You may literally have a transformational idea or product concept; something that every human, corporation and government entity on the planet would want and gladly pay vast sums for, but without adequate resources, it will never see the light of day. Without a doubt, the most valuable and invaluable resource is knowledge. It isn’t necessary for you to possess proficiency in every aspect and category for product development and launch. In fact, it is highly unlikely you or anyone will ever possess sufficient capabilities to self generate everything you will need for the triumphant pursuit of securing a niche in the market. However, it is, at the least, wise to know and understand each factor along the chain of development and launch. It is at least as important to be aware of your weaknesses, as it is to know your strengths.
Being able to identify available resources is critical to arriving at a desired and successful outcome. Normally, resources tend to multiply and become more available as a project (and life in general) moves forward. However, if a project is initiated prior to establishing the existence of and access to adequate resources, failure is almost certainly just around the corner. It is a given fact the number one reason new businesses fail, is due to inadequate capitalization. In a very real sense, inadequate resources, of which capital is certainly a major element, is the opposite side of the same coin. IdeaShares is designed to provide as many resources possible to the inventor/entrepreneur, however outside sources will ultimately be required. This module is designed to provide direction on getting maximum leverage with the resources available.
The Resources category contains five self explanatory questions which should not require much thought to answer with confidence and accuracy. Subsequently, this module addresses each question with minimal explanation, as little is required. Therefore we will focus on types or resources needed, identifying those resources, both in terms of relevance to your specific project and purpose, as well as where and what to look for.
How much knowledge and understanding do you possess regarding the idea/concept you are interested in pursuing? One might think the very reason for being “enrolled” in ISU suggests that core competency is low. That would be an incorrect conclusion. Very few people have adequate, let alone significant proficiency in every category necessary to achieve a successful outcome, without outside assistance in some form and capacity.
Obviously, you have an idea or concept you believe in. Irrespective of its category or classification; i.e. first of kind, an improvement of existing product(s) or something between, there are many facets and components required to breathe life into your idea and get it to the marketplace. Again, it is neither necessary nor likely you will ever possess proficient knowledge nor capabilities in every category necessary for development and launch, but you do need to know how to create an accurate roadmap to follow to give your idea and project the highest probability for success.
Each category in the eRIM Analytics Tool and the IdeaShares 7 Pillars of development, as well as subsequent modules contained in IdeaShares University are specifically designed to provide sufficient proficiency and understanding to aid you in the accomplishment of your goals. Toward that end, what do you really know about your idea?
Simple question: How much time is available to you for project pursuit? This question shouldn’t require much thought, but could require a lot of planning and time budgeting. When you combine the answers of the first two questions in this category, the ensuing importance and relevance to your project begins to come more into focus. If you possess little or inadequate knowledge and time, absent outside help, your prospect for success is low. Knowledge & time; the two most precious commodities. The first is potentially unlimited, and the latter is very limited by comparison. Lack of proper planning in both areas and/or a limited supply of either will almost certainly result in failure.
This question pertains to identifying outside resources you will require to get your product designed, protected, developed, manufactured, branded, marketed and launched (and any other “specialty” requirements exclusive to your project). Just as you know, for the most part, what your capabilities are, and what your time availability is, it is at least equally important to not only be aware of, but understand what you lack to get the job done. Again, know and understand your own weaknesses at least as well as you know your strengths.
This is probably the easiest question to answer, but assuming your finances are limited, is likely going to be the hardest obstacle to conquer. This question is limited to your personal financial resources. Do not include any outside financial assistance in arriving at an honest and accurate assessment. There is an old saying among entrepreneurs regarding how to raise capital for startup: “Begin with the “3F” principle; Friends, Fools and Family.” This, by the way is a very bad plan. There are many pitfalls to approaching friends and family for investment or loans, and it isn’t the kind of relationship(s) you can simply distance yourself from if things do not turn out well. It is also typically the first mistake the novice will make, and things generally continue to go downhill from there. Other obvious options include loans (including collateralized and non-collateralized & credit cards) investors, partnerships and cooperatives. While there other ways to finance, these are the customary avenues for capitalization. Refer to the ISU Funding Module for in depth methods and information for financing.
