So, you think you have a great idea. You’ve come up with a solution to a problem that you believe is workable. What is your next step? Many people have great ideas, but have no idea how to get them off the ground.
How do Ideas Become Inventions? Ideas become inventions through the process of creation and innovation. Inventors start with ideas they think are great and work diligently to turn that idea into a concrete product. Along the way they demonstrate an ability to communicate the value of that product for marketing and investment purposes, so others see the value of their idea too.
The Advantages of Individual and Small-Business Innovation
Do you feel like you’re at a disadvantage as an individual or small-business inventor? Before the 1930s, private inventors were the main source of new patents. Since then, large corporations that invest heavily in research and development have led the way, but they are often cumbersome and slow to respond to the market (Anderson, 2004).
One of the reasons for this is that the major, well-established corporations prefer the “just-in-time innovation strategy” since they can still draw profits from obsolete products (Anderson, 2004, p. 58). This is especially attractive since they may have large inventories of a product that your invention will make obsolete. Most of the money they spend is on product improvement rather than innovation. This allows smaller private companies to take the lead in innovation (Anderson, 2004).
While large corporations still dominate fields like the aerospace industry, fossil fuels, plastics, and the automotive industry, smaller companies have been able to break into fields like “biotechnology, pharmaceuticals, and medical technology” (Swartz, 2004, p. 4). This is because the knowledge base for these fields is not limited to these larger companies (Swartz, 2004).
How Can I Invent Something Useful?
To make sure that you invent something that will fill a need, look for problems, pains, and inconveniences that you can mitigate or eliminate. Carefully research your product and industry and your intended customer base. If you’re looking to sell small ideas to a company, try cold calling companies in your industry of interest. Offer general proposals, without giving away too much detail, in order to ascertain their level of interest.
In a book entitled Value Proposition Design: How to Create Products and Services Customers Want (Osterwalder, Pingneur, Bernarda, Smith, & Papadakos, 2014), the authors attempt to explain the relationship between customer segments and value proposition. In other words, they look at the needs and wants of a particular group of potential customers and try to determine what valuable goods or services they can provide to those potential customers (Kyhnau & Nielson, 2015, p. 81).
In a review of Value Proposition Design by Kyhnau and Nielson (2015, p. 81), they note the recommendation to use use a “value proposition canvas” to determine if your proposal fits with the customers’ needs. The canvas involves gathering customer information in order to develop an accurate customer profile. Then, you create a “value map” that outlines how you intend to provide value to that customer base. You will need to find out what obstacles your intended customers face and provide a way to alleviate those pains for them (Kyhnau & Nielson, 2015, p. 83).
While ideas can come about as a result of a happy accident, they more often come about through more deliberate processes. Many inventors are visual learners, and being able to visualize something before putting it into practice is especially useful. Another important inventor trait is the willingness to accept risk and uncertainty. Risk aversion is part of what is holding the larger corporations back (Swartz, 2004).
Try to identify a need in an area you have an interest in and provide a workable solution. Develop relationships with people in the field and bounce a few general ideas off of them. You might come across an idea that’s already out there that you can tweak just enough to make it stand out. Maybe you can find a way to increase a current product’s efficiency or reduce its cost.
Make sure to do some research so that you’re not infringing on a patent. This is known as a “prior art search” or a “novelty search.” If you visit the US Patent and Trademark Office’s website at uspto.gov, you can search patent lists covering patents after 1976. Anything before that you can find at a Patent and Trademark Depository Library in your state. A quick and simple option is to use Google Patents, but you should make sure to be thorough in your research. For larger ideas, it might be wise to consult a patent attorney.
Develop a Sketch or Prototype
After you’ve gathered some important information on your potential customers through your research and come up with a solid value proposition, you may wish to enter into the design phase with a sketch or prototype. The authors of Value Proposition Design warn not to get too attached to an idea or pet project. Instead, work in rough drafts and sketches while remaining flexible. Getting too involved in details at an early stage only encourages attachment, and you do not want to invest too much time in an idea that will not work (Kyhnau & Nielson, 2015).
You can use a prototype simply to give a general idea of appearance, size, and shape. A proof of concept prototype might be necessary to demonstrate a high-risk portion of a design to investors. To build your prototype, you will need to figure out what tools and resources you will need and the costs involved. A sketch costs next to nothing but can be used to great effect in communicating your idea. Get feedback where you can, again, without giving too much away.
Provisional Patents and Patent-Pending Status
If possible, file a provisional patent application (PPA) for patent-pending status. As of the writing of this article, the USPTO website lists the fees for a PPA at around $70 for a micro-entity, $140 for a small entity, and $280 for a large entity. If you earn less than $100,000 per year, then you can qualify for micro-entity status. Compare that to a regular patent that might cost anywhere from $1,500 to $15,000 with various filing fees and the cost of a patent lawyer.
The provisional patent application grants you patent pending status for one year before you will need to file a nonprovisional application claim. With the perceived ownership status of a PPA, you can market your idea to companies. You may even be able to get the licensor to pay for the patent. Provisional patents are ideal for small-scale ideas, but you can even file multiple provisional patents for larger ideas. Be sure to look up the details on provisional patents on the USPTO website. You do not require a lawyer to fill one of these out.
Patents and Patent Lawyers
Larger ideas may require one or more patents to shield them from the competition, but these can cost thousands of dollars, especially in lawyer fees. After you’ve carefully considered the value that your product provides over the competition, you need to take into account the risks of losing your intellectual property (Udell, 2012). Even if you get a patent, you will have to enforce it yourself with the aid of a lawyer.
