What are milestones?

Discussion About The Importance of Setting Milestones

Launching a new product is essentially an experiment. The “hypothesis” is the business purpose, and the assumptions can only be validated or negated by real-world experience. Going back to classical Chicago School of Economics, it was F.A. Hayek who pointed out that “entrepreneurs are rewarded by markets when they are right and show superior judgment, but punished when they are wrong.” Today, Dr. Paul Jacobs of Qualcomm simply states, “It’s OK to make mistakes, just don’t make a career of it.”

Entrepreneurial success comes from this continual process of rearranging resources continuously in search of greater value. Moving ahead through challenges and roadblocks increases the learning, which, when focused on what went right and what went wrong, uncovers the risks and uncertainties. Collectively, this learning improves the chances of successes. The secret to “maintaining collective momentum” means launching new ideas, rebalancing the team, and re-evaluating individual elements of the approach.

Milestones are the formal breaks that allow the team to evaluate performance along the way. Also known as stage-gates, or check-points, milestones enable you to learn from the results of the experiment to date, and make adjustments in modeling, strategy, and objectives as necessary to proceed.

As Ross Cockrell, general partner at Austin, Texas-based Austin Ventures with over $2.4 billion in committed capital, says, “It is important to maintain and support your credibility with investors today.” According to Cockrell, “Milestones make sure you’re doing what you said you would do.” See theĀ discussion below to determine which milestone you have passed in your product development process.

Product Development Milestones

Eureka: Idea Formation and Evaluation Stage
At the heart of even the most complex innovation there is usually a basic, and yet startling “entrepreneurial insight,” a new way of looking at an old problem. As this point, the idea and opportunity has been analyzed as we discussed in a previous article. Maybe the conceptual and engineering design work has been completed even a working prototype developed.

Alpha: Concept Testing Stage
An in-house process that can run parallel to engineering activities. The developers can also interview, and work in real-time with lead users, early-innovators, and other fellow “bench-testers” like friends and family, investors or their experts. Objectives are to learn more about expectations, and how end-users will most likely be using the product. It is important to get the early bugs fleshed-out, create the service and support/technical guides, get new ideas, verbiage on how to explain, discuss, and hopefully insight to selling more.

Beta: Product Use Testing Stage
Takes place on the premises of intended end-users, or where they will be using the product and preferable under actual usage circumstances. Objectives include finalizing the complex set of customer needs and specifications. May concentrate only on whether the product performs as expected or on whether the performance meets the direct needs of the end-user or as perceived by that user group. It is then determined to take the product to full-production or return back the bench-testing and even concept evaluation. If proceed, need to determine how to convert lead-user contacts into the first customers.

Gamma: Market Testing Stage
Where the product is put through its paces and thoroughly evaluated by the end users. More than field-testing, it is working with the pre-production units, or the first units produced from the production line that is not yet operating at full capacity, but making limited quantities of the product, or low-rate initial production (LRIP). At this stage, the key objectives are to check on the effectiveness of the marketing and sales strategy. If there is a solid the fit with business strategy the product is fully-launched. If needed, the manuals are printed, the sales and service representatives are trained and the channel is stocked.

Delta: Post-Launch Testing Stage
Usually occurs some time after the product launch. A small number of products are repurchased from customers. Objectives are to carefully evaluate wear and tear of the production product under actual usage circumstances. Usage and other performance problems are identified for product improvement aid in determining how to scale, modify, and evaluate the production process. If conducted formally, new product teams can discover ideas for upgrades, new products, product extensions, and even entirely new uses for the same product.

SOURCE: Roadmap To Entrepreneurial Success