapsed around us. But anyway, one way or the other, here we are now today with 30 designers across four offices from coast to coast in the US and Canada.

Sam Gupta 4:37  

So that is a very interesting and crazy background. In my opinion, because typically, when I look at the engineers and the people who are involved in the product development, they don’t necessarily have as much financial literacy, to be honest in terms of doing the product costing and in terms of understanding what the needs are going to be of a CFO. 

So this is going to be great in terms of understanding your experience and how your experiences when collaborating with CFOs, but before we do that, we have one of the standard questions that we ask every single guest that come on the show. And that is going to be your perspective on business growth. When you think of the word growth, what does it mean to you?

Kevin Mako 5:14  

Well, I come from an interesting perspective on growth because in order for me to have grown in the early days, especially my 20s, essentially, I had to risk it all. I was one of those businesses that are completely organically grown from just myself to the 30 people that we are today. 

So never had any investors, never had any debt, never had any financing. So for me, growth comes with it a very kind of crazy secondary fear, which is very motivational, which is if you’re trying to double up an organic growth company, essentially, you have to risk it all. 

Because every time you start making money, and you really want to grow to the next level, you have to put it all on the line in order to get to the next level after that, and so on. So I basically played that game, going from $0 to profit back to zero to profit every time I wanted to scale five or six times throughout the first ten years of building this business. 

Traditional #manufacturers have exponentially more weight behind a new product than any startup out there. Click to Tweet

Risk mitigation opportunities with additive manufacturing

Sam Gupta 6:08  

Okay, amazing, So one of the things that I would like to mention here, as I’m pretty sure you have worked with a lot of different CFOs and finance folks, they don’t like to hear the word risk. Risk is for engineers and product developers. What we want to see is how we can mitigate that risk. 

So do you have any specific strategies, from your perspective, because you are saying that if you want to grow, you definitely have to take risks? But that risk has to be manageable. We should be able to mitigate the risk. So from your perspective, let’s say if we talk about our traditional manufacturers and distributors, they are not going to have as much experience and or appetite in taking those risks. So what will be your advice or recommendation in terms of taking enough risk so that we can grow the way you are growing right now.

Kevin Mako 7:01  

The interesting thing is when you have a career story and entrepreneurial story like mine, and you have danced very delicately with risk, right, you become very, very acutely aware of what those risks are. I would say if you looked at the way that an entrepreneur, especially a high growth, especially one who’s relying on internal financing, essentially financing by clients, you can’t just take bold or aggressive risks. 

And one of the big things that we did in order to scale without collapsing, and to be able to do that over and over and over again, is just like a relentless appetite for experimentation. Very small, very calculated tests, no matter what that would be, whether it’s new marketing programs, new advertising avenues, new website, new methodologies, new client base, whatever it might be when you’re trying to scale and grow, and you are very risk-averse, it’s far easier to take a little bite-sized chunk, and then start to see what works and then slowly start to develop the ones that seem to be working, and let go with the losers.

Kevin Mako 8:06  

And that is one of the things that some entrepreneurs and some CFOs. And some companies will say that we really want to focus on one big thing and put our eggs in one basket. But if you have to be risk-averse, okay, if you have to be very careful about the financing, if it’s not an option to fail, which isn’t for most people, then the easiest way that you can kind of be creative about that without losing potential opportunities, is just to relentlessly focus every month, what are you trying this month? 

And how are you benchmarking that? What sort of key metrics are you using to test whether or not that seems to have any flavor to it, or whether or not that’s something that should just be tossed to the side, shiny object syndrome, versus something that actually is quantifiably valuable to your business as long as you’re trying to scale it?

In terms of their #distribution network, #manufacturing, #supplyChain, funding, internal resources, the executive committee, etc., you could go on with a long list of advantages that traditional manufacturers have compared to #startups.

