3 Things all Entrepreneurs Should Know About Hedge Funds

Many entrepreneurs often consider seeking hedge-fund capital to get their business or new product off the ground.

What is a Hedge Fund?

And is it right for you and your business? Here are three things every entrepreneur should know about hedge funds.

1. Hedge funds are designed to reduce investment risks

The whole purpose behind a hedge fund is to reduce the risk of investments, a practice known as hedging. Hedge fund managers use a variety of different investment techniques, and invest into a range of different asset types in order to generate a higher return for a given level of risk than what is typically anticipated with normal investments. In other words, the risk is less, and the return is higher when compared to other investment formats.

2. Hedge funds can be divided into two different categories

Hedge funds can be divided into two different categories: absolute return funds and directional funds. An absolute return fund is designed to generate a steady, consistent return on the money invested no matter what. Basically, the manager attempts to remove all market risk in order to create a fund that performs well regardless of market performance, meaning the fund’s performance is entirely contingent on the manager’s skill level and expertise. While investing in an absolute return fund is a fairly low-risk venture, the returns offered on these types of hedge funds are low.

Directional funds, in contrast, are hedge funds that are not fully hedged. In other words, there is more risk involved compared to an absolute return fund. While these managers are exposed to the market, they do yield higher than normal returns for the level of risk they take. Directional funds are said to have a stock-like return, meaning that though returns may not be steady from year to year, they offer higher returns than absolute return funds.

3. More and more hedge funds are investing in tech startups

Many entrepreneurs wonder whether or not it is possible to raise venture capital from hedge funds. The answer to this question is both yes and no. Yes, because hedge funds do sometimes invest money in private companies. It used to be that the vast majority of hedge funds would never write checks to startups, and rather would be looking to invest in well-established companies. But the nature of the hedge fund game is changing.

Hedge fund managers are increasingly looking to invest in tech startups specifically. For example, San Francisco hedge fund Coatue Management was the backer behind Snapchat’s $50 million round of funding. Your ability as an entrepreneur to secure hedge fund capital will largely depend on your niche, as well as on your individual business profile. It isn’t an easy feat, but it certainly isn’t an impossible one.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.

3 Mistakes to Avoid When it Comes to Funding Product Development

Funding the product development process can definitely be a tricky endeavor.

Product Development Funding Mistakes

To improve your shot at success, avoid these three common development mistakes.

1. Failing to do research prior to applying for a bank loan

There are multiple lending opportunities available for potential entrepreneurs, and a loan can be an excellent way to get your idea off the ground. But first, do your research prior to applying for a loan. Understand which loans meet your needs, and which ones don’t, and make sure you fully understand the qualifying criteria. There is no use wasting time and energy applying for a loan you won’t qualify for.

2. Applying to every single Angel Group you can find online

Angel funding can be an excellent way to get your product manufactured and out onto store shelves. However, it is important to solicit angel funding strategically. In other words, don’t just apply to any and every Angel Group you come across after doing a quick Google search. Most Angel Groups have pretty stringent funding guidelines. For instance, they might specialize in funding products within certain industries, or with investors from certain locations.

The application process can be arduous and time-consuming, so there is no point in applying to an Angel Group that funds Cincinnati-based entrepreneurs for product development in the biotechnology industry if you are a Los Angeles-based entrepreneur trying to develop a new kind of beach cooler. If you are considering going the angel-funding route, be sure to only apply to groups whose criteria align with your profile.

3. Using crowdsourcing as a first step

Crowdsourcing platforms such as Kickstarter are definitely a great resource when it comes to funding product development. However, when you are trying to pull together funds for product development, it’s never a good idea to turn to crowdsourcing right off the bat. Do not attempt to crowdsource all funds needed for the development process. Instead, crowdsourcing should always be used to fill holes in your funding needs.

When you’re just starting out in the product development process, you are most likely in the idea phase, don’t have a clear business plan, have not performed audience research, and probably don’t have a prototype. This could spell out disaster when it comes to crowdsourcing. Remember, donors are much more likely to throw money your way when you are well advanced in the development process. They may want to see videos that showcase your product, a clear budget, and a comprehensive understanding about who your target audience is. Save crowdsourcing for last, and use it to close any holes in your budget. Furthermore, the less money you ask for, the more likely you’ll have success. It is much easier to raise a few thousand dollars than it is to raise $50,000 to cover all expenses associated with the product development process.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.

