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Flight of Fancy?

Launching a high-tech product can be a technical and financial challenge. Try these tips to get yours off the ground.
August 1, 2004
URL: http://www.entrepreneur.com/article/71872

The Entrepreneurs: Williams J. Boyers Jr., 39-year-old founder of APS in Tacoma, Washington and partner and co-founder Ray Henson, 39, who helped Boyer with the technical aspects of the invention

The Product: The digEplayer is a portable battery-operated in-flight entertainment system that passengers place on their tray tables. The 3-pound system, which holds 64 full-length movies and hours of digital music, cartoons and TV sitcoms, is a less expensive alternative to the traditional onboard in-flight systems that cost as much as $1 million per plane to install. A licensing arrangement with Twentieth Century Fox allows APS to reprogram the units every 60 days with new movies right before they go to video.

Startup: $250,000, which paid for making a rough design of the unit

Sales: $1 million-plus in the first quarter of 2004

The Challenge: negotiating the expensive product development and marketing costs required to introduce a high-tech product to a market with well-funded competitors

William J. Boyer Jr.'s high-tech business idea could certainly be described as ambitious: He set out to persuade airlines to ditch their traditional onboard entertainment systems for his innovative alternative. Although in the early days he lacked the requisite capital and technical expertise to get the business off the ground, before long, his venture was soaring past the million-dollar sales mark. Here's a closer look at how he launched his big idea from conception to reality.

Steps to Success

1. Sell customers on your product's benefits. Big customers are almost always skeptical of new vendors with smaller businesses. But they will listen if your product strikes them as unique and important. As Boyer explains, his product met that criteria: "I knew my product had two big benefits. Current in-flight entertainment systems weigh in excess of 1,500 pounds [due to wiring, screens and other components], a weight that requires about $100,000 of fuel per year. The digEplayer only weighs 3 pounds per system. The second benefit is that [if my] product fails, only one unit fails. When current systems go out, no one can watch a show. [With digEplayer], airlines can avoid unhappy customers on a long flight when a system goes down."

2. Don't be afraid to bring in a partner. Technical expertise is expensive-especially with high-tech products, where you might need a minimum of 10 redesigns before you get a product that meets your needs. If you can't afford to spend that kind of money, another option is to give up a part of the business to a partner with technical expertise. In Boyer's case, he found Henson, his technical expert, in the coffee shop Boyer owned. "I originally got my idea in 2000, and I knew one of my customers had worked at Intel and knew about electronics," says Boyer, who launched the business in 2002. "I kept asking him questions until, finally, Ray insisted I tell him what I was working on. Ray liked the idea, and he agreed to work on the project for a share of the business."

3. Find champions in the market. It doesn't matter what your product is-you'll have a tough time meeting the right people and breaking into the market if you lack an inside connection pushing for you. So do research to find people looking for a solution like yours. Boyer's champion was Dave Palmer, Alaska Airlines' managing director of marketing.

Boyer, who loves being around planes, was also working as a baggage-handler at the time, so he knew of Palmer. Boyer got the initial meeting because he had heard the managing director of marketing was struggling with the $1 million cost of adding an embedded entertainment system to each plane. So Boyer sent him a letter with a money-saving solution that caught Palmer's eye: Instead of spending $1 million per plane, Palmer could buy 40 digEplayer units for each plane (at a tenth of the cost of the embedded system). The airline could then charge air travelers $10 each to use a unit in flight. "I've probably talked to Dave Palmer 75 to 80 times," says Boyer, who is now courting other airlines as well. "He made time for me every time I wanted to see him."

Thanks to that commitment from Alaska Airlines, Boyer was able to secure a licensing deal with a division of Twentieth Century Fox called Fox in Flight. It helped, too, that the studio needed what he offered-content sales outside of theaters. "I sent a letter to Twentieth Century Fox asking if I could get an appointment for content procurement," he says. One thing led to another, and soon Boyer was on a plane to Los Angeles, where, he says, "[the studio] went out of [its] way to get me the licenses for the content. And they set up the license so I can get movies about a month before they are generally available on video."

4. Take small steps. You can try to limit your expenses for developing a high-tech product, but they can still add up. To keep costs down, be careful and move slowly to ensure you're spending money on a product that will sell. "On my first call to Dave Palmer, I started out with just a picture," says Boyer. "Then, when Dave liked what he saw, I kept moving forward with better models and prototypes. I had two mock-ups, a working model in a briefcase, and two prototypes before we finalized our product. Plus, I contacted Twentieth Century Fox after Alaska Airlines insisted I have content, so my last prototype included movie programming from Twentieth Century Fox and music programming [from] DMX Music."

IN THE LIMELIGHT
August is National Inventors' Month, and it's a great time for inventors to showcase their products at local libraries. Inventors' Month is sponsored by Inventors' Digest magazine, the United Inventors Association, and the Academy of Applied Science. These groups prepare kits for libraries so they can set up exhibits. So call your local library, and offer your product as part of the display. To get publicity, contact your local paper, and ask the editors to write about your display.

Lessons Learned

1. Show customers your credibility. It's not enough that someone is looking for a solution to a problem; customers must believe you can actually get your product produced and marketed. Therefore, first-time inventors should consider bringing in an experienced partner or a team of advisors with significant market experience. Ideal advisors for a high-tech product are engineers with relevant experience at big companies or marketing or regional sales managers for midsize or large firms. When someone experienced in the market believes in you and your product, it adds credibility to your project.

2. Ask, and you shall receive. People in the market get bored with their jobs, so an inventor with a new product can be an interesting project for them. To get help, simply ask people for help, and then take their advice. However, people will only help if you listen to them. Inventors have a tendency to want to be in charge of their idea and sometimes have trouble taking advice. You must get beyond that if you want to succeed with a high-tech product.

3. Seek out investors. High-tech innovations take a lot of money to launch-more money than an inventor usually has. The secret to finding investors is getting a credible response from a big customer, which shows you're ready to launch your business. Family friends and local investors are often willing to help fund your idea once a big customer offers a positive response and requests some definite action from you. Boyer, in fact, secured an investment for product development from a wealthy acquaintance, after he had both Alaska Airlines and Twentieth Century Fox tentatively agreeing to proceed.

4. Don't miss your window of opportunity. Your chances of success fade dramatically once people think you've lost your steam. Your champions might stay with you when momentum is on your side, but don't expect them to stick around when it's gone. Therefore, it's imperative that you keep getting results. You need to have something to show-a new model, prototype or package-every two or three months to stay at the top of your game.

GET ON TV!
The Electronic Retailing Association (ERA)-which represents the people who promote products on TV, such as infomercial company Guthy-Renker as well as the home-shopping networks-is having its annual conference in Las Vegas from September 26 to 29. The ERA Conference & Exposition will feature the Invention Showcase, which gives inventors the opportunity to attract attention from TV marketers looking for the next hot product to sell. Some of these people may finance your invention, and typically, buyers from home-shopping networks QVC, HSN and ShopNBC show up, too. A booth costs $525 for the Invention Showcase, and you must have a patent to display your product. For more information, go to www.retailing.org, click on "Meetings & Programs," and then click on "Invention Showcase."

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.