Product Design: F212
Business Week have an indepth look at the workings of Fahrenheit 212 – a NYC agency that develops innovative products without pandering to the baggage of their clients’ business. They say:
The group typically takes five months to complete a project. The first month is an immersion process, when a Fahrenheit business director and the group’s analyst pore over sales numbers, market conditions, existing consumer research, and learn about the client’s businesses and assets. Over the next two months, the creative team, composed of Zibara, Oliver, and Payne, develops the ideas, then hires outside designers and engineers to assess feasibility and build prototypes. After presenting the ideas to the client, the firm does formal market research and focus-group testing.
Fahrenheit 212’s founders devised an unusual business model. Although the firm collects the consultant’s typical monthly fee, the majority of its potential revenue is tied to the success of its ideas. Each time an idea reaches a milestone–the product enters a test market, say–Fahrenheit gets a bonus. Fahrenheit expects to generate roughly 25% of its total revenue this year from such payments. Eventually it hopes to increase that to two-thirds of total revenue.
Getting there will mean beating the steep odds against new products succeeding in the marketplace. Quick buy-in from clients is crucial, too. Before pitching Raw Tea to Diageo, Fahrenheit took the trouble of going to a bartender/mixologist to devise a close approximation of how the new beverage would taste. When Vuleta and the gang presented it to Diageo executives, they passed around actual samples in specially designed bottles. It’s that attention to detail that has other companies intrigued.