The key discipline of thinking of your idea not as an invention but as a business opportunity starts here. Novelty may count for nothing without strong evidence of market potential, and it’s your job – not anyone else’s - to search for it. If your findings are not clearly promising, it usually isn’t worth carrying on. The risk to you may be too great and you’ll have a tough time convincing anyone else to back your idea.
In particular, many inventors underestimate the strength of competition. Every new idea faces competition from whatever people do in its absence, so you need to assess what is already around that could make it difficult for your idea to succeed in the market-place.
With the possible exception of gadget freaks, hardly anyone buys a product simply because it’s an invention. In general:
The stronger the competition in the market- place, the tougher it’s going to be to interest anyone in your idea. Therefore, in any assessment of market potential you must consider how your intended product might cope with competition. You also need to study competition for the simple reason that in the case of a completely new idea, what you know about competing products or companies may be the only reliable or predictive data available.
Evaluating competition is something that many inventors do badly, believing that if their idea is novel then by definition there can’t be any competition. Wrong! All ideas have competition.
Competition doesn’t just mean products exactly like your idea. It means anything currently used or done to tackle the problem your idea is meant to solve. That’s a much wider definition that could well embrace ideas that are completely different from yours. As a general rule, any product, service or pattern of behaviour that can be regarded as a full or partial alternative to your idea is competition. For example, competition for your laser mousetrap might have to include:
You may be able to find out most of what you know by using a search engine. Bear in mind that you may get significantly different results depending on which countries a search engine specialises in. For example, US Froogle (http:// froogle.google.com) found over 3000 search results for ‘mousetrap’ but UK Froogle (http:// froogle.google.co.uk) found fewer than 500. Despite that, some of the UK products seemed unavailable in the USA. However limited the sales territory of a product may appear to be, that could easily change so it still counts as competition. That weird mousetrap sold only in Albania could be in every Tesco or Wal-Mart by this time next year.
Once you’ve ‘done’ search engines, go looking in retail or trade outlets and at catalogues and directories. Read industry journals and visit specialist trade exhibitions to find out about new product launches.
Digging deeper, pick the brains of people in relevant trades or professions, as long as you can do it without disclosing your inventive step. Professionals often have preferences and prejudices that may help you rate competition you already know about, or they may know of products or methods that might never occur to the non-expert. Retired experts can be particularly valuable, as they may be able to tell you stuff that a company employee could get fired for disclosing. (They may also have time on their hands, and if they like what you’re doing could be useful partners.)
Some of this may overlap with Project 1, but for Project 2 purposes you’re looking not just for a wider range of products but also for alternative solutions that may not involve products at all.
To do this well you may need as much data as you can reasonably collect about:
More of this in Project 3, but this is the most crucial part of the exercise because in most cases there’s no such thing as a wide-open market with lots of unsatisfied demand just waiting for your invention. The market already belongs to the competition. They’re known, popular and perhaps trusted, while your product is an unknown quantity.
Once you’re confident that you’ve identified and evaluated all competition, you can use that information to help identify and evaluate potential markets for your idea. Key questions that need answering include:
Let’s start from the most basic but often overlooked position. The problem your invention solves may interest you, but do enough other people feel the same way? If they don't, the market may be too small and unprofitable to be worth bothering with. Ideas that may be difficult to justify include solutions to problems that rarely arise or are of no real importance when they do (a fireproof mousetrap) or solutions that offer only a tiny advantage over existing products (a disinfectant-impregnated mousetrap).
You may also be on a hiding to nothing if all you’re doing is showing people how to solve a problem without having to buy your product. For example, years ago we saw at an invention exhibition a device to make it easier to paint behind pipework. It was undeniably clever but so simple that once seen, it could be improvised in seconds by anyone with a piece of cardboard. If it ever got to market, we’re not aware of it.
This is rarely as easy to answer as many inventors think. Simply saying ‘anyone who needs a mousetrap’ won’t do. Markets are increasingly segmented with often not much overlap, so aiming your product at one segment may risk shutting you out of another. The same inventive step can often be developed in different ways and it may be a non-obvious one that pays off, so spend plenty of time looking for gaps in the market - areas where existing provision or competition is weak. For example, designing your inventive step into a cheap mousetrap for home use (obvious market) may be less profitable than putting it into a high-spec version for pest control companies (less obvious market).
This can be a crucial factor if you intend to market your own product, but more of that in Project 6. Even if you want to license your idea to a company, you may have to start the ball rolling yourself so minimising risk to early stakeholders has to be a priority. If your preferred market is hard or costly to enter, it may make sense to identify an easier - perhaps local - market to start with, even if it’s less profitable. Experience and trading success in the softer market may in time make it easier to crack the harder one, and may also help win over the companies you ultimately want licensing agreements with.
What’s it worth annually and is it booming, static or on its way down? You should hesitate to enter a declining market unless you feel your product can revive it. Looking into the future, are there any emerging technological, social or legislative changes that might radically affect its fortunes?
Price isn’t everything but it might as well be. Get your price wrong and you either won’t make sales or won’t make a profit. At this stage you may have no idea what your product might cost to provide, but in a sense that doesn’t matter - the market has decided for you. With very few exceptions the market price of your product must fall within the range set by competitors. Your competitors have done much of your research for you: they’ve found out what the market will bear. If you can’t get into that price range, you may have to alter drastically either your product or your marketing plans.
What legal or industry standards of safety, performance, use, design, construction, sale etc apply to your proposed product and how easily will it meet them? This is a crucial aspect of product development that you overlook at your peril. Standards such as British Standards (www.bsi-global.com) or International Standards (www.iso.org) may have to be complied with to have a product considered fit for sale. Achieving compliance can be a lengthy and expensive process, so check what hoops you may have to jump through.
We often see excellent ideas that stand no realistic chance without new laws to encourage or compel their use, or a radical shift in public attitude. The odds against either happening are usually enormous. Examples are expensive car accessories that improve the safety of other road users, or domestic renewable energy systems with very long payback times.
It may turn out that only a portion of your idea is marketable. If this can be incorporated in an existing product or design it may be pointless to proceed with the whole invention. You may discover this now or at the intellectual property protection stage (Project 5), when you’re left with fewer worthwhile claims for novelty than you’d hoped for.
It’s your choice how much time and effort you put into this Project, but the more potential you claim for your idea, the more you must do to prove it. Answering all the questions above may be overkill if your idea’s prospects quickly start to look shaky, but if the outlook is more hopeful it may make sense to go for maximum information with one eye on a future business plan (Project 8). If you get to that stage, market potential has to be demonstrated in detail.
However things turn out, try to make your work look professional and in line with good research practice, so record the source of every piece of significant information.
Up to you, but a few bits of advice:
There’s a huge amount of good, bad and indifferent information to be had out there, so it may help to impose some kind of framework on it before you start your research. You could for example make a list like this:
What I can’t know until it happens
The following checklist is partly an action planner and partly a reminder of what matters. If you’re tempted to think ‘I don’t need to do all this stuff’, it may help to point out that we’ve modeled the checklist on questions professionals are very likely to ask if you want their advice, support or money. We therefore have to be stern and say that if you aim to be a respected and successful inventor, you can’t afford to duck any of it.
You now need to decide whether there’s enough justification to take your idea any further.