4 Ways to Develop the Ultimate Kickstarter Campaign

In the six years since Kickstarter’s launch, nearly 10 million people have pledged upwards of one billion dollars to fund tens of thousands of projects.

How to develop a kickstarter campaign

The crowdsourcing site can be a truly great way to fund product development, but Kickstarter isn’t just about getting free money from random people on the Internet. A successful Kickstarter campaign requires hard work and a well-crafted strategy before you click the “launch” button. How can you craft the perfect Kickstarter campaign and take your product from an idea to a tangible object on store shelves? Take a look at these four ultra-useful tips.

1. Set a goal that makes sense

You may want $100,000 to launch your product, but that doesn’t necessarily mean you’ll get it. First, you must set a reasonable goal that makes sense. Whatever you do, don’t just post a random dollar amount. Make sure you display a clear and coherent budget on your Kickstarter campaign. You may need to do some research to figure out what your factory order minimum is, how much the materials to make your product will cost, and how much you are going to paying employees, etc.

2. Get the timing right

The time you launch your Kickstarter project can actually have a big impact on whether or not your project is successful. The Coolest Cooler campaign, which is the most successful campaign in Kickstarter history to date, was only successful the second time around. The campaign originally launched in the month of November, but failed to meet its goal. Several months later in July, the campaign was launched a second time and proved to be much more successful, since consumers were much more interested in purchasing a cooler during the heat of the summer.

3. Personalize your campaign

Make an effort to connect with donors instead of sending out mass messages. If you want people to invest their money into you and your business, invest your time into forging strong relationships with your prospects, which involves sending personalized emails. If you don’t have time to write each and every contact a detailed message, at least take time to segment your supporters into demographics for more personalized targeting.

4. Use Kickstarter as your last step

Many entrepreneurs use Kickstarter as a first step for product development; however, Kickstarter should be your very last step. Don’t launch your campaign until you have a clear business plan, a small base of customers, and product you know is going to work. Don’t ask people for money unless you absolutely know that your product is going to succeed.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.

Everything You Want to Know About E-Waste

Did you know that it takes 539 pounds of fossil fuel, 48 pounds of chemicals, and 1.5 tons of water to manufacture just one desktop computer? Did you know that 33 pounds of minerals must be extracted, and 79 gallons of water must be used in order to produce just one e-reader?

What is E-Waste

Developing and manufacturing electronic devices we love and use isn’t just labor intensive — it’s also resource intensive.

Unfortunately, in spite of the vast quantities of resources it takes to make these devices, the vast majority become obsolete within a few years and end up in landfills. This produces an inordinate amount of e-waste, the consequences of which are definitely not pretty. But could smarter product design actually reduce e-waste?

What is e-waste?

E-waste is short for electronic waste. It refers to electronic devices such as computers, televisions, VCRs, stereos, copiers, fax machines, tablets, and mobile phones that are tossed out because they are unwanted, obsolete, or no longer working. Today, upwards of 20 million tons of e-waste are disposed of globally each and every year, and the Environmental Protection Agency (EPA) estimates that e-waste is the fastest growing municipal waste stream in the United States.

What are the consequences associated with e-waste?

At this time, only 12.5 percent of all e-waste is recycled, meaning that when electronic devices are disposed of, they often end up rotting in our landfills. This is incredibly problematic, as e-waste is often toxic. It is estimated that roughly 80 percent of all electronic devices release toxins into the air and into the earth when they are left to decompose in landfills. That includes dangerous heavy metals such as cadmium, lead, and mercury. While e-waste only makes up roughly two percent of all waste in landfills, it does make up a staggering 70 percent of all toxic waste.

How can better product design help with e-waste?

Through effective product design, product designers can actually help mitigate this e-waste problem. First and foremost, design can help encourage users to recycle their products, or resell them instead of throwing them out. This can be done by designing electronic devices that have detachable data storage. “People often don’t return their old cell phones because their data is on them,” explains Sara Behdad, a product design analyst from the University of Buffalo. “We thought if you have two different designs, one with removable memory and one without, how would this affect the consumer’s likelihood to return the product?”

