– And then there were two. I’m gonna just do a little showing off to start and pronounce your name properly.
– Oh, that should be interesting.
– I know how to do it now. You taught me.
– I did.
– And you’re going to put on your slides, right?
– I’m actually gonna try it right now just to make sure I’m doing it right.
– You did it.
– [Jorg] All right.
– Well done.
– Ladies and gentlemen, it is my distinct pleasure and honor to introduce your Jorg Lorscheider, a native of Germany.
– That’s right. Who really, you can’t really hear the accent.
– I was three years old when I came.
– You Sprichst du Deutsch fluently?
– No, I mean, my parents spoke German at home, but I always answered in English. And that was times like in the late ’60s, we were trying not to be German.
– Right. That’s funny. Well, I’m a pure-bred Syrian and Syrian was only spoken in the house when we children were not to understand what was being discussed.
– Didn’t help me from a cultural standpoint, as much as I would have liked in later years. 10 Life Lessons from a 30-year Product Development Career by Jorg Lorscheider. Let’s go to it.
– All right. Well, just a little bit about me. So, I’ve spent my entire career really in product development, but I think what’s significant is that I’ve in that time done kind of all ways of trying to do product development well. So, I started with my first company was we’re gonna build our own engineering team. Then I founded a company doing outsource product development, was there for 10 years. And then I moved on to another company that had a completely different business model in product development, which is a completely outsourced business model. And then now I work for Omnica which is a 40-year-old company doing product development. And I also have my own product development firm, called TechFlex which is an outsource firm that does development using resources in the Ukraine. So, I have a lot of different experiences that I thought might be interesting in that time. So–
– What is the value position for TechFlex? Is I have Ukrainian people?
– Well, the proposition is, a lot of small to medium-sized companies don’t have relationships off-shore. They don’t have as much money, and we see a lot of them making mistakes. They go to places that are very inexpensive, but they really don’t get what they want. So, what we’re trying to do is bridge the gap, and provide very high-quality engineering services, software, and hardware. But, I would say, at a mid-tier cost, but so we have people in the United States doing project management and then the engineering people in the Ukraine. So, we have very strong partners in that.
– You might talk to your marketing coach at some point about that to tighten up that value prop, just.
– Okay. It was I wanna thinking about when we were doing this. So, I want to talk about different business models, and when does it really make sense to outsource? What’s the best time? And I’m hoping that we’ll have some good discussion on that. And what are some of the pitfalls? What are the some of the typical things that I see or have seen over the years that we can draw some experience from? So, let’s go to, sorry. So, as an example, I’m sure all of you have done remodeling in your home. You’ve done different projects and you have to choose which way you wanna do it, what type of provider you wanna do it with. You can do it yourself cabinet, you can do all kinds of things. Same with larger items. So, I wanted to talk a little bit about the types of… Let me do something here, sorry. So, the types of service providers that exist out there. So, this is pretty straightforward. There are full-time dedicated infrastructure with full-time employees. That’s like an Omnica, but there are many others around the country. They have a larger overhead, but they have more dedicated employees, maybe been there a little longer. And so, I think that they’re a little more stable, but they’re usually more expensive as well. There’s a hybrid infrastructure, which is something like TechFlex does where we have project managers that are dedicated employees, but their resources are contracted. And then you have actually, I did work for a company for about two years that actually only had contractors. So, there was actually no other than the owner, there were no dedicated employees on salary, and that can work as well. So, all these models work, they may or may not be right for you at a particular time. And so that’s kind of what I was.
– The last one seemed pretty risky. Relatively speaking.
– Yeah. I think it can be, again, it comes down to who you’re dealing with, right? In this case, in my case where I was working with someone, they had a lot of experience, they’ve been the contractor they use, they’d been working with for 20 years. So, I would say it was not so risky, but in general, I think it can be more risky. It’s also difficult to gauge their quality because, if they can show you lots of pictures of projects they’ve done, but what does that really mean? You’ve probably all seen people’s portfolios. They could be projects that someone did when they were working for somebody else and now they’re using it as their portfolio piece. So, it’s hard to make judgments about.
– You got a takeaway for a manufacturer listening about which way I should go?
– Well, I think if you’re a large company, let’s say you probably wanna have a dedicated infrastructure group like in Omnica, or some of the big ones, there’s medics and others, many others. You probably want to have the security of that because that’s a U.S.-based company and everything is, they have processes, procedures, legal, all these things. I think that the risk is lower, but usually the cost is higher. So, cost isn’t the major driving factor, it’s probably a safer option for a big company or a manufacturer of medical devices in United States.
– How’d you answer this? Pardon me. I’d like folks on the call to type in if they have a point of view about, ’cause I would, I think of this. I know it’s not exactly, but it’s like big, medium, small in terms of structure and costs. It’s going from top to bottom. And if you choose the wrong one, if you go smaller to save or middle, or I don’t know if there are any experiences about folks with things that they’ve built in the past, where they wished they had picked a different category, that’d be interesting to know.
– Yeah. The perfect example that I often hear in the market is look, and this isn’t a development, but it’s more with manufacturing, but I think it still applies. Look, we went with Flextronics and they didn’t have time for us. They were too big to really consider you an important client. And so they weren’t getting the attention that they really required. So, that’s an example of the kind of situation you could find yourself in.
– Rick says too big can be so expensive that you can’t finish.
– Interesting. Yes. You mean running out of money, or?
– I’ll bring them on, and Joanne I’ll bring you on as well. I know you’ll just be voiced, that’s fine. Rick you’re on mute, and you were saying that you can’t finish. Is that because you run out of money or what?
– Well, it’s not exactly a Goldilocks thing, but too big, too small. You can realize that halfway through quoting their services you couldn’t possibly afford them because they they’re set up with the infrastructure to deal with with equally large infrastructures. And that can make them very expensive. The nice thing about a big company is lots of history, fairly standardized, you know what you’re working with and they’re more likely to have somebody who knows exactly what you’re doing, which is good. And of course, if you go the other route with a small company, you want to have much more of a personal knowledge of exactly who they are, what they’ve worked on. I know I went in with, I know I went in to help a small business. They had a young guy starting something, but there were some things that you didn’t know. But if I was bringing in a consulting group, I would wanna have some, I wouldn’t wanna just talk to the head guy. I wanna talk to the people that were gonna be doing the work, because they really are more important than some broad history of a huge company, because you’re only dealing with a small one.
– Yes, I agree.
– [Joanne] Hi. I have a question. I recently hired somebody to create some packaging for me.
– [Joanne] And they had a room that was packed full of great projects that they had done. It really looked good. He said, okay, we’re gonna have a start off meeting and we’re gonna do all of, you get all the requirements down, and they didn’t even do that. They just started designing on their own. One would obviously. So, my question to you is, what would you do to vet appropriately that somebody from a design perspective, even when you’re seeing great looking products?
– Yeah. I think I’m gonna go to one of my concluding slides, is that.
– You don’t have to run there. Just tell us.