Another seemingly simple question: What facilities do you have at your disposal for product development? This question will obviously be directly relevant to the development requirements for your product/concept, and is by no means restricted to buildings and real estate. Again, depending on the nature of your product, you not only need the physical location, but the tools and machinery, many of which can be very expensive. Some ideas, both simple and complex, require only assembly. If this is the case, it should be a matter of parts collection and production line style assembly.
This question is also partially weighted based on your answers to the first three questions (core competency, time and finances). While it is certainly possible to have development facilities at your disposal, if you lack one or more of the previous three, something is obviously missing, so proceed with caution in that scenario.
On the surface the Resources category questions seem pretty easy to answer, but represent the most vital aspect of responsible innovation, with nearly infinite pathways to follow. Just as knowing and understanding your weaknesses is at least as important as knowing your strengths, knowing and understanding what pathways not to follow in the identification and implementation of resources, is similarly at least as important in knowing what paths to choose, and will result in the conservation of your most valuable commodity; time. Every single component in this category must be present with equal competence and execution. A weak link will likely result in project failure. The axiom “the devil is in the details” has never been more appropriate and true with regard to making certain you have identified and executed the best resources for your project.
“Moore's law is the observation that, over the history of computing hardware, the number of transistors in a dense integrated circuit doubles approximately every two years. The law is named after Gordon E. Moore, co-founder of Intel Corporation, who described the trend in his 1965 paper.”
As technology has advanced since 1965, developments and trends have resulted in the collapse of Moore’s Law. Continually accelerating computing capabilities, software and technological advances, a new reality has replaced Moore’s Law. The Law of Accelerating Returns:
“An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense “intuitive linear” view. So we won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate). The “returns,” such as chip speed and cost-effectiveness, also increase exponentially. There’s even exponential growth in the rate of exponential growth. Within a few decades, machine intelligence will surpass human intelligence, leading to The Singularity — technological change so rapid and profound it represents a rupture in the fabric of human history. The implications include the merger of biological and nonbiological intelligence, immortal software-based humans, and ultra-high levels of intelligence that expand outward in the universe at the speed of light.” - Ray Kurzweil
In a world where technology multiplies exponentially over an ever decreasing period of time, it is absolutely mandatory to first be certain your idea is in some way unique, provides a valuable benefit and has a fighting chance for success. You haven’t even made it to the starting line until you have passed these initial tests:
Is your idea truly unique? Is it something you were simply not previously aware of, or a variation of an existing product or technology? Fortunately, technology provides the ability to research in an almost unlimited capacity via the internet, which represents your first and most obvious resource. In a relatively short period of time, you can conduct a very thorough search of existing patent records online by accessing the USPTO (United States Patent & Trademark Office), and this represents a mere sub-fraction of information available in practicably any and all genres of endeavor.
Beyond our own IdeaShares Network (ISN) where you can search for a full spectrum of services and goods through our preferred, sponsored providers, the availability of online information, specific to your field of endeavor, can point you in the right direction without the need to devote a large amount of time. What you do with this information and how you administer and vet it is where the predominant amount of your time will be invested. You will likely find numerous providers of services you need to move forward with product development, but how do you know which provider to engage?
Another excellent online resource for inventors, entrepreneurs and product developers is the Thomas Registry, found at ThomasNet.com, where you will find an enormous amount of information and service providers.
While costs are certainly a major factor and consideration, the least expensive does not automatically equal the best option. In fact, more often than not, the least expensive will not be the wisest choice. At this point, old fashioned human communication, via phone, email, snail mail or even an online service like Skype is the best resource available to you for vetting and filtering contacts.
This important, and unavoidable facet of product development is to do your homework. Unless you are committed to this, your results are apt to be disappointing, not to mention a complete waste of time, and reminiscent of another axiom: Garbage In Garbage Out (GIGO).