Experimental design with additive manufacturing

Sam Gupta 8:56  

Okay, amazing. There’s a lot of insight there. But in my experience, working in manufacturing and working with CFOs, I’m still trying to connect the dots here, right? So typically, when you look at the experimentation or the R&D phase, my experience talking to a lot of different manufacturers, it’s very hard to sort of template the risk and budget, the experimentation project, and that is sort of the fear majority of the manufacturers have because they don’t know how to plan for these projects, how to assess the risk of these projects, so they are not going over budget, and they are getting the ROI from these projects. 

And the second thing that you mentioned is bite-size, which is very interesting because as far as my experience with manufacturing goes and my experience working with manufacturers goes bite-size and manufacturing, they don’t go hand in hand. So help us understand a bit bite-size and experimentation can work together while mitigating the risk while not committing for this bloated amount of funds and budget and doing in a manageable way, the way you are doing?

Kevin Mako 10:02  

Absolutely. A good question, by the way, and we’ve worked with hundreds of companies over the years and exactly what you’re saying here in terms of how do you and let’s get specific here, how do you develop your next hot physical product, your next consumer product? And how do you do that in a bite-size manner? 

How do you take a stepping stone approach to it? And it depends obviously on the size and the scale. The bigger an entity, the further you could push a product down the development line, the more information you can actually get back from potential users or test groups or whatever else. 

But let’s look at something I’ll talk about one client, in particular, reliable products, we redesigned something called Uber light for them. It’s, basically, a multi-use light. It started as a showing light.

Kevin Mako 10:47  

But now it can be used in all these sorts of things, a very high-end light, great feature, the easiest ways that you can start on kind of simple experimentation is just really professionally and smartly redeveloped just the conceptual design and feature sets of that product. 

One of the first exercises we generally go through with the company is there’s a lot of data when you’re looking at your organization around your next product. And you may even not know just how much data there actually is, you’ve got sales reps, who are getting feedback from customers, you have customers themselves, which are posting reviews online about your products, you have engineers who are coming up with ideas, you have just random staff members, right, you might have a front desk person who has a great idea for a product.

Kevin Mako 11:32  

So one of the first things we like to put together when we’re looking at, whether it’s a small or medium-sized Corporation, it’s going to be all done all the way up to the large levels. But you build out the kind of like an innovation schedule to ensure that you’re able to collect all of those innovative ideas from within your team at a start because that’s the easiest, most accessible people, you can get this stuff done in no time, right? 

Once you’ve actually built out the plan, figure out how you’re going to serve and collect that data. It’s relatively easy to start surveying these organizations and trying to figure out okay, well, what features do we think could be revolutionary, what could be the next hot product that’s really going to put us back into the light or help us just shore up the fact that we are a leader in this market vertical.

Kevin Mako 12:13  

And you’d be amazed at how much information if you do this process properly, how much information you can gather, right there, you’ve already tremendously mitigated a bunch of, a whole bunch of your risk, because now you’ve got all of the potential stakeholders weighing in on what they think is good, and the bad ideas and whatever else. 

And that is an incredible starting point to really use all of that knowledge base before you’ve ever even started designing your next version of the product, especially before you’ve started engineering or tooling or anything else, right. That’s the first step.

Sam Gupta 12:46  

Okay, I could not agree more. I think involving everyone from the get-go is definitely going to hold the manufacturers in mitigating this risk from the get-go. But in our experience, and let’s go back to the traditional manufacturing and the distribution, they are not necessarily as innovative as some of these startups are. 

And if I look at some of these products, it’s not that these products are something brand new, that nobody was doing this functionally before. I mean, let’s look at some of the products. Let’s say if you guys are developing, maybe you guys are developing some sort of camera that’s going to be underwater, right. And again, the utility is not new. It’s not that people weren’t utilizing these products before. They had their own ways of managing things. 

But somehow, you guys are able to disrupt the space or ability to be successful in that space with these products. But traditional manufacturers are not able to do that. In fact, you are actually disrupting their market. You are taking market share from the traditional manufacturer. So what are some of the things the traditional manufacturers might be able to do the way you guys are doing these things? Because obviously, not as innovative as you guys are. 