Second, thinner products such as ultra-thin tablets and smartphones are much more difficult to take apart, driving up the cost of recycling and refurbishment. Disassembly of [thinner products] usually cannot be done automatically,” Behdad said. “If you want to recover components, you have to use manual labor.” By designing products that can be more easily taken apart, refurbishing and recycling costs go down, reducing e-waste. The bottom line? Well thought-out product design can certainly help out with the e-waste problem.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.

What’s the Advice From 6 Creative Geniuses? – A Spark of Inspiration

Designing a great product takes creativity. Are you looking for a bit of creative advice for your next product development project?

Creative Product Design Advice

Check out the following advice from six creative geniuses for a spark of inspiration.

“Others have seen what is and asked why. I have seen what could be and asked why not.” — Pablo Picasso

Famous Spanish artist Pablo Picasso knows a thing or two about creative genius. Routinely dubbed the most influential painter of the twentieth century, Picasso co-founded the Cubist movement, which was an early twentieth century avant-garde art movement that totally revolutionized the world of European art. The key to his creative success? Looking beyond what exists to what could exist. True creativity is all about charting new terrain and delving into the unexplored.

“If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” — Antoine de Saint-Exupery

Coming up with a great product idea and getting that product to the market often requires a whole team of creative people. Effective leadership means inspiring creativity in others. How can you do that? It isn’t about assigning tasks and work, as Antoine de Saint-Exupery says; it’s about inspiring passion and creating a common vision.

“Genius means little more than the faculty of perceiving in an unhabitual way.” — William James

Want to be creative? Learn to see things in a unique way. Break up your routine and try new things. It just might inspire you. If it worked for William James, one of the world’s most leading philosophers who churned out a slew of revolutionary ideas in his lifetime, it will probably work for you, too.

“If you hear a voice within you say ‘you cannot paint,’ then by all means paint, and that voice will be silenced.” — Vincent Van Gogh

Being truly creative means getting out of your own comfort zone and pushing your own limits. Van Gogh was certainly one for pushing his limits. The major post-Impressionist painter even cut off his own ear in a fit of creative frenzy. Now, while we wouldn’t advise cutting off your own limbs, getting out of your comfort zone and trying new things can be a highly effective way to get your creative juices flowing.

“When I teach classes at the School of Visual Arts I’ll ask the students ‘How many of you have been to a museum this year?’ Nobody raises their hand and I go into a tirade. If you want to do something sharp and innovative, you have to know what went on before. Museums are custodians of epiphanies, and these epiphanies enter the central nervous system and deep recesses of the mind.” — George Lois

1960s-ad man George Lois was one of the stars of the golden age of advertising, and pioneered a number of now widely used advertising tactics. He propelled major brands such as Tommy Hilfiger, Xerox, and MTV to stardom. But Lois was never one to just pull concepts out of thin air. Some of his best and most valuable creative ideas were firmly grounded in what came before him. Consider his iconic Esquire Magazine cover depicting pacifist boxer Muhammad Ali as the target of government persecution. Believe it or not, Lois used Piero del Pollaiuolo’s painting “The Martyrdom of Saint Sebastian” as the model for the now iconic cover.

“From 30,000 feet, creating looks like art. From ground level, it’s a to-do list.” — Ben Arment

Creativity doesn’t just come in one instant flash. As Arment suggests, it requires consistency, dedication, and perseverance. Creativity isn’t going to arrive to you; you need to get to it.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.

5 Eco-Friendly Materials to Consider in the Product Design Process

Are you looking for eco-friendly materials to use for your next product?

Eco friendly materials to use for product design

Be sure to consider these five materials.

1. Glass

Glass can be an excellent alternative to plastic in the product design process. While plastic is derived from fossil fuels and is incredibly taxing on the environment, glass is actually made from sand, a renewable resource. It is also incredibly easy to recycle.

2. Liquid wood

Liquid wood is a promising new bioplastic that is currently garnering lots of attention. Though dubbed liquid wood, this biopolymer is intended to replicate plastic. It looks, feels, and looks exactly like plastic, but is totally biodegradable as it is derived from pulp-based lignin, a completely renewable resource. Liquid wood is produced by mixing lignin, a byproduct of paper mills, with water. The mixture is then exposed to intense heat and pressure, creating a moldable composite material that is super strong and totally nontoxic. It’s a win-win. In the past several years German researchers have incorporated this plastic substitute into a variety of different items, including toys, golf tees, and hi-fi speaker boxes.

