In part 1 and part 2 of our series on vetting an idea for marketability, LapWorks owner Jose Calero discussed his background an an entrepreneur and his first four steps. Today, we conclude with the last 8!
Step #5 – PROVE YOUR PRODUCT IDEA IS WORTHY. Now that you have a prototype, find the best way to approach your target audience (groups of them at trade shows, etc.) to show them your prototype or demonstrate your service idea. You need feedback from your target market and they will tell you if your product or idea is wonderful or not. Go prepared with a questionnaire so you can keep the interview short and sweet but pointed and friendly. Do NOT ask friends or family members what they think of your product or idea. They don’t want to hurt your feelings so they’ll tell you what they think you want to hear. This is the wrong group to ask for feedback. Ask them for money when it comes time to launch you product but not advice about its worthiness. They’re not the experts – your target market is.
IMPORTANT NOTE: Aside from polling your target audience for their feedback, which is a necessary step, a more important step in this process is to have your product evaluated by a credible source. Who would that be you ask? We recommend the Innovation Institute who has developed a 45 point consumer product evaluation system called PIES XII Preliminary Innovation Evaluation System. To quote them, “the PIES format is a comprehensive, structured evaluation system consisting of 45 criteria that are used to evaluate the commercial potential of your idea or invention and to provide you with a risk profile of your project.” Click on over to the “Forms” link on the left hand side of the page to begin the process. They’ll charge you $225.00 for a complete evaluation with risk analysis and by any standard, that will be the best investment you will ever make. Why? Because it will give you a completely objective analysis of your product or idea and stop you from spending your life savings on a not-so-good-idea.
Step #6 – PROTECTING YOUR INVENTION. There are a few ways to do this but the best way is to start with an NDA (Non Disclosure Agreement). There are lots of NDA’s available on line – you can learn more about NDAs here. To quote them: “A nondisclosure agreement — also called an NDA or a confidentiality agreement — is a contract in which the parties promise to protect the confidentiality of secret information that is disclosed during employment or another type of business transaction.” An NDA is a great starting document to protect your invention or idea but it’s not as strong as a provisional patent – which is the next step.
Once you have decided that your invention is a “go” and you want to move forward with launching it, that’s the time to apply for a provisional patent. “A provisional application for patent provides a priority filing date for a patent application and permits the use of the “Patent Pending” designation in connection with the invention for a period of one year. A provisional patent application can serve as a low cost first patent filing to inventors and confers the benefit of parity with foreign applicants due to the one year novelty rule. Applicants must claim the benefit of a provisional application in a corresponding utility patent no later than 12 months after the provisional filing date.” This means that you have 12 months protection under the provisional patent before you have to file a full patent application. This 12 month window is what the provisional patent gives you to establish the marketability of your product before investing. If you do not apply for a full patent before the 12 months of the provisional patent has expired, your idea or invention will become part of the public domain.
Step #7 – DO A SWOT ANALYSIS. The word ”SWOT” is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. A SWOT analysis will give you tons of information about your product / idea that will make you consider and evaluate the various SWOT conditions that exist for your product or idea. Don’t overlook this step – it’s critical and could save you a lot of money. But don’t let the potential bumps in the road stop you from pursuing your dream. Just because there is work to be done doesn’t mean your product / idea isn’t worthwhile. It just means that you have some work to do and don’t let it discourage you. The simple fact is that if it were easy, everybody would be doing it.
Step #8 – HOW ARE YOU GOING TO GO TO MARKET? There are a number of ways to take your product to market. They can be broken into two separate categories: first, you can do it yourself which will cost many, many thousands of dollars to do it right. Or you can find a “partner” who already has the existing retail and/or distribution channels in place. In today’s market, it is practically impossible to launch a single new product on your own. If you want to pursue this path, here’s how you do it: Begin building your website right away; get the product packaged and ready for shipment according to industry standards; at the same time begin your promotion consisting of email blasts, banner ads, SEO/SEM, print ads, trade shows, product demos, buying mailing lists, press releases, etc. Continue stoking the fires until you’ve reached millionaire acres.
A less capitol intensive way to take a product to market is through a partner or set of partners. Make two lists – one for all the top retailers, distributors and others within an industry who would most likely sell your product. The second list will be of the number two companies within those industries. If the top company turns you down, then just go to his competitor, usually the number two company in that industry. Begin by visiting the top companies on your list and have them sign the NDA. (If you have received acknowledgment from the USPTO [U.S. Patent & Trademark Office] that they have received your provisional patent application, then there is no need to have them sign the NDA because the provisional patent is all the protection you’ll need for the next 12 months.) If any of them are interested, one of the following may happen: (1) they might want to buy you out altogether; (2) they will want to pay you a royalty; or (3) they will buy the product from you if you will act as the manufacturer. Naturally each of these options carries with it a different level of support activity.
The above 8 suggestions are not intended to be an exhaustive study on the subject of product development. They are simply a set of guidelines that you should seriously consider before investing your life savings in the next product, service or venture that come along. This information is provided to you so you will know what to do with the next great inspiration that pops into your head. Armed with this information you can go forward with confidence knowing that at the end of the process, you’ll be making an informed, intelligent and usually correct decision.
I would also like to encourage you to share this information with anyone you know who is thinking about investing in a new product, service or business venture. Do yourself and others you know a favor and follow these simple steps to better decision making when it comes to investing in a new product, service or business venture. Good luck and invest wisely.