by Tom Vass, Vice-President, RTP Product Development Guild

The RTP regional economy has a unique set of economic strengths in technology innovation. The basic platform for all the strengths comes from the population of scientists and engineers who live in the region. Raleigh tops America for PhDs per capita for a metro city.

The RTP is geographically the largest research park in the world and is home to more than 130 R&D companies, employing nearly 40,000 workers. The RTP is home to IBM, GSK, Cisco Systems, DuPont and Sony Ericsson.

The high number of PhDs, and the location of large high tech corporations sets the stage for technology commercialization in distinct product areas. Our focus at the Guild is on product development because that leads to new venture creation which leads to new markets.

New markets are essential for wealth creation because persistence in the status quo distribution from current markets of wealth tends to lead to economic stasis. We suspect there is a mutually reinforcing relationship between wealth creation and new product creation, meaning that the more of one leads to the more of the other.

However, this relationship is perfectly symmetrical, which means that the longer the status quo of current markets remains constant the longer the existing distribution of wealth will stay the same. The result will be lower rates of innovation and new product development.

New products do not get created without a lot of effort, and our basic business model addresses how to help entrepreneurs commercialize their ideas. Our approach to new product development is different than the existing players in the region.

We focus attention on independent entrepreneurs who are not affiliated with the tech transfer programs at the local universities. We also target small engineering and manufacturing firms, and spin-offs from the R&D efforts of the larger corporations. We suspect that many of the 40,000 workers in the RTP have great ideas that could turn into great products if they follow the business development model of the RTP Product Development Guild.

During the month of October, we are going to target product development in the 4 areas we think will be most beneficial to regional economic growth. Each product area shares a common technological platform in both design and production, even though the end market users of the products are different.

On each Wednesday evening of October, we will host an educational seminar at our facilities in Morrisville, N. C., to introduce our model to budding entrepreneurs in each product area.

Our selection of product areas are:

1. October 10. Consumer technology products for the mass retail market.

2. October 17. Health monitoring and home health care products.

3. October 24. Sports and recreational equipment.

4. October 31. Homeland defense products.

We will charge a small admission fee, and our seating is limited to the first 20 entrepreneurs who register to attend. We are soliciting the participation of individuals and small companies who are curious about our business model of advice for commercializing technology.

We think that participants will gain benefits from meeting each other, and listening to how others are going about the process of commercializing their product ideas. If the RTP Guild model seems attractive, then the next step would be to apply as a project candidate for one of the Guild’s product development teams.

While commercializing technology is a great objective, we think that the bigger goal for each entrepreneur is to win the Guild’s prestigious annual award for the RTP’s Most Disruptive Product Technology, presented in March of each year. But, you can’t win the prize unless you get in the game.

Registration for the October events is at: www.rtpproductguild.com

by Montie Roland, President - Montie Design

Product design in the RTP area is nothing new. Entities that vary in size from the smallest startup to the largest multi-national companies are engaged in a daily business of product development. These companies don’t practice the art and science of product development in a vacuum. They rely on an infrastructure of local vendors that provide a variety of services and products.

Since moving into our new office space where we added an embedded machine shop, and becoming a part of the RTP Product Development Guild, the Montie Design business model has changed dramatically. The biggest change is how much tighter we have integrated with the product design community around us. Our firm has relied on the services of other vendors for years, so in itself this is nothing new.

The new offices opened in June of 2007. Approximately one month later, we were joined in the office by Brandon Lisk and 101Machine. The office space included a shop and office area big enough for both companies. The rationale for having them in the same space allows both companies to offer more vertically integrated services. Consulting firms operate with remote (across town) vendors every day, but being in the same building allows a greater level of cooperation and coordination, thus relieving pressure from clients to have an in-house machine shop.

What I didn’t expect was how it would change the Montie Design business model. Once 101Machine was up and running, clients began expecting that Montie Design would do several things. The first was to handle the prototype builds directly. Previously we would design the product and create the documentation. Then we would recommend a machine shop and get a quote. The client would then take that quote and issue a purchase order directly to the machine shop (or other vendor). Now clients expect us to manage the prototype build and handle the billing so they just have to create one purchase order. This arrangement makes it more convenient for the client and gives us a higher level of control over the process. However, it also added a new layer of administration that we have accommodated for. As a result, we have begun issuing purchase orders to vendors and tracking them. This was a big change for a small, but growing, company. It was a welcome change because it has allowed us to offer a broader range of services that aren’t directly tied to the number of billable hours. It also requires tighter financial controls because of the larger, and more complex, cash flow requirements.

Not all prototype parts and pieces can be economically produced by a single machine shop. An example was a group of physically large parts that were beyond the normal capabilities of 101Machine. Barnes Machine, in Apex, was able to very cost effectively produce these parts in a very tight time frame. This was a case where we were able to produce a set of prototype parts in an off-site location as a service to our client. JMC Machine is another example of an off-site vendor (also located in Apex). We have worked with Glenn Berry and Howard Nystrom for over a decade to produce parts for customers.

We also work closely with ADR Hydrocut to create complex, flat parts. ADR Hydrocut has two water jet cutting machines. The water jet process uses an extremely thin column (fifteen times the thickness of a human hair) of water mixed with an abrasive to cut complex shapes out of sheets of just about any material. Their business model relies on quick turnarounds of parts. This means that you can usually order a part and receive it within five to ten working days. One of the advantages of our current office location is the close proximity to ADR Hydrocut. This proximity and close working relationship with the owners, Al Ely and Ron Harris, allows us to work hand-in-hand with them, which is critical on projects with tight time restrictions.

The value of the relationship with JMC Machine and ADR Hydrocut has gone far beyond any one project, or one customer for that matter. The personal relationships with the owners of these companies have lasted for over a decade. These are people that I call friends. As it is always critical to not confuse friendship with what is best for the firm, or the customer, I find it wonderful to be able to work with a group of friends whom you can trust.

So how does all of this tie into the subject of a design community? Much of our success as a design firm is related to the availability and performance of the vendors that support us. Without the vendors behind us, we could not serve our customers at the level to which they have become accustomed. Adding a level of vertical integration has allowed us to expand our services, but at the same time has highlighted our need for quality relationships with reliable vendors. Relationships such as these help form the backbone of the product design infrastructure that is such a vital part of product design successes in the Research Triangle Park area.