January 2000

*****************************************************************
*****************************************************************

THE ONLINE INVENTOR - January 2000

(c) 2000 Market Launchers, Inc.

http://www.marketlaunchers.com

Publisher: Paul Niemann

*****************************************************************
*****************************************************************

PUBLISHER'S NOTES:

This issue focuses heavily on the characteristics of highly successful products. It is generally believed that fewer than 2% of patented products ever produce a profit for the inventor, and so our second and third articles are designed to help you qualify your inventions BEFORE you spend a lot of time and money on them, just in case the one you're working on right now is more likely to become one of the 98% rather than one of the 2%.

Thanks to each of you who have recommended this newsletter and/or our web site to your fellow inventors, as we've noticed that more and more organizations are referring inventors AND companies to us. We're continuing to grow, as evidenced by the huge increase in both the number of new subscribers AND the number of inventors who have listed their inventions on our web site over the past few months.

As was mentioned in the last issue, our main objective is to co-brand our site with one more company or organization in 2000, just like we did with Inventors' Digest in 1999. This final co-brander will be a company or organization that has extensive ties to manufacturers and other potential licensees and, as a result, will drive a high number of companies to the site, so they can shop the Invention Database for new products to license in. We'll continue to look for additional ways to keep improving, just as we've done in the past.

Best Regards,

Paul Niemann
www.MarketLaunchers.com

"Make it a practice to keep on the lookout for novel and interesting ideas that others have used successfully. Your idea has to be original only in its adaptation to the problem you are working on." -- Thomas Edison to his colleagues.

************************************************************

In this issue:

Article # 1:    "Two Qualities That I Look for in a New Product" -- A Short Interview with Mike Marks of Invention City.

Article #2:    "Seven Essential Characteristics of Highly Successful Inventions," by Jack Lander.

Article #3:    "Suggested Books for Innovation."

************************************************************

Article # 1:    "Two Qualities That I Look for in a New Product" -- A Short Interview with Mike Marks of Invention City

I had the chance to meet with Mike Marks during the Housewares Trade Show in mid-January. Mike is President of WorkTools, Inc. and he also runs InventionCity.com, which commercializes inventors' new products. It is an excellent web site for inventors. Although many inventors submit their products to Mike, he'll invest his time and money in fewer than 1% of them. He has to firmly believe that the product can do very well in the marketplace before he'll get involved.

He told me something that you may have heard before in one form or another, but it's worth repeating. He said that there are 2 things that he wants to hear from inventors when they submit their consumer products to him, in order for him to consider choosing that particular product to attempt to bring to market:

1.    "Everybody I've shown this product to says that they want to buy one. They all say that they've just got to have this product."

2.    "The production cost is no more than 1/4 to 1/5 of the retail price."

If the majority of people who see it just HAVE to have it, then there must be a pretty good market for it. And as long as the production cost is no more than 1/4 to 1/5 of the retail price, there will likely be enough of a profit available for him and any middlemen and the retailer.

One obvious benefit of doing your market research is that you'll find out whether or not people are likely to buy your product -- because a great many patented products have been created for which no market exists. If that's the case with one of your inventions, you'd certainly want to find that out now, BEFORE you spend a lot of your time and money on it, right?

So ask yourself if your invention meets these 2 criteria before you put too much time and money into it. Invention City also has an excellent evaluation form to help you determine the likelihood of your new product succeeding in the marketplace. To go there, visit http://www.InventionCity.com and click on "Market Research." To submit your consumer product to Invention City, go to their site and click on "How to Submit an Invention."

# # # #

Mike Marks is President of Invention City (www.InventionCity.com). Invention City works with inventors on a percentage or equity basis, rather than charging upfront fees.

************************************************************

Publisher's Note:    The following article is condensed from one of Jack Lander's reports. I have read 4 of his reports so far, and I highly recommend them to any inventor. Each one covers a topic such as: inventing, prototyping, patenting and marketing, and each of the reports are very reasonably priced. His web address is listed at the end of this article.

Article # 2:    "Seven Essential Characteristics of Highly Successful Inventions," by Jack Lander.

