Industry Expert Blogs

Have you ever engineered a new product that made it to production readiness, only to find the revenue figure is way below the plan, maybe even zero? While working on this poor revenue-generating product, other potentially more successful opportunities were put off, further straining the business financials. The bottom line is that it costs a bundle for new product failures; as a result it is essential to continually assess and change the opportunity selection process based on the valuable learning’s an unsuccessful product will provide.

As an example of cost, consider a small-scale project where there is an average of five people working on it for a year. For this example let’s say the fully loaded employee cost is $150K/yr. This gets to a labor only figure of about $750K for a one-year effort. Throw in masks, silicon, packaging, tools and other overhead for another $250K and we can easily hit the $1M mark for a typical small-scale project.