Using goal-setting to invent the augmented-reality teddy bear

How Rachel Rutherford, CPO of Seedling, overcame the unique challenges of setting goals across a hybrid physical-digital team.

March 30, 2023

Welcome! This is the first post in an interview series where I talk with startup leaders about how they use OKRs, goal-setting, and strategy to accomplish their goals.

In 2017, Seedling developed an augmented-reality teddy bear called Parker. It launched in Apple Stores world-wide and was the first in-store product to use Apple's ARKit, their augmented-reality toolkit for app developers.

Just a couple years earlier, Seedling had been a kids’ toy brand based in New Zealand, with a mission to create open-ended experiences for kids that fostered their imagination and creativity.

The founder, who had started a physical product company, believed that technology was an important part of how kids could play, create, and express themselves. To shift the company to this hybrid physical-digital vision, she raised venture capital, expanded to the US, and acquired a mobile app and digital team.

Rachel Rutherford joined as Chief Product Officer in 2016 to lead this transition.

Her story was fascinating to me, both because of specific challenges of setting goals across physical and digital teams, and also because of the unique product issues that arose as they developed Parker.

This interview has been edited for clarity and length.

Welcome, Rachel! I'm excited to talk with you about goal-setting! But first, what exactly is Parker?

Parker is an augmented-reality teddy bear. It's a stuffed teddy bear with no electronics inside: no batteries, no WiFi, no Bluetooth.

It was designed as a doctor role play experience for ages three to seven. By utilizing patterns on the bear and its accessories, we created an augmented reality app experience.

The child could use a device to play doctor with Parker, helping when it had a tummy ache or allergies. They would play with both the physical toy and digital app.

How did you orient Seedling to build these physical-digital hybrid products?

When I first got to the company, I looked at how it was operating. There was a very experienced supply chain team and a new US-based physical product team. The CEO was guiding a lot.

The digital team was very experienced but had just been acquired. They had separate apps under the Seedling brand that had no physical product component.

It was pretty obvious to me that it wouldn't work unless that Chief Product Officer owned product across both physical and digital at a company that was trying to deliver on what we were delivering on.

What was the biggest challenge in working with both physical and digital product teams?

We were always building from zero to one. Every year we asked, what is the big new thing we're going to develop this year and release? We needed something on shelf within nine to twelve months.

On the physical side, there was a lot of experience, knowledge, and process on how to get a product designed, manufactured, produced, and on shelf.

Now we're introducing a technology component. How do we know that this physical product is going to work with the app? What are those check in points? What are those milestones? Will this concept work and make sense to children?

We conducted a lot more user testing, and integrated some of the best practices in digital to make sure that the experience worked together, and that children were comprehending and playing with the experience.

Integrating two teams to regularly create a hybrid physical-digital product from scratch seems like a tall order! How did goal setting help?

My philosophy as a leader is that when you come from a place of first principles, it doesn't matter what you're making, like, if it's an app or a craft kit. That's why I love goals, because they're an alignment tool. Having shared goals is a first principle. It's so important that anyone on the team can look at a goal and digest that goal as part of what they’re contributing to.

There was a lot of time spent upfront on deciding what we wanted the experience to deliver for kids. That wasn't about whether it was digital or physical. It was asking, what do we want the child to experience?

For example, we wanted the child to play in the way that they choose versus having to follow instructions.

Whether you're on the physical team or the digital team, you're taking that goal and that product principle and saying, okay, how does this apply to the thing that we're designing or that we're creating?

Once you have that unifying goal, what did you do next? Did you figure out a strategy for the year?

At Seedling, it was pretty fluid. Company strategy was mostly driven by the CEO with product and marketing input. We're looking at our assortment of products, opportunities we see in the market, the trends. You're constantly looking at what is doing well for what age groups, and then deciding who to target -- okay, let's make a product for ages three to six.

We knew we wanted to be in this tech toy space. That was a company strategy decision.

How did you break down that company strategy into clear product goals?

It was very collaborative with the team. Let's define timelines together. Let's define product principles together, design principles, and get everyone together for goal setting.

I've worked in organizations where goals are super rigid, like here's your metric, here's your revenue number. What I'm talking about is a little softer. It's more about the experience and the product principles.

For us at Seedling, there were a few elements to the goals. One was timeline and milestones. Something is really due when it's due. And this was hard for the digital team where products had been developed more iteratively.

