Week 4: How to Build a Great Product 🧰🔩📐

Your DTC Product 101 Cheat Sheet

Pattern
7 min readFeb 23, 2022

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The power of a great product
When you have a great product that’s profitable on its own and that people love — you’ve built the foundation for a sustainable and durable business. When you have one of these killer products on your hands, your team’s confidence becomes infectious. We’ve been fortunate to have experienced this lesson firsthand since starting Pattern. However, it doesn’t happen overnight.

Arriving here takes a lot of trial and error, time and patience. It’s important to also remember that great products often emerge organically; once enough people use a great product, they will start doing what every business dreams of — talk about your product for you. The most powerful form of marketing, hands-down, is still word-of-mouth. Nothing gets you word-of-mouth like a great product.

So let’s talk about how to build a great product! 👇

A Family of Products

First, if you run a business that sells various products, it’s important to think about how each product works together. How do they each cohesively ladder up to a unified product offering? A series of great products disjointed from each other will not help create a long-term model for success.

Rachel Gant, who alongside Andrew Deming, is a Founding Partner at YIELD Design Co., shares her conviction that each product within a business should be holistically aligned and exist cohesively with all other products a business offers.

Rachel explains, “As we’ve added and expanded upon Yield’s product families over the years, we always keep that key word of ‘family’ close to heart as the building block for each new addition along the way.

Like with humans, there are direct families with tighter similarities, and extended families with more distant yet familiar traits. Together they create a whole, and when mixed among various generations, beautiful layers of uniqueness and similarities are revealed in a way that is both complementary and intriguing.”

Rachel Gant, Founding Partner at Yield Design Co.

Pricing & Production

Now let’s get down to brass tacks; building a great product is a two-part challenge.

First, you need to actually make a high-quality product, which is not an easy thing to do! Second, your margins on the product need to be able to support your growing business. Also not easy! A single great product that does both can make your entire business.

Pricing
It’s important to find the pricing sweet spot that gives you the best value, but doesn’t alienate too many potential customers.

Managing and evaluating changes in the market, materials and manufacturing is an ongoing process. We have all seen the fluctuations in the total costs of sourcing materials, manufacturing and shipping over the past year. Many goods have seen an increase in price, which is inevitably passed on to the customer — a delicate and unavoidable balance if you are building a sustainable business.

High-Quality Product
Finding the right materials and manufacturers for your product is crucial — ensuring they deliver on professionalism, quality, and reliability of your product.

Your customers will demand it.

Additionally, you must find common ground with your vendors on the total pricing, from source to ship. A big part of building a great product is developing great relationships with great vendors. In today’s automated world, much of B2B business is still human relationship management.

For eComm, you generally want to aim for 50% gross margins, minimum, including shipped cost. That’s the total cost you can sell your item for, whether DTC, or to a third party purchaser, minus the total costs it takes to actually make this item.

From here, you are going to keep taking from that leftover margin for overhead, marketing, and other business expenses. The margins on this product need to start high enough so that they can sustain your business after all the additional costs are deducted. They add up! That’s the nature of the business we’re in, so it’s important to start yourself off with a fighting chance to survive.

Note: For a more in depth discussion on Supply Chain, come back for Week 6.

Design and Engineering

Most eComm today involves selling physical goods. In addition to sourcing and manufacturing the items, you need to come up with a unique design and engineering model for what they’ll look like, and how they’ll be used.

For Pattern, we’ve relied mostly on two partners since Day 1 for both areas: Branch Creative for industrial design (the design of what our actual products will look like,) and Doris Dev for mechanical engineering and production oversight (translating the designs into specs and cost for production, and working with sourcing and manufacturing partners to start the prototyping process).

Some product founders either have a background in one of these areas, or choose to work off a manufacturer’s templates that can be slightly customized — a form of ‘white labeling’ a product putting some light brand touches on an existing product template).

For everything else, you need to find the right partners to help your product achieve its desired solution, reflect your business values, and make something that stands out in a crowded marketplace.

Working With Your Partners

Josh Morenstein, who alongside Nick Cronan, is a Founding Partner at Branch, talks about the importance of the relationship you have to build and maintain with your partners throughout the process of bringing a product to life.

“Over the past few years,” Josh says, “Branch has partnered with over a dozen entrepreneurial DTC brands to help create their inaugural product. All of the products that have gone on to see great success have three key ingredients in common:

1) Product design is a team sport
Communicate with your partners (industrial design, branding, app development, engineering, manufacturing, etc.) early and often. You will need to navigate compromises along the way, and you will want your core team at your side to help make the right decisions.

2) Industrial design is an organic process
Discoveries are made from day one to the day before the product launches. Be open to allowing your design to evolve.

3) Be efficient, but don’t rush your product to market
Physical product lives out in the world for a long time, so it’s essential to get it right. Even if it results in missing what might seem like a costly deadline, taking your time could be the difference between an ‘OK’ product and an amazing one that you’re proud to launch and consumers are proud to own and use.”

Josh Morenstein, Founding Partner at Branch

Industrial Design & Mechanical Engineering

Industrial Design
You want to approach this process with a clear goal of what you want to see. It’s often helpful to create a ‘mood board’ of visual swipes of products you like within the industry /category or from outside that space. What excites you, inspires you? What colors, textures, materials, or even intangibles, are you attracted to? This will help your design partner tremendously. A lot of communication is needed to help ‘describe’ how you want something to feel. It’s very subjective, and often takes a good amount of live back and forth! That’s OK, just prepare for it.

Mechanical Engineering
This is where the rubber meets the road. You should enter into these conversations with a sense of what you need your item to be sold for, your goal for what the total costs need to come in under, the quantities you need, and the timeline you are working with. Some of the aforementioned you can be more flexible on, and others may have some hard lines in the sand. This is important to communicate up front with your production partners. They are going to have to take in all these considerations, as well as the initial CAD (computer-aided design) to try and combine them into reality.

Prepare yourself for six-to-twelve months of running through a series of often costly initial prototypes, and subsequent iterations. Each round can take up a good amount of time between your feedback and the manufacturer’s production run. Be decisive, seek alignment for each round, and eliminate regret. You have to be bold here. Physical items are different from digital; you can’t ‘command + Z’ undo something easily. Your choices need to be extremely considerate and confident. If you make something rushed or inferior, you are stuck with the duds.

In conclusion

Remember that much of business is about interpersonal relations. Do not get lost in the physicality of your product in isolation. You need a great team empowered, engaged, and incentivized end-to-end. From materials to manufacturers to designers to engineers; it takes a village to get a high-quality product to your customer. And it will take great leadership to do so at a cost beneficial to your bottom line.

Remember to balance your budget, and to also aim for high-quality. This does not happen overnight, it takes time. Remember, if it was easy, everyone would do it. Building a great product is a time-tested defensible moat that can be an evergreen foundation to build your business around.

Emmett Shine, Co-founder at Pattern Brands and Gin Lane

It takes some failures and setbacks, but once you can build a great product that people love, and is highly profitable, you have the foundation to build a sustainable and durable business.

Good luck!
Pattern
🏡

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