An investment in knowledge pays the best interest.
Benjamin FranklinReading this could save you thousands…..
(By Ian Coker)
We believe that there has never been a better time to attempt to bring an invention to the marketplace due to a number of key factors that have come together in the last two decades:
A fantastic and commercially successful example is Neomi Bennet’s NeoSlip (www.neo-slip.com).
Neomi has basically done everything right and has built a business
around her invention.
We want to work with people like Neomi.
We want to help you to succeed but unfortunately it is hard to get it right and easy to get it wrong!
Common errors to avoid:
1. Lack of initial research
2. Getting ripped off by ‘invention promotion’ companies
3. The ‘1%’ error
4. The ‘single prototype’ error
5. Patenting issues and errors
6. Leaping forward to product design before the proof-of concept prototyping stage is completed
7. The idea is too ambitious
8. Confusing the generation of artistic impressions with real Computer Aided Design (CAD, which these days means 3D modelling)
9. Insufficient business experience
10. Overconfidence and/or not listening to advice: the ‘Einstein’ error
11. Perpetual motion
12. Money : not budgeting effectively, or simply not having enough of it!
13. Licensing as the only business model.
These are explored further below.
(Please note -the following is not intended to sound overly negative but to present a list of common errors and pitfalls.)
“….Probably the hardest business model in the world…?”
It is important to understand from the outset that attempting to make money from an invention is just about the most difficult business model imaginable.
Anyone who tells you anything different is either inexperienced or worse might be trying to deceive you.
It is generally well accepted that starting a business is a high risk venture and it is often quoted that between 50% and 90% of start ups fail. But that’s just with ‘normal’ businesses where you are attempting to sell or provide an existing product or service. With an invention however, you are attempting to create a new product as well, from scratch. This is usually much harder, takes much longer and costs much more than you probably anticipated.
Less than 4% who try are successful…..
A commonly quoted statistic is that since World War II, only about 4% of granted UK patents result in commercially successful products. But most of those will have been submitted to the Intellectual Property Office (IPO) by established manufacturers. So it’s reasonable to assume that a much smaller percentage of successful patents are from private individuals or small businesses.
Doom and gloom?…..
We have undertaken hundreds of R&D projects since 2000 for inventors and small businesses. Many of those were really inspired ideas:
(These have intellectual property protection in place).
But only a very small number over the years have made it commercially.
So the big question is why? Why is it so difficult to go from having a brilliant idea that you feel sure would sell, to the point where it is actually on the shelves of shops and is selling…?
There are several main ways that people make mistakes (or are ripped off):
KEY MISTAKES:
1. Lack of initial research
It is amazing that people will often confess that they have done no initial research at all. They have assumed that because they have not come across it in their everyday experience, it is therefore unlikely to exist. This could not be further from the truth.
It’s wisest to do at least some research before taking things further.
2. Getting ripped off by ‘invention promotion’ companies
Read the following on Wikipedia....
'.....An invention promotion firm or invention submission corporation provides services to inventors to help them develop or market their inventions. These firms may offer to evaluate the patentability of inventions, file patent applications and license them to manufacturers, build prototypes, and market inventions. They are distinguished from more conventional consulting firms and law firms offering the same or similar services in that they market their services primarily to amateur inventors through the mass media. Many inventors have been dissatisfied with the services they have received from invention promotion firms........Scams in intellectual property or invention scams are a type of scam in which either inventors are lured to pay money for development of their idea but the development does not occur, or investors pay money for a non existing product or for an invention never to be developed....' (source: en.wikipedia.org/wiki/Invention_promotion_firm)
'...Intellectual property (IP) is a very complex area and covers a vast range of diverse subjects.As a result, there are opportunities for unscrupulous individuals and organizations to take advantage of those wishing to secure protection for their IP....' (source: en.wikipedia.org/wiki/Scams_in_intellectual_property)
A more subtle approach is employed these days. There are companies (and one very high profile company in particular) who are encouraging people to believe that they provide a technical engineering design service for their clients when in fact what they actually do is provide ‘visuals’ only i.e., more or less just artist’s impressions. This may not be clear to the client because they may not be familiar with CAD terminology. We have had several clients who paid thousands to a company believing that they were going to undertake engineering design on her behalf but all they have done is to create very impressive-looking ‘visuals’ but with no real engineering basis at all. This came to light because the client had been encouraged to apply for a patent through the same company but the concept was flawed: does not obey the laws of physics and they should have informed her of this.
Be aware from the outset that what you are embarking on is very, very difficult to achieve. Many companies will have you believe that your idea is a sure winner and will encourage you to spend your money.