But since we're going on shelf October 1, we must hit that date.

The deadlines are real.

Yeah, the deadlines are very real. So that's always in the goals. There's got to be perfect clarity as to when things have to be done. And then it's truly an exercise in breaking things down. If you're starting this project in January and you're on-shelf October 1, you've got to have milestones that everybody's aware of and tracking.

The second goal area would be from the revenue side. The product team had a goal of being ROI neutral by the time we went live. It meant that our development costs would not be higher than the amount of pre-sales and orders from retailers.

We start the whole process with projections. We have a sense, based on historical data of what we might think the order volume might be. That gives the product team a target.

Then you're thinking about pricing and positioning. It's a triangulation. We're looking at other tech toys in the market for the age group. We're looking at who those potential retailers or sales channels are. You have to calculate in wholesale pricing versus retail pricing. The goal is getting to a place where we can say, okay, we're creating a $60 MSRP bear and we'll have to sell X many units.

How do you go from a general product idea to the specific team goals?

One of the first things I did when I started at Seedling was design our product development process. I created several phases. Phase 0 all the way up to Phase 6.

Even before phases start, we do R&D. You're spending a little bit of time just getting your hands around the basics. What ages are we creating for? What’s trending for parents and kids? What technology might we use and how could that work?

We would spend time thinking about three or four different concepts before we landed on one. Each phase would have specific digital and physical milestones. These phases are how physical product gets made, so there's not a ton that’s negotiable. Then we wanted to make sure the two teams were aligned by the end of every phase.

Phase 0 was called Framework because it laid out a blueprint for the product strategy and the product launch timing.

Phase 1 is concept development, where teams could explore more of the user experience and make sure kids were loving the product

Phase 2 is viability, checking the business viability, manufacturing viability and technical feasibility.

Phase 3 is pre-production, which for the physical team means back-and-forth with manufacturing partners. For digital, they continued app development.

Phase 4 is production, which means we're in manufacturing. The digital team is really focused on completing the experience end-to-end.

Phase 5 is shipping & transit of the physical goods. For digital, they are working on polish and getting end-to-end builds completed and tested.

Phase 6 is launch, where both teams and numerous other partners in the company prepare to go out to customers.

Since you're starting with just a product direction and things are pretty nebulous, what sort of milestones do you have? Could you dive into what R&D and Phase 0 looked like for Parker?

I can't say I did it perfectly.

Ultimately we were all very good at holding to the agreed upon milestones. When you're building from zero to one, rather than having a specific metric, you come up with milestones, like we want a prototype that we can be kid-testing by this date.

Then the team breaks down that milestone. Let's play with three or four different concepts for a while. Since at some point we need to be kid-testing, we'd develop a diverge and converge model of product development where we were able to explore.

In this case, the team also had to figure out what AR frameworks were available to us. What are their capabilities? Let's get creative and experiment with them.

So you have a couple months before your first milestone of having a prototype, and there's an expansive and cohesive piece to that exploration. During that part of the process, how much were your physical and digital teams working together to explore different ideas and test technical feasibility?

It was truly a little bit of magic in the bottle. When we started off, it was a huge back and forth between physical and digital because we want these experiences to feel like they were designed together.

You can't just send a team over in the corner and say, develop a really cool app, and another team into the next corner and say, develop a really great physical product, and we'll hope that they come together at the end. That doesn't work.

They're sitting together so there's a constant back and forth around this. Total, the company was about 40 people, and the entire product team was maybe 15 people. And there was also our creative director, who had a team, and was really influential when it came to the aesthetics, packaging design, and graphic design.

So it's about triangulating these three teams.

For example, the digital team prototyped some different technologies and wanted to have five or six physical items in the doctor kit that kids could play with. But the physical team could only allow two to three based on our cost-of-goods threshold.

One tool we created was a wooden thermometer where the tip was a conductive material that could be used as a stylus.

I think the digital team came up with the idea, and brought it to the physical team. The physical team is saying, oh, this is how big the thermometer in the kit needs to be for this age group and how kids play with thermometers. And the digital team is saying, okay, then we could create these games in the app. That's the interaction that leads to having a game where Parker has a fever: the child takes the temperature and touches the thermometer to the iPad to see that Parker has a fever.

