Get a slice of your pie.
So you have come up with a good idea and believe it is going to make you really rich. Well it may, but how? What is your plan?
The idea is always the easy part and from my point of view as a designer, creating the product is also an easy part in the equation. Some projects may pose technical challenges, however with research, design and development these can be overcome. Conceptualizing, designing, prototyping and manufacturing are all fairly quantifiable and mostly predictable and can be planned and budgeted for, but making back your money and more is a little trickier.
So to get a little reality let’s do a quick checklist:
Question 1: Are you doing this for fun or do you really want to make money from it?
Do you just want to develop the product to fill a need you have, or to say you have produced your own product, or do you want it to generate an income stream?
Question 2: Have you done your market research?
Do you know if your idea really fills a need or gap in the market? Have you really checked to see if it has already been done? You have no idea how many meetings have been cut short, by me doing a really quick google web or image search and showing the prospective clients their idea has been done – sometimes a hundred different ways. Don’t just search for what you think it should be called, dream up synonyms, and even describe it.
If you don’t find the idea here, dig deeper, do patent or intellectual property (IP) searches. If you haven’t found your idea yet, ask why - is it really a good idea, or maybe you just think so? See if others think there may be a market, and a word of caution here, most people cannot see or image different ways to solve problems and this may stifle a good idea by a lack of vision.
Question 3: How are they going to make money from it?
Obviously you want to make money, but how. Just having your product does not mean people will “beat a path to your doorway” to buy it.
Like I said, having the idea, designing and manufacturing the product are all pretty easy and mostly the “cheap” part in this process. How do you intend to sell it? If you are not already an established business this can be really challenging.
I would guess that most people would want to hold on to their product, have full control of it, in the belief that this is how they are going to make the most money. This path carries the highest risk, but could bring the greatest reward. Be aware, setting up distribution systems to handle the product from manufacture to your end customer requires infrastructure, marketing and advertising. Not only does it costs a lot, but requires specialist knowledge, a lot of energy, patience and nerves of steel. Do you have the balls?
If you think that you do not need all of this as you are going to sell your product (in the singular) to retailer and they will take care of this for you – think again. Most retailers do not want to deal with stocking a single product line from a supplier unless it is a high value item with a good profit margin. The time and effort it requires is just not worth it.
If you don’t have what it takes to sell your own product, all is not lost, there are other ways to reap the reward for your good idea. There are the options of selling your idea (your Intellectual Property), or licensing it to companies that may be aligned with your idea and have the distribution network and expertise to sell it.
To do this you will either have to patent the idea or take out some form of intellectual property (IP) protection. For more information on IP visit (https://www.ipaustralia.gov.au/) IP Australia. This site has all the information you will need on your various protection options, as well as allow you to search to see if your idea has already been done, which is an essential part of your market research. Alternatively pay a visit to your friendly patent attorney and pay them to do this for you.
IP only gives you ownership to your idea and negotiating the sale of your idea with a package that includes the IP is twofold – one, it protects you from being ripped off and secondly it give you something to sell. But as I have said before, the idea is the easy part, and to just sell a naked idea may not get the reward you are after.
Too add value and command a greater return you should develop or refine your idea. To do this you should consider some serious industrial design input that at the very least produces some photo-realistic concept images or takes the design to some form of 3D prototype.
The ultimate package to negotiate with would include, IP, and a well-designed working product, that has been prototyped, tooled, manufactured and a pilot run done. Industrial designers can help you with this, and it would assist in proving your concept and its possible market viability.
This is back to the risk reward balance and dictated by how well you have done your market research, how deep your pockets are and how much stress you are prepared to live with.
So my advice to entrepreneurs with great ideas is to be realistic. Do your homework and assess your particular situation. Rather than be too precious of your idea or too greedy, do what you do well, and work with a team that could make your idea return a bigger reward. Always remember, it is better to have a slice of the pie than to pay for the ingredients, but have no pie at all.