On Your Mark . . .
Position yourself for growth in 2017—join us live at the Entrepreneur 360™.
Flash Sale—save up to $200 on registration. Ends Thursday. Secure Your Seat »
In a flash of brilliance, you come up with a great idea. You've thought of the product consumers will clamor for, one that will land you on the cover of all the top business magazines. But a looming question fills your thoughts: "Now what?"
That question becomes even more daunting when you realize you have many choices. Some can be expensive, others are just a waste of time. But one thing is certain: Your first step should be to evaluate your idea's marketability and potential for success. After all, without good marks in these two basic areas, your idea will never pay off. So here are some suggestions for the novice inventor.
One of the first things you should do after coming up with your brainstorm is find a comfortable chair to sit in and think long and hard about your idea. If an invention is going to make money, it must be more than just a good idea. With store shelves filled to capacity, a product must be outstanding to attract consumers' attention--and cash.
When considering your idea, start with the basics. For instance, is it legal? Don't skip this step, because your product could cross some legal boundaries you weren't even aware existed. Many watchdog agencies ensure that products meet or exceed certain standards and requirements; these include the U.S. Food and Drug Administration, OSHA, and the Underwriters Laboratory.
Does the product conform to all local, state and federal laws? Are you sure your idea doesn't infringe on someone else's patent? Many of these concerns can be answered by speaking with experts in your industry, consulting with an attorney and having a patent search performed.
Next, ask yourself if your product will create safety concerns. This is an issue you can't afford to ignore. If your product is designed for children, this should be your number-one concern. Get advice about this issue from both your attorney and your insurance carrier.
Also consider the environmental impact of your idea. Consumers today care more about how products affect the environment than they did in the past. Your idea may be more successful if it's biodegradable or recyclable.
Also consider consumers' likely perception of your product. There are many great ideas that people simply won't accept for one reason or another. For example, a hat with a built-in stereo, sunglasses and fan may be practical, but many people would consider it ridiculous and, in turn, ridicule the wearer.
What industry does your idea belong to? Making this distinction is important because it helps you identify what companies and products make up your competition. You can then shop the competition and see what you'll be competing against, what your retail price will need to be and what stores you can sell to.
Knowing whom you're marketing to is crucial to determine before you start the development process. Does your idea fit into a growing or shrinking market? For example, developing a new type of adding-machine paper when adding machines are virtually obsolete is probably not going to be a money-maker.
Get an idea of who will buy your product and how many of these people there are. What is the profile of your potential customers? Do they live in one specific geographic area? Will they be able to afford your product?
You can conduct your own surveys of potential consumers at shopping malls or other public places. Or you can talk to potential retailers of your product to gauge their interest.
If your own market research indicates your product is a winner, you'll then want to take it to the professionals for their unbiased opinion.
To get the best advice, seek out the services of an independent product developer (IPD). For a fee, these companies will evaluate your idea (usually without requiring a prototype) and give you a report on its marketability.
But beware! There are a lot of IPDs that are nothing more than scam artists. Warning signs include a hard and fast sales pitch, evasive answers to specific questions about how they perform their research, and too-good-to-be-true success statistics. Disreputable companies also usually ask for money upfront and tell you your idea has great potential--then try to sell you additional services. (For more information about IPDs, see "Independent Counsel," below.)
Roughly 100,000 patents are issued every year by the U.S. Patent and Trademark Office (PTO). Some patent attorneys estimate that only one in one thousand patents becomes a profitable product. With the average patent costing close to $5,000, that means that around $500 million is wasted each year on patents that are essentially useless. Unless you just want a patent as a trophy, don't rush into spending thousands of dollars to file a patent application until you have reason to believe your idea will be a commercial success.
You may have heard about the need to file your patent application as soon as possible to prevent someone else from beating you to the patent office. There is some truth to needing to be the first to file. If you know there's someone who wants to file a patent on the same idea, I recommend you file a provisional patent application, which costs only $75. (For more on provisional patents, see "Bright Ideas," March.) This establishes an official filing date for your idea with the PTO and buys you an additional year before you must file officially. Most patent applications don't move quickly, however, so it's best to take some time to research the viability of your idea in the marketplace before incurring the time and expense of a patent.
Let me leave you with one final thought: Coming up with a great idea is a wonderful, euphoric feeling. But before diving in headfirst, check how deep the water is. Carefully evaluate your idea for its marketability and potential for success. Such an approach saves time and money, an entrepreneur's two most valuable resources.
IPDs tell you what's great--or not--about your invention.
Independent product developers (IPDs) can give you--for a fee--an objective evaluation of your product's potential, which may help you decide whether to pursue further development. There are three very reputable IPDs you may want to consider.
The first is the Wisconsin Innovation Service Center at the University of Wisconsin in Whitewater. (You don't need to be in Wisconsin to use its services.) For $495, it will send you an evaluation of your product with regard to competition and technical feasibility in about 30 days. It will also conduct a preliminary patent search. Call (414) 472-1365 for more information.
Another IPD is the Washington Innovation Assessment Center (WIAC), which is affiliated with the Washington Small Business Development Center at Washington State University, Pullman. For $350, WIAC will select three evaluators from a pool of more than 300 to analyze your idea and give you feedback. For an additional fee, they'll also conduct a preliminary patent or trademark search. The evaluators identify positive and negative characteristics of your idea and then provide a quantitative measure of its potential for commercial success. For more information, call (509) 335-1576.
The Wal-Mart Innovation Network (WIN) is another option. For $175, the students at Southwest Missouri State University in Springfield will evaluate and score your idea for market potential. If your score is high enough, it may be viewed by Wal-Mart buyers for possible placement in their stores. However, WIN should be looked at primarily as a source for product evaluation. To find out more, call (417) 836-5671.
The best thing about these IPDs? You don't have to worry that sharing your idea with them will release it to the public domain. All three will sign confidentiality agreements to ensure your idea is kept on the QT.