Kevin Mako 13:58  

It always comes down to that first thing that is how do you actually be innovative. The amazing thing is a traditional manufacturer is you have exponentially more weight behind a new product than any startup out there. So in terms of your distribution network, your manufacturing, supply chain, your funding, let alone other things like internal resources, the executive committee, etc. right, you could go on with a long list of advantages. 

Of course, the disadvantages, you don’t have boots on the ground, you don’t have the hundreds of 1000s of people out there coming up with ideas or whatnot, potentially in your vertical or in your space or whatever else. So that innovation, it’s difficult to get that same on-the-ground feedback. 

But you can actually hybrid those two with some of the things I said before. That’s taking it one step further. Something really interesting that traditional manufacturers can look at when they’re looking to either build out their next product or even just improve what they have. First things first. Ninety-nine plus percent of patents today are not novel.

Kevin Mako 15:00  

They are integrations of two or more things that make that patent product novel that So first, you don’t have to be coming up with something that is so revolutionary like a teleportation machine to be innovative. It’s taking innovation truly, especially at the mass manufacturer level, big producers, midsize producers, that is taking what you have and leveraging it based on the data that you’re able to collect in those first phases, small, incremental improvements. 

What I think is very interesting to your listeners especially is looking at, and we could go into the Sam if you’d like but looking at the future of how to go from that innovation stage that we talked to earlier. Getting to the point where you’re actually testing certain marketing things to see in a very cost-effective way, what may or may not be those small, incremental improvements that will really improve your bottom line are really enhanced your revenue stream going forward. 

There are some tremendous things happening in the physical hardware space over the next 10 to 20 years that are going to leave certain manufacturers that are stuck in their ways in the dust.

Kevin Mako 16:08  

But for those who are willing to look forward and understand that, like a new future is coming, you’ve got a front-row seat of opportunity there to these things. There’s a number of things happening there. I would say five or six key things. First and foremost, Now this doesn’t affect everybody. This is going to affect everybody in the near future, depending on how you think of this, either directly or indirectly. 

But first and foremost, over the next 20 to 30 years. And look around the room right now that your wherever you’re sitting in or look around your car, whatever else, every single thing that you touch and feel around you in that room that is manufactured will have a microchip in it. It will be connected in some way or another. It can be something more complicated. 

Like we’re already seeing something like the NEST thermostat or whatnot, or it’ll be something very simple like the seat you’re sitting on to say, hey, look, you’re using the cushioning. Is that 50% efficiency, right? Now you need to replace that couch cushion and tap here, and we’ll get a new one order to your house. Right? 

It’d be very simple to very complex. But all of that is getting redesigned. Right now, there’s an entire lesson, as the Industrial Revolution, let’s call this the connected revolution. This is an entire revolution of things happening right now, which is redesigning everything around us.

Kevin Mako 17:19  

So that is something that, first and foremost, if you’re a manufacturer, you have to look at your product line and say how is this going to evolve? How is the market going to evolve over the next 10 to 30 years? And how am I going to be sure that I’m on that ride? 

Second of all, product design tools, software, prototyping techniques, materials, design, etc., are making product design or product innovation or incremental improvements to products easier and faster than ever, right? 

We all use SolidWorks design software for mass-manufactured products. You’re using FDA tools for simulations. Every year, those tools are getting exponentially better, right, and as other players come in, I like Autodesk fusion, 360, and such. And then you’re able to actually draw your tool line straight from your CAD model, all automatically organic shaping done automatically.

Kevin Mako 18:07  

All these sorts of tools and resources are making it exponentially faster for a manufacturer to make those improvements not only faster but far, far cheaper, especially when you start looking at some of these advanced prototyping techniques that are out there, not just 3d printing. Obviously, that’s the start of this pyramid. 

But you get into much more advanced technologies that are even Reverse Silicone Casting and all these sorts of 3d Printed metals and this sort of stuff. So really being able to get good quality test prototypes to market groups to say, hey, is this great or not right? Again, you’re mitigating your risk and actually going to full-scale production. Three big companies are spending less on R&D but much more money on the acquisition of small startups. So, Sam, you mentioned it earlier, it’s hard to compete with the sheer innovation and risk-taking and whatever else of the small folks. Well, here’s the beautiful cherry on top of that whole thing.