Even if you lack access to the internet, there are still avenues and remedies available to you. Your local public library can provide you with internet access, as well as good ole fashioned print formatted information and databases. If you are located near a college or university, the same may apply. Absent these choices, a good book store is an excellent alternative. There are also companies that provide research services that will, for a fee, engage their services on your behalf.
However, ISU believes your best course of action is to do your own work and research, which is why we have developed these course offerings and networks. We have done most of the “heavy lifting” but intentionally developed in a manner that enables you to “learn the ropes” thus making your product substantially more appealing and viable to the outside world. IdeaShares doesn’t put your idea in front of investors; we put a prepared and knowledgeable intellectual property holder in front of a GROUP of investors who pay very close attention to those kinds of details.
No matter your method of pursuit, you must be confident your idea is unique and valuable enough to be both worthy of your time, treasure and resources.
There is certainly nothing wrong with walking the innovation path alone. Many people prefer this approach for obvious reasons, not the least of which is there are no partners to divide the profits with. However, a team approach can be very beneficial and dramatically increase your odds for success. As we have stated, very few people have adequate proficiency in every category of the development chain to see the entire process through without outside assistance. Even then, there is typically usually wisdom in counsel. For the sake of comparison, two people with the exact same education, experience, and subject matter knowledge, will likely have different ideas on how to proceed.
Ideashares Network (ISN) was developed to provide many options for you for resources and teambuilding. Of course you can also go your own way in this endeavor, but we strongly encourage you to use this vital resource of trusted sponsors and providers along your path to entrepreneurial success.
If you select your team members carefully and with bias only toward the project itself, the synergy created usually ends in a result greater than the sum of its parts. If you elect to go the team route, then you obviously need to select partners based on your own weaknesses and categorical shortcomings. For this, we will refer back to the IdeaShares 7 Pillars of product development:
Research & Development (R&D)
Sales & Distribution
Because the eRIM Analytics Tool was specifically designed for evaluation, we can’t think of a better resource for the evaluation phase of development, and this “partner” won’t cost you a penny. The thing you most need to avoid in this stage is reliance on someone whose livelihood depends on your money, to advise you on product and idea viability. You want this evaluation to be based solely on the facts, not opinion; especially a self serving opinion. Nevertheless, product evaluation is only one category of assessment you will need along the way. The selection of team member(s) with the ability and experience to analyze and evaluate the development phases, with specific consideration given to design, prototyping and manufacturing is vitally important to maximize the leverage of available funds and time efficiency.
Each one of these categories is vital, so we will forego statements of the obvious. However, with the new patent laws, it is particularly important to make sure you are protected. Again, you may have the most significant new technology in human history, but if you fail to protect it, or improperly disclose it prior to securing patent protection, someone else may enjoy the fruits (and profits) of your innovation and labor.
It is very probable you will need a good patent attorney or patent firm to secure protection. However, you can do a lot of the heavy lifting on patent preparation by selecting the right partner, assuming you lack the expertise to do so on your own. This could save you a very significant amount of money and time which will give you an advantage over would be competitors.
We can tell you the benefits of this attribute first hand, as we are very fortunate to have a partner that has a masters touch in finding additional protectable claims and the ability to write Provisional Patent drafts, which can then be filed with the United States Patent and Trademark office (USPTO) and cost us nothing more than the filing fee. He also happens to possess a PhD in mechanical engineering. It definitely pays to find good and capable partners.
Just as going unprotected can easily result in the loss of your intellectual property, inappropriate and misinformed disclosure of your idea can result in loss as well. Throughout the course of transforming your idea into a product, you must be diligent about who you disclose it to, either in whole or part, as it could be considered what is known as “public disclosure” which could permanently prevent you from successfully securing a meaningful utility patent. You absolutely must get into the habit of using non-disclosure agreements when discussing and disclosing your idea to anyone. Additionally, you must only disclose the idea to people/entities that are of material relevance to the further development of your concept. Even discussing it with a family member (except your spouse) under the protection of an NDA could still result in public disclosure litigation unless you can prove that family member has material relevance in further IP development.