Many inventions are successful without meeting all of these characteristics. But the closer that your invention matches these seven, the better your chances of success. Your highly successful invention:

1.    Responds to "pull marketing" rather than requires "push marketing,"

2.    Is timely,

3.    Does not require a change in established modes of operation,

4.    Does not require legislation or governmental approval,

5.    Is not intended for the "big three" in Detroit (or any very large corporation),

6.    Has an established distribution channel that can be penetrated, and

7.    Provides easily-comprehended benefits that existing alternatives do not provide.

Here is an explanation of the above characteristics:

1.    It responds to "pull marketing" rather than requiring "push marketing."

Pull marketing is the marketing of a product that the potential buyer already clearly understands as something that he or she needs or wants, or which he or she very quickly recognizes as fulfilling a well-defined need or want that has not been fulfilled previously. It's as though the buyer is purchasing from a shopping list.

Full push marketing is the marketing of a product that, while it fills a need or want, or solves a previously unsolved problem, that need, want, or problem is vague, weak, suppressed, denied (it won't happen to me), or not compelling until legislated.

The most commonplace examples of pull market products are food, gasoline, clothing, etc. The market is receptive to any improvement, such as lower price, better quality at the same price, more features, more dependability, etc. Little seller effort is required to sway the buyer. Usually the seller's effort is communicated in simple words or numbers, or the improvement is obvious.

An example of a push marketing product is one that requires a lot of explaining before the potential buyer understands and agrees that he or she needs it, should want it, or that it solves his problem. Buyers of push marketed items buy on impulse.

Push marketing is a much greater gamble than a product that responds to pull marketing. This is not to say that inventions that require push marketing should be avoided altogether. They often provide the advantage of little or no competition, whereas inventions in the pull category must typically endure great competition because the need is well-defined and understood, and is a magnet to both innovators and product developers, the latter having resources to produce and distribute cheaply. And likewise, the market channels are well established and understood - - even rigid, and often difficult for "the new kid on the block" to penetrate. What must be acknowledged by the inventor of push marketing products is that more imagination and effort must be devoted to searching out and testing marketing channels and methods.

The main point is that if your product's value to its buyer can't be grasped immediately on sight, it is a push marketing product, which ismuch more difficult to sell than profitably than a pull marketing product.

Mass-marketed pull items are often impossible to introduce directly to larger chains, such as Wal-Mart, Home Depot, etc., due to "slotting fees." Slotting fees are assessed by the large chains to assure specific shelf space for the suppliers. Start your marketing through the smaller regional chains or independent stores that don't demand "legal bribes" in order to test a new product. Many such chains, the names of which are not household words, are easily located through references available at your local library and local offices of the U.S. Department of Commerce. The Encyclopedia of Associations will list several trade associations that will provide valuable information.

2.    It is timely.

This is not the time for inventing a better CB radio - that should be obvious. Most of us have a fairly well-developed concept of products whose heyday is past. Few businesses will risk their resources on the hopes of creating a market for a product that may take years to pay off and yield a profit. For every Edison, who drove his light bulb to success by creating power plants and selling his light bulbs below cost in order to "prime the pump," there are thousands of business managers who see no point in risking assets on what might possibly be the "wave of the future."

In the words of Victor Hugo: "An invasion of armies can be resisted, but not an idea whose time has come." And to paraphrase Hugo in the converse: An idea whose time is not yet come will be resisted as though by the force of armies (the public).

The great question is, "When has the time come for one's invention?" An invention that is long overdue can create wealth due to the easy and rapid recognition of its utility value.

3.    It does not require a change in a well-established mode of operation.

For example, don't waste your time trying to create a keyboard that is faster than "QWERTY." It won't stand a chance of being accepted. Don't waste your time on a new way to steer an automobile; steering wheels are entrenched, and neither you nor anyone else is going to convince people to steer with levers.

Successful inventors hop on a band wagon that is already in motion. They don't invent products that ridicule the established mode. They don't merely offer an alternative to something that already works well. "Me too" inventions are up against not just the usual resistance and problems of product launching, but they must attempt to convert the would-be customer to a different way of doing things. And the costs of such conversions subtract from profit.

Go with the flow; don't buck it.

