I've written a lot lately about licensing your invention for royalties. Full disclosure: that is my preferred path.
But, I'd be doing you a disservice if I did not also address the other option available to you as an inventor: DIY or venturing your invention.
I ventured my product – Savvy Caddy thin wallets – for over 8 years. The first step in this process is to let go of your “invention” and focus on your product, because your invention will not succeed unless it is converted into a packaged, marketed and distributed product.
I did it all myself (with the help of a few resources, but no employees) and I was successful in that my business made enough profit so I could stay in business.
I made a LOT of mistakes and, were I to do it again, I would do a lot of things differently. In this first post, I'll address the 100,000 foot view of venturing your product. In the next post, I'll discuss the details you must attend – the nuts and bolts of a product based business.
Don't forget to grab you free copy of Habits of Successful Inventors – red button, to learn why you must build a team.
Venturing Your Product – the 100,000 Foot View
Does that mean you shouldn't even try? No. But what it does mean is you must clearly prove that your product is demonstrably better than other competitive products – in ways that consumers care about.
Consumers care about pain, price, and perceived value – probably in that order.
By pain I mean, what pain or problem does your product solve? Consumers aren't looking to buy products, they are looking to buy solutions to problems – things small or large that annoy them or disrupt their lives on a daily basis. The bigger and more pervasive the problem, the better a product will sell because it has almost universal appeal.
If you had invented an additive that, when poured into the gas tank, would guarantee 50% better fuel mileage for all automobiles – your product would fly off the shelves. The Sock Slider has been a very successful TV sales item because millions of people struggle to put on their socks every day. What problem does your product solve? Is it a problem that is widely recognized? How much does the average consumer care about the problem?
There is lots of confusion around product pricing. Gucci and Louis Vuitton are two of the top 9 luxury brands in the world. They can command top dollar, because they have huge brand recognition and perceived value.
Guess what? Your new product has neither brand recognition, nor a lot of perceived value (at least in the beginning). No top dollar pricing for you.
The cold, hard reality is that any new product must be better than competitors and must be ‘competitively' priced or it has no chance to succeed in the marketplace. Also, consumers tend to brush off new inventive products unless or until they are proven in the marketplace. Probably 90% of the time, they will choose to buy a brand they know, like, and trust, regardless of whether or not your product is actually superior.
Here is the bottom line most inventors hate.
Your product is ‘competitively' priced only if it is cheaper than other well known competitive products and offers superior benefits and value.
“But, if my product is clearly superior, shouldn't consumers be willing to pay a bit more for it?” No, they won't. Is that fair? No, it's not.
But you behave exactly the same way when you are shopping. Let's say you are comparing Crest toothpaste (which you have bought for years) at $3.50 with Kleen & White (also at $3.50), a new innovative toothpaste that will make your teeth 20% whiter and reduce cavities 30% better. You'll think for just a moment, then put the Crest in your basket. You'll say to yourself, “I'll try Kleen & White next time.” Know, like, and trust just won the day, again.
Perceived value is driven by a combination of pain/problem and price.
If I am thirsty before embarking on a 5 hour road trip in my car, I might buy bottled water for $4 from a convenience store – or I might pass on it and get something later.
But, if I had just spent 4 hours, sweating it out in the Australian Outback in 105 degree heat, I'd happily buy that $4 bottled water, even a $6 one. Why? Because the perceived value to me just went way up, so I'm much less concerned about price. I know, because I experienced this precise scenario personally.
To sum it up, if your product has high perceived value to consumers, that means in their minds it has a great price (cheaper than other items) and it would seem to solve an annoying or pervasive problem for them. Then, and only then, will they take a chance and buy a new product that they don't currently know, like, and trust.
Your goal is to stay in business long enough that your buyers come to know, like, and trust your product. It took a few years, but that happened for me and I had whole families who bought my wallet and then would buy more to gift to friends. It was a beautiful thing.
Don't forget to grab you free copy of Habits of Successful Inventors – red button below, to learn how to deal with criticism and other valuable tactics.
Stay tuned for Part II next week.