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IN RESOURCES
Resources are all the physical things you need to obtain and 'put in place' in order to develop a product.
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Weak financials and too little funding.
Never 'capital starve' a PD effort.
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What to do about it!
Just about 99.99999% of the time funds raised for new product development projects are substantially below what eventually is required. The usual reasons are:
- 'Good Time' estimating (problems don't exist); no consideration for Murphy's Law.
- Desire to please investors or bosses "We can do a lot with little, 'cause we're brilliant!".
- Naïve knowledge of what a full PD program requires.
- Founders focused too much on their equity.
- Technology-based team focusing mostly on technology investment, having little knowledge of the other major phases, such as marketing, sales, distribution, production and sourcing requirements.
- Some investors are surprisingly naïve of the PD process.
- Developers ask for all of what they think they need up front, before a track record of responsibility is established.
A thorough and knowledgeable, up-front assessment of the business plan, and detailed consideration of the plan's implementation, will help assuage under-capitalization. This is a very important issue, since investors are not particularly receptive of 're-visits to the well' because the PD project was under-funded. It shows a lack of understanding by the PD team.
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©2003, Richard M. (Dick) Haney
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