– Yeah. I’ll tell you. So, the thing that most people ask for when they are evaluating us, let’s say, is experienced with similar projects. So, I think they gave you that, right? They showed you a bunch of good stuff. Speed, how fast they could develop it. I assume that was acceptable to you. And then references also talk to people who have worked with them, and credible people obviously. And then cost is probably the next, the last piece. So, I think references is probably key here. I don’t know if you talked to any references, Joanne, but I probably would’ve wanted to talk to somebody who’d worked with them before.
– [Joanne] In all honesty doing that kind of thing was new to me. I went by what they were displaying and what they told me they would do. And they didn’t do what they told me they were gonna do, number one, which we did have in writing. When I kind of went by the projects that they had done.
– Yeah. A lot, that’s one of the things I always tell people in this business, is we sell confidence and trust, not as much as we sell engineering. You really have to build trust, and so it’s sometimes difficult to, and I think when, if you haven’t done it before, I think it’s extremely difficult. Any service provider, right? Look at, we’ll have some examples later or just look at kitchen options as we were talking about, we didn’t know which kitchen designer to use. We had a full service kitchen designer, we had, do it yourself, we had something in the middle. We didn’t know. So, we ended up picking the, do it yourself one. So, we designed, with their help, we designed the kitchen and then we used a third party installer and we saved a little bit of money in the end. And we wish we had actually gone with the full kitchen designer who was way more expensive, but by the end of the day, it would have been done right the first time and we wouldn’t have had to gone through a huge torture of getting things done. So, it’s the same kind of thing. It’s very difficult. References are really important or other people you know, that have, like the MDG group, of course, where you could say, I need a package, a good packaging designer and get referrals. Just like you would pick a doctor, right? You pick doctors often through referrals. Oh, I know somebody who’s a good this or that. So, I think that’s the wrong way to do it. Pardon?
– I know that every time I refer someone, I feel as though I’m giving away some of my own brand equity, my own credibility. If I refer Jan and she doesn’t know what she’s doing, then why should I… each time? So, I agree with that analogy and I appreciate it.
– And I wish Joanne would have talked to me about her packaging.
– When was this Joanne?
– [Joanne] Well, I was gonna, I’ve created a chocolate bar mold, a chocolate bar.
– When was this? When?
– [Joanne] Oh, I’ve been working on this for awhile. So, I created the mold, had the molds built. The molds are great. And I need the packaging down for my chocolate bar. So, I hired a company out here, I wanted to keep it local to keep them working. And so, I knew where I wanted to print it because it’s a reputable company. And so, I told the, the owner of this development company, I told them I wanted to do it at Warneke. And he says, oh yeah, I’m best friends with the CEO of Warneke. I’m like, oh, awesome. You understand their processes. You’ve used them before, you should understand this. Well, he created a package for me that Warneke turned around and said, I can’t produce this for you. So, I have now, because I’ve paid all that money to them and we have certain work done, had to have a dye cut, and a man and being that I’m a little person doing this, a dye-cutter manual, dye cutter where I’m gonna actually print it. I’ll print them out myself and then I’ll run them through a manual dye cutter to get going until I can find somebody else that can actually produce it. I’m considering going back and requesting money back because of this issue, and nobody else has been able to come back and say they can produce it, but I didn’t know enough about the industry. Unfortunately, it’s a learning curve for me.
– Well, it’s also not. I wouldn’t necessarily feel bad about it. I can give you countless examples. This is something that happens all the time is, especially in industrial design where you get some incredibly beautiful designs, but they can’t be manufactured. This happens all the time. So, I see people shaking their heads. So, yeah, this is a common occurrence in the design community. So, you really need somebody that has the practical experience on top of the design knowledge. And it’s sometimes hard to find.
– [Joanne] Yeah. The design is awesome though. It’s gonna be worth it cutting it for a while. Thanks so much.
– Well, Jan, you had a question and if you have a moment to call Joanne after this call, see if there’s anything–
– Yeah. And yeah, I worked in a, one of my first project when I first got out of college, was finding out about all the equipment in the company because someone had ordered a half a million cartons that were a quarter of an inch, too short to run on the equipment we had.
– I thought you were gonna tell the popcorn story, which is far more appetizing.
– Popcorn net when I had to do quick ’cause I was pregnant, but yeah, microwave popcorn are getting better.
– Jorg’s insinuating circumstances for projects, yes.
– Oh, I loved being pregnant because I could put my hands on my hips and say, I’ve got a deadline. Are we gonna meet it?
– That’s very resourceful.
– For Packaging a dedicated infrastructure, seemed best and most effective because, why?
– Because they actually were invested in the company and would take the time to actually learn all the pieces to make it run properly through their understanding of requirements for the equipment, materials that were possible, how the product interacted with anything to give you the shelf life. They would just, it just worked better from the different companies I’ve been in if you can have dedicated people that were actually doing that kind of work as packaging. Because they understood how they had to fight through different things to get the money they needed for the sampling, for the testing and doing that work. When you brought in contractors, they might have great ideas, but like Joanne said, it just didn’t work with what we had in the facilities. So, I’ve always, and I hated doing it because I’ll come in as a consultant and I’ll work with a company for a little while and I’ll turn around and say, you need to hire a full-timer to get this work done. You can’t afford to keep paying me. And I’ve lost out on a few, but I’ve also got some retainers that way. So, it’s, I just find it works better if you can hire a full-time person, that’s very invested in your company.
– Yeah. It’s called professionalism as well. There’s a lot of people out there that unfortunately in our society, of course, everyone’s trying to make money and sometimes that supersedes their desire to be honest or their desire to be fully transparent, let’s say. And that’s where we lead into some of these problems.
– Thanks, Jan. Peter. Peter.
– Yes. Hi everybody.
– Hi. You are in.
– Yeah. I’m not sure with the way this Zoom works, but I’m not sure if anybody–
– It works as you just wrote something nice, so, instead of me reading it, I thought I would love you to share with us your thoughts.
– So my question is, so, comment is that invariably, as the early men, as the product is presented for manufacturing, the early efforts in the manufacturing runs, result in some sort of evolution of the product or the products attributes. And you need such corporation from manufacturing engineering people to allow the product to evolve before it actually goes into a hard and fast manufacturing. My experience is that with small operators, like Jorg’s last two they’re not likely to have the ability or the interest in working with you to evolve your design as they start punching it through manufacturing. And whereas if you work with a bigger company, like his first example, you are more likely to, they’re more likely to have the resources and the interest in helping you evolve the product.
– I think that’s a great point. Yes, having the knowledge of manufacturability is something that really comes a lot through experience. You have to have a broad understanding and from it when you’re a designer of different methods and processes, and not everybody has that, and that takes a lot of experience. We also at Omnica do transfer to manufacturing. We work with contract manufacturers to make sure that they understand the workflow, they understand how it goes. We make modifications if necessary to get the, or we call it the new product introduction process, streamlined and getting that product into production as quickly as possible. Right.