IdeaShares provides a generic Mutual Non-Disclosure Agreement in our forms library for your use. If you have already engaged a patent attorney, they will advise you on how and with who (and who not) to disclose your idea to, as well as provide you with the requisite forms and paperwork to use. Our form will protect you in the legal sense, but, depending on the nature, progress and needs of your project, it may be necessary to add language and otherwise revise this form to meet your specific needs.
You will also find substantially more information on intellectual property protection in the ISU Intellectual Property Module. However, the point being made in this segment is relevant to determining whether or not you want to build a team to pursue the development and launch of your idea, and who & what to look for if you choose that course.
R&D has arguably the broadest scope of work than any other category along the product development chain. It is inclusive of everything after the “napkin sketch” phase (and sometimes before). The eRIM Analytics Tool for this category is relevant to the key components necessary to determine your internal assets and circumstances, but is not reflective of the actual work needed for development. R&D will include drawings (computer aided design/CAD), prototyping process, engineering and numerous other critical aspects in preparation for manufacturing.
Typically other departments are required to assess other needs and requirements that may or may not be pertinent to this phase. By example, it may be necessary to meet with the marketing/branding and/or public relations department(s) to decide on things such as colors, shapes, various sizing requirements, specific materials and competing products and how to leverage any advantage or disadvantage. These are just a few of the possibilities that may arise throughout the R&D process.
It is often necessary to re-design a product in preparation for manufacturing for a variety of reasons. For the sake of conserving resources, you want to make sure you are including all, or as many relevant & conceivable aspects before a re-design occurs. This is especially true if your are relying on an inventory of parts to make your product. You want to avoid paying for parts that ultimately will not work, as it not only costs money, but will delay the development time table.
Again, the purpose for this segment is to consider what you need to look for with regard to teambuilding and partnering with the right person or people. If you decide to build an organization to pursue your own product development, you need to be aware of and understand the R&D process, so you know what characteristics, experience and attributes to look for in a partner that will carry his/her own weight. Don’t get caught up in the enthusiastic euphoria of future possibilities when selecting partners. The last thing you need is dead weight, especially if you have to answer to them to progress, knowing they are contributing little if anything to the project.
This category obviously represents a requirement for expertise and knowledge in materials and processes. If you do not possess the know-how, then you will need to find a partner to take care of this facet of product development. This can be accomplished by selecting a partner within your own organization, or an established manufacturer willing to take on your project at reduced costs, accepting an equity stake, or a combination of both. There is a section dedicated to manufacturing partners later in this module, but the point is to be sure you have this requirement covered.
Either method is perfectly acceptable, and, as in everything, there are pros and cons to each. Either way you will be surrendering ownership/revenue, so you will want to make the choice that is right for you. You may have just one idea at the moment, but we can assure you, once you have been “bitten” by the innovation bug, especially with a successful product launch, you will likely have a strong drive to keep inventing and developing. A manufacturing partner is almost certainly going to require a greater percentage of ownership, than the team approach, but it is also significantly more streamlined and will involve a considerably smaller investment of your time.
While branding and marketing are in the same overall genre, product imaging and promotion, they are equally important and require two very different skill sets, both reliant on the other. Branding is the process of creating a brand and the image behind it. This phase is arguably among the most important along the entire development chain. Brand loyalty is one of the most important assets a product can possess, to the point that major corporations spend millions of dollars annually to grow and protect. Brand and logo infringement also represents serious revenue for law firms practicing intellectual property law.
Branding has numerous stages and requires some very creative thinking, along with the ability to predict market movement, placement, market share and other crucial elements involving trends and patterns, which is also a key component of the marketing phase. Branding is inclusive of developing logos and catch phrases, and leaves no room for second guessing, as one seldom is given a second chance to make a first impression, especially in the online, digital world.