3. Chicken feathers

Believe it or not, chicken feathers are almost entirely composed of keratin, one of the toughest and most durable proteins available. An added bonus? There is certainly no shortage of chicken feathers. More than three billion pounds of chicken feathers need to be disposed of annually in the United States alone. Of course, we don’t expect you to actually use the feathers themselves in the design process. Rather, chicken feathers can be used to make a keratin-based plastic that is both substantially stronger than traditional plastics and remarkably more eco-friendly, as it is fully biodegradable.

4. PCL polyesters

Polycaprolactone (PCL) is a synthetic aliphatic polyester that can completely degrade after six weeks of composting. This miracle material has been used in biomedical devices and sutures, as well as applications for food-contact products, such as trays.

5. Starch-based polymers

One of the hottest eco-friendly materials out there, starch-based polymers are 100 percent biodegradable, low-cost, and renewable. Starch-based polymers are part of a growing trend in which plant materials are being optimized for manufacturing purposes. “An increasing number of applications have emerged recently, including packaging, biomedical products, textiles, agriculture, household use and building, where biodegradable polymers and biocomposites are particularly suitable as sustainable alternatives to plastics,” explains Bergeret Anne. Currently these biocomposites are bit pricey, but prices may very well drop as technology improves.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.

How to Create an Ideal Hashtag for Your Product

Using a social media hashtag is an excellent way to garner visibility for your new product and spark consumer excitement in the months and weeks leading up to a product launch. Keep in mind that the best hashtags will connect your product with your target market.

How to develop twitter hashtags for product launches

Crafting the perfect hashtag, however, is often easier said than done. Keep the following points in mind when designing the perfect Twitter hashtag for your product launch.

Keep it short and sweet

The shorter your hashtag, the better. You want your hashtag to be easy for consumers to remember and spell. After all, the goal is to get your consumers to actually use the hashtag. Effective hashtags will typically be a word or a phrase, never a sentence. A good rule of thumb is to try and keep each hashtag under twenty characters.

Be specific

Every brand should have broad hashtags that correspond to core keywords. However, when it comes to an event like a product launch, you want to be as specific as possible. This helps your followers identify specific campaigns and events. You want to distinguish your product launch from the everyday social media content published about your brand.

Make it unique

You want your consumers to associate your chosen hashtag with your brand, and your brand alone. Before you decide on a hashtag for your product launch, do a quick search to see if it is already in use across other social media sites. If it is, you may want to come up with an alternate hashtag. Remember, when your hashtag is memorable and unique, consumers will be more likely to use it when engaging with your brand.

Consider KitKat. The candy bar brand used their tagline for the #HaveABreak hashtag, and consistently use it on all of their social sites from Twitter to Google+. Their consumers know and recognize the brand hashtag, and therefore use it to engage with the social KitKat community.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.

Know Where Your Consumers are Looking for Information

The following is an excerpt from our new ebook, How to Design with the Consumer in Mind. To download the full ebook, click here.

Product design refers to the entire process of building a product, from conception to distribution. That means that any product development process must include marketing strategy. And of course, as you need to design the product with the consumer in mind, you also need to market with the consumer in mind.

How to know where your customers look for Information

When it comes to marketing, it isn’t simply about what you say. It is also about the channels you utilize to deploy your message. There is no use in deploying your message across channels that your target consumer isn’t going to visit. You need to know where your consumer is looking for information, and you need to deploy your message across these channels.

Figure out who your consumers trust. In order to reach your target consumer, you need to figure out which channels of communication he or she trusts. How is this accomplished? It is wise to employ some kind of social monitoring tool to determine where you brand is being mentioned online (forums, websites, etc). Do some primary research, such as interviews or surveys, to figure out which of these sources your target consumer trusts the most. Remember, you are wasting valuable time and resources if you employ a marketing channel that your consumer doesn’t find reputable.

Pay attention to social media demographics. In today’s world social media is undoubtedly an invaluable marketing tool. However, when it comes to crafting a compelling social media campaign you need to spend your marketing dollars wisely, paying attention to which specific social media sites your consumers are actively using.

