Category Archives: Manufacturing

Should I Invest In My Invention?

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Before you heavily invest in your brilliant idea there are some basic questions that you should answer. These are questions that must be answered, whether you plan to sell your product yourself or license your product to an existing company.

1: Is there really a market?

Are there people who will really buy my product? If you believe that “I have no competition!” there may be a good reason why other companies aren’t making a competing product. The only real test is a market test. Only live customers can tell you if you have a winner or not. (Your family and close friends do not count; often they don’t want to hurt your feelings and will tell you what you want to hear).  After filing a Provisional Utility Patent application create a prototype, a model, a written description or picture, and test your new product in the marketplace. Offer it, sell it, or give it away to customers and see how they respond.
Get immediate feedback. Get responses from those you expect to buy your product just as soon as it is available. In most cases, your initial product or service idea is deficient in some way. But by changing it in response to customer comments or complaints, you can tweak your product to be a market leader.  Record this marketing data if you plan to license your product.

During this process assume that a competitor is rushing to bring a similar product to the market. Develop the action habit. Avoid paralysis by analysis. Instill a sense of urgency at all times. Remember: “Only the paranoid survive!”

2: Is the market big enough to make this invention worthwhile pursuing?

Is the market large enough to justify all the time, trouble, effort, and expense necessary to develop your product and bring it to market? Can you sell enough of your product to make it economically worthwhile? There are many products for which there is a definite market, but the market is too small to make them worth pursuing. Market research in this area can be invaluable in helping you decide go/no-go.

3: Is the market for your product concentrated enough?

If your invention survived the first two questions, does the means of advertising and promoting the product exist that would enable you to sell to that market in a cost effective way? If your target customers are difficult to reach, identify or educate for any reason (geography, demographics, awareness, etc.) this could be a real show-stopper. While the Internet extends your reach to access unique customers your competitors have the same advantage as you.

4: Who is your competition?

Who are your main competitors in the market? There is always competition, even if the competition is your potential users choosing to live with their problem instead of buying your solution. Make a list of potential competitors. How long have they been in business? What are their products? What benefits do they highlight?  What features do they have?  What are their price points? Do they have a guarantee? What are their product extensions? What accessories do they have as companions to their products (the sale after the sale)? There is a graveyard of new products that died because there was no market, the market was not large enough, the market was not reachable, or the alternative to the new product was more compelling than the new product.

Finally, remember that luck and timing has a role in the success of a new product. Do your homework and if all the lights turn green, put it in high gear and make your own luck before the market window closes.

Ron Reardon, Patents & More, Inc.

Top 8 Killer Investor Presentation Points

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Investors are people just like you and me.  They want to know ‘what is it in for me’. They have money to invest because they have successfully earned enough income to put them in the top 5% of the wealthy.  They are motivated to invest because they want to give back with the experience and money.

Your first presentation should be no longer than 8 – 15 minutes.  Back up charts and other visuals can be used to expand on a point.  Use our Top 8 Killer Investor Presentation Points as a guide.

1.  Opening Remarks
2.  Mission Statement
3.  Market Opportunity
4.  Description of Product or Services
5.  Management
6.  Marketing Strategy
7.  Capital Needs
8.  Closing Remarks

1.  Opening Statements

Opening statements should be concise and to the point. Introduce yourself and any other members of your management team who are present.  If possible, have one of your creditable investors speak for a couple of minutes on their personal insight as to why they invested.  It should not be an investor who is a close relative or is part of the management team.

Get excited and have passion about your opportunity.  Create a buzz about your deal, so that investors will spread the word about your company to other investors.

Comment:    Give a concise and professional overview that gives investors attending some insight as to your organizational skills.  The tone you set for the presentation is critical. Be professional, but find some areas where you can add some humor without being a comedian.

“First impressions are very important.”

2.  Mission Statement

In one or two sentences, state the mission of your business.

3.  Market Opportunity

In a short paragraph, demonstrate to the investors the specific market opportunity or need for your product or service.  Be specific with how many actual products or services can be sold and in what time frame.

Sample of Opening & Mission Statements: Good afternoon, my name is Tom Jones. I am the founder and President of XYZ Corporation.  Assisting me today is our CFO, Richard Smith.

Accelerated use of latex gloves and latex covers for medical devices to protect against infectious diseases over the past two decades has resulted in as many as 17 percent of healthcare workers affected by latex allergies.  A greater risk is with the general population that is not aware of the allergy until they come in contact with latex during a medical procedure.  XYZ has identified the cause for the allergy and has determined a process for making latex virtually non-allergenic.