Kevin Mako 19:00  

You don’t need to compete with them, let them prove the market, and this is happening with companies all over the world. Right? Yeah, the NEST thermostats are a great example, right? Let somebody build the next great thing, and then you swoop in and acquire and then leverage your history and connections and manufacturing experience and all that to make them 100 times or 1000 times the size that they could have been right. 

We’re seeing this happening at all the high levels, but this kind of logic is trickling down most of our clients that are really startup clients almost all of them when they proved the market and they get to like a reasonable level of sales and not a big deal maybe six figures in sales right even low six figures they get acquired somebody says that’s a great technology.

Kevin Mako 19:48  

So what’s something to really keep your radar out is how you can acquire companies before they become big, and that’s a critical thing. Hit them when they’re just starting to make sales so that you don’t have to pay ten times the price. Price a year later when they really start to catch on. And in fact, you can be a big part of that growth story. 

So it’s a very inexpensive way to get a great new technology added to your line, either white-labeled with your brand or whatever else, and then scale from there right now, big one coming in here, talk about risk mitigation, additive manufacturing, this will change the game over the next 10 to 20 years manufacturing 50-100-200 units of a product, getting it out to the market, getting feedback, and then making small iterative changes, doing it over and over until you say, Okay, I think we’re ready to do 5000-10,000 units tooled up and going to market.

Kevin Mako 20:34  

So you now actually are able to test run your product to the market, for a fraction of the cost, you won’t be making any money because this is high-cost production per unit. But it’s a very cheap and easy way to test before you spend the big bucks on a full production line and marketing campaign and all the rest, right. And then you’ve got other things like crowdsourcing, and direct to consumer and all this other stuff, too, which is all kicking into it, right? 

But if you look at all these things put together, it really is, it is an incredible ecosystem of opportunity for those kinds of executives and CFOs that are looking to either acquire or develop in a smart way, small, iterative improvements to their products so that they are at the front line of that revenue growth, or that profit improvement over the years to come.

Something really interesting that traditional manufacturers can look at when they’re looking to either build out their next product or even just improve what they have: ninety-nine plus percent of patents today are not novel.

Technical underpinnings of additive manufacturing

Sam Gupta 21:19  

Okay, so let’s talk about additive manufacturing a bit more. So the way you are describing it, I don’t know if there is a real technology that has changed. And because of that, now additive manufacturing is possible. So let’s say CFOs may not be aware of the data in manufacturing. 

So how would you decide what has been the changes in the technology that is allowing manufacturers to be able to produce these goods and short runs and test out in the market before they can do the full production? Well, so tell us a little bit more in terms of what has changed. And what is changing?

Kevin Mako 21:53  

So is you know the way the big picture, the way to look at is you look at it like inkjet printers, right? It was incredibly expensive to print full color over the years; they got better and better to the point where now everyone has them in their home. And I can print out photorealistic pictures in three seconds, right? 

Yeah, it’s the same things happening with 3d printing. Now it’s a little bit more complex. It may take a little bit longer. But the reality is the same kind of exponential technology growth is happening. It’s happening to such a degree that what these big kinds of 3d printing companies eventually their goal is to and everybody’s working on it at the high levels in 3d printing or additive manufacturing is saying,

Kevin Mako 22:28  

How can we get closer and closer and closer to the cost level of one plastic part tooled versus one plastic part printed, and of course, ten years ago, very expensive? Every printed part was a fortune. The machines were a fortune. But as we all know, Moore’s Law, all of that is changing in time. 

So there are facilities, there’s one in particular, right now we’re having a kind of behind the scenes discussions with so I can’t go into it in too much detail. But they’re building a $10 million facility in Texas, just for this reason. So what they’re looking to do is to produce up to 500 units for new products, or changes to products or innovations on products, both for early-stage companies and for large corporations alike, essentially, in a reasonably cost-effective manner to test the market without being without actually paying to 3d print individual things.