4.    It doesn't require legislation or government approval.

The thinking today among fire marshals is that in a high-rise building fire the occupants have the best chance of survival by staying in their rooms, with windows and doors to hallways closed, awaiting rescue. Ed Wicks pondered this strategy, and invented a way to bring fresh air to persons in such a situation. He invented a system that automatically drains the water from bathroom water pipes, and delivers fresh air back through the pipes. The air is sufficient to keep a positive pressure on the bathroom, and therefore keep smoke out, but at a volume that does not feed the fire.

Ed patented the system in 1983, and has spent more than $100,000 of his own money developing and promoting it. The Japanese reviewed his system, and adopted it for their own high-rise buildings throughout the country. Unfortunately, Ed doesn't have a patent in Japan, and he hasn't collected a penny of royalties. And in the United States Ed hasn't yet sold a unit, even though the Wicks Life Line system is lauded by fire officials all across the country.

Just as sprinkler systems and seat belts were shunned until legislation compelled them, the Life Line system will almost certainly require legislation before it is specified by architects and builders. People consider death or serious injury due to accidents to be remote, and think that nothing that will happen to them. It is always the "other guy" who gets hurt or killed.

Unless you are very young, very rich, and very patient, if your invention requires government legislation or approval in order to sell or license it, you probably won't.

5. Its market isn't the "big three" in Detroit, or any very large corporation.

Henry Ford had a policy of never paying royalties to independent inventors. (Whether he cheated inventors isn't known.) This set the unspoken policy for the big three that appears to be in effect even today. Their attitude is that independent inventors simply cannot come up with inventions that their own engineers haven't already thought of.

Big corporations consider independent inventors to be dangerous. The reason is that people sue them when they steal inventions -- "infringe" is more polite. In their arrogance, they are certain that no one knows more about their field than they do. And even if an outsider does invent something meaningful, he or she is trespassing in their sacred domain, and is therefore fair game to ignore or crush.

In order to ensure that "David" doesn't get close enough to "Goliath" to sling his pebble, these giants have erected stone wall barriers called "legal departments." Any idea or invention that is submitted to them, whether patented or not, is bounced back with an agreement form that must be signed by the submitter. This agreement is entirely one sided. Goliath has all of the rights.

In one sense you can't blame them for stonewalling inventors. Imagine the case where they have been working on exactly the same invention that has been submitted. And imagine a paranoid inventor who is sure he is being lied to. Given the precedent set by Robert Kearns and his delay windshield wiper in prevailing in his case against Chrysler, the best way to avoid bad publicity, enormously expensive litigation, and a possible unfavorable settlement is simply to do everything possible to discourage inventors from penetrating the stone wall.

There are two extremes of the royalty game: In the book publishing business the product is almost 100 percent a royalty item. In the automobile business the product is almost a zero royalty item. If you insist on inventing things for automobiles, stick to the aftermarket. Here, at least, you may be able to deal with a small or medium size corporation that doesn't have a legal department.

Some large corporations respect independent inventors, and even invite them to submit their inventions. Nordic Track, for example, depends entirely on independent inventors for their new products. But approach the Goliaths cautiously.

6. It has an established distribution channel that can be penetrated.

It is not feasible to create a new product (invention) and set up a new marketing channel at the same time. Either one alone is terribly demanding of time, money, and psychic commitment. The large, going business may be able to do it; but the typical inventor cannot.

Before committing resources to our inventions we should always identify the channel(s) through which it will reach the ultimate user.

Equally challenging is the economics, and by that I mean that the manufacturing costs must be low enough to support all of the outstretched hands that will demand a chunk of the selling price, and still leave enough for you and me as true profit.

For any product, the marketing channel should be the first thing considered before spending money on a patent or a prototype. If you can't convince yourself that there is at least one viable channel, and you or your prospective licensee's profit margin after selling through this channel will be attractive, it may be better to work on another invention.

7. It provides easily-comprehended benefits that existing alternatives do not provide.

If your invention/product is not just a "me too" item, and it is the first product of its kind on the market, often it will command an enviable position. However, the sellers usually see no reason to risk resources on a mere "me too" competing product.

Now, if the manufacturer is a "big name" -- one that can't be ignored -- that is a different case. But a new product from an unknown producer that doesn't offer distinct advantages over the established product -- at least to a certain segment of buyers -- will usually not be taken on by well-managed distribution networks. Test marketing of a new item can usually only be accomplished with a commitment to "big bucks" advertising, and, in the case of large chains, possible slotting fees as covered earlier.