– Right. And if you don’t have someone that can work with you on that basis, you end up what I might call attribute creep.
– Some of the, maybe insignificant, but maybe very significant in a marketing sense, attributes of the product are forced to creep as the product is forced fitted into a somewhat inflexible manufacturing process.
– Yeah. And those changes that late in the process are the most expensive changes typically.
– Yes indeed.
– Thank you, Peter. So–
– Thank you, Peter.
– while some of you might be thinking, we’re talking about 10 life lessons, we’re on lesson one. Holy hell, how long is this presentation? I’ll say that having worked on the presentation with Jorg, that one was absolutely the deepest one. I think.
– No, it was good though. A lot of good points and yeah.
– I also know that, as.
– Hopefully some of the next ones will be more interesting when you see all the crazy things I’ve done in my life.
– It is interesting. But I will put in a plug for Jorg, the reason I asked them to do this presentation. And I’m actually gonna read is a value prop, which he’s not memorized, I bet. To small to mid-sized health and tech manufacturers, Jorg is the guy you call when you are developing an electromechanical device or app, because over his 30 year career, he’s got it more than a thousand companies on the best development pathway. It is inconceivable that it’s more than 1,000, but we did the math.
– It’s kind of inconceivable, but.
– It is.
– 20 years as a service provider, I’ve seen a lot of projects, I’ve seen a lot of customers.
– Okay. Send you guys a comment, but let’s move on for right now and we’ll come back.
– Okay. Thanks. So, one of the things is, maybe I should have, there we go. So, I was planning to buy a stock and I’m sure all of you have had some related experience, that I did a lot of analysis, I was looking at charts, I was looking at everything. I talked to my wife, I talked to friends. I was trying to play it safe, I didn’t want them to take any risk. And of course in all that time I missed the opportunity. So, I think one of the things is you can’t get rid of all risk in product development. You have to move forward, and if you’re just lying dead in the water, it’s not, so, lying dead in the water is nothing but a comfortable alternative because it’s, no risk is never gonna make you go anywhere. So, I think that’s something that I see in a lot of clients. They want to be so sure that they get it right, that they totally miss the opportunity and it also adds a lot of expense into any kind of process because it adds time. And so, that was my, a life lesson number two. The life lesson number three. So, I was in Quebec City, which is a beautiful place. I don’t know if any of you have ever been there, but it’s fascinating. I was going to be speaking at a tech conference, and this is probably, I dunno, 20 years ago or more. And I really had no idea what I was doing. So, I was really, did not go well. It was pretty boring experience. So, I think one of the things about how this relates to product development is you really need to be prepared. So, we have a lot of clients. I’ve seen many, many clients come in, and they really don’t know what the product’s supposed to do. They don’t know their customer very well. And you need to know that extremely well while it’s cheap to do so. So, it doesn’t cost much to go talk to people to understand what the product is, build maybe basic prototypes, whatever, get the knowledge, because otherwise you’re going to be making changes in the design process, which gets very costly and time consuming.
– Your advice is to the manufacturer, to make sure you completely understand your value prop to your client?
– My advice is to people doing product, trying to get a project done, whether it’s a manufacturer or a startup or whatever, you really need to know your customer, you need to be prepared, you need to have a business plan, you need to be ready. Because even later on, when you’re in the midst of product development, there are always unknowns that happen. And if you can’t address the unknowns quickly and make decisions quickly, you won’t, you’re just gonna stall the project. So, knowing all this information, gathering all this stuff ahead of time, allows you to make those decisions very quickly and keeps the project moving. So, that was my life lesson number three.
– Thank you.
– Do it yourself. Hey, everybody can do it themselves, right? I have to admit to a huge failure. This is actually a project that I’ve been working in. I do a lot of handyman projects around the house, I built a coffee table for my daughter. I like to do stuff with my hands. So, I was doing this. My wife bought a steam oven, and I’m putting a steam oven in the cabinet, so, I have to build this frame. And of course the frame is painted a custom color and blah, blah. So, I have to do, get the material, cut the frame. Then I made a mistake. You can see it there. And basically last night I installed it, and this is a true story. Last night I installed it and it was completely that wrong. So, my wife called a professional to do it. So, my lesson here is you can do everything yourself, but it’s gonna cost you. So, this is really meant for people. I see this happen a lot with, and I’m not disparaging anyone with people that come out of academia, they’re really trained to learn well. So, they think they can learn everything that they need to learn in order to get a product development going. And I think my answer is, yes, of course you can do that, but you won’t get to where you’re going fast enough. So, you really need a professional team to do product development, you can’t just think I’m gonna learn everything and do it myself.
– This is very entertaining. Thank you.
– It’s true story. Literally last night I was so mad because it didn’t come out. I was so disappointed. So, this is me. Yes, I did actually catch that fish. You might think.
– How heavy is it?
– It’s 110 pounds.
– Wow. And you pulled it over the side?
– I did.
– It’s, let’s just say, on a surface, it’s easy, right? And you throw the line in and the fish went on and I reeled it in, right? But what isn’t easy is, it took me six years of trips, I probably lost six other of this size fish over those years, I had to learn what the conditions were. I had to learn how the fish behaved. I had to do all this stuff. So, my point being that on a surface, things look easy, but in product development, really, nothing is really that easy. Nothing’s really that simple. You might have a single-part product. It might just be one part, but you have all the intricacies of, how do you mold that part? How do you, what’s the tooling strategy? Where are the gate locations? Where are the bosses? Where are the sink marks? All the different things that happen in a plastic part design, for someone not skilled in it, you would think, hey, this is just a piece of cake. So, that’s my lesson number five. Is things on a surface, athletes are good example here too, right? They make stuff look easy. You think I can go do that, but you cant.
– Duane wants to know the taste of the fish. And I am more concerned about the prehistoric nature of the fish.
– Okay. So, just so you know, that fish is probably about 50 years old, and it is a grouper. And it tastes, actually grouper tastes very good generally, but when they’re this big, they’re not quite as good tasting, but definitely edible.
– And how long did it take you eat 50 pounds of, a hundred–
– I still have fish in my freezer.
– Oh, this fish?
– When did you catch it?
– About a year ago.
– Oh, okay.
– It’s vacuum bagged. It actually tastes pretty good when you vacuum bag everything.
– Okay. But still it’s enough for all of us to have some?
– I’m at a point where I really need to get it eaten. So, I might have to just ship all you guys, some fish in the freezer bags or something.
– Okay. Another benefit, of MDG.
– Another MDG benefit.
– Oh, premium benefit.
– So, I don’t know if any of you are car people. I am, I particularly love classic cars. So, I purchased this original 1967 Pontiac grand Prix convertible. I loved it. I was excited, I drove it. I drove it down PCH and took cruises in it, it was just, it was awesome. But over time I started, I liked working on it, but then I couldn’t really work on the engine much because if I wanted to do something major, I would have to, I couldn’t drive the car, and then I couldn’t enjoy it the way I wanted it to. So, I eventually, I also spent thousands of dollars. I underestimated how much money it would actually take to fix up this car, even though it was a driver. So, eventually I sold it, I lost interest. And I also lost some space, which is another thing. But I think what you need to, but the point is that money is the fuel that keeps development running. If you run out of money, your stakeholders lose interest, the project stalls, you’re really not gonna get where you need to go. And anytime a project stalls, it’s really bad news. So, it’s gonna cost a lot more money than you think, just like most things. So, I see, Andre on there. You have a comment, Andre?
