Don’t make the mistake of assuming your idea for a new product or service is needed in the … [+]
The biggest mistake people make with their intellectual property has nothing to do with protection. It’s not knowing whether anyone else is going to benefit from their brilliant idea. It’s not knowing whether there is demand for it in the marketplace.
A lot of us get ahead of ourselves. We file non-provisional patent applications, build expensive prototypes, raise money, and start businesses — and then, after all that, find out whether anyone really wants our product. This process is extremely expensive, time-consuming, and, when our assumptions are wrong, painful.
The risk of spending a lot of time and money on an idea that no one wants exists at every level of the innovation ecosystem, including inventors, startups, small businesses, and corporates. For example, the U.S. National Science Foundation awards over $200 million each year to advance the development of new ideas through its Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The startup companies are funded to do technical research, which is inherently risky — but it’s more often the market-based risks that cause them to fail.
“The biggest risk is that they build something that no one actually cares about,” stressed program director Ben Schrag during an Inventors Groups of America meeting.
When deciding which startups and small businesses to award, the NSF considers how common market-based risks are being managed, and provides training to all awardees on how to better understand their market and customers. NSF also launched a program in 2011, Innovation Corps or I-Corps, that’s devoted to teaching researchers how to test the market before starting a business.
“This is so that [the company] doesn’t spend a bunch of money on R&D to reduce the technical risk, and then realize too late that it was actually a different issue – lack of a customer pain point – that was the most important threat the whole time,” Schrag said.
Test the Market For Your Invention Idea in 4 Steps
There is a simple solution! You need to test the market to determine whether anyone truly wants your imagined product or service first. Is the benefit of your product or service great enough for potential customers to actually purchase it?
There are many benefits to testing for market demand. You can leverage market demand to get other parties to come to the table. It gives you a paper trail of protection. In my experience, potential licensees are less likely to try to work around you when you have evidence of market demand. You can file better intellectual property based on the input you receive by aligning your patent claims with your business objectives.
You must account for the risk that you’re developing an idea that no one wants before spending a lot of time and money. That’s the big benefit of the strategy outline below. It’s an effective way of testing the benefit of your idea before building and protecting it. It allows you to refine or redesign your product, and protect it accordingly, based on the input you receive. Ultimately, it helps you move forward in the right direction by providing critically useful information.
Let the market help you determine when to file a non-provisional patent application.
Here is a simple four-step process inventors and startups can rely on.
Step 1: Learn the most efficient way of manufacturing your product idea and what it’s going to cost.
You will hear these two questions over and over again from interested parties. How do we make it? What does it cost? Prepare to answer these questions.
Step 2: Protect your idea by filing a provisional patent application (PPA).
This allows you to describe your invention as “patent pending” for one year. Filing a provisional patent application with the U.S. Patent & Trademark Office is both affordable and easy to do.
Step 3: Create high-quality marketing material that highlights the benefit of your idea.
Sometimes, all you really need to test the market is a 3-D computer generated model. Virtual prototypes, which are easily made, are very affordable.
Step 4: Reach out to industry experts to get their opinion.
Focus on connecting with a buyer at a major retailer or another end-user. LinkedIn has made it easier than ever to reach out to industry experts, including buyers. Start by identifying the department that your idea would sell in. Then, search for buyers and send a request to connect. Do not pitch your idea right away. Instead, tell them that you are launching a product that you would love to get their input on and ask them if you may send them more information. Make sure to only disclose the benefit of your idea, not your intellectual property itself.
Do you need to make changes to your idea so that it will sell at retail? They’ll let you know. This strategy works with retailers as large as Walgreens, Walmart, and, in the U.K., Tesco.
There are other things you can do to test the market, including reaching out to potential licensees. It’s important that you reach out to the correct person and that you take the time to understand their business. Acknowledge the company’s mission, describe that you’re working on something proprietary, and then be concise and direct with your ask.
“The way to cut through the clutter is by showing you’ve done your homework and you have something to offer,” explained LifeScan Chief Marketing Officer Lisa Rose in an interview.
Don’t get me wrong. Protecting intellectual property is extremely important. Patents, trademarks, and copyrights — the tools provided by the USPTO to protect our intellectual property — are fantastic. But they’re also just one piece of the puzzle. Are you sure you’re using them correctly? The question for entrepreneurs isn’t whether we should use them, but when.
When there is market demand, money is spent — meaning people actually start working on commercializing your product idea. I’ve experienced this firsthand. I couldn’t get any traction with my big idea for the packaging industry until I had a customer that wanted 50 million units.
Everyone cares a little less about intellectual property when there’s sincere market demand. With market demand, everything seems to fall into place. So, yes, while intellectual property is important, it’s not as important as you may be thinking. Make finding a customer for your idea your primary objective.