Choose a patent lawyer with relationships in your product’s industry. You can get an hour of free time with an attorney who is a member of the American Intellectual Property Law Association (AIPLA) to assess your needs (Udell, 2012). Patents can also take more than a year to process, which is another reason that they are not ideal for smaller ideas since they come and go so quickly. Patentability requirements include novelty, usefulness, and non-obviousness.
The USPTO lists the three types of patent as “utility, design, and plant,” and each of these can be either provisional or nonprovisional (https://www.uspto.gov). Utility patents cover inventions that provide a specific use or benefit. Design patents cover ornamental changes to a functional item. A plant patent involves a new variety of plant that was either invented or discovered.
Selling Your Invention (Product)
Once you have a provisional patent for your invention, you can share your ideas with companies using sell sheets, sketches, or prototypes. Make sure that you choose companies that are open to innovation. When you call companies, try to get in touch with someone in advertising or sales that will have a vested interest in new ideas. Point out that you’re a product developer since companies are interested in selling products, not necessarily inventions.
Don’t provide too much detail over the phone, just pique their interest. If they call you back, then you can go into more detail and find out how you can get this information to them. A product sell sheet provides a simple description of the product in order to gain interest. It can be a one-page, one-line statement of the benefits of your product. It could also be a drawing or a picture. If you have their email address, you could scan your drawings and send them as a PDF file. Videos can be another useful way of getting your idea across.
You may choose to sign a Non Disclosure Agreement (NDA). Some larger companies might try to force you to sign something saying that anything you discuss with them is fair game. It should be obvious that that’s not a good idea. You need to be able to explain why your idea is better than what is already on the market.
New Venture versus Licensing
If you have a sketch or prototype, you’ll need to decide whether you wish to move forward by starting an independent venture or pursue licensing to a larger company. In a new venture, you are looking to sell the product yourself as a startup business. In licensing, you are selling the right to produce the product to a company while collecting royalties (Udell, 2012).
Venturing requires that you be an expert on the product and your competitors since you will have to do everything to launch the company yourself. While your profit margin will be higher as an independent venture, it also requires more investment and more personal risk. A new venture startup can cost around $150,000. You will need to factor in the cost of producing the product as well as packaging, marketing, and distribution (Udell, 2012).
Only a very small percentage of new ventures are successful. However, with a product that has a very large market and is easy to manufacture, starting up your own company can be the better option. Many ventures have failed because the owner had to micromanage every detail, so don’t be afraid to seek help (Udell, 2012).
The process of licensing can require even greater intellectual property protection than a new venture. On the positive side, licensing will usually cost half as much as a new venture and entails less risk since the company you are licensing to will invest more resources to get the product to market. Licensing can provide a steady income with a successful product with a royalty rate per unit sold. A good IP attorney can do the negotiating for you. You may have an idea that would involve highly complex manufacturing processes that would make licensing the obvious choice (Udell, 2012).
How do You Invent Something with no Money?
There are several ways to get your project off the ground if you’re able to communicate its value. You may be able to find a source of investment through family and friends (Udell, 2012). In order to attract private investors or receive a bank loan, you’re going to need a solid business plan. A business plan should include information on how to product is to be manufactured, marketed, packaged, shipped, and distributed. The most important selling point to a company or bank will be profitability.
You could sell shares in your company or specific rights to your invention, like manufacturing rights or marketing rights. You can find a number of crowdfunding websites like Kickstarter that provide a platform to fund various projects as well.
There are also federal and state funds available for particular areas, so check with federal, state, and local economic development agencies. Small businesses in green industries will draw funding and loans for innovation. Some banks will lend to proprietary-based green tech companies. Microloans might be available for an innovative green startup business.
Testing and Improving Your Idea
You can also use your interactions with companies and potential customers to test and improve upon your invention. In Value Proposition Design, the authors suggest setting up a workshop in an established organization to test your idea. Kyhnau (2015) recommends piloting these workshops with a small group that you know well. One developer technique is to use the concept of Minimum Viable Product in which you include only the minimum features to satisfy early users. You then use feedback from customers to move forward and improve the product (Kyhnau & Nielson, 2015).
Find measures to test the customer’s preferences and priorities as well as their willingness to pay for the value you are providing. You can use the information that you gather from potential customers to learn how to communicate the value of the product to them and potential stakeholders (Kyhnau & Nielson, 2015).
Do your Homework and Get Started
Ideas become inventions through careful planning and research. Small businesses are taking on a greater role in innovation, and larger corporations are now more willing to engage in licensing with small companies and individuals. In order to invent something useful, identify a need or want; develop a statement, sketch, or prototype; and seek some form of intellectual property protection before approaching companies. Provisional patents are a great way for small businesses to break into licensing.
If you’re low on funds, there are investment opportunities out there for well-thought-out proposals and smalls startups. Never forget to test your idea and encourage feedback. You’re not just an inventor; you’re a product developer, so make sure that you are developing a product that satisfies the needs and wants of your customers.
Anderson, H. (2004, May). Why big companies can’t invent [PDF File]. Technology Review, 107(4), 56-59. Retrieved from http://signallake.com.
Udell, L. J. (2012, May). Licensing Versus New Venture: The Anatomy of a Startup [PDF File]. The Licensing Journal, 32(5), 1-4. Retrieved from http://californiainventioncenter.org.
Kyhnau, J., & Nielson, C. (2015) Book Review of Value Proposition Design [PDF File]. Journal of Business Models, 3(1), 81-89. Retrieved from https://www.researchgate.net.
Schwartz, E. I. (2004). Sparking the fire of invention [PDF File]. Technology Review, 107(4), 32-41. Retrieved from http://jrichardstevens.com.
United States Patent and Trademark Office (2017, November 16). Types of patent applications and proceedings. Retrieved from https://www.uspto.gov.