The Next Big Product
Waiting for some inspiration for a great new product to strike you? Try following the lead of three old college chums, Adam Rizika, 38, Bob Rizika, 35, and Scott Brazina, 36. In 1989, while students at the Sloan Management School at MIT, the three agreed to start a business together and introduce the "next big product." But they had one major problem: They had no idea what that product would be.
In 1993, four years after graduating, they made their move-quitting their jobs to start reflective technologies Inc. and search for the right product. Later that year they created illumiNITE, a fabric with a coating that reflects light. Unlike traditional reflective apparel, which simply boasts several orange strips, the partners' innovative apparel provides a full reflective silhouette, keeping runners, cyclists, walkers, children, etc. safe at night. From their small beginnings, the partners have created a multimillion-dollar company with such major clients as Land's End, Adidas, Polaris, Eddie Bauer, Honda, L.L. Bean and even the U.S. military.
Brazina explains the original mission of the partners was "to find a new technology that would produce high-value benefits for consumers and be difficult to copy." They planned on raising around $2 million-not enough to fund developing and introducing an expensive and complex industrial product, but sufficient for funding a decently priced consumer product. They also wanted to be sure their invention could sell well enough to build a reasonably large company, which in turn would be consistent with their career goals.
Researching Competitive Products
To discover their ideal idea, the partners planned to visit the technology licensing departments of major universities to see what technology was already available. But before they got a chance to make the rounds, they found out that Adam's employer, Airco Coatings, had a wealth of outside technology it had given the thumbs down to. Among the rejects: a new type of reflective technology.
The partners quickly scanned competitive products and realized that they could create an enormous market advantage. They bought the inventor out and spent the next year developing the formula and method of application. Next, they applied for a patent.
After developing the technology behind illumiNITE, the partners started generating initial market contacts to determine how the product should be sold. "We went to companies like Nike with swatches," says Brazina. "We explained we didn't have a product yet, but asked how they felt illumiNITE could be incorporated into their product line."
The partners also conducted consumer focus groups. To assess the product's benefits to consumers, they created a competitive matrix chart, demonstrating the areas in which illumiNITE was better than the competition. "New technology isn't a plus if it doesn't translate into a consumer benefit," says Brazina. "Runners wanted apparel that was flexible, attractive and breathable. Our competitors didn't meet those criteria." Priming the market helped the partners shorten the time needed to generate their first significant sales once the product was ready.
Marketing The Product
The partners could sell their product in a variety of ways: They could sell just the coating, sell fabric with the coating, license to other fabric companies the right to incorporate the coating or sell consumer products. To avoid choosing the wrong strategy, the partners decided to model their business after Gortex, the company that makes waterproof fabric. "Gortex is in the same business we are, selling a fabric treatment," says Brazina. "They had successfully branded their name over the past 20 years. We've worked closely with Gortex from the company's beginning and have a Gortex employee on our board."
The partners also kept a close relationship with the Sloan Management School; their company is used as an example in some of the school's new-product classes, because it's a classic case study involving:
technology that's hard to copy, easy to implement and able to generate high profit margins;
customers who are dissatisfied with current products, have similar needs and purchase requirements, and are easy to locate;
competitors who have outdated or adapted technology, are unlikely to respond to new products and are fragmented without a strong market leader; and
a product that offers a good price/value ratio and significant benefits that are easily understood by consumers.
In the case of illumiNITE, the partners went out looking for a product and technology that met those requirements. However, if you, like most inventors, have a product already developed, you can still use the same requirement analysis to calculate your product's chances of success. If your product doesn't meet every requirement, don't despair-simply adjust your product.
Reflective technologies dealt with this very dilemma. IllumiNITE concentrates the light it receives and reflects it back so the wearer can be seen at a distance in the night. That's exactly what nighttime runners, walkers and cyclists want. But the concentrated light means the product doesn't look that reflective up close, so consumers might pick up the fabric and not realize what the real benefit is. The company compensates for this by using strong visuals on its packaging of a runner wearing the reflective fabric at night, and by telling consumers how to test the product's reflectivity indoors.
Preparation For A Successful Launch
The partners spent one year preparing their business plan, which defined just what type of products they were looking for. Then they spent 18 months talking to consumers to determine what benefits they wanted. They were only ready to start spending the money to introduce their product once they knew they were giving consumers exactly what they wanted.
In the 20-plus years I've been working with inventors, by far the biggest mistake I see is people spending their money first and then finding out, after trying to sell their product, that they still need to make a few changes to meet the needs of their consumers. Often these inventors don't have enough money left to make the necessary changes.
Proper planning is a lesson every inventor should learn. Research all the details of your invention before you start spending your money, and you're more likely to get your product successfully launched.
Made To Fit
Reflective material, such as that used in reflective technologies' illumiNITE products, is really an adaptation of reflective strips made for highway signs. Adapted products are often a great opportunity for inventors.
Another recent market that uses adapted products is the cosmetics market for preteen girls. Previously, preteens were using cosmetics designed for teenagers. Suppliers who've geared their products toward 6- to 13-year-old girls-by, for instance, making the packaging more appealing-have had great success over the past three years.
- Reflective Technologies Inc., 15 Tudor St., Cambridge, MA 02139, (617) 497-6171.