– He wrote me in all caps immediately upon this, that, you’re unmute, Andre, as soon as you put the picture of the car up.
– Okay. So, yes, this is very apropos for your presentation because I am a car guy. I had a 1966 Buick Electra Convertible–
– Oh, beautiful.
– With a 455 cubic inch engine, the largest GM engine on a production line. And it was a great car. And believe me, you brought back great memory. So, this was so far the best MDG Premium presentation ever.
– Just because of this slide?
– Just because of this car.
– Wow. Okay.
– Yeah. I’m sure there’s a lot of you don’t care about cars, but this is–
– I’m not a car guy, but I sure wouldn’t mind getting driven around in that.
– Yeah. It was a lot of fun. So, everybody knows how this goes. I don’t know how many of you have done remodeling projects or even major remodeling projects, but I’ve done several. They are painful. And we got an estimate to do the remodel of this house after we had some serious water damage, and it kinda went up from there. And so, we’ve more than doubled the estimate, by the time we were done, it was 16 months versus, I think the original estimate was eight months. So, things that happened, it’s like going into design, again, not being prepared like we were talking about, you don’t know exactly what you want. Things are constantly changing, you’re finding stuff in the house that needs to be fixed, that you didn’t know it was buried in the walls. All the stuff you’ve seen, all the shows. And in product development, it’s the kind of same thing. So, the more, you know what you want, the more streamlined the project’s gonna go, the less it’s gonna cost. It’s still gonna cost more than you think always does. I don’t know. I think maybe one in 10 projects come in under budget maybe. And.
– So, what’s the implication for a manufacturer?
– Well, again, you have to be prepared, and you have to budget more than you think it’s gonna cost. So, even if someone gives you, or four people give you quotes, pretty much make sure you have enough contingency budget, or at least, you know where you’re gonna get more money if you need to, in order to make sure that you can finish that project because it’s, you don’t know what’s gonna happen. So, you need to have the contingencies.
– Eddie. You’re on mute. Eddie’s on mute.
– Another classic car survivor.
– And actually a 1966 Mustang Convertible, beautiful car, I had loads of joy with it, but exactly the same, but the best thing about selling it, was I sold it to somebody who had a four or five-year-old son. And although there was lots of work to be done on the car, you could see that, ’cause that I had children about the same age and they grew up with that car and it’s still going now, I hope. But I actually use the car whenever I talk to anybody about any project and the costs, but putting it into a context of like you say, with the house, or, have you remodeled the kitchen or a bathroom? Did it ever come in on budget? Why would you expect this to do that? Well, and that is actually the reason to go with, because again, if you try to do something, first time you do anything, it takes longer, costs way more. But if you go to somebody, who’s got a process, then you have more reliability. It’s still gonna, there’s still is going to come up.
– But if you ever said to me, hey, have you ever tried to remodel your bathroom? Why do you think I’m gonna do any better than that? I would probably not think that’s a great marketing pitch.
– How many bathrooms have you remodeled? It goes back to that question.
– And also–
– I think in contractors are generally, many of them are very unprofessional. we’re talking about professional services. So, it is a bit better. But nevertheless, you need to have contingencies because you don’t know what you don’t know and things change all the time.
– Go on Jan, come off mute and tell us your little boast.
– We had our kitchen remodeled here and it came in under budget because they screwed up a couple of things they weren’t supposed to and we charged them for it.
– Okay, you gonna get back in your note.
– No, well, they messed up. So, it was either.
– And you made them pay for it?
– yeah, it worked out really good. ‘Cause we knew what we wanted and we made up our mind before we started. And that’s what they did. And the two bathroom remodels came in right on time too. Right a little trouble with the remodel on his new house ’cause COVID is just slowing everything down.
– Oh, yeah.
– Jorg, you don’t have a COVID slide, do you?
– I don’t have a COVID slide. I didn’t address COVID here. I’m assuming I’m optimistic that COVID will one day be gone.
– Well, it’s the President has been cured and so.
– Oh, yeah, that’s right.
– We’re on our way.
– That’s why there are so many that they’re sick there in the White House.
– I said.
– Sorry about that.
– My finger on the, changed the attendee button. I apologize Jan.
– Sorry Jan. So, I’ve done a lot of remodeling obviously. And so, we downsized recently, sold the bigger house, moved to a condo, found out it had a bunch of problems. So, we remodeled that as well. But what I found is that how this relates to, in every quote we got, everyone has optimistic schedules. Everybody says, oh, I’m gonna get it done, and this many weeks, they’re basically all unrealistic. And my point is that, you can always find someone who’s gonna tell you what you wanna hear when it comes to schedules. They also know that once you start working with them, it’s very difficult to switch, right? There’s been all the learning and all the things going on and you can’t just switch, just like you can’t switch contractors, midstream. You can, but it’s costly. You can’t switch the service providers for design and engineering to midstream either. And so, you need to be aware that people do tend to fudge on the schedules and say, oh yeah, we can meet your timeframe, et cetera. I think one thing that we’re very conscious of, here at Omnica for example, is trying to be realistic on schedules. And if customers are not realistic about their schedules, we actually decline to work with them because we want to know they won’t be happy in the end. And that’s not something that you see very often in the industry. Most people are always looking to get more business, of course. And so, you have to be aware and be honest with yourself about schedules.
– You remind me, I was talking Jose Bohorquez this week, and I said, whatever happened to that lead, that this program we did produce. They said, yeah, we talked to her and we gave her an estimate. And she balked at the price to a degree that I said, well, can you go back and educate her about why it’s much more? And he said, in my experience that client will never be happy. She will always come back and say what you said, but you’ve said and all this other stuff. And so, he just said not a good fit.
– Yeah. And that’s very true. Some people will never be happy no matter what you do or they’ll let you run through every hoop. And it’s funny in the history of Omnica and history of a lot of product development firms, we sometimes, especially when we’re starting out, when Omnica started out, everyone was killing themselves, working night and day, 16 hour days to try to satisfy the customer whoever that happened to be. And the fact is, you can’t ever satisfy them, so, you’re just killing yourself and customers are happy to let you do that. But it’s no way to run a company, you’re gonna burn people out. You’re not gonna have longevity. So, that’s something that you have to be aware of as a service provider. But as a developer, someone who wants to develop a product, you need to be very attuned to what people are saying about schedule and heighten your senses to understand, to make sure that that’s an honest estimate and maybe even compare if you find somebody else in a related industry, say how long, you’ve ask them how long the project took and things like that to educate yourself about how long it really could take.
