Crowdfunding new product development

Crowdfunding NPD

Online collaborative product development funding

Social product development is an emerging web based method of attracting funding and interest for new product ideas. Also referred to as crowd funding, social product development (SPD) allows individuals to ‘invest’ small amounts in return for some reward (usually a sample of the finished product).

For product developers, SPD provides seed-funding to pay for development, tooling etc. Almost as importantly it can also gauge interest, secure initial sales and help attract distribution deals.

The idea of crowd funding through social media and online communities was originally pioneered in the late 1990s by fringe artists looking to fund low-cost recordings, films or tours. Fans of a particular band or genre benefited by going to the concert, film etc and being publicly acknowledged (i.e. in album notes or on the artist’s website).

The shift to use this crowd funding model for product development was more recent and has been facilitated by web-based agencies such as KickStarter (US), Pozible (Australia) and CrowdCube (UK) with more sites still emerging. A notable KickStarter product success is the PadPivot, a portable and ingenious stand for iPad and other tablet devices. After setting a goal of US$10,000 in January 2011, the idea raised almost US$200,000 by mid-March, with about 5000 people pledging an average of US$40 each to support the product. For PadPivot’s inventors, this enabled them to complete the design, produce complex injection moulding tools and ship final manufacturing products by June the same year.

Why contribute?

The buzz of investing in an interesting product idea will never have the emotive pull of supporting an emerging band or artist. So if it’s not ‘social cred’ what’s in it for SPD investors?

On purely pragmatic terms, contributors receive rewards matching their contribution. For example a $5 contribution gets them acknowledged on a website, $15 gets a T-shirt and a $50 contribution earns the supporter one of the very first products produced by the venture.

Beyond these tangible rewards, SPD also taps into people’s altruistic side, as well as offering bragging rights to being a co-partner in the latest ‘must have’ product. Understanding who contributors are and what they want gives some clues to the types of products that are best suited to social product development.


SPD is not risk or cost free. Before being ready to list onto a SPD site, a product developer (inventor, designer, entrepreneur etc.) needs to put in a fair amount of effort and investment themselves. This includes protecting the intellectual property (IP) of the idea, and then undertaking initial design development to a level that clearly demonstrates and communicates the idea.

Both of these steps should involve professionals; patent attorneys for IP protection and product designers for industrial design and product engineering. Each of these steps can involve some time and cost, and need to be co-ordinated. For example, CAD mechanical drawings produced by design engineers are needed for patent applications.

Lastly, a compelling presentation needs to be produced, ‘selling’ the idea to potential contributors. This presentation usually takes the form of a YouTube-type clip featuring CG (computer generated) animations of the product, and video of a prototype in-use as well as the developer describing the product background and business case.
Generally the better this preparation is done, the better it will do on SPD sites.

Going live

Most agencies operate along similar lines although details vary slightly between each of the different SPD sites.
To list a project, developers are required to submit a video description of the idea, and define their funding goal ($) and a rewards schedule based on tiered contributions from a couple of dollars through to larger amounts (sometimes up to a thousand dollars).

All going well, the project attracts enough interest to reach and surpass the set goal, and the funds, less the agency’s fees, are transferred to the developer. If a listed project doesn’t reach its goal within the timeframe, funds are returned to the contributors. This latter scenario ensures that the system only supports projects with sufficient funds to reach an objective.

Hibermate banner image

The pitfalls

For all the apparent benefits, SPD has at least as many pitfalls. For contributors, the obvious one is that they may be getting mixed up in a shonky deal, and the product never eventuates. There are, although admittedly few, cases of this occurring in the US. It is important to note that contributors have no share in the business they are ‘investing’ in, and effectively no tax position in relation to amounts contributed.
For developers, the biggest issue is the brazen exposure of their idea. This is a two-edged sword; publicity attracts interest and contributions, but also alerts potential competitors to the idea. Even with water-tight IP protection, competitors can use their stronger market position or potentially work around patents and designs if they get an advance preview of the idea.


