This is a series of posts on the 12 steps how to invent a product. A DIY class for inventors.
The fourth step is EXPLORATION. Explore your market!
Here you are armed with your concept. Not quite an invention yet and lots of work before it becomes a product that people want to buy.
Innovation occurs when a significant number of people or organizations purchase the product or service. In other words, if done properly; innovation means making money. If there is money to be made, there will be competition.
The purpose of exploration is to explore the market to determine if you have a competitive advantage. But you say. “I have no competitors.” Then you are very smart/gifted/lucky or there is no market for your product.
Michael Porter, a Harvard Business School professor, describes competitive advantage as having two basic types or forms:
- Differentiation advantage
- Cost advantage
In Vegas, the house wins because they have the advantage in the odds. This is the cost advantage. They take in more money than they pay out.
There are numerous casinos on the strip all looking for you to give them your money with the hope that you hit it big. Each casino has to offer some sort of differentiation to get you to spend money at their casino. They are competing with other forms of entertainment and recreation as well as competing with other casinos.
How is your product different or unique? How does the FAB compare? Features-Advantage-Benefit.
- The feature is an attribute of the product.
- The advantage is what it does that others do not.
- What is the benefit to the user? Is the benefit better than a substitute product?
The obvious thing to do a Google Shopping search, read catalogs, and visit stores where your product would be sold. See if someone has already done what you are thinking of. Wouldn’t you rather find out now rather than later?
Patents are so important because they can create a barrier to entry for competitors. A patent can provide a legal monopoly where you can block competitors from offering your unique set of features and benefits.
Take note of how much competing products are selling for. If your product is much more costly, it will be difficult to have a competitive advantage. If you can’t make a profit, you can’t compete. You can be priced higher but you need to offer a differentiator that is commensurate with the additional cost. On the other hand, just lowering your price is not a good strategy either. Larger competitors may have more buying power and undercut your price.
Look at your product relative to the competition. If you can reduce the number of parts or streamline the manufacturing by using a more efficient process, you can reduce your cost and increase your profit margin.
This is Strengths, Weaknesses, Opportunities, and Threats. Keep this in mind when you do your market research and keep good notes. Google “SWOT” and you will find lots of good information. I may post on this in the future.
Get out there and start researching. Do a thorough job, but don’t get analysis paralysis and get stuck. Ask for help at the inventor’s mentors forum.
Here are the 12 steps to invent a product:
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