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Why Do It?

You now need to decide whether there’s enough justification to take your idea any further. It may on paper be novel and have market potential, but that doesn’t automatically make it worth exploiting.

In our view this is the most crucial Project of all. So far there’s been no need to spend or risk much. Go further and that will change, in ways you won’t always find easy to control. This Project therefore instructs you in some necessary tyre-kicking and pitfall-avoiding skills, all commonly ignored by gung-ho inventors with often dire consequences.

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Moving from Thinking to Doing

By now, you may feel confident that your inventive step isn’t covered by prior art and that there could be a market for a product incorporating it. You may perhaps also know that it works, if you’re working out of our sequence and have made and tested a prototype.

This may encourage you to go full steam ahead to the next stage, but that will propel you out of the comfort zone of thinking about developing and exploiting your idea into the discomfort zone of actually doing it. You may have got to Everest base camp in one piece and high spirits, but next comes the mountain itself.

From now on, exploiting your idea as a business venture – which is what it is, even if your aim is a royalty deal with a company – will commit you to significant effort and financial risk. So are you absolutely sure there’s enough justification to go ahead?

  • By the end of this Project, the boxes you need to be able to tick with confidence are:
  • My inventive step is significantly novel.
  • My invention has significant commercial potential.
  • The potential is there to make a worthwhile profit from my invention.
  • I personally am up to the challenge of exploiting my idea.

If you doubt your ability to do all of the above - and it certainly isn’t easy for most non- professionals to do well without practice - pay a patent attorney to do it for you. If you think your idea looks promising, this could be money very well spent. Ideally, pay to have the whole of Project 1 redone professionally but if cost is a problem and you’re confident of your basic findings so far, it may be enough to ask the attorney to advise only on the patents you found in Project 1. Two pieces of advice though:

  • Don’t go in with the attitude that you only want good news. You may not think so at the time but professional opinion that bursts your balloon can be well worth the cost if it stops you making much more expensive mistakes later.
  • Don’t expect a patent attorney to give an opinion on whether or not your idea will be commercially successful. That’s your area of professional responsibility; theirs is limited strictly to legal matters. (See Project 5, Patent attorneys.)


Significant Commercial Potential

You’ve worked through Project 2 and think your idea has definite commercial potential. But something else is much more important than that: other people have to think so too.

The potential for strong IP needs to be there but it’s not a big crowd-puller. It will matter later but only commercial potential has the magnetism to attract other stakeholders in the first place.

Significant commercial potential means not just some sales and some profit. It means sales and profit on a large enough scale to make all the risk generated by your idea worth taking.

So forget for the time being how many people might want to buy a product based on your inventive step. Much more important is how many will want to sell it. All a purchaser puts at risk is the ticket price of your product, but a company or entrepreneur may have to gamble millions just to make it available.

And it is a gamble, because in business as elsewhere there is no such thing as a guaranteed winner. There are successful new products that with hindsight look like obvious winners, but talk to the people involved and you’ll often hear a tale of doubt-laden development, pre-launch jitters and careers on the line.

You therefore need to review carefully any responses you’ve had to your idea in Project 2. As we said then, good responses from the demand side (potential customers or end users) can be easy to get but suspect, even downright treacherous. It’s harder to get opinion from the supply side (manufacturers, retailers etc) but that’s what you need for ‘grow it or throw it’ decisions. If you’ve already sounded out the supply side, are you confident that you’ve got a wide enough spread of responses from people who really know their stuff? And are you confident that you know the relevant market sector well enough to evaluate those reponses accurately?

‘So What?’ Ideas

Often, the ideas that are hardest to make a decision about are those that fall into the ‘so what?’ category. A ‘so what?’ idea is one where yes, it’s novel and yes, it could sell – but not enough on either count to get the adrenalin going. The inventor can see it selling by the ton, but to others it’s at best just another log on the fire.