The Weibull distribution is a complex, multi-level algorithm widely used for a broad variety of projecting and/or determining many functions and behaviors. By example the Weibull distribution function can be used to project the amount of time a visitor to a website will remain on your page or site. Again, this can be very complex, but is an excellent tool for design, engineering and projecting variables that can (and will) impact your project, and is worth the time and effort to at least be understand it purpose and potential. Having a partner that is familiar with this tool, which has multiple uses along the product development chain, can be invaluable.
Marketing is the process of not only engineering a successful product launch, but keeping the product on the market while increasing market share. There are far too many marketing strategies and tools to list in this module, as they are covered in the ISU marketing module, however the point is to have the ability to cover every aspect of both phases, and, again, what and who to look for when selecting a team member(s) to manage these functions, entirely dedicated to the daily operations. A single person may well have the skills and expertise to perform both functions and occupy both of these roles, but you need to have a working knowledge of both, to know what questions to ask a potential partner. If you comprehend these roles and subsequent responsibilities, you will have far less exposure to possible product failure due to inadequacy or inexperience in this critical category.
The standard conventional distribution model involves three key participants: production, wholesaler and retailer. This has been the process for many years, with well established providers on each level. However, this model is not without faults, as one may try to circumvent the other, or, as the old axiom states, cutting out the middle man.
Another element of consideration is the type of product you have and the how best to sell and distribute it. If your product is digital or “virtual” sales and distribution will predominantly take place online, which will command an entirely different strategy more aligned with marketing than conventional distribution models.
Assuming your product is physical, your distribution strategy needs to encompass both conventional and web based models. The number of products being sold online these days is increasing exponentially as more people are coming online & becoming comfortable with purchasing on the web, and recognizes its convenient, money saving characteristics. However, online sales do not work as well for some products, and can never take the place of the human nature to touch, hold and personally evaluate.
Additionally, web based sales have very different parameters for dealing with human buying habits and frequently unavoidable sales issues and concerns. Online sales do not allow the buyer to personally evaluate before purchasing, and with the exception of having a very straight forward and aggressive return policy, which is more of a hassle then simply jumping in the car and returning to the store, your only alternative is to have fulfillment and distribution that is as close to bullet proof as possible.
Amazon is the best example, as they are the largest online retailer, as well as the largest order fulfillment service. It is imperative your ordering and purchasing policies are favorable toward the customer. This is true for any product irrespective of your sales & distribution model, as customer service needs to be exactly that, especially at a time when customer service seems to be a foreign concept to many companies, and second chances are few and far between. Show your customer how valuable they are to you.
Fulfillment companies offer a full spectrum of services, which are usually available on an “ala carte” basis, including credit card processing, product storage and packaging, delivery/shipping and returns. Some even offer printing, marketing, sales and customer survey services.
Providing the customer with an attractive environment, especially through online sales, as well as a valuable or value added proposition from the moment they first see your product or website, dramatically increase your chances of securing a buying decision, and retaining a loyal customer.
Also, the type of product you have and the way customer will use it will (or should) influence your sales & distribution strategy. By example, is your product large, heavy, bulky, and perishable? Those factors will limit your distribution options and, in the case of large or heavy products, significantly increase shipping costs, potentially to the point of cost prohibition.
Direct distribution is another model/strategy; meaning you sell and distribute your product through your own personnel and facilities. This method can be used for individuals and retailers, but you need to be familiar with the distribution models that are most prevalent in your industry, and try to remain within that framework, and improve on the service where/if possible. This method has been very effective and efficient for many retailers, including the largest retailer in the world, Walmart. This technique eliminates the wholesaler (an entire layer of typical distribution), which enables lower retail pricing, but be careful not to burn any bridges with existing wholesaler relationships.
The size of your product may represent some issues and barriers. If the product is large, retailers willing to commit sufficient display area, which represents a premium to all retailers, may be challenging, and result in fewer sales outlets and/or lower sales through your retail distribution. It is also worth reminding you that Tradeshows are an excellent source for developing retail and distribution relationships.