Kevin Mako 23:18  

So they’re setting up certain methods and production lines and live technologies where they have certain materials getting fed in, they can very quickly and efficiently 3d print, live changeovers, all that sort of stuff so that your unit cost is coming down substantially. And it’s amazing because there are no upfront costs, right? It’s all variable costs. 

Once it’s actually designed and set up and tested, then it’s just a matter of printing out more units. So this sort of technology, although it’s at its infancy, right now, just look at what happened to printers. It will happen to 3d printing, where it just gets easier and faster and more efficient. 

So when you’re thinking about your products going forward, you may want to think if it’s not logical to tool up, or if you want to try ten different things in the market, but you can’t tool up ten different products or versions of that product start to think how I could do a few units? 

Kevin Mako 24:00  

What partners can I use? How can I design this appropriately so that this thing could not be mass-manufactured right? Light manufactured or the product of additive manufacturing, just to test out the market, you even looking at companies, right? Like IDT, Adidas, which are offering unique shoes to different users, you can actually customize your shoe online, and then they’re using additive manufacturing methodologies to send you a shoe that you’re the only one in the world that has, so that’s like the unique element of it, but there’s also the speed and execution of it. 

All of that is coming together and may apply to your products moving forward. And all of that is heavily reducing your cost to market at least to test, and then once you’ve tested and you know it’s a winner, then to a lot. So that’s why additive manufacturing is becoming so powerful. It’s just it’s simply reducing the cost of actually test run units before you go to market.

You don’t have to be coming up with something that is so revolutionary like a teleportation machine to be innovative. It’s taking innovation truly, especially at the mass manufacturer level, big producers, midsize producers, that is taking what you have and leveraging it based on the data that you’re able to collect in those first phases, small, incremental improvements.

How additive manufacturing can help expedite business case development and innovation

Sam Gupta 24:58  

Okay, amazing. So obviously, the policies are great. And I absolutely appreciate the trends and technologies. But when I talk to these traditional manufacturers, and obviously important to their engineers, and from the skils perspective, or from the appetite perspective, to be completely honest, they are one of the brightest people that I often talk to right now. 

They all understand these technologies, they all are very creative, they all are hanging out on things like I was talking about newer technology, we all have multiple ideas, but their biggest challenge and the barrier always is working in these traditional organizations, in pitching that next big idea in getting traction from the organization.

Kevin Mako 25:39  

And this is why it’s so important. So if you’ve got these engineers, or if you’re a CFO, or whatever it is, and you’re looking at it, and you’re trying to pitch up the chain and the corporation to say, yeah, we want to do this, here’s a big difference. If you had a million-dollar budget before, you could try one or two new products into the market a year. 

If that’s your budget, now, you can go to your executive and say, you know what, for that same million dollars, we’re going to try six products this year to test market, or on the inverse historically, if you were constantly bumping into the head, that ladder ceiling and saying, look, here, we want to develop this product, we want to test this market, and it’s going to cost a million dollars. And the executive said no, stick to what we’re good at. Now you can go to them and say it’s going to cost $200,000. And obviously, that’s much more appetizing.

Kevin Mako 26:28  

So again, you’re really reducing the barrier to entry for trying out new products. And then, of course, the products being successful, what executive doesn’t want to look at something that you’ve now proven you market validated, maybe you’re in a small geography, or maybe with a very niche demographic, whatever that might be, you can now say, Okay, look, for now, only $200,000, we designed, developed, tried additive manufacturing, we printed essentially 200 units, we sold it to this market, they were willing to pay, they loved it, look at the reviews that are coming back, of course, it’s an out of the park success. Now with 200 units.

Kevin Mako 27:02  

Let’s scale that to 20,000 units. Now you’ve got a great case model, a very quantifiable case model to say we’ve tested it. And this is why we want to improve this as opposed to having a bunch of engineers or a bunch of financial executives saying, yeah, I think this is a good new idea and could be a big deal. Forget that. That’s why those ideas get turned down historically. 

