(18) New Year's Push
I am now ready for a New Year's push, i.e. into rapid prototyping, focus group testing, and getting a finished product manufactured. The official 'first year' of this business is complete, and I'd call it moderately successful, if a bit slow. Everything I read points to, while taking basic steps to protect oneself, being first on the market and establishing a customer and marketing base. Even though I'm sure a large plastics company in the industry I'm working with could probably design around and quickly 're'-produce my product very quickly, it would take at least 6 months. I'm assuming they'd do their own marketing studies, reverse-engineer my product, do some re-engineering of their own, establish their own marketing campaign, integrate the product into some existing or maybe a new line, etc. In the meantime, I'm building (hopefully) a loyal base of customers and probably enough business to make me happy.
Though it's so far taken me a year and a half, and will likely be another year until I'm full on marketing, manufacturing and selling a completely safety-tested product, I feel the progress made would be difficult to truly duplicate unless the product's a sure winner (which it will be, of course!). On the other hand, once duplicated, they'd (the infringers!) probably have little chance of me coming back with a patent infringement suit, as I'm not ready to spend a lot of money on it. On the other, other hand, since the patent isn't yet issued or published, they don't really know how robust the claims are, or when it was initially filed, so therefore are taking a big risk of future suit without adopting a 'wait and see' approach. Well, I hope they all 'wait and see' through my first couple of million dollars of revenue, and then simply approach with a phat license deal, which I'll probably reject in favor of some kind of partnership or co-investing.
Regarding the claims, I've sent another diagram of an additional embodiment to the lawyers, to see how they can 'extend' the original application to include. This new embodiment is really one of the first embodiements I thought of, but was altogether more complex, less utilitarian, and ultimately less useful. It is, however, easier to manage and assemble, the primary drawback being that this embodiment isn't flexible with respect to associated part sizing; it's a completely customized production. This means I'd have to manufacture completely customized parts for various sizes of the target market, and can't really reuse the parts. More expense, but maybe a definite market segment to address. I'm very motivated to get the originally filed embodiment produced and tested, as it can be reconfigured and reoriented in many different ways, with many different applications, and therefore many more avenues of product, safety and market testing.
One element I'd highlighted in that Modern Marvels contest entry (now officially deleted!), was the humanitarian value of the invention. This is an area that I've started researching a bit; my invention will really help both the affluent and not, as well as being probably useful in the handicapped market. I see multiple lines of product, including (A) high-end, expensive model for the 'suburbanites' (those who frequent bike stores), (B) low-end, cheap model for those really in need (those who live in small, urban apartments with limited income), (C) hobbyist model for those who just want the main parts and may want to use for their own, creative purposes, and (D) specialized model for handicapped applications. There's incredible handicapped and third-world humanitarian value in what's essentially a very simple invention - I've got lots of work to do in positioning my product for promotion towards those ends. Perhaps a program of donations to needy causes. Did some research on organizations that help the underserved in other countries; there's one in particular that may be the right avenue - "Bikes for the World".
Each model 'package' might have its own marketing campaign, packaging/labels, test conditions, package/parts options, and pricing structure. Note that the underlying invention is basically unchanged across the different packages. What's different is the invention's inclusion of various parts and accessories, creating the 'package' in some form of pre-assembled collection. I believe it's very important in the marketing campaign to come up with a number of options and accessories associated with the invention, so as to extend the customer base and flexibility of the product to adjust to different market segments. Not too many, however, as too many accessories and options may actually confuse the buyer and dilute the product focus. Most of the accessory options I've come up with aren't "inventions" themselves per se, but certainly do contribute in total to the underlying invention's success.
For these variations in packages, I've created a spreadsheet trying to examine the collective costs and potential prices for all the pieces. This is to help anticipate what the future 'first run' might look like; i.e. the orders to the manufacturer and suppliers for the initial inventory of products to package and sell, with the associated costs and likely markups. Lots of guessing right now, but I'm zeroing in on the 'orders of magnitude' associated with my product's cost structures, including future investments I will have to make. My investment 'kitty' is about a third depleted (with the initial designer costs at about $5K and patent filing costs at about $9K); the next major investment is in a rapid prototype/model run to create the actual products to test (I'm expected a cost somewhere around $3K). The initial 'real' manufacturing run, using actual aluminum molds for the plastic parts, will be a huge cost - don't know exactly how I'm going to finance that, yet, or what the cost/benefit options are of on- vs. off-shore manufacturing. If my initial testing and focus group marketing does well, however, I'll probably look to some kind of 'personal' loan, i.e. home equity. Everything I've read about successful start-ups and small businesses point to investing in oneself; every dollar wisely invested by yourself yields huge returns in your own business, as compared to counting on investments by others.
