Tuesday, July 27, 2010

You Need More Than a Better Mousetrap

"I'm sitting on a gold mine," the inventor emailed me. He desperately needed money to turn his cool invention into a success. He was frustrated that lots of garbage inventions were for sale in the stores, but his wasn't. If he only had some money, he could make a TV commercial to get people to buy his invention. He also needed money to manufacture the invention. 

He didn't like it when I suggested that he get help from SCORE or from a Small Business Development Center. But this is exactly what he needs to do, if he wants free help to raise the capital he needs.

Does this sound like you? Does this sound familiar?

You may have a brilliant idea, but in the words of one of the original Mad Men, David Ogilvy, "It's not creative unless it sells." I've seen too many truly great ideas and great products fail. Only 10% of new products make it. So as hard-hearted as it sounds, I don't care how great your idea is, if it doesn't meet a real need, it will not sell.

Since the inventor wouldn't tell me what his invention was, and since I charge by the hour to consult, I have no idea if this particular gizmo does meet a need. But even if it does, the inventor will have to get it into stores or catalogs so that people can buy it. Or he will need to create a website and sell it directly online. There are many very inexpensive ways to do this. However, what you say to stores or to consumers about the true value of your product is what will get it into the hands of consumers. I'm not talking about the technological, gee-wiz stuff. I'm talking benefit.

But turning an idea into a success isn't just about benefits. You also need to know how much money it would take to manufacture your gizmo and how much money you can charge for it. Apple knows it can charge premium prices for its inventions. A certain segment of the marketplace will pay more for Apple's sleek, cool products. But not everyone will. Apple makes lots of money, but they don't have a huge market share. Truly, if you have a new invention, think "what will consumers pay for it?" What markup will stores put on it? How much money will I get from the wholesale price? Will this give me a decent profit margin? When will I break even? No investor or lender will give you money, unless you can answer such questions.

If you have questions about manufacturing and marketing your invention, contact me at: upstartwyn@gmail.com.

If you have stories about your successful invention, post it on this blog.

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