Deciding what is and isn’t a ‘so what?’ idea can be subjective, so here are what we see as the essential distinctions:

  • An exceptional invention makes a real and widely recognised difference, setting new standards in its market from which there is no going back. For many it will be a ‘must have’ product or technology. For other companies or inventors it becomes the one to beat, but improving on it isn’t easy.
  • A good invention may not in technology terms be an earth-shaker, but it comfortably fills a gap in its target market and offers good opportunities for a business to increase its profits or market share. The potential reward may not be big enough to tempt other companies or inventors to try to beat it.
  • A ‘so what’ invention offers just another choice among many alternatives. It has some advantages for some people, but otherwise leaves the market unmoved. Without at least one solid redeeming feature – for example, very low cost to manufacture – it’s difficult to whip up stakeholder enthusiasm. For other companies or inventors it’s a simple exercise to better it – if they can be bothered.

‘So what?’ ideas are often more a matter of design than invention. Popular among inventors are ‘convergent technology’ or multifunctional products which combine two or more technologies. Every now and then a good one comes along – for example the camera phone – but many are distinctly underwhelming, such as binoculars with a built-in radio or a battery- powered pepper mill with built-in light (no, we can’t think why you need it either). Another problem with multifunctional products is that although customers may appear to get two or more sets of benefits for the price of one, the performance of each function may be so compromised by design or price constraints that the overall benefit isn’t that great.

None the less, ‘so what?’ inventions are by no means always hopeless cases. Consumer markets are in fact awash with ‘so what?’ products, and an idea that one company turns its nose up at could be a godsend to another. A further muddying factor is that while many ideas are born into so-whatness, even good ones can expect to have it unfairly thrust upon them at some point or other. For example, in the 1870s the telephone was rejected by Western Union as an ‘interesting novelty’ with ‘no commercial possibilities’, while in the 1980s James Dyson was told repeatedly that ’if there were a better kind of vacuum cleaner, Hoover or Electrolux would have invented it'.

But often, of course, the sceptics are right and the inventor wrong, so to rate your idea on a notional so-whatometer, consider how well it might meet key stakeholder criteria for showing interest in a new product or service. At the very least it needs to be all of these:

  • Something that can give a company a commanding position or monopoly in the market-place. (This is why strong IP matters. Without it, a company may be unable to protect its investment.)
  • Something that markets will want in preference to the competition. (As we’ve said, there is always competition, so your product needs to offer as many clear advantages as possible over alternatives.)
  • Something that offers a good return on investment over a significant period.
  • Something that offers a clear, low-risk route to market. (You may know who you want to buy your product, but exactly how should it be sold to them? This can be a much harder nut to crack than many inventors appreciate.)
Most of these criteria raise issues that can only be tackled in detail later, but your idea needs to ring bells loudly now on all of them to avoid being so-whatted too easily.

Note too that all these are business and not technical criteria. If your invention doesn’t work, end of story. If it does work, all that will matter to most other stakeholders is where’s the market and how stonking is the profit.

If your idea’s so-whatometer rating looks worrying, your challenge from now on may be to focus less on developing it as though it were a major invention and more on strengthening the aspects that could still make it a worthwhile commercial product. For example, a basic design that’s cheap to manufacture may get you further than one dripping with sophistication. This may mean lowering your sights, but it could in practice improve your prospects of making money from your idea.

THE COST OF INVENTION

It’s impossible to give exact costs for developing an invention so this is all very approximate, but to stay below about £10,000 you probably need:

  • A company to snap up your idea more or less straight out of your head and agree to pay all further costs – in which case they’re unlikely to want to pay you much, if anything.
  • A simple, cheap-to-make product that doesn’t need a patent, coupled with enough skills of your own to get by without much professional help. Very few inventors are so fortunate.
Much higher costs are more the norm, which is why it’s essential to plan to minimise risk and spread it among several stakeholders if you can. Here’s a list of just some of the actual costs incurred by one technically very straightforward invention, to get it only to prototype stage. It doesn’t include anything for the inventor’s time or personal expenses.

  • Prototype design - £12,000
  • Prototype manufacture - £14,000
  • Testing - £8,000
  • Market research - £9,000
  • Patenting (including patent attorney fees) - £15,000
  • Other professional fees - £10,000
All these costs could be higher or lower but the total spend of £68,000 for an invention still in progress is not exceptional. For example, you might be able to get to prototype stage for far less but then have to add the costs of any of these:

  • A licensing executive to approach companies and negotiate on your behalf. Terms vary but may involve an up-front fee.
  • An investment broker, who may want a sizeable ‘introduction’ (not necessarily success) fee.
  • Production, marketing, distribution etc if you plan to make and sell your own product. Unlikely to be cheap.
There’s also the ongoing cost of patent renewal to consider – often several thousand pounds a year for international cover. And personal expenses, such as travel, could add up to a significant amount, especially if you have to make trips abroad to visit companies, trade fairs etc.