A quick note about my guidance; I'm working off of what I read - articles and online discussion about how inventors create and market, how first-time buisness owners operate, how people like me start businesses. It's all out there, and moderated by some common sense and a very methodical, emotionless, ego-less and careful approach, the whole thing does eventually come together. All business, no stress, keep it quiet and personal, don't stop, search the Internet every day, continue with 'real' life, it's still a true 'do-it-yourself' hobby for now.
Though it's so far taken me a year and a half, and will likely be another year until I'm full on marketing, manufacturing and selling a completely safety-tested product, I feel the progress made would be difficult to truly duplicate unless the product's a sure winner (which it will be, of course!). On the other hand, once duplicated, they'd (the infringers!) probably have little chance of me coming back with a patent infringement suit, as I'm not ready to spend a lot of money on it. On the other, other hand, since the patent isn't yet issued or published, they don't really know how robust the claims are, or when it was initially filed, so therefore are taking a big risk of future suit without adopting a 'wait and see' approach. Well, I hope they all 'wait and see' through my first couple of million dollars of revenue, and then simply approach with a phat license deal, which I'll probably reject in favor of some kind of partnership or co-investing.
Regarding the claims, I've sent another diagram of an additional embodiment to the lawyers, to see how they can 'extend' the original application to include. This new embodiment is really one of the first embodiements I thought of, but was altogether more complex, less utilitarian, and ultimately less useful. It is, however, easier to manage and assemble, the primary drawback being that this embodiment isn't flexible with respect to associated part sizing; it's a completely customized production. This means I'd have to manufacture completely customized parts for various sizes of the target market, and can't really reuse the parts. More expense, but maybe a definite market segment to address. I'm very motivated to get the originally filed embodiment produced and tested, as it can be reconfigured and reoriented in many different ways, with many different applications, and therefore many more avenues of product, safety and market testing.
One element I'd highlighted in that Modern Marvels contest entry (now officially deleted!), was the humanitarian value of the invention. This is an area that I've started researching a bit; my invention will really help both the affluent and not, as well as being probably useful in the handicapped market. I see multiple lines of product, including (A) high-end, expensive model for the 'suburbanites' (those who frequent bike stores), (B) low-end, cheap model for those really in need (those who live in small, urban apartments with limited income), (C) hobbyist model for those who just want the main parts and may want to use for their own, creative purposes, and (D) specialized model for handicapped applications. There's incredible handicapped and third-world humanitarian value in what's essentially a very simple invention - I've got lots of work to do in positioning my product for promotion towards those ends. Perhaps a program of donations to needy causes. Did some research on organizations that help the underserved in other countries; there's one in particular that may be the right avenue - "Bikes for the World".
Each model 'package' might have its own marketing campaign, packaging/labels, test conditions, package/parts options, and pricing structure. Note that the underlying invention is basically unchanged across the different packages. What's different is the invention's inclusion of various parts and accessories, creating the 'package' in some form of pre-assembled collection. I believe it's very important in the marketing campaign to come up with a number of options and accessories associated with the invention, so as to extend the customer base and flexibility of the product to adjust to different market segments. Not too many, however, as too many accessories and options may actually confuse the buyer and dilute the product focus. Most of the accessory options I've come up with aren't "inventions" themselves per se, but certainly do contribute in total to the underlying invention's success.
For these variations in packages, I've created a spreadsheet trying to examine the collective costs and potential prices for all the pieces. This is to help anticipate what the future 'first run' might look like; i.e. the orders to the manufacturer and suppliers for the initial inventory of products to package and sell, with the associated costs and likely markups. Lots of guessing right now, but I'm zeroing in on the 'orders of magnitude' associated with my product's cost structures, including future investments I will have to make. My investment 'kitty' is about a third depleted (with the initial designer costs at about $5K and patent filing costs at about $9K); the next major investment is in a rapid prototype/model run to create the actual products to test (I'm expected a cost somewhere around $3K). The initial 'real' manufacturing run, using actual aluminum molds for the plastic parts, will be a huge cost - don't know exactly how I'm going to finance that, yet, or what the cost/benefit options are of on- vs. off-shore manufacturing. If my initial testing and focus group marketing does well, however, I'll probably look to some kind of 'personal' loan, i.e. home equity. Everything I've read about successful start-ups and small businesses point to investing in oneself; every dollar wisely invested by yourself yields huge returns in your own business, as compared to counting on investments by others.
A quick note about my guidance; I'm working off of what I read - articles and online discussion about how inventors create and market, how first-time buisness owners operate, how people like me start businesses. It's all out there, and moderated by some common sense and a very methodical, emotionless, ego-less and careful approach, the whole thing does eventually come together. All business, no stress, keep it quiet and personal, don't stop, search the Internet every day, continue with 'real' life, it's still a true 'do-it-yourself' hobby for now.
posted by T | 8:00 AM
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