We have a contract to distribute our process to 72 countries and are raising $500,000 to fulfill the contract.

4.  Description of the Product or Service

Describe what product or service your company sells.  Keep it simple.  Don’t bring up technical or confusing information.  Details are usually brought up in later meetings.  It is important to be specific on the product or service’s unique value to customers and why your company is different from the competition.  It is imperative that you show how your company will attract customers who will purchase what you are selling.

5.  Marketing Strategy

Many companies who have had good products and services did not become successful.  One reason is to clearly identify your company’s marketing strategy.

Talk about the value of your strategic alliances and partnerships. Investors look for aggressive marketing as a key component to success.  Therefore, choosing a marketing method is critical to achieving your success.  Will you be marketing directly or use strategic partnerships and alliances?  This is vital, since the cost to market directly can be very costly.  Using strategic partners, alliances, or resellers could be a much more valuable marketing and sales strategy.

“Create a buzz about your deal by being articulate, passionate, and with complete understanding of your opportunity.”

6.  Your Management Team

Describe each key person who is important to making the company successful.  Most investors recognize that having a management team of friends and relatives is usually not a good idea and could be a critical mistake to the company in many ways.

Assemble the best talent you can find, with strong managerial skills, and explain to the investors why this management team, under your guidance, can lead the company to success.

If your management team is not in place, it is vital that you at least identify key personnel who will join your business at some future event or date, (such as after funding has been obtained).

“Investors are attracted to people who have been successful

in other businesses.”

7.  Capital Needs

It is very important to outline the need for funding and why your company should be considered for an investment.

Understanding the importance that each investor is very interested in how you are going to spend their money.  Demonstrate exactly how your company will prudently spend the money.

Be sure to have an easy to understand, detailed month-by-month written use of funds that backs up what you say in your presentation.  In a summary format, reveal the use of funds and projected salaries.  Investors look favorably on first year salaries of $40K – $60K tied in with some performance clause.  Investors usually don’t want to pay for high salaries.

8.  Closing Statements

Be sure to say ‘Thank you’ to the investors for their time and invite them to an demonstration, a visit to your facility, or to an additional meeting with more in-depth information.

The gold is in the follow-up.  Keep investors informed about your progress in an investor relations campaign.  Ask if there are certain areas they would like you to address.  When possible, get their feedback on what they liked and any concerns they may have.

“Practice until you can deliver the presentation by memory.”

Karen Rands is Founder & President of LaunchFM, providing Investor Relations Services, Entrepreneur Coaching, Raising Capital, Finding Angel Investors, Seed Stage Finance.  You can contact her at 1-888-569-0464

Ron Reardon, Patents & More, Inc.

Everyday Edisons

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Everyday Edisons is a public television series that celebrates American ingenuity, resourcefulness and innovation. Now airing its fourth season, the Emmy® and Telly Award-winning show depicts the reality of “light bulb” moments and how to turn those ideas into viable products. The series celebrates everyday people who have an idea for a new product or a solution to a problem, and follows that solution from concept to product development.

Created by prolific inventor-entrepreneur, Louis Foreman, Everyday Edisons was the first show on TV to positively reward the inventive spirit and empower those to bridge the gap between an idea and a successful new product.

As the world’s economic landscape continues to shift, it is important for this and future generations to creatively work together to develop innovative solutions that benefit not only consumers, but also the community as a whole.

Take a look at some of the “Everyday Edisons” that Season Four features, from a husband and wife team to a physics professor, and learn about their inventing struggles and triumphs for other ‘Edisons’ out there.

Brian Smith: A dog walking-related accident left Brian Smith with an aching shoulder—and a desire to do something to prevent other owners from injuries because of their beloved, yet often excitable dogs.

Charlie Lumsden: Hawai’i local and outdoor enthusiast Charlie Lumsden was so impressed with his workout on the water that he decided to create a way to do the moves no matter how far from the North Shore you live.

Daniel Lentz:A college assignment led Daniel Lentz to his idea; his industrial design background made it possible. See how he made something as chore-laden as a dog bath easier with his invention!

Eric Huber: Prolific inventor Eric Huber set out to invent something that would help the environment and make cleaning the kitchen an easier feat.

Faramarz Farahi: This physics professor took his research out of the lab and applied it to fabric. See how Dr. Farahi’s innovation changes the landscape of alternative energy.

Greg Bruce: Professional fence installer Greg Bruce used his post-digging know-how to create an innovative new workout device.