Funding is a complex universe, with many options and consideration & covered thoroughly in the ISU Funding Module. For this reason, please refer to that module for information on funding options. However, toward that end, there are other resources available that can provide an alternative to traditional funding in its many forms. Also understand, unless your project is completely self funded, it will almost certainly be necessary to prepare a business plan and pro-forma(s), irrespective of the financing mode you elect to pursue. Several additional options are presented below:
Licensing implies ownership of rights to license. As a general rule, unless you have protected, valuable intellectual property, you really have nothing to license. There are rare exceptions to this rule, which would require an environment of absolute trust and well defined terms and boundaries, as well as rights, duties and obligations.
There are numerous types of licenses, but the most common are a license to manufacture and sell; license to manufacture only, license to use; license to sell only. Each type has its own terms and parameters, and you want to make sure the important aspects are covered in the license agreement. License agreements are really nothing more than a legal contract between two or more parties outlining the type of license and the specifics and nature of the license. While there can be any number of terms drafted to cover the specific needs of the product and the parties entering into the contract, the most common conditions and terms you will want to cover at a minimum are:
Parties to the license agreement (Licensor & Licensee(s)
Definition and identification of the intellectual property being licensed
Term (timeframe) of the license agreement
Rights being granted
Stipulations in the event of sale of IP or sale of company (both sides)
Provisions in the event of bankruptcy (both sides)
Payment of royalty fees
Financial obligations for maintenance of patent(s)
Performance metrics (minimum sales and/or timeframe for minimum sales volume, which can be based on a set amount of time or tiered for both time and performance)
Records maintenance and audit rights
Inclusion of issued patent numbers on each unit manufactured (may also include logos of both the licensor & licensee(s))
Sharing of new IP and/or “know how”
State of jurisdiction
We strongly recommend you engage legal counsel to draft and negotiate the license. There is no need to re-invent a well oiled wheel. You may possess the knowledge and ability to draft the license, but it will still be wise and advisable to allow someone “skilled in the art” to review and edit as necessary.
This is the most common license granted, especially for smaller products and business entities. This license grants the licensee the sole (and usually exclusive) right to manufacture, market and sell your product. You may also want to retain the right to co-market and sell your product, which is not uncommon, depending of course on your available time, resources, sales and marketing ability and desire to “get the word out” and make sales. In this event, your contract will also need to identify marketing and sales parameters and guidelines, identification of existing relationships or territories, and other logistics that are likely to exist in a co-marketing environment.
It is also possible to grant more than one license such as license only to manufacture and license to sell, in which case, typically only one licensee will be paying you royalties. This type of arrangement can become very convoluted, and is probably not the best way to proceed except in atypical circumstances, such as a limited number of manufacturer options due, for example, to a very unique product, or requiring unique sales abilities or access to certain markets.
Usually this type of license occurs through a sales only license, where the primary licensee is subcontracting the manufacturing component of the development chain, unless the manufacturer is invoicing for the primary license holder, permitted by terms in the primary license. This licensing arrangement is not common, but you need to be aware of the possibilities and options. Again, an experienced & reputable contract attorney can provide good advice on the best direction for your circumstances. In either case, you will want to make sure the manufacturer is acting under the authority and in accordance with your patent(s).
This type of license is typically associated with a component (your product) that is required to make a larger system or product work, such as a mechanical device or software by example. This type of license is usually event driven, as in point of purchase or a download. It is not uncommon in these circumstances to no require a license at all, in lieu of sales agreements or contracts, which may also come with additional terms such as minimum sales volume, performance metric(s) or definition of territory or specific existing and/or yet to be developed sales relationships.
This is also a relatively common type of license, where you want to license a sales outlet or partner that has no relationship to the manufacture or creation of your product, or that is buying directly from your manufacturer licensee, permissible through the terms of the primary license. If the sales only licensee is buying directly from your manufacturing licensee, then you will likely receive royalty payments from only one of the licensees. It may be necessary and to your advantage to enter into multiple license agreements, in which case your licenses will need to be non-exclusive. However, in non-exclusive licenses, some of the terms contained in an exclusive license will neither appear nor be relevant. By example, performance metric(s) such as minimum units sold, or guaranteed royalty payments other than an pre-established number, will typically not apply. Again, consultation with a contract attorney, not matter your experience and expertise, is good advice.