It seems like organizing all of this is a really difficult problem. I imagine there must have been times where somebody starts running in some direction and the rest of the team isn't there with them. How do you handle that situation?

Yeah, there were many! The pattern on Parker's belly is a good example. Seedling has extremely strong brand and aesthetic principles centered on using natural materials. We didn't want it to feel like a tech toy, so no plastic or electronics.

It was really hard to get to a place where the creative team was happy with the pattern of the belly and the tech team thought the augmented reality app could recognize it.

We had to experiment with that pattern. Is this pattern working with our AR technology? Does the curvature of the belly impact that? Is there allowance for organic shape and differences between bears? So much R&D is necessary when you're creating a brand new type of product, one that, frankly, we couldn't point to another product in the market and say, let's do it like them.

Oh, and clearly, we'd actually give the toys to kids and see how usable they were or if they actually encouraged creativity. You’re working throughout that first phase on aligning all the inputs.

We talked about the goal setting -- the strategic focus, alignment, and metrics. How about the other side? How do you make sure you're actually hitting deadlines and reaching milestones?

Phase 0 was the most nebulous. Does this work? How would a child use it? There's all these open ended questions. We didn’t always hit the Phase 0 deadlines perfectly.

The physical product team would make a calendar since manufacturing is a very waterfall process.. If you want it done by September 1st, this is how it works backwards. Once you know what you're creating and there are clear milestones, then we really work to the hard deadlines.

There were around 25 to 30 specific milestones for a physical product to go from concept to it's on the boat being shipped to the stores. What I did with the team was talk through the average amount of time they'd need for each specific milestone.

Then I set up a weekly meeting between physical product and supply chain. Every single week we'd check and see whether we're on or off track.

We were in physical production of up to 40 or 50 different physical products at a time, all at different points in the process and different phases. Some phases are more product development heavy, some are more supply chain heavy.

Accountability was clear on the physical side, frankly. It's also really hard because there's a lot that's out of your control. You're trying to manage a partner overseas and a supply chain is never 100% in your control.

There was a meeting once where someone asked, “Can you make the boat go faster?” The answer is no. Our supply chain team was incredible and super nimble, but there are hard truths. There's so much in the physical product world that is just, this is how it works, this is how long it takes. There are ways in which you can make the process move faster, but it's a grind. It's a constant grind.

On the digital side, accountability came down to the team determining clear milestones and goals. We want to have a really good beta by this point. We want to be testing it with kids by this point. We want to have 15 games at launch. Right.

Let's say our goal was 15 games at launch, but things aren't moving quite at that pace. Perhaps onboarding took longer than we expected. It's not about perfect estimation or making people work long hours. We'd descope and say, hey, let's actually just launch with 12 games.

When you're trying to hit a launch date, you constantly ask where and what can we pull back so that we're going out with the highest possible quality AND on time.

How would you define acceptable quality? And how would you balance it with quantity?

I'll give a ton of credit to the team. They were probably more critical of what they were creating than I could ever have been. I can't emphasize enough that hitting your goals starts with great hiring and a team that trusts each other.

I'll give you a really good example of a descoping we had to do on the digital side because of what happened halfway through product development.

The team had been prototyping the whole app with voiceover, like, "Hi, I'm Parker. I have a tummy ache." But when we got this worldwide retail deal with Apple, suddenly we had a massive requirement to localize the app. And there was just no way we could have done all the voiceover, all the game instruction, by the launch date.

Fortunately, I had a brilliant product manager at that time. He and the team worked out that we can do this whole experience through interaction, like arrows and nonverbal UI, as well as having Parker just make noises. Parker will laugh. Parker will groan. Parker will cry. They came up with an entire language for Parker’s reactions.

The only verbal thing we left in was onboarding for parents that we did localize, but otherwise the entire child experience was adapted to be global. And this was after the team had built most of the games with temporary voiceover.

There were just things that came up where we really had to change the approach. And the game changer there was just having a great team. When you're all aligned to a hard deadline that you have to hit, you ask, how do we get creative? That's one of my strengths, too: not holding so tight to a specific version of the vision.

You’ve got to fall in love with different options. And ultimately, it was great. Kids loved it. That’s really all that mattered.

Wow, that is an incredible on-the-fly change to scope! And probably a good place to end this conversation. Rachel, this has really been wonderful. Thank you so much for sharing your experiences!