ALTI's Apprentice Boardroom Report For 4/21/05 (Episode #14)

Mr. Trump asked his five weary candidates to invent a device that helps organize desk / office clutter for the big box office retailer Staples which does over $13 billion in sales annually. 

Under severe time pressure and with limited budgets, how does the winner of the task effectively invent, develop, and prototype a solid contending product that ultimately made it to production and is currently on the retail shelves? My practical business lesson, "Effective Product Development Strategies" will attempt to answer this question with simple practical advice that you can apply to your business today.

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Listen to my brief audio analysis that exposes the truth behind why Net Worth Corp. failed and offers a few more practical tips that just might keep you out of the boardroom. 

Clients or Customers, Which Comes First?
Despite the apparent and continuous friction between Craig Williams, 37, and Kendra Todd, 26, Team Magna Corp. deployed solid fundamentals to lay a solid foundation to build upon when they first sought to meet with Staples executives. They clearly understood the difference between client and consumer, and in this case, the "client" comes first. The team absorbed critical guidance and understanding behind the project and were better able to understand how they would be judges, what constitutes success and also create an item that resonates with the clients brand value, "easy". 

Below is one such nugget that came from the Staple executives:

Which is Better: Inventing or Enhancing?
Staples executive explained the market is filled with organizational doo-dads and gadgets and that the best course to take was to improve upon an existing product over trying to invent something totally new.  I couldn't agree with this strategy more, especially given budgetary and time constraints. 

I often find myself explaining to entrepreneurs that it is typically better to attempt to improve an existing product, service, or system. The reason is that the incumbent has already proven there is a market of customers willing to buy it. Enhancing an existing product can be done by improving current features, adding features, fixing application or usability flaws, increasing quality, and integrating synergistic items.

This strategy speeds market adoption, segments the current market and can sometimes even draw laggards into the market adoption cycle to try the product thus expanding and growing the overall market. (Laggards are customers that are late-adopters, and typically resist trying new things).

Invention usually requires much more research and development, (thus R & D costs must escalate accordingly). Introducing totally new products to a marketplace requires that the market be "made", (potential customers must be educated about a solution they never knew existed that addresses a problem that most are comfortable "managing" their current way, this is called breaking the inertia of status quo). 

Making markets can be very expensive since the customer ultimately decides if the pain or problem the feel is worth the cost of the solution to fix it. Lastly, I personally believe that there are very few real original ideas, and most all "inventions" are merely just derivatives of an existing idea. For example, the Internet is not a new idea, but a derivative of the  television & print media idea.

Your Turn... Have you taken away any valuable lessons from watching The Apprentice?   I'd like to hear your feedback. Just call the Apprentice Feedback voice mail line (800) 598-1338 ext. 9915 or email .  If you make a good point you could be featured in this newsletter.

Magna used the Enhancement strategy as a frame of reference when they set out to execute the next step of effective product development...

How Can You Get Quality and Affordable Market Research?
Team Magna left the comfort of their war room and ventured into the environment of their client to speak with actual customers. The act of being face-to-face enabled the "researchers", Kendra and Tana Goertz, 37, to witness the types of products that often made it into a customers shopping cart. This is huge since one can assume that those products represented a solution to an identified problem or pain the customer was experiencing at that time.

Surprisingly, a majority of product development initiatives do not require exhaustive studies or research with hundreds of participants. Very often relavant results can be discovered within just a few hours and with meaningful face-to-face dialog with between 5 and 25 suitable participants after which the law of diminishing returns begins to become evident. 

Garbage In - Garbage Out
The face-to-face observational analysis was critical to the teams success as it provided them with the necessary clues to adapt their research and analysis on the fly. In doing so, they were able to ask more direct questions, inquire about possible applications and uses, and gauge emotional responses and reactions to ideas. Further, entering into conversational dialog that is non-leading and inquisitive in nature will often result in the customer sharing the enhancements the customer would most desire.

Pitching The New Product
Whether pitching the new product to a client or to customers, it's important that the pitch focus on the customers pain and present the solution to that specific pain. Magna Corp. actually demonstrated its product in actual / practical use that, while a staged dramatization, was identifiable to the target audience of potential customers.  Just remember, solve a problem, cure a pain, win a customer!    

Shameless Plug: 
Do you desire to grow your market by adding a new product or service? 

Before you get started, consider retaining ALTI's team of specialists who can affordably research your target market, clearly identify pains, problems and solutions and guide you to introduce the right product with the greatest return for your investment. To get started give us a call or shoot us an e-mail for ONE free hour of complimentary consultation. (206) 984-9560 or

Feedback From Last Week Patricia Fernandez - Scottsdale, AZ. writes: Mr. Sabo, your article about Manufacturing Success in your recent newsletter has affected me profoundly. Not only did it contain real, candid, practical advice, you also motivated me to break free from my victim mentality where I was content to blame my lack of success (as I desire and envision it) on outside forces. Starting today, I will begin to put your principals to practice and make my own success. Thank you.

Its nothing personal, its just business...

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