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Starting a Bike or Any Other Kind of Business from Home

Part Four: Think Like a Product Manager & a Risk Manager

by John Neugent

Tech articles | Commentary articles | Starting a businees Part 1 | Starting a Business Part 2 | Starting a Business Part 3

John Neugent probably knows more about bicycle wheels than anyone else alive. Maybe more about bikes as well. He's spent his life in the bike business, at every level. He now owns Neugent Cycling, a firm devoted to delivering world-class equipment at the lowest possible price. If you are in the market for a set of wheels, please, check out John's site. He really knows his stuff. —Chairman Bill

John Neugent

Author John Neugent

The job of the product manager is, not surprisingly, to manage products. Depending upon the resources of the company, he or she works with engineers, designers, graphics people, purchasing agents, and marketing and sales people.

While I think most people would think the primary focus is to develop or source great products, there are a number of other key factors that most people don’t think about. One of the key considerations is vendor reliability. Can they deliver consistent quality on time? If you can’t get enough product, you can’t sell it. Further, if there are quality issues it hurts the brand and becomes very expensive.

Contrary to many opinions, most people don’t want something new. They want quality products that work and are generally accepted in the market. I sold both disc brakes and electric bikes well before their time, but the word "sold" is a misnomer since I had virtually no sales. If you think about Shimano, most of their new product categories are introduced well after the general category has been accepted. They didn’t get into the wheel business until Mavic had it well established. The same goes for disc brakes.

Much has changed since I first became a product manager in 1982. The PC and Internet changed everything. In 1982 communication with other countries was with a telex machine which required someone well versed in its use. Any drawings were sent by snail mail. Now we can Zoom anywhere and CAD (computer aided design) software is relatively inexpensive and within the reach of most people.

But one thing hasn’t changed, and it’s probably the most important part of a product manager’s job. The management of risk. There are all kinds of risks including delivery issues, patent issues (more on this below), quality issues, sales issues, and marketing issues. It’s the product manager’s job to reduce risk as much as possible. Management typically doesn’t reward success as much as punish failure. You are expected to do a good job.

Patent issues are some of the most costly. I will give two examples. I was involved with a wheel patent issue. Many other larger companies fought the patent and won largely because the patent had been invented long before the patent in question existed. It’s called "prior art". You can’t patent something that has already been developed (and in this case patented). A very simple patent defense costs $100K or more, which meant I couldn’t fight it.

A second patent issue has to do with how the U.S. patent system works. When you apply for a patent, it’s kept secret until the patent is either granted or rejected – which can take five years or more. I was working for a new saddle company with a new product using technology found on Herman Miller Aeron chairs. The top of the saddle was made of an elastic mesh. After a few years of development, we were ready to take the product to market when another patent issued making exactly the same claims that were on our patent. In other words, we didn’t own the technology. As it turned out, there were multiple patent holders for the technology we needed to manufacture the product and it died.

One of the top product managers in the bike industry at the time told me that every model year when they introduced their bike line he was petrified he would have missed something important. There are always unexpected things happening and it’s the job of the product manager to manage them.

John Neugent was was one of the first to establish quality hand building in Taiwan around the turn of the century. He now owns Neugent Cycling, a firm devoted to delivering world-class equipment at the lowest possible price.