5 Reasons Why Turnkey Product Development is a Bad Idea

Article Technical Rating: 1 out of 10

As an entrepreneur, or small company, I know it’s tempting to hire a turnkey product design firm to completely develop your new product from start to finish. The less technical you are the more this is probably true.

NOTE: If you're serious about developing a new electronic hardware product then download our free cheat sheets - 15 Steps to Develop Your Electronic Product and Summary of the Costs to Develop Your Electronic Product.

Some of you may be thinking: “I’m not an engineer. I just want to hire someone to take my idea and turn it into a finished product. They can just wake me up when they have it done.”

But that type of thinking is a big mistake for various reasons including:

1 – You Need To Manage Product Development

You need to be involved in every detail of creating your new product. To be successful you have to “own” the entire process of bringing your product to market.

Handing over product development, or for that matter any aspect of running your startup, entirely to someone else is a recipe for disaster. No one else has your passion, or your vision, so you need to be the one in charge of every step.

You don’t need to personally do every step yourself but you need to be involved enough to know what is going on. You must be the driving force behind each step constantly pushing your project forward.

If your product is a big success then developing other future products will be necessary, and you’ll need to manage those projects as well.

So to be truly successful you need to learn about the entire process of developing a new product. You can’t really do this if you entirely hand over the development of your first project to someone else.

If you are totally non-technical and the idea of being involved in developing a new product is scary, then you need to consider finding a technical co-founder.

But that means you better be good, or at least comfortable, with the other half of the equation: sales. If both product development and sales are terrifying to you, then you may want to consider another type business.

For me, being an engineer, the product development side was never an issue. However, the idea of selling terrified me. Calling on big retailers, meeting with corporate buyers, leading a team of sales people, and running trade shows, were all very intimidating to me.

But I was determined to become good at everything my startup required and I pushed myself way outside my comfort zone. In the end I’m a much better entrepreneur because of those experiences.

2 – Checks and Balances Lower Development Risks

There are big design firms out there that can handle every step of developing your product. But they are expensive.

There are also freelance engineers out there that can handle most of the steps. But then no other engineers will be checking over their work.  Using multiple engineers, each specializing in one part of development, you get a set of checks and balances.

Checks and balances in the development process significantly reduces your risk.

Just like you would get a second opinion on a major medical procedure, so it is wise to have more than one engineer developing your product.  You can bet that any new product hitting the market has been reviewed by multiple engineers, probably dozens in fact.

When I was a circuit design engineer for Texas Instruments (TI) it was required that all designers get second opinions from other engineers.

Engineers at TI were always required to present their designs to a room full of other engineers. It was almost guaranteed that at least some issues would be discovered during these reviews.

All large companies developing complex products require design reviews. This is because regardless of the designer, mistakes almost always occur when developing anything even moderately complex.

3 – Hiring a single engineer, is like having a single doctor your whole life.

I’m not sure about you, but if I found out I needed brain surgery I wouldn’t have my family doctor perform the procedure. Specialization is necessary to get the best when it comes to complicated tasks like healthcare or engineering.

Bringing a new electronic product to market is too complicated for only a single engineer.

Instead, by hiring multiple engineers that specialize in each step, you’ll be much more likely to get the best engineer for that task.

For a typical electronic product you’ll end up needing to hire probably four different engineers:

1 – Circuit Design Engineer to design the electronics

2 – Layout Engineer to turn the electronic design into a Printed Circuit Board (PCB).

3 – Firmware/Test Engineer to program and test the electronics

4 – Industrial/3D Design Engineer (to develop the plastic that holds everything together)

4 – Putting All Your Eggs in One Basket (Design Firm) is Risky

It’s a risky mistake to put the future of your startup completely in the hands of one single engineer or engineering firm.

What if that engineer decides to go back to working for a big company, or the design firm goes out of business? As the only engineer working on your product this will really set you back.

This is less so when you hire multiple engineers to develop your product. It’s much easier to replace an engineer working on only one part of your project, than it is to replace an engineer handling the entire development.

5 – Turnkey Development Will Cost You More

Engineers with different specialties charge different rates. Some cost more than others. For example, circuit designers usually charge more than firmware programmers or PCB layout designers.

Or an industrial designer, experienced in product aesthetics and ergonomics, will usually cost more than a 3D modeling engineer.

If you hire only one engineer, or one design firm, you’ll most likely be charged the highest of all those rates. Instead, if you personally hire separate engineers specialized in each task then you’ll be paying lower engineering fees for at least some of the steps.

This could easily save you thousands of dollars in development costs. It just takes being directly involved in each stage of your product’s development.

Remember, to be successful as an entrepreneur you must be adaptable and willing to learn about a large variety of topics. Rarely can you expect great things in life if you hide in your comfort zone.

Now don’t get me wrong and I’m not saying don’t outsource any part of product development. It’s very unlikely that you or your co-founders can be the best at every part of product development. But you really should avoid hiring a big turnkey product development firm that will completely design all aspects of your product. It’s your dream, and your product, so there is no one better to drive development than you!