From the April 2004 issue of Entrepreneur

The Entrepreneur: Dan Grace, 35, and Jeff Polke, 34, friends and co-founders of GCI Outdoor Inc. in Cromwell, Connecticut

The Product: The Everywhere Chair, developed in 1996, is an outdoor chair with an adjustable back and seat, so the chair can be used on sloping surfaces. The line comprises nine products sold to more than 800 stores-including Eastern Mountain Sports, L.L. Bean and REI-at retail prices between $24 and $60.

Startup: $10,000 was used to apply for a patent and make prototypes. The company also applied for a $25,000 line of credit, which was used to buy office equipment and fund initial production.

Sales: $2 million in 2003, with sales of $2.6 million to $3 million expected for 2004

The Challenge: How to know if you should proceed with a product when you're not sure if the market is big enough to support it

When Dan Grace, an avid golfer and engineer, came up with The Everywhere Chair, he wasn't sure if he'd have enough customers to build a profitable business. He had designed the adjustable chair to work on sloped surfaces, such as those around putting greens, but golfers proved too small of a market niche. Before long, Grace and business partner Jeff Polke targeted the outdoors market instead. Here's how they found the right target market and built a multimillion-dollar business around a product that at first seemed to lack broad appeal.

Steps to Success:

1. Don't quit your day job right away. Grace got his idea for The Everywhere Chair while attending a golf tournament. Around the putting greens, the ground was sloped so people could see better. But traditional lawn chairs don't work on steep slopes, so spectators went without. The light bulb went on-and Grace decided to develop a new kind of chair and apply for a patent. But he didn't quit his job as an engineer right away. Instead, he spent more than a year testing the product, making prototypes to show to potential consumers, and doing all the grunt work to be sure the business was ready to sell products.

"The decision to quit my job was based on support [from family and friends], and consumer feedback on my prototypes," Grace says. "After the patent, preproduction and business investments were made, there was no turning back. After receiving the first 1,500 units, I quit my job, and we hit the streets to sell the product." Polke, too, waited until the end of the initial startup phase to quit his retail management job.

2. Listen to your customers. Grace and Polke started slowly, selling the product themselves at local trade shows. "We started out first at home shows," Grace says. "Many of the people who came up to us thought The Everywhere Chair would be perfect for camping." So they switched over to shows for sportsmen and saw more sales success.

In fact, one of their breakthrough products came from listening to a customer. "At one show, a prospect [told] Dan we should make a canoe chair," says Polke. "Neither Dan nor I had ever paddled a canoe, but Dan created the Sit Backer canoe chair in 1999. That product [pushed] sales to another level."

3. Generate quick sales. Before Grace quit his job, he attended the Harrisburg Eastern Sports and Outdoor Show in 1997, where he sold 800 chairs to consumers, met potential retail customers and lined up local sales. Using leads from the show and from their own research, Grace and Polke sold the chairs to about 20 retailers, mostly in the Hartford, Connecticut, area. "That local support was huge," says Grace. Soon, a top sales rep in the industry took on their line. After that, says Grace, "The business took off in New England. He was able to get over 50 new stores to carry the product in just a few months."

4. Look for help when you're ready to boost sales. Inventors can bring sales up to $400,000 or $500,000 on their own. But some inventors need help to bring sales past the million-dollar mark. In 2001, Grace and Polke decided to hire a consultant. "Now we view the consultant as a partner in the business," says Grace. "He helped us analyze where we were making money, he helped us staff efficiently, and he helped our business change from one that was barely making ends meet to one that makes 18 to 22 percent profit annually."

NEED A HAND
Lots of free information is available from the U.S. Patent and Trademark Office (USPTO) Web site (www.uspto.gov), including two great guides for first-time inventors: General Information Concerning Patents and Basic Facts About Trademarks. The site also offers a lot of information for more experienced inventors. The easiest way to see what brochures are available (and to download) is to click on "Inventor Resources" at the bottom of the USPTO home page, and then look for the box called "Brochures." You can also access the Inventors Assistance Center through the site by clicking on "Patents," then looking for the Inventors Assistance Center in the box marked "Help."

Lessons Learned

1. Let customers tell you where the market is. Inventors often evaluate products based on their needs, but they must also see what potential customers want. Grace and Polke, golfers to the core, ended up selling to a market they weren't familiar with because they let customers tell them where the market really was.

2. Be flexible so you can capitalize on opportunities. Once customers tell you where to go, you have to be flexible enough to change directions. But many inventors get so attached to their concept of the product that they're unable to adjust to an evolving set of opportunities. Many successful ideas are at least 50 percent different from the inventor's original concept. Your chances of success will increase if you can modify your product based on what the market wants.

3. Don't be swayed by people who don't like your product. If you have a product with limited appeal, you'll run into people who don't like your product. It would be foolish to let their negative input discourage you, as most products are bought by less than 5 percent of the population. To succeed, you just need a small group of people who want your product.

Ask yourself: 1) Is there a group of people who have a strong motivation to buy your product, as opposed to a group of people who want to buy the product for different reasons? 2) Is there a way to easily reach those people through stores, catalogs or events? 3) Do people who like your product feel it's a good value at the price you need to set to make money? If you answer yes to all three questions, you may have a winning idea.

4. Look for the small victories. Everyone wants overnight success-but success may be a long time coming. So savor small successes. If you go to a home show and just 10 people buy the product, that's a success if they all have the same need. That gives you the information you need to expand your efforts into better shows or sales channels. If you get a store to handle only 10 units of your product, but they sell out in 30 days, that's also a success. Look at success as a series of steps, and you'll stay motivated until you hit a major breakthrough.

TOYING AROUND
The toy market appeals to inventors, and for good reason: Opportunities abound, as the toy industry turns over 60 percent of its products annually, according to The Toy and Game Inventor's Handbook (Alpha Books), perhaps the best book I've seen on toy inventing.

This book doesn't spend much time on evaluating a toy idea. Few toys make it, and it's hard to know which ones will. Instead, the book concentrates on how to get your toy to market, with tips on getting started, negotiating a deal and more. The book is written by two experts: Richard C. Levy, who has licensed more than 125 original concepts, including the Furby; and Ronald O. Weingartner, who has 35 years of new-product development experience, including heading the Hasbro/Milton Bradley game education division.



Don Debelak is author of Entrepreneur magazine's Start-Up Guide #1813, Bringing Your Product to Market(www.smallbizbooks.com), and host of inventor-help Web site www.dondebelak.com.