– 17 Years ago, I worked at an ad agency in Syracuse. Don’t ask me it was Post-9/11, I needed to work. And I read a book about advertising. I think it was “Confessions of an Ad Man,” and the quote I remember, the only quote I remember from the book is, when you’re dealing with a client it’s yes, sir, no, sir and ulcer.
– I like it.
– My client asks, if you ever fired a client.
– Oh yes. Many times. Many times. I think at this stage in Omnica, in my experience at this stage, we tend to weed them out before we have them. But there are times when that filter doesn’t work and sometimes you get a client that’s extremely demanding or yeah. I actually have a story that’s I’m not able to share, but we recently actually did that in Omnica and basically fired the client.
– That’s the story we wanna hear.
– I know, but it’s it’s confidential. I can’t talk about.
– Okay. Okay.
– Jan writes, she also fired a client. The second one she had when she started. It hurt, but it was necessary.
– Thought I was brave. Especially when you’re starting out, and you don’t have a lot of funds and you’re just scraping along to try to make the whole business work.
– I tired of one this year, too.
– It’s very different–
– Even though it’s gonna be a tough year. I was like, I can not do this.
– Yeah. Well, ultimately, if you look in the long-term and I think this is something that Omnica looks at a lot is, we got to have, if we wanna be successful in the long run, we have to have employees that are happy. Then we have to be happy.
– As a–
– Yes, exactly. You can’t burn people out, otherwise they won’t let us stay. Things like that, so. Yeah, so, I wanna talk a little bit about different cost structures. So, I’m sure you guys are all familiar with how service providers sell their services. Some provide fixed costs, some work time, materials. Sometimes you do a fixed phase and then you re-quote the subsequent phases as you move through the project. You can do phased estimates or even some product development firms would take equity for doing some product development. We are a strong proponent and this may be controversial of time and materials. And actually Omnica does not work on anything but time and materials. And the reasoning there is, anytime you have a fixed cost, all you’re really satisfying is the PM’s and the accountants and so forth, but it really has a negative impact on the projects because projects by nature are very fluid, things change, people talk about scope creep and all this other stuff. Well, scope creep doesn’t matter, nor does it exist if we have time and materials, because we’re billing on a regular basis. If you the customer want to turn left, instead of turning right, then fine, we’ll do that. But obviously there’s a cost associated with it, but it’s reflected in the time and materials. It’s the most flexible way to keep a project moving, getting it done quickly. Fixed costs of any kind tend to every time there’s a change, let’s reevaluate the scope, maybe if you’re a big company, it could be, let’s get a committee together and all this other stuff. And it’s just all stalls projects is really not as effective. So, I’m sure I’ll hear some comments about that, but that’s how we do business.
– Marc, you were first. Marc Fine, you were on mute. And what were we looking at?
– So two comments. First, about fixed cost and time and materials. That’s a tough one, if it’s a well-defined development project, you might be able to do a.
– If there’s a lot of research, how do you predict that? That’s insane. And you can’t do a fixed cost when there’s a lot of uncertainty. And I was also gonna mention going back to the last slide. When you have a startup and I’ve had a few, everybody there is sleeping at the office, just kill her.
– We’re having some–
– The reason a lot of your engineers come to work. Say again.
– You’re coming in and out.
– My Internet’s unstable. Anyway, when people come to work for a company like yours, it’s because they wanna go home on weekends and after five. And so there’s a disconnect between the client and the provider and they just have to kind of understand.
– Yeah. That’s true. That’s true. I haven’t really seen that much in our experience though. I think that makes complete sense. But I haven’t seen it much in our experience, mainly because generally we have so much more development experience than the startups that we tend to show progress much more quickly than they could ever imagine. And so, they’re usually pretty happy.
– Yeah. I just agree with you. I never do fixed costs. That’s a hard and fast rule I’ve got. I’ve done time and materials, phased estimates, and then it was a startup and they want to reduce my rate, I will actually reduce my rate, but I’ll do it for equity.
– Right. And you never reduced your rate below your direct costs? Right?
– You can’t lose money on something.
– Still profitable. It’s just, I go down to my lowest rate, but add in equity on the other side. So, well, like everybody wins an I’m still in the game.
– Have you ever gotten money out of the equity portion?
– I expect to soon.
– Okay. Let us know if that actually happens.
– That would be great. I totally applaud you for that. I’ve probably had equity over my career in probably, I don’t know, 20, 30 companies. I never saw done.
– I don’t trust it for a moment.
– Well, that’s why it’s a gravy on top. So, I don’t go below what I would’ve gone.
– That’s why. Yeah, exactly. You don’t wanna do that.
– My question was, in terms of just doing time and materials, which is my normal mode of operating too. What is your best way of dealing with customer-originated or client-originated project scope? There’s always the easy, the choices. And I wonder if you’ve got a better one than this, the choices are the memo reminding them that they’ve exceeded the scope of what we’re doing, we’re doing something extra, it’s going to cost more. Let me know if you need an estimate update or something like that. What is the, ’cause almost no matter what you do, sometimes they’ll still come back and say, hey, we thought this project was only gonna cost 30,000, it really cost 40,000. What’s the deal? And I said, well, we nearly doubled the work and you’re getting a fantastic deal. But what has worked best for you?
– Yeah. So, here’s what’s worked best and continues to work to this day is, so, what we do is we generally ask for a PO, let’s say for a phase, whatever it is, let’s say it’s $100,000 to make the numbers simple. We actually meet with the clients every week and we bill them every week. So, there’s very little difference between the accounting and the actual progress.
– So, the point every week?
– Every week.
– That sounds excessive and cumbersome.
– Well, not really. Billing, isn’t really that hard.
– No, it’s for you, I don’t wanna receive an invoice every week. It’d be like.
– Well, it’s important. And the reason is, well, this is what we do. And the reason is you want a couple tightly, the progress of the project to the expenditure of the project. That’s really the key. If you wanna know the other way of doing it, that’s fine. But, and by doing that–
– Management, I’d be like, you just sent me a $2,000 invoice. Exactly. What did you accomplish this week?
– Well, exactly. So, let me finish. So, by sending those invoices, the invoices are also very detailed and annotated. So, every engineer puts in his time. This is what I worked on, this is what I did. So, you see every engineer’s work, it’s very detailed. In fact, some of our clients use the invoices as part of their design history file.
– And so, the point is that the customer over time gets into a cadence, and an understanding of the implications of their direction and the cost. And that tends, and so when we start getting running out of money, we start saying, look, we know three, four weeks in advance, look, we’re gonna get to the end of this PO and we’re not gonna be done. So, we need a PO expansion or we need whatever. And we don’t really have any trouble with that to me, and honestly.
– I’ve got a question. This is fascinating, weekly billing. What, how do you, what do you say to them? If they give a little pushback, like, yeah, we like to pay for all our every month or something like this, and ’cause what you’re saying sounds great. And I’m just trying to walk through how I would deal with my customers. Now, maybe because some of my customers are really small, but at the same time, those are the ones who also lose track of what’s going on–
– And what they’re getting. They lose track the most easily, because they may be brilliant surgeons or this or that, but they’re usually terrible project managers. What do you say to happen?
