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Is the product to be leased, sold, subsidized or given away? Is the company a for-profit or non-profit business? What is the investment expectation of the investors and company - a hobby, an eventual IPO, merger with or selling to another firm… or the next Google?

Such fundamental business issues will definitely affect the development process and product requirements.

Following are a few examples of how the Business Model may interact with other product mentors to affect your product's definition:
  • Location of main market(s) and production location(s) - if offshore, this has implications on the 3rd Party Encumbrances, such as 'Eco-design' demands, regulatory and environmental requirements, thus costs. If you plan to ship product by sea then you should consider the product size, storage/climate characteristics, packaging type and weight to maximize the quantity you can ship in a standard container; this may affect Product Utilization.

  • On going cash flow - in order to meet an anticipated 'cash-out' position the set of features may need be only minimal. This will definitely affect the Product Utilization (feature/performance set and development costs), the Infrastructure (supporting costs) and perhaps Spirituality (the designer's passion for what is correct for the product).

  • Hire contractors to supplement employees - this can affect Spirituality, the passion and spirit of the employees. If a manager brings in Bob from a consulting firm because Bob is an expert in a particular area, perhaps a key employee, who feels she is just as capable as Bob, may be less inclined to passionately support the project thus increasing costs while reducing efficiency.

  • The cost effectiveness of outsourcing - this can affect the Infrastructure; it requires an honest and holistic analysis to see if it really is cost-effective. Many product stakeholders, have an "everyone's doing it so, we also need to…" assessment of the business need for offshore arrangements. Perhaps not…

  • Investor exit Strategy - this can affect Product Utilization (a hastened development schedule), the Product Market (eliminating some markets), and Spirituality (a great design is trampled by limiting the feature-set so the product is just good enough to demo to potential buyers, who may even change the product to fit their markets).

 
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©2006, Richard M. Haney
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