3. The ‘1%’ error
Thomas Edison famously said “Genius is one percent inspiration, ninety-nine percent perspiration”1. But many inventors can fall into the trap of reversing that, and believing that the act of conceiving the idea is the main thing. Or ‘I thought of it -it’s someone else’s job to do the rest’ . There is a belief that a person thinks of an invention, takes it to a manufacturer and then receives royalties. The idea is very alluring because it implies a minimum of effort and cost and risk. The inventor has done their part by thinking of it. The brilliant idea is thus ‘bought’ by a super rich organisation and the inventor is made for life. I have not heard of a single case where this has happened. If you approach a third party whether they are a manufacturer or an investor they will need to know 3 things: IS IT NEW? DOES IT WORK? and IS IT YOURS? If you cannot show that it is (probably) new, cannot prove that it works and cannot provide evidence that you are the intellectual property owner then you are effectively expecting them to do these activities for you or even giving it to them on a plate.
[1. Spoken statement (c. 1903); published in Harper's Monthly (September 1932)].
4. The ‘single prototype’ error
‘...I want you to make a prototype so that I can take it to a manufacturer...’
A commonly held myth is that you make a prototype, apply for the patent and then manufacture it. Where is the error? The mistake lies in the idea that ‘making a prototype’ is a one-off activity. The point is that design and development is a process not a single activity. James Dyson famously made 2000 prototypes before he felt ready to manufacture his first cyclone vacuum cleaner. It shouldn’t hopefully require quite that number but the point is that innovation is a process and there can be many stages before a design is finished.
Example: fishing project …..We made four prototypes of a device for fishing. The first one worked but was too complicated, too big and too heavy. The second was abandoned as impractical. The third worked but was hard to assemble. The fourth worked, was light, just about small enough and was very simple to build. It is now ready to move towards tooling for manufacture.
5. Patenting issues and errors
There are a number of crucial errors commonly made and these are explored below.
Patenting too early: don’t apply for a patent before it works well
It is an error to patent too early. The temptation to do this is very strong because of the fear that someone will get there ahead of you. But it’s essential to do the proof-of-concept things first: make sure it is new, make sure it works, make sure the design has been optimised, then apply.
Example: paint dispenser project ...we were approached by a prospective client who had made a prototype paint dispenser for artists. He had already applied for a patent. He wanted someone to manufacture it for him and so wanted it remade to look a bit more professional. Although impressive, it was ten times as complicated as it needed to be. However, he rejected this advice because he had already patented it. He should have finalised the basic design before applying for the patent.
Don’t invest all of your development budget on patents
A patent should be seen as one important aspect of developing a new product but not the main objective. It is a mistake to spend too much money on this stage if you then don’t have enough left for development.
Example: “I’ll just sell it to Ikea” were words spoken to us by a man who had won an award at an invention show for his idea which was a kind of shelf that you didn’t need to fix to a wall. It was clever (but not without flaws in our opinion). Winning the award made him believe that Ikea would definitely buy it from him. He spent a bit on making prototypes but then spent £20,000 -all his remaining savings- on international patents. He had no money left and unfortunately Ikea said no (we asked them on his behalf). His mistake was to sink all his funds into international patents which are very expensive. He could have spent a fraction of that on a UK-only patent and perhaps made up a small first batch to sell with what he had left. That might have at least attracted good publicity.
Don’t invest in international patents unless you have something commercial in place
Securing the intellectual property rights is important and the usual way is through applying for a patent but as stated above, the patent should not be seen as the ultimate goal. The ultimate goal must always be to create wealth from the idea. In fact, applying for the patent is right at the beginning of a long and difficult journey that is expensive and very risky and uncertain.
Example: shower concept ….Some years ago we were approached by a wealthy hotelier who had spent £40,000 on international patents for four ideas before he had built and tested anything. His favourite one was a device for showers and we told him plainly that it would not work as it defied the laws of physics: “but my patent agent said it would” was his reply (– well, yes, but he earned a fortune from it!). We made a test rig for a few hundred pounds and demonstrated that it unfortunately could not work. This man was a very successful hotelier and he was rich and perhaps a little too self-assured. He should have first done his research and the proof-of-concept stages before investing in patents.
Also, it makes no sense to invest in world-wide patenting if you have nothing commercial in place. If you have a rock-solid agreement with a manufacturer then it might be advisable to patent it overseas, but if not just patent it in your own country. International patenting is way too expensive for most people to consider.
Don’t write the patent application yourself
By far the largest cost component of patenting are patent agent fees. So it is possible to avoid these costs by drafting the patent yourself. We believe this is a false economy – a patent is a legal document and it needs to be drafted by someone who understands intellectual property law.
Example: getting a granted patent even though the Intellectual Property Office (IPO) had rejected it. The client had invented a kind of drying locker. The idea was simple, Nick Kanavas and Scott Mills commuted to London by motorcycle but found that it was miserable when it rained on the way in to work as at the end of the day they had to then put on their wet bike clothing. So they invented the drying locker. It featured a heater and a fan plus hooks and shelves etc. It also had a timer. But the IPO (then the Patent Office) rejected it as they said it was just a drying cabinet which was very well known technology. But our patent agent Graham Jones (OBE) argued that it was innovative because it was lockable. This argument won and a patent was granted.
