The Entrepreneur: Bob Olodort, 57-year-old founder of Think Outside Inc. in Santa Clara, California
Product Description: The Stowaway Keyboard is the first and only full-size portable keyboard designed for use with small handheld devices. It folds easily so it can be carried in a suit pocket or a purse. The product is marketed under a private-label agreement by companies like Fellowes, Kyocera, Motorola, Palm, Sony and Targus.
Start-Up: $1.5 million in private equity, raised in 1998 to launch the product in 1999
Sales: Approximately $15 million projected for 2003
The Challenge: Learning from past experience to launch a profitable product
Whether your past inventing endeavors have succeeded or failed, no doubt the experience provided you with valuable lessons. So before you pursue your next idea, take time to evaluate what you've learned. That strategy has certainly paid off for Bob Olodort, who recently launched his latest product winner, a foldable keyboard for handheld devices that sold more than 1 million units in its first year. A lifelong inventor, Olodort has launched inventions including the Seiko Smart Label Printer 240, a peripheral device developed in 1988 that today sells in excess of $35 million per year. Here's how he used past experience to his advantage:
1. Think ahead. Olodort's experience with the label printer taught him not only that peripherals were important, but also that they attracted a lot less competition than the products they were attached to. He used that knowledge to brainstorm ideas for other peripherals.
Says Olodort, "I knew computers were going to get ultrasmall, and I thought it was a matter of time before new input technologies would be needed. I tried other solutions, voice recognition for one, [but] I realized there was no substitute for a full-size keyboard." Keyboards offer privacy, convenience, familiarity and other advantages, he found. "And the full-size part was critical. After all, no matter how small the devices get, people's fingers aren't getting smaller. The challenge was to make a full-size keyboard that could collapse into a small space for portability." What paid off for Olodort was that he started developing the folding keyboard several years before the Palm Pilot came out, so he was able to hit the market in 1999-when handheld devices started taking off.
2. Use a low-cost business strategy. Olodort learned from earlier inventions, which he primarily licensed, that it was more cost-effective not to take on all the burdens of running a company, such as manufacturing. He explains, "I wanted to conserve as much cash as possible in our operations, so while we owned the original tools, we outsourced all our production." Selling on a private-label basis also kept his costs low. As a result, Think Outside, which has 18 employees, is a multimillion-dollar business.
3. Get outside input. One thing Olodort learned from his previous inventions is that input from other people keeps you on the right track. "I'm always running informal focus groups, asking people I know what they think about an idea," he says. "It's the only way I'm able to understand how others will view my creation." The old marketing theorem is that perception becomes the customer's reality, so inventors have to know how customers perceive their products.
4. "Wow" your customers. Olodort's customers were companies that could take on private-label arrangements. From his past licensing experience, he knew it took a lot of invention to make a company say "Wow, that's great." In terms of the Stowaway Keyboard, he says: "I knew the 'wow' factor would [come] from taking something that's pocket-size and magically [opening it] into a full-size keyboard. My original model folded many times, almost like an accordion, so it could collapse as small as possible." Olodort knew his customers' expectations would be high, and he didn't dare approach them until he knew he could impress them.
5. Keep it simple. From other ventures, Olodort learned a product won't succeed unless it can be easily manufactured. "Though my first accordion design wowed investors, I was having trouble sleeping, thinking it would have too many manufacturing problems," he says. "So I decided to go with a keyboard that only folded four times. We still had obstacles, but they were more manageable." Complexity can create problems for consumers, too. "The product has to be easy to use," he continues. "Customers have to be able to just unfold [the keyboard] without having to connect parts or screw things together. If it's any harder than that, they just won't buy."
6. Pay attention to aesthetics. Olodort's inventions have mostly been mechanical-in fact, his office is in his machine shop. He's learned that people perceive well-designed products in a positive light. "I feel that I have a strong aesthetic sense that adds to the complete look of a product," he says. "Two of the people I work with also have a keen sense of aesthetics. We're all very proud that the Stowaway Keyboard is in the design collection of the Museum of Modern Art [in New York]."
|PatentCafe.com has launched a new service to help inventors introduce products. The site's Intellectual Capital Office includes a searchable global patent database; an online product marketability evaluation; and a list of leading providers of prototyping services, product development and industrial design engineers and contract manufacturing services. Most services on the site are free, but some do require a fee. For product development services, it's free for buyers, but not suppliers. This is a good service to check out, whether your goal is to locate a service provider or get a second quote.|
1. Past success helps. Companies often worry when dealing with inventors. It matters how you behave during contract negotiations, product documentation handoffs, new product promotion, product changes, etc. Companies find it frustrating to deal with what they consider to be an unreasonable inventor. While first-time inventors struggle to overcome this, it's less of a problem for inventors with prior successes who can offer references from former clients.
2. There are no shortcuts. Learn what the customer wants, and design knowing customers have high expectations. Keep working until the product is right. There's rarely a rush to market for most successful inventors. Take the same care with your 10th idea as with your first.
3. Control what matters most. Inventing is an expensive process, and most inventors can't take on all the financial commitments to get a product to market. Outsource manufacturing-and, if possible, sales and marketing-to people who know how to get the job done. Concentrate on developing the product, the "wow" factor, the ease of manufacturing and the ease of use.
4. Prepare for the worst. A lot can go wrong in the inventing process, from a sudden market change to a new competitor jumping into the market. Vendors can go out of business, you can get stiffed on a big receivable, or your design may not work. Plan for trouble, and conserve cash in as many ways as possible. If you're prepared, it's more likely you'll overcome the sudden adversity.
5. Anticipation plus preparation equals success. Being first to market with the right product at the right price is typically the best way for an inventor to enter a market. That calls for correctly anticipating where the market is going. So follow the market trends to see where the big boys will play and where there's room for the little guy. Peripherals are a good spot for inventors since big companies tend to go after big product categories. If you predict correctly, you can cash in big.
|Underfinanced inventors hoping to sell their products often turn to independent sales agents, who work on a commission-only basis. RepSource (www.vmwinc.com/repsourcehome.htm) allows you to search for agents by product, industry or geographic location and includes postings for reps looking for new products, as well as companies looking for new reps. Another helpful site is the Manufacturers' Agents National Association (www.manaonline.org), which also provides a listing of agents looking for new lines. Log on, and you'll also find articles on topics like how to select an agent, types of payment arrangements and how to develop a successful agent network.|
Don Debelak is the author of Entrepreneur magazine's Start-Up Guide #1813, Bringing Your Product to Market. Write to him at email@example.com.