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And Now – What About You?

Going beyond this project means committing yourself to developing the business potential of your idea. As soon as you do that, something very significant will happen that not every inventor is comfortable with. Prospective stakeholders will start looking not just at your idea but also at your ability to help make it succeed. Shrewd investors tend to back not the idea but the person, on the reasonable grounds that an inexperienced or incompetent entrepreneur can ruin even a brilliant idea, while a good entrepreneur may work miracles with an unpromising idea. So how might you measure up to the challenge?

There’s often a genuine dilemma here. It’s probably fair to say that few inventors want to run a business. They prefer, and will probably be right to prefer, royalties from a company. That may be you too. But to get even close to a licensing agreement it’s unlikely that you’ll be able to avoid managing the early development of your idea as though it were a business.

In practice this isn’t hugely difficult and you may find you like it, but it does require at least some effort and motivation. Again, there are issues here that will be developed more fully in later Projects, but key questions for you to ponder now are:

  • Do you know how far you want to take your idea?
  • Do you have a workable plan for getting there?
  • What part will you play in your plan? If you think you can handle everything yourself, are you sure? Very few inventors have all the skills needed, let alone the time or money, and investors are generally wary of backing one- person ventures. Usually some kind of team effort is needed (Project 7).
  • In our experience, inventors who rise to the challenge and make a good job of managing the business aspects of their ideas are far more likely to succeed, or at least make progress, than inventors who expect other people to do it all for them.
Which brings us to something else.

Can success be bought?

It’s reasonable to assume in an increasingly services-based economy that, if you think of an invention, there ought to be people you can pay to make a commercial success of it without your having to lift a finger. And indeed there are. They’re generally termed invention promoters or invention brokers, and there are plenty of them around. If you want to use one, go ahead - but first give yourself a thorough grounding in the methods some of them use.

  • Go to the DTI’s Consumer Direct website www.consumerdirect.gov.uk and link through to ‘Scams - Invention promotion firms’ (there’s a link off our own website to the exact URL).
  • The Intellectual Property Office publishes a ‘Step-by-step guide to using invention promoters'.
  • Some US invention promotion companies look for business in the UK so check out the US National Inventor Fraud Centre at www.inventorfraud.com, though be aware that this is a private initiative run by a patent attorney.
  • Search Google for ‘invention scam’, ‘invention fraud’, ‘invention promoter’, ‘invention broker’, ‘invention company’, or the name of whatever invention promoter you’re interested in. (Or is interested in you. They may cold call, using the contact details on a published patent application. Some have been known to represent themselves as a company interested in licensing your patent - which you may be delighted to hear but is almost certainly not what they’ll do.)
  • Contact a local inventor’s club, innovation support organisation, consumer advice service or trading standards department and ask about any experiences they’ve had with invention promoters. Do this in person, as for legal reasons you may get very limited information by other means.
Are we trying to steer you away from invention promoters? Perish the thought. What we will say though without fear of litigation is that some expenditure on professional assistance - for example on IP protection, design, licensing - will be necessary and can undoubtedly help an invention along but IT WON’T AND CAN’T BUY SUCCESS. All you’re buying is the materials of success - the equivalent of paint, wallpaper, lighting etc. It’s how well you put it all together that makes the difference - assuming, of course, that you’ve got a quality idea in the first place. Effortless invention? No such thing.

How much of a money-spinner might your idea be?

An important measure of whether to go on with an invention is: what’s it worth to the inventor? Too little, and there may be no point carrying on.

Invention lore says that nothing less than millionaire status will do, but in reality many products make relatively little for their inventors even when the licensee company is being scrupulously fair. Some inventors we know are happy if their royalties pay for a decent annual holiday. Others get much less.

