You Want The Truth?
Apply now to be an Entrepreneur 360™ company. Let us tell the world your success story. Get Started »
When Jason Clute, 42, came up with his big idea in 1992-a device for propping up a sleeping baby-he never imagined the product would one day hit the shelves of Toys "R" Us and Wal-Mart. "I was making the product for my friends," he says. "I thought it would end at that, but they all encouraged me to try to put the 'Prop-A-Bye Baby' on the market."
Still undecided on what to do, Clute found his answer when a friend mentioned the Wal-Mart Innovation Network (WIN), which evaluates new ideas. "I wasn't sure what to do," he says. "But when I heard the evaluation was only $150, I said " 'What the heck, I'm going to give it a try.' " After all, my friends were all telling me I had a great idea." So Clute submitted the invention-and learned the idea ranked in the top 15 percent of all ideas submitted. It turned out to be all the encouragement Clute needed: In 1992, he launched DEX Products and introduced the Prop-A-Bye Baby. Clute sold $3 million worth of products last year, and today, DEX Products has annual sales of $20 million.
Don Debelak is a new-business marketing consultant and the author of Bringing Your Product to Market (John Wiley & Sons). Send him your invention questions at firstname.lastname@example.org
Winner Takes All
The WIN program stems from a cooperative effort between Wal-Mart, Southwest Missouri State University in Springfield and the Innovation Institute, a product evaluation consulting company, also in Springfield. According to Gerald Udell, director of the program "The program is open to any inventor with any type of product." Today, for $175, inventors can get their innovations evaluated by eight to 10 experts against more than 40 criteria. In 1999, WIN, which started in 1990, evaluated over 1,200 ideas in virtually every product category.
The program started as a public serv-ice for inventors. Wal-Mart want to give inventors the opportunity to get their products on its shelves, but didn't have the time to evaluate every single idea that came in. So Wal-Mart now refers inventors to the WIN program. Once products pass the initial screening (about 8 to 9 percent of all submissions do), Wal-Mart will consider striking a deal locally to purchase the product. That doesn't mean, however, that Wal-Mart wants every idea that passes the first evaluation. "I passed the first round, but Wal-Mart felt I wasn't ready," Clute remembers. "They worried I couldn't supply enough product to fill their needs. I was told to go out and get some customers and then come back-and then they'd re-evaluate their decision. I started selling the product to baby stores and finally received orders from Toys "R" Us. Then I went back to Wal-Mart, and they agreed to take on the product."
What exactly does the $175 fee cover? According to Udell, those who submit products will receive a report based on more than 40 criteria, such as start-up capital, whether the products are likely to get meaningful patents, and whether the products can be safely designed and manufactured for a reasonable cost. Each inventor also finds out how his or her products fared in the evaluation and get a book that details each evaluation criterion. The evaluation report is valuable because it not only states the worries the assessment team has, but also specifies any alternate channels the inventor should pursue. Here's a general breakdown of submissions: 22 percent are not recommended; 23 percent receive a "very limited and cautious" recommendation; 28 percent get the "limited and cautious" recommendation; 7 percent get recommended with reservations; 12 percent get recommended for channels other than Wal-Mart; and about 8 percent receive recommendations to Wal-Mart. Those lucky enough to win a positive recommendation earn access to a list of the 2,000 firms in the WIN.
Results Are In
Clute appreciated the WIN program for a multitude of reasons. For one thing, he says, "I really didn't have any idea of how to evaluate an idea." That's something shared by most first- or second-time inventors. Inexperienced inventors typically underestimate the challenges inherent in introducing a new product to market, and they really should get an outside evaluation prior to spending any money (even before getting a patent). As Udell says, "We try to help inventors assess the risk of introducing their invention." Assessing that risk ahead of time gives inventors a better idea of their chances before they move ahead.
In 1992, after Clute received his evaluation results, he attended the Juvenile Products Show in Dallas. "I really didn't want to introduce my product [on my own]," he says. "I tried to give my product away to a manufacturer, but no one would take it. I finally introduced Prop-A-Bye Baby myself, because I believed it might reduce the overall number of babies who die every year from SIDS [Sudden Infant Death Syndrome]."
No one knows for sure exactly which products will prove winners. Many factors-some of which are unpredictable-determine a product's ultimate success. How hard the inventor works, how quick he or she adjusts his or her product to market needs, and how well manufacturing agreements are negotiated are just three examples. But unforeseen factors-like striking intrigue in the right buyer-make the process even more complex. Not even one of the baby manufacturers initially approached by Clute thought the product would sell. But, two years later, a buyer at Toys "R" Us did. Thanks to that one person's support, the ball started rolling for the Prop-A-Bye Baby. Some inventors work for years before finding the key contact who believes in their idea. Others never find that contact.
While inventors shouldn't view an outside evaluation or assessment as the final answer, they should consider it a good starting point. A third-party assessment of the situation helps determine which obstacles need to be overcome and how willing he or she is to commit the time and resources necessary to get a shot at success. Such evaluations can also push hesitant entrepreneurs like Clute in the right direction. A little encouragement is often all one needs to move forward and create a million-dollar company.
If you've got an idea, consider having it evaluated by an outside firm. it might stop you from spending thousands on a sure to flop-or prevent you from leaving a great idea on the back burner.
Words To The Wise
Sure it's a great idea, but will a patent protect it?
One criterion that should be used in any evaluation of an invention is whether a meaningful patent can be obtained for a particular innovation. According to Donald Kelly, former director of the Office of Independent Inventors of the U.S. Patent and Trademark Office, "[The effectiveness of] a patent depends on the scope and breadth of the claims." For instance, a broad claim lacks details about the product design itself, while a narrow claim includes a great deal of specific information. Kelly suggests inventors perform "an analysis of the claims to see if any recited element could be eliminated or altered from the recited form and still perform the inventive function. If so, the claim is weak and can be circumvented."
Here's an example: Patent #4,969,580 happens to be for a shampoo and conditioner hanger. The first claim is 40 lines long and full of specific information-an immediate indication that the claim is too specific to be meaningful. Some of the specific items in the claim are: a hook; a support plate extending at right angles that allows the dispensing cap to extend beyond the support plate; a strap made of plastic with a loop; and raised ribs. A new product would only infringe on the patent if it included every feature mentioned in the claim. So, in this case, another product wouldn't infringe on the patent as long as it did not include raised ribs on the strap. To review the entire patent, go to www.uspto.gov and do a patent search by number.
Selling to stores the easy way
It's a fact: Small retailers just don't have the buying power of big retail chains. So, to compete more effectively, they often enlist the services of resident buying offices, which help in purchasing products economically so small retailers can be somewhat cost-competitive with mass merchandisers. Resident buying offices present a good sales opportunity for inventors and small manufacturers because they can sell to many stores through just one buying location. The resident buying offices also look out for innovative products that aren't yet available at the big discount chains.
For the names of some resident buying offices, check out these directories at major libraries (all the following are published by Business Guides Inc.):
- Sheldon's Major Stores & Chains & Resident Buying Offices
- The Directory of Apparel Specialty Stores
- The Directory of Drug Stores and HBC Chains
- The Directory of Supermarket, Grocery & Convenience Store Chains
- The Directory of Home Center Operators & Hardware Chains.