Nigel Flynn, Co-owner and principal of Slingshot and Chairman and President of Infrasonix, rounds up the year with Business Chief North America discussing the current landscape for the New Product Development industry and his predictions for what’s to come in 2021.
Could you tell me a little bit about yourself and the company you work for?
Slingshot is one of the largest and longest established New Product Development Companies in the South-East United States. We are also the only company with a full science and technology team in addition to industrial design, a range of engineering disciplines and a manufacturing services group. We work in Consumer; Medical; Military Security and Industrial Products serving multinationals like Coca-Cola, Black & Decker, Procter & Gamble and Arm & Hammer, and large mid-market firms and promising start-ups.
I am the co-owner of Slingshot Product Development Group together with my business partner Ms. Taylor Leigh. The company has developed more than 1,000 products in 20 years and is named in over 750 patents owned by our clients during this time.
Could you talk me through the current landscape for your industry as we count down the final weeks of 2020?
When the pandemic first hit it was not clear how our company would weather the storm. Initially, some of our future clients were hit so hard and so fast by the pandemic, that they had no alternative but to postpone their work with us until next year or cancel it indefinitely. This fact has impacted our growth in 2020, and we believe reflects the performance of our wider industry sector.
On the brighter side, Slingshot continued to work with its existing clients largely uninterrupted during 2020. Most of our clients do not see new product development as a discretionary investment that they make only when the economy is strong, so their commitment to us has been largely unwavering.
How have you seen your industry evolve this year?
Our industry is a fee for service business, and despite the long-term view of big businesses, economic down-turns can be hard. We have been in business for 20 years, so we have seen this cycle three times. This is when we typically see the resumes of our competitors, but not this year, which gives me hope that our industry is surviving well despite the economic headwinds.
There is no doubt that there have been winners and losers among our client-base. Some of our Medical and Industrial clients saw their business fall off the edge of a cliff in the second quarter, but overall, our business base is diverse, and the balance of demand for our services has remained relatively strong throughout this year.
We think that our success this year is the cumulative effect of steps we have taken to strengthen our business over the last five years. Our pool of talent: Industrial Designers; Engineers; Scientists and Manufacturing Experts as well as Intellectual Property and Regulatory expertise has never been stronger, and this has helped us to develop both market share and customer share.
What technology and/or approaches have you seen emerge in the industry due to COVID-19?
Once COVID hit, the first thing that happened was the phone immediately started ringing ‘off-the-hook’ with inventors and start-ups filled with ideas related to pandemic contamination control products. When the going gets tough, the innovative become inventive. This passion from inventors is inspirational, although it is unfortunate that many inventors lack access to financial resources to sustain the journey to market.
At the same time, some of our larger clients saw outsize demand for existing products, and in some cases increased their appetite for new product development.
Elsewhere, we saw small to medium sized companies, who had never sold a contamination control product before, suddenly discover that their business relationships gave them access to new multi-million-dollar markets with their existing customers. In a lot of ways, entrepreneurial America was at its improvisational best. Those companies that were able to rapidly pivot to new opportunities with agility, have in some cases, enjoyed explosive growth in unexpected categories, either off-setting losses elsewhere, or even enjoying net growth for the lucky ones. Of course, the challenge for these new entrants will be holding on to the business when the Pandemic abates.
The pandemic economy is complex, and I do not want to oversimplify a picture with many moving parts, but business agility to exploit new opportunities is key. This is definitely a part of an entrepreneur’s DNA: see an opportunity; make a move and build a business. Although I must stress that the existing financial strength of such businesses / entrepreneurs is a very strong predictor of their new venture’s success.
How do these compare to before the outbreak?
The basic principles of innovation are not changed by a pandemic, if anything they are enhanced by it. If businesses do not consistently deliver innovation they will die. Only 12% of the Fortune 500 companies present in 1955 were still on the list in 2015. 88% of Fortune 500 companies have either gone bankrupt, merged, or simply overtaken by newer and more innovative companies. Market disruption is happening ever faster. In fact, Richard Foster, a lecturer at the Yale School of Management, has found that the average lifespan of an S&P Fortune 500 company dropped from 67 years in the 1920’s to just 15 years today.
Large companies can become exceptionally efficient because of economies of scale but struggle with bureaucracy and ingrained processes, Large, making it difficult for them to deliver transformative innovation. It is hard to be disruptive from within. Increasingly companies now look to third party resources like Slingshot to help them to achieve innovation. In the big picture, this is why our services are in strong demand from large established companies.