Another example is where a client wrote their own patent -a kind of valve for a radiator- and specified that it should be made in stainless steel. The problem with that is that anyone could make and sell one in brass or ceramic or plastic and would thus get around the patent.
6. Leaping forward to product design before the proof-of concept prototyping stage is completed
It is important to make sure the basic concept works as expected before investing in product design.
It can be very expensive to invest in tooling if basic testing has not been done and then to discover too late that it all needs to be changed.
7. The idea is too ambitious
Referring back to the NeoSlip concept by Neomi Bennett (www.neo-slip.com), this is a simple fabric pouch which Neomi has built a very successful business around.
A small simple item will be relatively economic to develop and manufacture.
Large, electro-mechanical devices will be far more expensive.
8. Confusing the generation of artistic impressions with real Computer Aided Design (CAD, which these days means 3D modelling).
(Mentioned previously). There are companies (and one very high profile company in particular) who are encouraging people to believe that they provide a technical engineering design service for their clients when in fact what they actually do is provide ‘visuals’ only i.e., more or less just artist’s impressions. This may not be clear to the client because they may not be familiar with CAD terminology. PES has several clients who paid thousands to a company believing that they were going to undertake engineering design on her behalf but all they have done is to create very impressive-looking ‘visuals’ but with no real engineering basis at all. This came to light because the client had been encouraged to apply for a patent through the same company but the concept was flawed: does not obey the laws of physics and the company should have informed her of this.
9. Insufficient business experience
Without a basic understanding of business concepts you could be in a very weak position when attempting to negotiate with industry professionals.
We have all seen this on Dragons Den: as soon as someone reveals that they don’t really understand what a balance sheet is or what the difference between gross and net profit is then the dragons are out.
So it is worth doing a bit of homework into basic business concepts.
10. Overconfidence and/or not listening to advice: the ‘Einstein’ error
‘They said that to Einstein too!’
Some people believe that the very fact of having your idea rejected somehow proves that it must be valid because that happened to people like Einstein and Galileo as well! But of course the adage that “all fools are poets but not all poets are fools” also applies here! Being told that your idea won’t work does not mean you are a genius! The worst culprits are those with perpetual motion inventions (see below). I have talked to quite a few over the years and two things are always true: they won’t listen when you say that you can’t create energy from nothing; and the mere fact that you think they are wrong proves that they are right!! (& see below).
Having said all of the above, a person shouldn’t be put off just because no-one listens. If it works and makes business sense, people will listen eventually (as long as it is presented properly). It is important to persevere, but to be ruthless with it if faced with the hard reality that it does not work as you expected, or it is just too expensive to develop or make or if it is indeed just not new or innovative enough. As stated above already, this is the hardest business model in the world in our opinion.
11. Perpetual motion
Energy cannot be created from nothing -it can only be converted. So if you have invented a way to create unlimited energy out of nothing please do not get in touch!
“…A perpetual motion machine is a hypothetical machine that can do work indefinitely without an energy source. This kind of machine is impossible, as it would violate the first or second law of thermodynamics.….”
(Source: en.wikipedia.org/wiki/Perpetual_motion)
“…Robert Fludd's 1618 "water screw" perpetual motion machine from a 1660 wood engraving. This device is widely credited as the first recorded attempt to describe such a device in order to produce useful work, that of driving millstones...” (source Wikipedia: commons.wikimedia.org/w/index.php?curid=2854454).
However cleverly your machine works it won’t work!
Does it use buoyancy? Magnets? Whatever clever arrangement looks to you like it will rotate on its own forever and can thus be used to generate free energy it is against the laws of physics. The usual error is to ignore losses due to friction, heat, noise etc. For example people sometimes believe that if you attach an electric motor to a generator and then use the generator to drive the motor it will run forever. It won’t because there are energy losses.
Do not invest your money in any such idea.
12. Money : not budgeting effectively, or simply not having enough of it!
This is probably the most common problem.
A lot depends on what your business plan is (licensing or manufacturing). The minimum is usually:
-IP research (searching for existing published information) £450
-Building a prototype £450+
-Applying for a patent: £600
These are the minimum proof-concept steps that should be done with any idea.
So a budget of c. £1500 is probably the minimum you would need to get to the point where you could demonstrate this to an interested third party (investor, manufacturer etc).
If you cannot raise that kind of money from personal funds you are in a difficult position. You should not approach investors or manufacturers without having done the proof-of-concept steps.
The only option is really to team up with someone you know and trust who has funds and a genuine interest in your idea but they should understand that it is a high risk venture.
13. Licensing as the only business model.
Licensing is often the preferred business model because the risks are minimised but it is very hard to achieve.
There are alternatives such as manufacturing. The most important factor will probably be your budget.
Final comments
Most failed innovators make more than one mistake.
But failing and being defeated are not the same thing. Failing is part of what you have to go through in order to succeed …Defeat is when you have given up. Sometimes you have to be ruthless with yourself and abandon a project. But never give up! -Persevere!
If you have a project you would like to discuss -please get in touch now for a free technical appraisal in strictest confidence.