Ken Joyner: A new puppy is adorable and fun, but often leaves behind a few messes. Ken Joyner and his daughter cooked up an invention to make cleaning up frequent spots a breeze- without harsh chemicals.

Mark Stark: When Mark Stark’s friend turned down a friendly card game because he couldn’t hold the cards with his prosthetic hook, he took it upon himself to create an affordable, functional prosthetic— suitable for card-playing, guitar strumming, and simple everyday tasks.

Maura Indes and Tom Adam: A cat is a wonderful addition to any family, but their bathroom habits are not. Frustrated with cleaning a filthy litter box, Maura Indes and husband Tom Adam came up with a way to dispose of the chore altogether!

Al Contarino: Not one to be short of ideas, seasoned inventor Al Contarino had this “ah-hah!” moment while watching a cooking show. He thought of a way to make one common outdoor cooking process better, and developed his patent-pending prototype in his home workshop.

For more about Everyday Edisons, past and present, click here: http://www.everydayedisons.com/the-inventors/

Louis Foreman is a prolific inventor, product developer, innovation enthusiast and small business entrepreneur. In 20 years, Louis has created nine successful startups and has been directly responsible for the creation of more than 20 others. In recent years, he’s been called upon Congress to share his point of view on patent reform, by USA Today for commentary on entrepreneurship and often to address schools and universities to propel the advancement of innovation for all ages.

Ron Reardon – Patents & More, Inc.

The Independent Inventor’s Handbook

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At first, I didn’t think the world needed another invention “how-to” book. After all, many other books have been published in this vein, right? Most do a reasonably good job of explaining the various steps of the invention process. But I must say there is something refreshingly original and enjoyable about the Independent Inventor’s Handbook (by Louis Foreman and Jill Gilbert Welytok, Workman Publishing, 2009).

Louis is the publisher of Inventors Digest magazine and executive producer of the Emmy® award-winning PBS show Everyday Edisons, as well as the and CEO of Enventys, a product-development firm working with major consumer product manufacturers and leading retailers. His businesses are proud Sponsors of the United Inventors Association (UIA).  Jill is a principal at Absolute Technology Law Group that provides patent protection for clients ranging from independent inventors to large corporations and federal research institutions. Together, they formed a team they refer to as “the Entrepreneur and the Attorney”.

Their new book is primarily helpful to inventors who come up with consumer products. If you’ve come up with a very high-tech or advanced industrial innovation, this book is probably not for you. But since most independent inventors create for the mass consumer market, The Independent Inventor’s Handbook is an especially useful update in today’s globalized economy, with new risks associated with the rise in retailers’ power at the expense of manufacturers, as well as new tools available to inventors. So the update is welcome.

For 8 chapters, the reader is treated to topical information on each recommended step. And it is told in a storytelling style that is quite fun. In fact, I think this is one of the book’s strengths: readability. Colorful captions, story vignettes and case studies abound. So while you may be in the thick of Chapter 3 on Prototyping, Manufacturing and Distributing — a dry topic, at best — you will nevertheless be treated to interesting story of how Earl S. Tupper was originally inspired by the lid of a paint can to come up with his signature air-tight plastic containers in the 1950′s, but that his other major innovation was the creation of “Tupperware Parties” as a massively successful distribution strategy.

Another strong point of the book is how it offers historical context. Indeed, inventing has been around for a long time. Louis and Jill did a lot of research to contrast what still holds true from what is genuinely new in the inventing field.

For example, inventors can still expect to meet entrenched opposition, much like Galileo did when he ultimately had to publicly recant his scientific observations. By the same token, there are really new things that apply today, such as the new USPTO doctrine of “non-obviousness” to obtain a patent.

Finally, the glossary of terms, sample Non-Disclosure Agreement and “Personal Roadmap” offer helpful guidance. My only criticism is that in their attempt to cover all topics well, Jill and Louis sometimes draw the reader from one topic (say, Patenting) to another (like Sales or Prototyping) in the same chapter, or even the same sentence. This was somewhat unavoidable, since all topics are interrelated. But it can require readers to flex when it comes to chapter topics. Honestly, I don’t know how I would have done it differently. But sometimes, it forces the reader to bounce from one subject to another.

Beyond style and content, the book also gets high marks for its collection of truth-nuggets, both encouraging and cautionary. After all, paranoia is the greatest impediment to progress on an invention project, but so is unbridled belief in quick riches. The reality of the inventing process is that it is not always cut and dry; nor is it linear form idea to success.

