Recently I encountered two people with different situations but the same goal. They want to commercialize their inventions.
One person has a prototype and issued patents. The other inventor is not as far along, he has a proof of concept and not sure where to turn.
My first question to either person is what is your end game? Do you want to license the invention or do you want to create a venture to sell it on your own?
It comes down to risk/reward, skill set, and desire. Sure, if you make the product yourself, you keep all the profit. You also bear all the risk and need a lot of capital. You can license the invention and make less money buy risk less and maybe sleep better.
Who is your customer? You need to identify the target market and who the decision maker is. Dogs don’t but pet products. You need a business case and maybe a formal business plan.
What is it you are offering? You need to present this as a FAB, no not the detergent. Feature-Advantage-Benefit. People buy benefits, not features. What will you product do and what does it do better or cheaper. You need a sell sheet.
Why should the person buy your product? What is you competitive advantage. Like Doug Hall says, “Be meaningfully unique or be cheap”. Why is your solution better? Is you competitive advantage sustainable thought patents or other means? You need a value proposition.
Where will this product be sold? Distribution is one of the hardest parts of this game. Sure you can sell on eBay or a website but how will anyone know about it. Want to sell to a chain store? Can you buy 10,000 pieces of inventory, can you store that many? Seems easy at first but it’s not. You need a distribution plan.
When will you be able to start selling? Do you need to make production tooling; do you need to set-up a factory? Is it domestic or overseas? You need a development schedule.
How are you going to promote the product so people know about it? Promotion is not cheap. It’s vital to get the word out about your product. There is so much competition for consumers wallets it’s tough to get noticed. You need a marketing plan.
How are you going to produce your product? Depending on the complexity, it just may a single part. Even that single part needs some sort of packaging. If you sell direct on-line it may just be a bag to protect it in shipping. If it’s retail, then you need to design and create retail packaging. This is an art unto itself. If it’s more complex, you need to set up an assembly line. Lots of work especially if the factory is the other side of the world. I would spend weeks at a time in Malaysia.
Assuming that I have not scared you off, let’s get back to the first question. License vs. Venturing.
Here is a quick summary of what you need to do for each question. This will help you decide and it is a start of an action plan for you to commercialize your invention. (Click to enlarge)
Thank you for reading. Comments are welcome and encouraged. Let me know what you think.