by Chuck Behn, Marketing Consultant, as presented to the Texas Inventors Association

Many inventors believe their job is done when they have acquired protection for their idea.  They can sit back and enjoy the royalty checks as they roll in.  In reality, if they haven’t pursued other options first, the likelihood of receiving any money at all is less than 12% according to a 1997 market study by Linton, Matysiak and Wilkes.  Here are some interesting facts about introducing new products:

1. An AC Nielson study stated 80% of new products fail within the first 3 years of introduction. (data includes corporate new product development operations and individual inventors).
2. A 1997 market study by Linton, Matysiak and Wilkes declared a major difference between the Top 20 new product introductions (success rate of 76%) and bottom 20,000 (success rate of 11.6%) introductions is the apparent lack of market research and strategic marketing done by the Bottom 20,000.
3. In our rapidly changing and highly competitive markets, a successful new product launch is thought by many to be the key to business growth and profitability. Sadly, Robert E. Cannon points to a little known fact for individual inventors and manufacturers:  the problem developing a successful new product is not a shortage of ideas, but rather the expense in producing and marketing new products without any guarantee of success. 
4. According to Bob DeMatteis, a very successful inventor and consultant to other inventors, the US Patent office reports that less than 3% of all patents ever make money for the inventor.  The Federal Trade Commission (FTC) reports an even higher failure rate – 99%.  The one common factor for most product failures:  lack of upfront research on whether your idea is salable.

The purpose of this article is not to promote doom and gloom for all inventors with an idea, but to improve your chance of success by changing the typical order in which events occur.  Below is a list of five steps that every inventor should take prior to spending any money on patents, prototypes, and most of all (shudder) – invention marketing companies. 

Step 1:  You are now a “Company.”  All inventors should start with the assumption that they are a company of one.  Whether you incorporate or not, the success of your company is based on the time, energy, and professionalism you demonstrate every time you meet with someone in relation to your idea.   Would you go to a doctor that looked like a fast food cook?  Not likely.  The same principle applies to your company when meeting with potential consumers, vendors, and/or other companies when dealing with your product idea.  You have to sell yourself before ever selling your idea.

Step 2:  Document your idea.  You should have a bound log book to document all aspects of your idea from the very beginning and continuously update it as you move through the inventing process.  This simple process provides the basis for a future patent application with dated evidence and idea documentation.

Step 3:  Understand your market/customer.  What are the trends in the market you are pursuing?  Is it slow to change or changing almost overnight?  What do your ideal customers look like?  Male/female?  Age?  What is their income level?  Where do they live?  What jobs do they have?  How many are in your ideal group?  What needs are not being met?  The more you understand about your customers, the better you will be able to provide a product that meets their needs.

Step 4:  Understand your competition.  What are your customers using today to solve their problem?  What companies are building those products?  Are they successful?  Is it their main line of business or one of many products they sell?  Who could potentially try to solve the problem?  You can slip by your competition if you know what they are doing and meet some overlooked need that customers really want.

Step 5:  Can you make money?  While you are determining your customers’ needs and evaluating the competition, you should be estimating production costs for your potential product.  You must remember to add distribution/shipping markup plus retail costs if you will provide it to someone else to sell.  Is your estimate below or above the competition?  Would your customers buy a product that costs more than what they pay today?  If you are not close to the existing price of your competition, the likelihood of a successful product diminishes greatly.

In summary, all of these actions cost little or no money, and can provide great insight to the potential success of your product.  Executives make decisions every day with incomplete information.  As CEO of your “company,” you want to have as much detail as possible, but you also don’t want to overanalyze and miss the opportunity completely.  The steps described above should take no more than 3-5 hours, depending on the availability of the information.  So get going and good luck with your successful break-through invention!

Chuck Behn has over 20 years experience in product development from both the technical and business side.  He has led start-ups in the security and telecommunications industries, expanded products and services for consulting and manufacturing companies, and led product development from both a technical, marketing and management perspective.  He currently is providing marketing and business development services to small and medium sized business to help develop and/or expand their products and services. 

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