– They don’t have to pay weekly, they just are apprised weekly.
– Yeah. So, that’s, so, you can do a couple of things, right? You can do, you can say, you can give them a statement weekly, for example, that shows the dollars, but it’s not an actual invoice. And then the invoice comes every month or something like that. But I think it’s really important that they understand the run rate, the burn rate that they’re incurring as it goes, because as they learn that it really informs them the impact of what decisions they’re making. And so I think that’s really the key.
– You include an analytic like, we’ve now spent 38.5% of the budget, but we’re only 23% of the scope done?
– Would that be helpful?
– We, know, lets get organized talk about this in one of my next slides. We’re very anti-reporting process, like to spend the time to do percentage calculations and do Gantt charts and everything every week on, that’s just a waste of time ’cause there’s never gonna be accurate. So, I think this way it’s simpler and we just learned over time that this has worked the best.
– Okay. Corey.
– Yeah. I can say from having been on the other side of the equation, hiring somebody that was on fixed bid and getting an invoice at the end of the month and having my socks blown away in terms of the cost, I’ve definitely approached as I’ve been doing consulting, do everything on time and materials, but it’s all about over-communicating. And I definitely try to provide weekly information but not necessarily invoice on a weekly basis, do it every other week or twice a month or something like that. But yeah, I found that over-communicating with the client and giving them, here’s what’s going on, prevents those into the month sticker-shock conversations that nobody wants to have.
– Cool. That’s exciting.
– And Rick, you were saying something that a lot of your clients are poor project managers. That rang a bell with me is that we’re very, very particular about who is project managing, because if you don’t have a good project manager on the other end, you take a big risk of your project not being successful. So, you really need somebody good on the other end, and that’s one of our evaluation criteria in deciding who we work with, if so.
– Let’s. Oh, go ahead. Go ahead, I’m sorry. I just, well, I just wanted to say one more thing about it. It’s really fascinating. The whole weekly invoicing thing, ’cause I’ve got a guy who once weekly reporting, but I realized that the most important part of that is probably gonna be the normal daily record of what I did during and how many hours during what days and how much it costs. I need to make sure that’s in the weekly, ’cause it’s online for him to look at all the time, but I’m finding out that a lot of them won’t look at it very often. So, Corey, I agree with you. I think, I need to also include that in my little one page weekly.
– And a dollar amount. I think it’s important ’cause they’ll look at the dollar amount and I guarantee you that.
– Than the hours.
– It can be.
– Just taking a step back. Of course, love to do time and materials, and we’ve had some clients that did it that way, but invariably right up front, when you’re pitching the project, the customer wants to know, well, how much is this gonna cost? And how long is it gonna take? So, how do you get over that hurdle? We’ve gotten to the position where we’ve given five phases to a project and we’ll give them a fixed cost on the first phase and try to get variable time and materials on the other. But even that the objectives, how do you get over that hurdle?
– Yeah, I think that’s, I’m glad you brought that up, Andre, because I failed to mention it. The fact that we’re time and materials doesn’t mean it’s just open season and we’re gonna build everything we can on the project. We still provide estimates, and we work very hard to achieve those estimates, but we always just call them estimates because they’re not fixed costs. So, we do work to budgets, we do work to schedules, but they are estimates and it’s time and materials.
– Great. Okay. But I was missing something ’cause–
– No, you were absolutely not missing something. And I failed to mention that.
– Okay, great. Thank you.
– Jan. You are on mute.
– I’m not sure what I can say. I know when I have to give estimates, and I call them estimates too, and say, here’s the max if we go over it, we need to discuss so that we can expand the money’s. And in packaging, people don’t do design and development processes particularly well for the FDA. So, I actually have forms that I just fill out at different stages to give to them, and then I force them to have design reviews for packaging, which they have never done before, or I walk away from the client. I just, ’cause then they get mad, ’cause they don’t understand what’s being done or how it’s being done. So, and it’s been lovely. I have a hard time with it sometimes, but luckily I’ve been able to work the last nine years with people that know me and know that I’m honest about it. So.
– Yeah. Reputation is everything in this type of business. So, absolutely. I don’t think, you develop a great reputation by having happy customers at the end of the project, not at the beginning of the project. And so, I think you need to develop those relationships and that rapport with the clients. That’s the name of the game, that’s how referrals come. Omnica gets 70% of its business through referrals and repeat business. So, it’s because of 40, almost 40 years, 36 years now of doing that.
– Oh, hi, Jorg.
– All your points are so recognizable. I’m sure.
– Well, I’d like to add is that we are sometimes confronted with optimistic or tights plannings, and you can see up front that they never will get the planning. They will always say exceeded. And then usually in the beginning there are decisions made because of the unrealistic planning. If you know up front that you would exceed as for, well, we as engineers, we always make a realistic planning and then multiply it by three or by five, and then we get real realistic planning. But if you know up front that it will take longer than you are decisions in the first place that you may, because of the tactile thing, became so at the end, they will hinder you in making your product right.
– Yeah. I think you can’t be afraid to lose a customer. You just can’t. Because if someone comes to us with an unrealistic schedule, and this is true of TechFlex too, which is a small company in comparison to Omnica, I just got to look, I can’t do it. Here’s what we can do, and if that’s not good enough for you, then go somewhere else. You don’t say that to them obviously, it’s a little more diplomatic, but that’s the upside of it. You can’t, and honestly, I think this is something that, Joe can probably relate to is, being eager is not a good trait for in the sales world, in this service business. You can’t be too eager. You need to–
– I’m not following me to sign a client.
– Yeah. To win, you wanna win so bad, you wanna get it so bad. You need to kind of step back and say, is this right for my company? And if it is great, if it’s not great.
– I’m trying to relate to–
– It’s a sales thing. It’s like customers, smell your desperation.
– But Jorg, do you also, if you present them with a realistic planning, can you done not also give them the extra opportunities it will offer? Say, you wanna be on the market in the nine months and it’s totally unrealistic. We say, but if you take one and a half year, then you don’t, then you can offer them extra opportunities that you can.
– Yeah. I have to tell you, I have never had a client come to me with a realistic schedule.
– Never. Never, they always come with their well, their thinking typically is, I wanna give an aggressive schedule, ’cause if we, and that’s so that we can get as close to that as possible, that’s their thinking. But the reality is not, that’s not how it works. There’s a certain amount of work that has to go on no matter what, and that’s gonna take a certain amount of time. And a lot of that comes to, again, a good client versus the not so good client, good clients have experience and understand what it takes. Hopefully I’ve done it before. Those are usually your best clients. The most educated ones are the best clients. The least experienced ones are usually your worst clients.
– It’s dispiriting. And I’m thinking about some of the folks in the group who are startups and they’re promising investors, we expect it to be here, and here’s the plan that we got from Jorg’s group. And we talked to them and we said, nine months and nine months shows up and now it’s 18 months.