Putting actual figures together is something for Project 10, but an inventor’s ‘take home’ from a typical consumer product may amount to only one or two pence per pound of retail price. By that yardstick, a high-priced product that could sell in large volumes for many years could be worth a significant level of development cost and should attract other stakeholders to share the risk, so maybe it’s safe to carry on.

At the other end of the scale, a low-priced, low volume product with a short life cycle but high development and IP protection costs may best be ditched right now. If your invention will never make you much but could lose you a lot, there may be no safe alternative. Other stakeholders are unlikely to be tempted, so whatever risk is around will fall entirely on you.

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SWOT Analysis

A SWOT analysis can be a good way to help you and other stakeholders make decisions about your idea. We don’t want to dwell on why it’s a universally recognised management tool (try Google > ‘SWOT analysis’ for more than you’ll ever need to know) but it’s especially useful because:

  • It’s easy to do.
  • It’s easy to understand.
  • It concentrates the mind.
  • It helps achieve agreement on what matters.
  • It’s a format professionals like and will award you brownie points for.
  • It can be updated as you progress.
  • It can be a ready-made component of a business plan.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses should be self-explanatory. Opportunities and Threats are the (usually external) factors that increase or decrease the prospects of commercial success.

To do a basic SWOT analysis, write each word as the heading of a list. Then write very short statements about your idea under each heading. Mentally dissect your idea as thoroughly as you can to cover (or uncover) every significant aspect. Ideally, do it as a team exercise with other stakeholders or one or more people whose judgement you trust.

For example, let’s try a simple SWOT analysis of our solar-powered mousetrap. It instantly kills and incinerates mice, leaving only a neat pile of sterile ash. A first prototype has been made that works well, but only some of the time. A shed has burnt down. Click the botton for SWOT EXAMPLES below for relvant Strengths, Weaknesses, Opportunities and Threats in relation to the idea for a solar-powered mousetrap.

SWOT EXAMPLES
  • SOLAR-POWERED MOUSETRAP
  • Strengths

    1. Dead mice don’t need to be handled or even seen.
    2. More humane than many alternatives.
    3. Low-cost components – potentially high mark-up.
    4. Utilises a free and ‘clean’ energy source.
    5. Worldwide potential.
    6. No prior art – verified by patent attorney search.
    7. Inventor has good technology skills.

  • Weaknesses

    1. Many competing methods of dealing with mice.
    2. May be too expensive for consumer market and/or poorer countries.
    3. May be perceived as less humane than some alternatives.
    4. Question marks over performance.
    5. Question marks over fire safety.
    6. Inventor lacks business skills.

  • Opportunities

    1. Climate change worsening mouse problem worldwide.
    2. Scalable to deal with rats, perhaps even snakes.
    3. Redesign for local manufacture may make it affordable in poorer countries.
    4. Two pest control firms – one UK, one US - have expressed interest.
    5. Sales may benefit from interest in solar- powered products.
    6. Product champion in UK company retiring soon – may come on board as consultant or stakeholder.

  • Threats

    1. May never work well enough.
    2. May fail to meet EU or US safety standards.
    3. Risk of uncontrollable copying in some countries.
    4. US company suspected of preferring patent validity challenges to fair licensing agreements.
    5. Product champion in UK company retiring soon – successor may be less supportive.
    6. Objections or adverse PR from animal welfare lobby.


How do You do it All?

Once you’ve laid your idea on the slab and carved it into many meaningful pieces, you can then start figuring out how you might (a) capitalise on the strengths and opportunities and (b) deal with the weaknesses and threats. It also helps you to prioritise tasks or divvy them out among team members (Project 7).

A benefit of SWOT analysis is that it combats the temptation to think only in terms of strengths and opportunities. There are always weaknesses and there are always threats. Find them, and you can start disarming them. Miss them, and they’ll nail you later. Do a diligent SWOT analysis and in return for a couple of hours’ thinking and jotting you could end up with a clear, credible and near-professional analysis of your idea’s prospects and what you might do to improve them.