Now you have new technology that can give you essentially metrics behind that innovation. And if you’re confused or about how to actually pull that off, we help numerous companies with that very thing. Feel free to reach out to me, feel free to shoot me a direct line of contact on my LinkedIn or whatever else. And at least I can point you in the right direction, depending on the type of product that you’re looking to innovate on.

If you’re a #manufacturer, you have to look at your product line and say how is this going to evolve? How is the market going to evolve over the next 10 to 30 years? And how am I going to be sure that I’m on that ride? Click to Tweet

Additive manufacturing workflow

Sam Gupta 27:46  

Okay, so let’s talk about it from the engineering perspective. So let’s say find the engineer in the organization. And obviously, I like the pitch. And as a CFO, I’m probably going to like the pitch as well, that rather than investing a million dollars in one product category, now I’m diversifying my portfolio to five different products. 

So obviously, that’s a very fancy test, right? Now, let’s say find the engineer. My traditional workflow is going to be I probably design this product in my head, I work with my traditional suppliers, or maybe I need to work internally. And that’s how my R&D processes are set up. 

So let’s say if I want to work in the new mindset, or maybe I want to work with you, or a vendor like you, right, so how is my workflow going to change? What is going to be required from my side in terms of creating this new workflow where I can do these five products, as opposed to doing this one product and reading the entire workflow to walk me through the process, if you could? 

Kevin Mako 28:39  

Well, first and foremost, I mean, you have to look at the innovation like you traditionally would and kind of understand what difficulties or challenges you may have in the design. From what I’ve seen, there are always two types of hardware design. There is the one side which is okay, we thought of a new way that this could be improved, right, let’s say you’ve got a cup with a handle and you say, you know what, we’re gonna put a little pad on to the bottom of this cup, because people keep breaking them, when they hit them on the morning, they set them down on the table. That’s pre-existing technology. It’s a clear improvement. 

Let’s call it relatively easy to design an engineer. I mean, that one, in particular, is super easy. But this is the framework, right? You’re using existing technology. Now there’s the other side, which I like to call experimental design. And that’s where you say. You know what, we want to use a test lab to figure out new material for that cup, the whole cup, whereas if you set it down, it’s unbreakable. Now, that is an entirely different type of design.

Kevin Mako 29:30  

That is what I call traditional R&D or experimentation. Whereas opposed to the flip side is product evolved and inter evolution product evolution via design or pre-existing technology built into a new design or new framework. 

Generally speaking, if you’re an engineer, you’re going to get a lot of pushback from the experimental side of things. And you’re going to get a lot of interest when you can show a path to production with the nonexperimental things. So what I would suggest is, first and foremost, if you’re going to come forward to the executive branch with new levels of innovation, make sure that you have a fairly clear technological path to that innovation because executives don’t like to just open-ended experimentation.

It may work; it may not work. So the more that you can shore up in terms of ensuring that the experimentation is not required, but the other innovation is, and it will improve the product in certain ways, then the easier it is to get that sign-off.

Kevin Mako 30:30  

So that is the first thing that I think is very important. And we see that right at the startup levels all the way through to fortune 500 companies. We work with many different types of folks. We always see those two different types. And we always tell the experimental ones like, absolutely, but they can try this, but it’s an open-ended check. That’s what executives don’t like to see. 

You can’t go to an executive to say, well, it could be $100 grand, or it could be $10 million, we’re not sure. Hopefully, we’ll do it towards the lower end of that. It’s classic experimentation, right? How quickly are you going to find a cure? Well, every 10,000 samples that you different samples you put in gets you that much closer, but you don’t know if it’s 10,000 or a million samples before you find the one that clicks. 

And it’s the same thing when it comes to hardware. You want to generally avoid experimentally or at least have that as a small piece of the budget or a small piece of your ask. But the bigger piece of your ask focuses on well; here are the clear, quantifiable, direct things that I think we will be able to build fairly easily that will improve the bottom line or the top line. 

Sam Gupta 31:30  

Okay, amazing. Thanks for that. And we are close to our time, Kevin. So one thing I would like to mention here is I love hosting other podcasts hosts because they have fascinating stories and insight as well. 