Marketing partnerships can be an excellent way to build a sales force that will cost you nothing until sales are made. This is an especially good marketing method if you have all of the other components in place and are “product ready.” You may have the greatest product in history, but with no sales you own 100% of nothing.
There are companies that specialize in sales & marketing. Sometimes theses companies come into existence through marketing their own products, but most frequently they are simply marketing “guns for hire” and provide an instant sales force. Beware of companies that ask for money, as they are typically nothing more than a scam. Again, question the advice of someone who needs your money to stay in business. If this method is right for your circumstances, seek only professional people or companies with a proven track record of sales success and accomplishment. If your product is of serious merit and value, you can find marketing services that will be eager to reach a fair and equitable agreement with you. Remember, they need products to sell, irrespective of their proficiency as marketers and sales people.
Notwithstanding, you can choose to enter into an agreement with the right company that will require some capital investment on your part, but only if that results in lower commissions and/or royalty payments.
A successful marketing campaign is built around the value, qualities and worthwhile attributes of your product. If you choose to build a team, obviously you will need to find a partner that has experience in sales and marketing, with the knowledge and ability to determine such things as price and volume, identification of the market universe and market niches for your specific product. Additionally, the right candidate will already have existing relationships with various manufacturers, and experience in licensing and royalty sharing. The early phases of marketing involve the creation of quality standards, test marketing and ways to leverage your sales and marketing dollars. ISU has a full module on sales and marketing with much more in depth instruction and information.
If you lack the ability and/or facilities to do your own manufacturing, you will need to find a manufacturer that can make your product. There are a variety of options when looking at and negotiating a partnership with a manufacturer. However, before you even begin looking for a manufacturing partner, you need to have a well thought out and developed plan, as well as an understanding of the manufacturing process and costs, otherwise you will inevitably find that your margins are slim or nonexistent. That isn’t an indictment on all manufacturers, merely a simple statement of fact. Manufacturing is like any other process; bad planning leads to bad results.
Prior to approaching manufacturers, you should have a very good idea of who your customers are, as well as market universe, demographics and marketing strategies. Additionally, you should also be aware of how your product will be made, and what materials(s) will be used and required for manufacturing. All of this will make it much easier to not only locate the right manufacturer(s) for your project, but successfully negotiate a partnership. Manufacturers are business people first. They understand their market and function very well, and they look for opportunities to expand and profit & and are far more likely to enter a partnership with someone that has their affairs in line and ready to proceed.
This is also the best position to be in with regard to protecting and increasing your ownership percentages. Again, if you know and understand every aspect and element along the entire spectrum of innovation, your chances of success increase exponentially, and, as importantly, you eliminate a lot of potential dead ends, disappointment and frustration, as well as conserving your resources. This will act as your best “filter” for researching potential manufacturing partners.
Manufacturing partnerships are similar to licensing, but require a more hands on approach, and means you will need to be “plugged in” and available consistently during normal business hours (and often beyond). With this type of arrangement, you need to remember that partnerships are very much like a relationship, so it is vital you select a manufacturer you can trust and work well with.
There are volumes of information available online and in print pertaining to all types of manufactures. You can also derive a great deal of information from manufacturer websites. While it isn’t mandatory, selecting a manufacturer in your general area, reduces costs and time requirements. It may be necessary to use a manufacturer in another state, or country, but you should try to avoid this if and when possible.
Again, once you have been bitten by the innovation bug, you will want to continue to bring new products and ideas to market. It is not only very rewarding, but a lot of fun. Choosing the right manufacturer(s) will go a long way in assuring your future successes, and maintain seamless production activity from product to product, as well as save a lot of time, money and unnecessary headaches.
Intellectual Property Brokerage
From Paper Napkin
Intellectual Property Management
Ideashares is a Virtual Idea Incubator that compresses the time, costs and risk associated with the early stages of Ideation. Our mission is to help great people activate great ideas by providing them with most efficient path from paper napkin to profit.
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