The Elephant in The Living-Room

The elephant in the living-room is the drawback so huge that either it’s missed entirely or people around a driven, but-me-no-buts inventor choose not to mention it. The elephant is often something very basic. For example:

  • A thief-proof device to attach a luggage container to a car roof. The only way to overcome it is to damage the car. Elephant: that’s what thieves will do.
  • A magnetic baby’s dummy that if dropped while out in a pram won’t be lost but will stick to the frame. Elephant: most babies’ prams are made of non-magnetic alloy.
  • A tiny camera hidden inside a VCR that starts filming the room when burglars break in. Elephant: this was in the days when VCRs were very expensive, so work it out for yourself.
  • The Sinclair C5, conceived as environmentally friendly personal transport. Elephant: to everyone else, a death trap.
  • A wearable sensor to raise the alarm when golfers keel over with a heart attack on courses where the use of mobile phones is banned. Elephant: few golfers play alone, and in an emergency any club rules about the use of mobile phones go out of the window.

All these elephants may seem laughably obvious but they clearly weren’t at the time to the person whose hopes were pinned on that idea - so are you absolutely sure there isn’t one hovering over your invention?

What if Your Idea Isn’t Novel but Does Have Commercial Potential?

It may be that your idea is covered by prior art but there’s no commercial product anywhere and you’re convinced it could sell. One possible strategy is to forget about being an inventor yourself and become an entrepreneur. Contact the owner of the patent that stymies your idea. If he or she is getting nowhere with the idea and the patent is still in force, it may be possible to strike a mutually advantageous deal based on you being the licensee of the other inventor’s IP. If the idea hasn’t progressed very far the effect may be that you become a sort of surrogate inventor, so the projects in this book could still be relevant.

Alternatively, there may be an existing product but it isn’t being sold in the UK. How about trying to import it, or negotiating for a licence to either manufacture it here, or to redesign it for a different application or a different market? If you’re entrepreneurially minded, something may be possible.

These kinds of strategy may not work if prior art patents are held by major companies (they’re unlikely to license cheaply, if at all) or if there are too many similar patents (it’ll be a nightmare to deal with several IP owners, perhaps none of whom has particularly strong claims). You also have to think long and hard about why, if the idea is so good, there are no products. Look out for the elephant.

Getting a second opinion
If it’s difficult making decisions about your idea on your own, it may help to seek a second opinion. Many inventors are so fearful of disclosure that they internalise too much and so get locked into one inflexible way of thinking about their idea, which is how the aforementioned elephants can breed so easily.

  • The most basic way of getting a second opinion is simply to go to someone you trust, preferably with relevant technical or market knowledge, explain your idea and say ‘How does that grab you?’
  • Next step up may be to go to a local public sector innovation or enterprise support organisation. Ask if they’ll look at and comment on your idea in confidence.
  • Patent attorneys can advise professionally only on IP aspects of your idea (see Project 5, Patent attorneys.)
  • Some companies will consider protected ideas in confidence (typically, at least a patent application) but often they can only provide brief feedback and may not be able to comment at all on ideas outside their normal product range.
Bear in mind that people who can consider both the IP and commercial potential of your idea are few and far between. We’d be ignoring an open goal if we didn’t point out that at www.abettermousetrap.co.uk we provide such a service, but in fairness there are likely to be others who do it too.

Finally: The ‘Grow It Or Throw It’ Decision

OK then - what’s it to be?

Why the Door?

It signifies that past this point, things will be different. You'll no longer just be thinking about your invention. You'll be involved in doing lots of challenging but positive and enterprising things to make it succeed as a product. Are you resourceful enough and ready enough to cross that threshold?

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Project 3 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.

 
Are your patent and product searches up to date? Do you still have a significantly novel idea?
 
Summarise your evidence of significant commercial potential.
 
Analyse in detail the most threatening patents you’ve found. What’s your (or your patent attorney’s) assessment of the IP potential of your idea?
 
Do a SWOT analysis of your idea. What does it tell you?
 
Identify the risks and problems that you see lying ahead.
 
Do a second SWOT analysis of your ability to deal with them.
 
Seek a second opinion. Whom did you consult and what did they say?
 
Is there an elephant in the living-room?
 
Justify any decision to carry on developing your invention.
 
Remember The Golden Rule: The potential reward from your invention must be much greater than the cost and risk involved in getting it to market.

Next Project…..
PROJECT 4
Project 4

Proving your idea

For obvious reasons you need to prove that your inventive step works. That usually means a series of increasingly polished prototypes.


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