Based on the above, we believe SPD could be a very useful model if the following can be achieved. Therefore BEFORE listing, potential social product developers should:
  • Already have plentiful supplies of entrepreneurial spirit (chutzpah). SPD is not for shrinking violets as you’ll need to sell your idea and yourself online to a whole wide world of backers.
  • Ensure the idea appeals to the kinds of people that trawl SPD sites. That is, quirky technology, lifestyle or homeware products are good. Worthy but obscure products are not. Alternatively, truly altruistic products, i.e. products that help third-world communities, could also do well.
  • Also ensure the product is of a value that suits being provided (given away) as a reward for contributions.
  • Have strong IP protection in place. IP protection, especially across multiple countries, requires good legal advice, which we all know is never cheap.
  • Get professional industrial design done on the idea to turn it into a feasible and desirable product. As a minimum the product idea needs to be represented by still CG images. Better yet are CG animations and a working prototype.

As getting to this point requires much of the design development to be done, developers should be prepared to have invested a significant amount before ‘putting it out there’ for remaining funds to pay for things like electronics design, tooling, packaging, marketing and initial production. Developers should also be ready to act quickly if the project reaches its funding goal so that they can beat any competitors to the market.

SPD isn’t for all and has some real drawbacks. It’s yet to be seen if it becomes a viable community-driven alternative to new product development, or ends up as an interesting curio of the web 2.0 age. But for the moment, it is emerging as an exciting and liberating alternative of bringing about new products and designs. And that can’t be a bad thing.


Agilent's new Cary 60

Agilent's New Cary 60

Analytical Instrument Design

Cobalt is very pleased to unveil the product of our first industrial design assignment with Agilent Technologies, the new Cary 60.

The Cary 60 is one of the company’s most popular optical spectrometer instruments. The science behind this instrument is based on the principal that light reacts uniquely to different materials. Therefore the measurable reflectance or absorption of light can be used to determine the chemical composition of a natural or artificially made substance.

The Cary 60 uses sophisticated optics and control technology to rapidly focus and detect light passing through a sample. Applications are very broad and include chemical, environmental and industrial analysis as well as forensics, biotechnology and life sciences to name a few. The instrument is equally at home within pharmaceutical labs or university facilities.

Design innovations

From an industrial design perspective, the key user interaction we considered was the sample access. The feel and action of the two sliding doors became literal and figurative ‘touchpoints’, prompting careful design detailing including a stainless steel handle plate that imparts an impression of quality and solidness.

Broader objectives such as DFMA (design for manufacture and assembly) and service access were also key design objectives.

Cobalt’s role within the product’s development was to work with Agilent’s R&D and marketing teams based at their Mulgrave site. Initially we developed 3 concepts ranging from moderate to major change. A key part of the design development was the early consideration of rapid, fastener-free assembly techniques.

The chosen design features complex surfaces restrained within conventional overall forms. The instrument expresses intelligence and technology within a conservative context.

About Agilent

Agilent Technologies began life as Hewlett-Packard. In 1999 Hewlett-Packard decided to focus on its IT products and spun-off its electronic and bio-analytical instrument division as Agilent. In 2010 Agilent acquired Varian, to form one of the world’s largest measurement companies with approximately 18,000 employees.

The Mulgrave site has now become Agilent’s Spectroscopy Division for atomic and molecular optical spectroscopy instruments.

Design Heritage

The new Cary 60 replaces the original Cary 50, itself a watershed product. Developed by Varian Australia in the mid-1990s, the Cary 50 was the first instrument Varian designed with the assistance from an external industrial design group.
At a global level the Cary 50’s design, user interface and materials set new standards in instrument design. Commercially, the model became an instant and enduring success over a remarkably long lifespan of 15 years. Unsurprisingly, Cary 50’s design language set the theme for Cobalt’s first 1998 project with Varian.

A new beginning

The opportunity and significance of designing the Cary 50’s successor has not gone unnoticed by Steve Martinuzzo, Cobalt Principal and Product Leader for Analytical and Medical. “Since those early days, Varian acquired a number of smaller businesses and then more recently merged into the larger Agilent group, but our on-going partnership continues” says Steve.

The next instruments in the development pipeline, respectively the 14th and 15th instruments designed with Cobalt’s assistance, are currently nearing completion. In the meantime the new Cary 60, like its predecessor, is set to mark a new beginning and is already showing it will achieve its own success.