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Why Do It?

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.


Invention Equals Business Opportunity

With the possible exception of gadget freaks, hardly anyone buys a product simply because it’s an invention. In general:

  • Customers or end-users will only buy it if they have a use for it and prefer it to competing products.
  • Companies or investors will only buy into it if they see enough profit potential to cover their financial risk many times over.
So performance and value for money tend to rank highest with users, while profit definitely ranks highest with most stakeholders. This means that if your idea or inventive step is going to have any future, it can only be as a business opportunity based on a significant and protectable improvement on existing technology or practice.

When viewed in a purely commercial light, many technically sound ideas start to look a lot less attractive, so you need to shine that light on your idea now. If you don’t, others certainly will later.

Thinking commercially from the word go also helps reduce your risk, which increases the further you take your idea. Many technology- immersed inventors tend to think of commercial considerations as some distracting back-seat passenger whom they’d much sooner not have on board. The reality is that while technology or design may be the driver, business is the navigator. Put it in the front seat or risk losing your way completely.


Competition

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:

  • All other mousetraps, however they work.
  • All relevant patents, even if not commercially adopted. (Competitors might later use them to invalidate or get round your IP.)
  • Non-trapping methods of dealing with mice, such as poisons.
  • Methods of dealing with other pests that could be used for mice.
  • Pest control services.
  • Cats.
If people don’t regard the occasional mouse as a problem, competition might even include doing nothing.

Habit or inertia could be your biggest invisible competitor. It can be very difficult or expensive to persuade people to abandon tried and tested ways of doing something or to desert a major brand, no matter how technically inferior the branded product may be.

Unless you’re already an expert and know your field of invention inside out, assessing competition usually involves three stages:

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Potential Markets

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:

Does anyone actually need your product?

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).

Does anyone need to but your product?

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.

What’s the best market for your product?

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).

What’s the easiest market to enter?

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.

How healthy is your target market?

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?

At what price might your product have to sell?

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.

Will it comply?

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.

Will something else need to change first?

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.

What’s the most marketable aspect of your invention?

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.

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How Much Resarch Should You Do?

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.

How Do You Do It All?

Up to you, but a few bits of advice:

  • You’re probably on your own. Professional research is usually expensive, and if your idea isn’t yet fully formed there’s a good chance that other people won’t really understand what they’re looking for and may produce misleading results.
  • Having said that, universities which run marketing courses often need real-life projects for their students. If your project meets academic criteria and you can provide a detailed working brief and perhaps meet some minor expenses, universities could be well worth a try as sources of unpaid but near- professional market research. The downsides are: (1) a risk of disclosure by blabbermouthed students; (2) the timescale will be the university’s, not yours; and (3) students differ in ability so performance and outcomes can never be guaranteed.
  • Unless done by someone with experience, don’t bother with surveys of consumer buying intentions. They may seem like a good idea but in practice can cruelly mislead. The problem is that they’re no guide to actual buying behaviour, as many people tend to say one thing to researchers then do the exact opposite later. The only reliable survey is to stick a product in front of lots of people and ask them to buy it.
  • Don't trust the opinions of family and friends. Most will lie to you and few will know or care enough to give you the sort of grilling that could be genuinely useful.
  • When talking to people, don’t say it’s your idea (unless you want flattery instead of truth) and don’t disclose your inventive step. Try to focus primarily on how people perceive and deal with the problem that led to your idea.
  • Don’t ignore the lone voice that contradicts everyone else. That person may have thought harder and more intelligently than others about the subject. What they say could identify a major weakness in your idea. Some business objections in particular - for example, too small a market - may be an early sign that your idea may only succeed if you market it yourself.
  • Use only reliable or first-hand sources of information. Never do what some inventors do and present as evidence a bunch of cuttings from tabloids. Some papers get their facts straighter than others but it’s rare for a serious piece of research – or anything, come to that - to be reported accurately in the popular press.

Free or Cheap Market Information Sources

  • Above all else, the internet. Be discriminating though, as much of the data you find will be too outdated, lightweight or self-serving to be reliable.
  • University libraries and public commercial information libraries. (Most academic libraries are open to the public.) A wealth of business and technical information - and helpful librarians with fact-finding expertise - awaits you. Look for guides and indexes to marketing data, industry-specific journals, directories, company reports, product statistics and market surveys. Some libraries offer free subject guides to their reference material.
  • The patent system. Looking at recent applications by key companies can tell you a lot about what may be heading for the market or lying about in R&D departments. (Though don't forget that a patent will be at least 20 months old before it appears on Espacenet.)
  • Trade fairs and exhibitions. Usually held annually. Most industries have their own events, which can be so important that companies gear product launches to them. Getting in may not be straightforward but they can be a unique opportunity to collect information, ask questions, poke at products, find out who does what and make useful contacts. (If there is only one major annual event where buyers gather, that is effectively your product launch deadline. Each one you miss is another year lost, so make it a key date in any development plan.)

INFORMATION MANAGEMENT

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

  • How strong any intellectual property will be.
  • How much time, effort or risk it’ll take to get my idea to market.
  • Once there, how well it’ll sell. How profitable it’ll be.
  • How competitors will react to it.
What I can find out but not rely on
  • What potential users or customers say about my idea.
  • What friends or family say about my idea.
  • What companies or individuals who want my money say about my idea.
What I can find out and rely on current competing products and prices.
  • What else people currently do or use that may compete with my idea.
  • The state of the market and/or technology. Relevant legislation or standards.
  • Current business models.
  • Current winners and losers.
  • The opinion of experts, as long as it’s impartial.
What I can do with the reliable data analyse competition.
  • Identify the significant advantages (if any) of my idea.
  • Identify possible target markets.
  • Estimate target retail and manufacturing costs.

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Project 2 Checklist

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.

 
Competing products, processes, behaviour:
  • Identify and list the strengths and weaknesses of existing competition. (‘There isn’t any’ is not an acceptable answer!)
  • Identify any emerging competition that isn’t yet on the market or isn’t widely available.
  • List the significant benefits of your invention that will enable it to compete.
  • Research potential market reaction to your invention, especially from company buyers, and report your findings.
  • Who doesn’t like it or think it will sell, and why?
  • What’s your counter-argument?
 
The market:
  • Report briefly on the state of the overall market for your invention. Who are its key players, what’s it worth, how is it changing etc.
  • Identify the potentially most profitable market segment for your invention.
  • Identify the segment that’s likely to be easiest to enter.
  • If the two are different, explain your reasoning.
 
Demand and price:
  • Put figures on potential demand for a product made from your invention, and justify them.
  • Identify and explain a target selling price.
  • Allowing for the normally big difference between ‘factory gate’ and end user selling price, indicate potential profitability from a stakeholder’s point of view.

Next Project…..
PROJECT 3
Project 3

Grow it – or throw it?

You now need to decide whether there’s enough justification to take your idea any further.


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