The Independent Inventor’s Handbook does a good job of clarifying the seemingly confusing steps involved, with both vivid and real life examples.

Patrick Raymond co-hosts Food Network’s series Invention Hunters and can be reached at www.myinventionscore.com

Ron Reardon – Patents & More, Inc.

Ten Things I Really Know about Manufacturing a SAFE Product!

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Many of you involved in inventing know me as The Sourcing Lady (SM), owner of EGT Global Trading, which I established in 1997. I have been involved in manufacturing, importing and exporting all over the world for the past 30+ years, working exclusively with factories in China since 1990. You MUST learn these critical steps in bringing a new product safely to market:

1)      Create a prototype from your sketches. OK if it’s rough. To properly develop your new idea, a model is essential, especially for step 2, below:

2)      Gather prototype, sell sheets, brochures and specifications and submit to a Consumer Product Safety Commission’s (CPSC) accredited laboratory (see sidebar), for a Product Design Evaluation (PDE). Typical cost for an evaluation should run about US$1000, for a comprehensive report addressing all government regulations, production testing, and design concerns.

3)      Create a packing mock-up, especially with a baby product. For a baby product, send the packaging sample along with your prototype as indicated above, for the PDE. Not creative? Go to a big-box store, look for a product like yours, and make something similar. If necessary use a polybag or blister pack from the dollar store, and insert your prototype, changing your printed inserts accordingly. This should only be done AFTER your PDE, in case you need to fix your prototype and/or packaging.

4)      Have your sourcing consultant review your PDE report for Consumer Product Safety Improvement Act regulations (if applicable) and all other federal and local regulations (i.e., Federal Trade Commission, Food & Drug Administration, US Customs and Border Protection – see sidebar). Have her/him note key excerpts to be translated into the language of the country of your prospective factory.

5)      Give your graphic artist a copy of PDE excerpts concerning packaging (i.e., country of origin and content statement, etc.), so final packaging can be created to conform to various government and local mandates. Have your sourcing consultant review the packaging before it is completed.

6)      Provide your sourcing consultant with your prototype, packaging samples, a list of required production testing, labeling, etc. (from PDE), and your translations. She/he should have 3-4 identical sets of these items (see #7 below).

7)      Depending on how many prototype sets you have given your sourcing consultant, she/he will provide you with several quotes and counter-samples from prospective overseas factories (I have worked with China factories for the past 22 years).

8)      Once you and your sourcing consultant have reviewed your price quotes, the quality of counter-samples, as well as the factories’ references, ability to communicate, and understanding of the various government regulations addressed, a formal purchase order contract is drawn up, which MUST include a stipulation for defective merchandise, along with your standard details such as pricing, quantities, shipping terms, import documentation, etc.

9)      Your sourcing consultant and factory must arrange production testing, usually done in the factory’s (overseas) country. Best case scenario:  all tests pass, and soon the factory will be ready to ship.

10)  You MUST hire a final shipment inspection (FSI) firm. (See sidebar – KRT Audit Corp.) Provide them with your inspection criteria such as packing marks (boxes), production functionality (how it works or is used), appearance, etc. The FSI firm will provide you with a report and photos, and now you are ready to have your sourcing consultant arrange shipping and import of your great new innovation!

Contact Edie Tolchin, aka The Sourcing Lady (SM), at www.egtglobaltrading.com – EGT@warwick.net, for further information including rules and regulations for shipping and importing from overseas, customs clearance, and the Import Security Filing (ISF) documents, required for all imported products. And, to design, develop and host your invention’s website, contact www.widgetsontheweb.com, a division of EGT Global Trading.

*                *                      *                      *                      *                      *

Here is a list of vital links to assist you in developing a safe new product:

1)       www.cpsc.gov – The Consumer Product Safety Commission – government watchdog for safe products and product recalls.

2)       www.cbp.gov – US Customs and Border Protections – for rules and regulations concerning shipping and importing from overseas.

3)      www.FTC.gov – The Federal Trade Commission’s website which can assist you in properly labeling your invention.

4)      http://www.cpsc.gov/cgi-bin/labsearch- List of accredited safety/testing labs endorsed by the Consumer Product Safety Commission.

5)      www.chinainspect.com – KRT Audit Corporation, for final shipment inspections, among other important services. Costs run appx. USD 275.

In addition to being an author, Ms. Tolchin holds a prestigious U.S. Customs Broker License, and is an expert in the Consumer Product Safety Improvement Act.
www.egtglobaltrading.com
EGT@warwick.net