– Probably unrealistic.
– I’ll tell you too–
– That’s true, but you’d rather be realistic. They won’t get there nine months. I don’t care who they talk to, so, it doesn’t really matter. The investor needs to know that.
– Your slides, some of your competitors are gonna say, okay, nine months we hear you. And then the switching costs are gonna be too great, but they will have won the business and you didn’t. So, how do you as an ongoing enterprise balance? Say, well, we wanna win the job if we can get them to understand how long it really will take.
– Usually the ones that are adamant about an unrealistic schedule are probably not customers we want anyway. But if they were, what I would say is, look, there are many things that we can do to satisfy your investors in advance of launching the product. We can do a 3D renderings, we can do mock-ups, we can do study prototypes. And there’s all these different things that you can do to give your investors comfort that the projects moving forward. So, I would probably focus more on that, than–
– No, you also gonna use the car example, where you ran out of money.
– All right.
– And investors lose interest.
– Well, again, we tell people, yeah, you don’t want them to losing, the investors lose interest of course. Yeah. So, yeah, that’s what I would, yeah, I would counsel them, right? I’ve seen so many startups, we’ve seen them all come and go a million times. I would counsel them, give them my best advice. And if that’s doesn’t work for them or they decide, sometimes they go away, like we have clients go away and then come back when they have enough capital do the project properly. That’s happened to us. So, again, I think it’s just being honest about what it really takes and going from there.
– And in the interest of time, Joanne, you had a comment?
– [Joanne] Yeah. Just this topic is really interesting for me because it was a big learning experience. I worked for a company, the owner of the company had worked with the FDA for 10 years. And so she was doing regulatory work and I came in to help out. One of the items I helped out was a Biological License Application, the BLA. So we had time sheets that we had to fill out because we had multiple projects that we could be working on. So, if the first hour of the day was a particular project, I put the project name down, hour number down and what I was actually doing during that time. But the biggest learning experience through that was how much time it actually takes to do something. And you don’t see it unless you actually write it down like that. And I think one of the great things about that is the time sheets can actually be passed to the customer or the client, so they can see during that out, well, maybe not all of it ’cause they don’t wanna see the other stuff, but the applicable stuff. They can see how much time it actually takes to do a particular review, write a document, whatever it might be. It could be multiple things, but.
– That’s a really good point. And I didn’t really think about that in terms of why this system works for us the way it does. By giving them that knowledge, we do give them essentially the time sheet entries, we rewrite them ’cause sometimes the engineers don’t write in the best way that’s acceptable to a customer. But, we generally, but it does give them some flavor of what it takes to do various tasks, and I think that’s probably part of the education process and why the system has worked for us.
– [Joanne] This information can be gathered and tallied, so that for a particular type of project, you can see how long it actually takes to do. So, for a Biological License Application for this kind of product, it took us this many hours, and when we did the next one, it took this many and you can then start to maybe even average them out and say, on average, it’s taking us this much time to do them.
– Absolutely. In fact, we do that. A lot of how we quote things is based on previous projects that are similar. That’s one of our great input criteria.
– [Joanne] Yeah. Thanks.
– Thank you.
– Sanjeev, you’ve been patient.
– Yeah. So, what I’ve found is when we raise money, it’s important to actually tell the investors a realistic timeline. And the advisors or the contractors, give us the timeline. If you can give us more of a timeline with plus minus X amount, right? Then it actually helps because when I go to the VCs and I say, hey, our funding is given based on milestones. And if we don’t hit the milestones, we don’t get the funds and you’re not able to move the project forward. And we had that happen with [Sanjeev’s company] POC, right? Where we didn’t have the milestone because the product wasn’t completed and the investors were unhappy and we have to beg, borrow and get the funds. But if there was a more realistic timeline, which said, okay, this can go up by 20% or 30%, then that’s fine. Because then that’s what you give to the investors and that’s what they go with. So, everyone’s expectations are in line. But if you just say, hey, this is the timeline, and reality is it can be 50% over or double the timeline. You were speaking about this when you build your house or remodel, that happened to me at my house as well, right? It went up by 100%. So, unfortunately, when you have a budget, you can control it, but when you’re a startup and you’re getting funds from investors, they don’t have that much control.
– I know it’s very true. It is very much a process of managing expectations and doing it in a way that makes people feel comfortable. Some people will never feel comfortable and you will lose jobs, other times they’ll go, okay, this person’s being honest with me and I need to, this is who I wanna work with. So, it can work in your favor and it can work against you as well.
– Yeah. And I’ve had that as well, where we had one contractor who said, they’ll do it a certain way. We agreed to certain things and they were not doing that. Whereas we brought in another contractor and they did that. However, on hindsight, I would have gone with neither one of them actually, ’cause they told me what I wanted to hear, not what would actually happen, right?
– I had a full time, the comment I’d given earlier–
– But you’re not gonna refer those two companies to anybody else I assume.
– No, I wouldn’t.
– Exactly. And that’s the point, right?
– [Sanjeev] Right. Exactly.
– Thank you.
– Jorg, take us to point number nine.
– All right.
– So maybe this is really too much. So, I actually in my household, I never really minded doing dishes. I really don’t mind it at all, I enjoy doing dishes. But my wife, she just says, you don’t do them the way I wanna do them. They’re not clean the way I want them to clean. So, I say, well, fine, you do all the dishes. And so she does, she does all the dishes, I guess that works in my favor. But, I’m not gonna fight her on it. So, the same thing is true in product development. We tend to fall in love with our own projects, right? We’ve invested time, we’ve done all these things and we don’t wanna relinquish control of it. You may want to, let’s see if there’s actually, sorry, no. And you have to let go to some degree to people that know what they’re doing, and you’ve got to give other people an opportunity to even improve on it or know more than you. So, you have to have some humility, you don’t necessarily have to control everything. You don’t, I noticed this a lot in customers that come to us, they want to be geographically close to the development. And I find that especially today in the COVID world.
– Can stop in physically and.
– Yeah. Well, that’s what they think, but they never do that. So, it’s just kind of a, it’s almost like a human comfort thing, but it doesn’t really achieve what they think it does. So, I think you can, especially today in the world of Zoom and COVID and how we’re being able to be productive remotely, you don’t really need to be right near your development partner, unless there’s some particular reason, you’ve got a special lab or something like that of course. But a professional organization doesn’t really need you hanging around all the time. No offense.
– Duane, I know that your comment’s a little off topic, but I’m curious about it. So, tell him what you wrote in.
– Yeah. I just said you should get a Smart Sink. They’re fantastic.
– What is it?
– I put my dish in the sink, I come back a day later and it’s gone. It’s really, really nice.
– It sounds as though your wife did the dishes.
– It’s evacuated. As we joke that my and I just put my dishes there and then when I come back there, it’s clean, it’s amazing.
– It is amazing.
– [Duane] Cleaned and put away.