Here’s an example. Imagine you are launching a new, environmentally friendly cleaning service. Your target consumer is a middle-aged working mom who doesn’t have time to clean, but does have money to hire a cleaning service. Twitter is most popular among the 18 to 29-year-old age bracket, and research shows that it is most commonly used by those residing in urban and suburban areas. If your target consumers are mothers between the ages of 30 and 45, it probably wouldn’t make much sense to pump money into a Twitter campaign, as it is unlikely that these middle-aged moms are regularly turning to Twitter for information. Pinterest, on the other hand, is most popular with adult females. The majority of users fall within the 25 to 34 age bracket (27.4% of users), followed by the 35 to 44 age range (22.1%) and 18 to 24 demographic (17.3%). Roughly half of Pinterest users have children, and one-fourth of users report an annual household income of over $100,000. It would therefore make sense to leverage Pinterest in a social media campaign, as your target demographic does have a significant presence on the site.

Personalize, personalize, personalize. Consumers are more likely to trust and engage with personalized content. Believe it or not, 3 out of 4 customers become frustrated when website content such as advertisements, promotions, visuals, or offers don’t immediately pertain to their preferences or interests. So whether it’s a PURL (personalized URL) or a personalized newsletter, be sure to employ some kind of personalized marketing.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.

4 Ways to Problem-Solve During Product Development

At some point during the product development process, you are likely to encounter a problem so large it leaves you feeling completely stumped. How can you successfully solve problems during the product development process?

How to solve problem during product development

Take a look at these four tips that originated from advice offered by expert problem solvers.

1. Start small

You’re in the midst of developing a prototype and have just found a massive flaw in your product design. Don’t panic: your problem might be huge, but the key to successfully tackling it is to start small. Consider the story of Sidney Farber. Dubbed the Father of Modern Chemotherapy, Farber took one enormous problem, which was cancer treatment, and focused on one incredibly small aspect of it, examining leukemia treatment on literally a microscopic level. Farber successfully developed a treatment that went on to become the foundation of treatment for many other types of cancer. The first step in tackling large complex problems is to find solutions to micro-problems — solutions which can then be extrapolated to bigger issues.

2. Don’t define your problem too rigidly

“Most businesses set goals in terms of ‘we need to improve X by Y percent,’” explains data scientist Mark Stringer. “On closer inspection, improving X by Y percent is often just a partial solution to a bigger, more ambiguous problem. Improving X by Y percent may incrementally improve your business, and using the define-plan-execute method will get the job done on a number of projects. However, if you don’t revisit and redefine the problem, you run the risk of misusing valuable time and resources.”

3. Take time to understand the problem

Just because you think you understand the problem you’re trying to solve doesn’t necessarily mean that you actually do. Consider the famous Netflix example. Back in 2006 Netflix offered a staggering $1 million award to anyone who could manage to figure out a way to improve the company’s viewing recommendation algorithms by 10 percent. Competing universities and teams worked for three years to solve the problem, but nobody ever quite hit the nail on the head. In the end, the solution that won the $1 million dollar prize was never fully implemented. Basically, it was a major problem-solving flop.

Why? Well, it has to do with the way Netflix defined the problem. Netflix needed to improve recommendations, but in order to do that, it didn’t actually need to change the algorithm. They should have taken a broader, more ambiguous look at the situation. Fast-forward a few years, and Netflix was actually able to find a simple way to improve their recommendations: they segmented recommendations by different household users.

The takeaway? Don’t define your problem too concretely. It will narrow your focus—which isn’t necessarily a good thing. “Businesses should also look to set concrete goals while defining problems ambiguously. Problem solving methods for ambiguous problems aim to continuously redefine the problem,” Stringer insists. “They start with a big, ambiguous problem and take an iterative approach to testing out solutions and changing course.”

4. Ask yourself, “Who else has solved this problem?”

More likely than not, your problem is not totally unique. Somebody somewhere along the line has likely faced a similar problem—and solved it. “The whole idea behind creative problem-solving is the assumption that you know something that will help solve this problem, but you’re not thinking of it right now,” explains Art Markman, a cognitive psychologist. “When you begin to realize that the problem you’re trying to solve has been solved over and over again by people in other areas, you can look at the solutions they came up with to help you solve your own.” Of course, their exact solution might not fit your dilemma perfectly, but the inspiration should help get your creative juices flowing.

Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.