Market to Your Target
Q: I've invented a unique low-cost vehicle information data product. My final anticipated cost to the public is about $300 per vehicle. This information would encourage a quicker decision in accidents, which would save time, resources and hopefully lives. My research into the market indicates that the government is considering making this type of product mandatory on all new vehicles. How do I take the next step in bringing this invention to market?
A: This question probes various dimensions of the legal, safety, financial and marketing arenas. I could write all day and still not fully answer this one, but I'll hit some high points.
Your next step in bringing this invention to market is to repeat your first step: Research the market. Forget about the 17-million-cars-per-year statistic-that has little to do with your product succeeding, unless the government really does pass legislation that would require your device on all new cars. By research, I mean learn everything you can about the legal, safety, automotive and manufacturing cost trends involved with your product.
Unless you have hard information to the contrary, you could wait 10 years before any legislation requiring mandatory inclusion of the device in automobiles is passed. Then add five more years before the auto companies phase in compliance. In short, if the federal government soon passes legislation favorable to you, and if your technology is tightly protected with patents, and if your product is the most cost-effective solution, you might have the opportunity to talk to the automakers about licensing. So the questions you should answer now are: Who are your customers? Why would they want to spend more money to add your product to their cars?
Short of waiting for all the planets to be perfectly aligned, it would be my suggestion that you look at taking your business down two roads:
1. Since state legislation can happen faster, find a state legislature that's outraged at rampant drunk driving and propose legislation requiring previous offenders to install an aftermarket version on their vehicle.
2. Begin presenting your product, not the patent, to auto parts store chains, dealerships, stereo installers and other aftermarket-related companies. If you offer them solid financial incentives, they could help develop your market.
A final note: One of my earlier companies manufactured a product line that we sold to the Big-3 automakers. One of them then contacted us for a special project and we jumped. Our solution would've required the addition of a few new parts being added to the car, at a total cost of $1 per vehicle. Unfortunately, they weren't about to add even a single dollar to the cost, so we didn't get that order.
I think a $300 hit at the consumer level for something the consumer can't enjoy full time is prohibitively expensive. Getting this piece of technology down to the $15 manufacturing cost, with a sale price to automakers or wholesalers at about $25 to $30 would help get you into the ballgame.
It's time to set some high-volume product-design engineers loose on this one. Remember, products don't sell, money sells. Find a way to make your product make money for the customer.
Andy Gibbs is president and CEO of PatentCafe.com Inc, a leading intellectual property information and resource Internet portal. He is an inventor with seven issued and pending patents, and an entrepreneur who has started seven companies ranging from product development to low-and high- technology product manufacturing. He speaks to inventors, entrepreneurs and venture capitalists on intellectual property, marketing research, competitive strategy and sales development. Visit http://www.patentcafe.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.