– Now, I do have to do the dishes here, I don’t always want to in between you, it sounds as though you’ve come up with some strategies I might employ.
– Think about it. There’s no negativity when you say, I have a Smart Sink. Does the dishes, it’s a Smart Sink.
– We’re gonna, maybe in December, we’ll have a session just about–
– We’ll have a counseling session. So, just call me and I’ll charge you for the time.
– Number 10.
– Okay. So, I used to run estate sales. I actually owned a franchise called Caring Transitions.
– What haven’t you done, Jorg?
– I don’t know. I haven’t really done that much. I’m really not that interesting. But I had this franchise, I loved it. I was helping seniors relocate to senior living facilities, and then we did estate sales to help them sell all their belongings and so forth when they couldn’t live at home anymore. But what I noticed was people were selling some just amazing things, and we would price them and we would research them and try to put a good price on them. But I always thought, gosh, people just don’t value this stuff at all. And I always thought that people are just so cheap. It really was really discouraging, ’cause some of the stuff was beautiful. Like, we have this pottery from Poland that this one lady had, that was just, it was out of this world and people are just like, oh, can I buy this one piece for $2? And it was worth thousands. But anyway, I digress. So, I thought that, I think what happens is clients who, especially startups I think, they click too high, a value on the work, their ownership of their project. It’s like, I’ve put all this work in, I’ve done all this stuff and nobody could possibly know as much about it as I do because I’ve gone through all this pain. And I can just tell you from a service provider perspective, don’t kid yourself, your stuff isn’t really that unique. Most, I would say 90% of everything we develop is a.
– Iteration of something you don’t–
– Iteration of something else. And we’ve done it a thousand times and physics are physics, a mechanism is a mechanism. If we don’t. So, I think people tend to overvalue their projects and it’s like, well, if you didn’t do exactly what I done before, you couldn’t possibly do my project. So, I see that a lot. And it’s just not true. You got to remember.
– If that’s an estate salesperson you’re aware of the Renoir discovered in the mantle over a house that is, he was liquidating his parents.
– Yeah. Yeah. I mean, it’s very rare that you find really valuable artifacts, but there’s still a lot of great stuff. I tell you if you, estate sales are a great place to buy stuff. I’m just saying, because you can get amazing, beautiful things. But everybody’s getting rid of stuff these days. So, prices are very low. I digress.
– Bring it on home.
– So, just some things that I get asked a lot about, I think I’ve mentioned this early. What experience do you have with similar projects? What’s your portfolio? That’s how people evaluate service providers. How fast? As I said here, 99% of the time, it’s an unrealistic schedule. We discussed that. I think references, people do ask for references. And that’s important. I think if you’re, if I looked, if I switched seats and I say as someone looking to buy services, I think I would definitely ask for references. Look at LinkedIn, look at people who you know, who might know somebody in these organizations. Cost is actually, if you’re doing product development in a startup or another things, cost isn’t really the number one factor. It’s always important of course, but speed is the most important thing. How fast can you get it done? And so we focus almost all speed. So, just some other thoughts I had, if a company has high turnover, it usually means they have less experience. If you have less experience, you probably need more process to overcome the lack of experience. More process is usually slower, being slower is higher costs obviously. More process is less creativity, and less job satisfaction for engineers. So, these are just some thoughts that we think about, in order to try to create an environment of longevity. Just as an aside, Omnica’s average tenure here is 18 years, which is for 30-person company, which is pretty astounding. So, I finally brought it to the end. I’m sorry that it took so much time, but I appreciate–
– Don’t apologize, we kept you here because you entertained us, and–
– I really appreciate all the comments and they’re good conversations. And if you have any questions, of course, you can reach me at these numbers. And then some references, oh, this is important. And I’m sure you’ll get this presentation from Joe, but take a look at a book called “Orbiting the Giant Hairball”, kind of a funny name, “A Corporate Fool’s Guide to Surviving with Grace”. This is, really talks a lot about creating an environment of creativity and how process, can suck you in to inefficiencies process and hierarchy. Generally just, that’s why big companies have a hard time innovating. And so, something that we do a lot is try to eliminate as much process as we can. I’ll throw this out there and you guys can talk to me later about it, but we are not ISO 13485 certified. I’m sure that’s gonna freak you out, 40 years of doing product medical device development. We can talk about that another time. And other things I found very interesting is this endowment effect of ownership. You can, there’s a link there that gives a good overview of that. So, if you’re interested.
– Well, that’s quite a, that was quite an ending. If you’re interested, I’m done. We are at an hour and a half, so, I’m gonna let people go. But you kind of dropped a little bit of a bomb there.
– I did. I’m from–
– In the 59th minute where you said, we’re not 13485 certified.
– That’s correct.
– As an exception here, Rob, if you don’t mind, I’m gonna promote you. Packard’s domain name is 13485cert.com.
– There he is.
– He has a point of view about, your not-certified shop.
– I’m sure.
– Mr. Packard.
– I’m not sure I’m in much different situation. Even though my email says, 13485cert.com. My company isn’t certified either. Neither one of us is a manufacturer of medical devices. He’s designing and we’re helping with regulatory submissions. And we partner with companies like yours all the time, but it’s our clients that need the certification.
– That’s correct. And that’s our position as well. We certainly understand regulatory processes, we feed data into a client’s regulatory process, but we don’t require it on our end. So, it also, if we had it, we would just be doing it in our process and then having to transport to the client and change it over into their process. It’s just a waste of effort. And this is one of the reasons why we’re not so big on the process side of things, because a client is the one who, and those processes in general were designed for manufacturers originally. And so the requirements from a design history perspective are not that difficult to provide that data, whether it’s meeting minutes, whether it’s, whatever it is, reports, FMEA reports, whatever it is. So, these are, that’s why we don’t do it, because it slows things down from our perspective to getting a design done.
– I’m gonna invite you to a conversation where it will be called 13485 or not to 1345 with another MDG Premium member who just got his shop certified.
– I know Jose is–
– Very pleased about it and so–
– Well, he should be. It’s a lot of work and I’m sure. I’ve done it. I’ve also done it in previous jobs when I owned a synchronous product development in Colorado, we went through the process. And so, I’ve been through the process.
– I didn’t know that.
– Okay. Small world.
– We go through the whole entire process every single quarter, if not, almost monthly with different clients, but for ourselves, we don’t manufacture anything. And the services we provide, nobody really would wanna pay the overhead for us to go through the certification process.
– Joanne pitches that she can help you get 13485 ready.
– No, thanks.
– We don’t want it.
– You get 13485.
– So, anyway, thanks again, everybody for their attention, especially going this late. So.
– Very entertaining and educational. Rick gives you an amen. I’m not sure about what, but.
– All right.
– Thank you.
– Thanks you guys.
– Our friend is Monir calling in from Paris from France. No, more secrets with EU Economic Operators. So, stay tuned for that and make it a great week, everyone. Thanks. I really enjoy these meetings. Thanks everyone.
– Thank you. Thanks everybody.
– Bye for now.