So briefly, do you have any stories or insight that you’ve got from your podcast, from any of the guests, maybe something that totally rocked your world? And that you would like to highlight?

Kevin Mako 31:55  

That’s a good question, actually. So I run the product startup podcast, and we focus on essentially new hardware development. Most of our guests are kind of high-level executives or extremely successful product manufacturers on one side or the other. I remember the story of Mike Morton, who was on the show used to be the head of design for all of Dell desktop, out of the entire division for many years in any case, and one of the things that he always said, which was interesting, because he said, okay, you’re looking to develop something new. If it’s experimental, basically look at it. 

Even if it’s only partially experimental, which he says is always the pitch, right, as we talked about before, but he says first things versus double your budget, double the time. Yeah, he said, Look, if you do that, then work backward from that number, and everybody will be happy. But don’t try and push it. Especially if you’re trying to experiment or get creative or get clever with some really new technology that’s pushing the boundaries of anything that’s been done in the past, really keep that in mind, right?

Kevin Mako 32:55  

So in terms of design, you’re always better to be realistic, be honest, and forthcoming when it comes to these sorts of developments. But again, focus on what you can do, and then leave a small bit to that experimental thing. If the experimental thing works great, do more of it. If it doesn’t, then no biggie because you’ve still focused on most of the low-hanging fruit that easy wins the great next evolutions. 

And you know what, Sam, that all comes back to the very first thing that I talked about on the show, which is it which very few companies do if you are running manufacturing for right now I would suggest taking an honest look at every month or even three months if you’re doing it far, even every year, do you really believe that you have a strong internal innovation Information System, which collects and aggregates and organizes quality innovations from within your firm? 

And I can almost assure you that you almost everybody listening right now will say, well, the engineering firm does, yeah, the department does. But that’s only one of maybe ten different avenues that you should be collecting innovation information. And if you start with having a very well-designed information intake program, then it makes it exponentially less risky and far more profitable. 

As you start to implement innovations, which you will notice are consistent across the firm all the way from marketing through to like engineering, you will start to notice trends of certain things that are low hanging fruit, easy to execute, but will have tremendous benefits to either revenue or profitability. And that’s your first and easiest step and your least expensive step to creating great innovations going forward as a manufacturing company.

Sam Gupta 34:34  

Okay, that’s it for today. Kevin, do you have any last-minute closing thoughts, by any chance?

Kevin Mako 34:38  

No, that’s it. I would just if you’re interested in hardware at all. Please check out the product startup podcast productstartup.com, which I am very excited to be hosting. Like I say, every week, we have amazing guests on the show that are very like-minded individuals out of incredible product organizations. 

So hope to see you there and of course, anytime. Feel free to reach out to Kevin Mako. Hit me up on any social media platform, and I’m happy to have a conversation, even if it’s just to point you in the right direction. So thanks, Sam. I really appreciate you having me on the show. You are a great host, and I enjoy listening to the episode. So thank you.

Sam Gupta 35:10  

Same deal, my friend. You have been a great guest as well. And my personal takeaway from this conversation is going to have that strong internal innovation information system, and the more Intel and the insight that you have, the better you are going to be with your innovation. The far superior your budget planning and your spend is going to be. On that note, Kevin. I really want to thank you for your time. This has been a very fun and insightful conversation.

Kevin Mako 35:37  

Thank you, sir. Appreciate it.

Sam Gupta 35:38  

I cannot thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up learnings from our guests, and hopefully, you learned something new today. If you want to learn more about Kevin or his podcast, head over to productstartup.com. Links and more information will also be available in the show notes. 

If anything in this podcast resonated with you and your business, you might want to check out the related episodes, including the interview with Kevin Lees, who discusses how engineering can work effectively with production and finance teams. Also, the interview with Dave Hataj, who describes the role gears plays in our society and the nuances associated with the manufacturing process. 

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social channels. I’ll try my best to respond personally and make sure you get help. Thank you, and I hope to get you on the next episode of the WBS podcast.

Outro 36:36  

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.




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