But that's what the business of invention is about, right? Novel solutions to needs, wants, problems that are obviously superior or advantageous in some way to former solutions. Or, hopefully, solutions to needs, wants, or problems that have never before been satisfied, but which will be immediately understood on sight by potential buyers.

Novel solutions are only viable if they can be protected as "intellectual property." There is no return to an inventor in developing a product that cannot be protected from "knock-off artists" as soon as it shows signs of success. Typically, this means getting a patent, although a copyright or trademark may offer protection in certain cases.

Conclusion:

Always consider that none of us has an infallible sense of which inventions will succeed, and which will not. Neither individual nor corporation can predict accurately more than about half the time. Typically, the success rate is much, much lower. Tom Mosley, in his excellent book Marketina Your Invention, tells us that only two percent of patented inventions earn more than the cost of developing and patenting.

I, personally, feel that this is a much too conservative figure. Many corporations routinely patent items that never get to market, and this "dilution" by corporations skews the statistics. From years of experience, and communication with many experts in this field, my own estimate is that around five percent of inventions that are patented by independent inventors pay more than the cost of their patents. Post mortems on the failures would likely reveal that one or more (probably several) of the seven characteristics that I have covered here were absent.

Don't be completely discouraged by these dismal statistics, however. Your chances of success are much better than average. How do I know this? Because you are reading these words. You are the kind of person who recognizes the necessity of learning the essentials of the marketing of innovation.

Always remember, even if you satisfy all seven of these characteristics, you still only have a fair chance of success. Don't fall in love with your inventions until you have assessed their success potential objectively. If you truly are an inventor, there is always one more invention to be conceived - - one that will succeed because it has the characteristics that facilitate success.

But even if you do satisfy all seven of the essential characteristics, no one is going to beat a path to your door to license your invention or buy your product. The idea that you can simply write a letter to a corporation, large or small, and have it open its arms and its treasury to you is a popular fallacy. Most successful negotiations begin through face to face contact, or at least voice to voice contact, not through letters. And most companies are indifferent to product proposals from the outside, so gaining face to face contacts takes tact and persistence. (According to my friend, Tom Mosley, author of Marketing Your Invention, only 12.5 percent of the 4000 companies he surveyed were interested in receiving new-product proposals from outside.) You must get through to the Chief Executive Officer, or, at the very least, the head of marketing, and arrange a meeting. This must be done without disclosing the nature of your invention in the preliminary contacting, for to do so invites premature judgment and rejection without a fair hearing - - without a hands-on demonstration of your prototype, and your personal presence to explain the benefits and subtle features of your product.

The most prominent reason for the failure to license good inventions is that the inventor,gave up too soon on his or her quest. If you don't have the time or personality for setting up face to face contacts, and negotiating, time after time, until you conclude a license agreement, you should consider having a legitimate invention broker handle this for you.

Best wishes for successful inventing.

Copyright 1998 Jack Lander
The Inventor's Bookstore
37 Seneca Road
Danbury, CT 06811- 4422
203-797-8955
http://www.inventorhelp.com

# # # #

Jack Lander is well-known for his prototyping skills and is a regular contributor to Inventors' Digest. He knows what inventors need to succeed in the world of ideas, inventions, patents and licenses. He has written over 20 valuable reports for inventors. To purchase any of these reports, visit his bookstore on the Internet at: http://www.InventorHelp.com.

************************************************************

Article # 3:    "Suggested Books for Innovation"

While there are plenty of books to help you patent, prototype, sell or license your invention, here are some that will help you increase your ability to create and develop new ideas.

1.    "99% Inspiration; Tips, Tales and Techniques for Liberating Your Business Creativity," by Bryan W. Mattimore

2.    "Thinkertoys; A Handbook of Business Creativity for the 90s," Michael Michalko

3.    "It Only Takes One; How to create the right idea and then make it happen," by John Emmerling

4.    "What A Great Idea!," by Charles "Chic" Thompson

5.    "A Whack On The Side Of The Head; How you can be more creative," by Roger von Oech

6.    "A Kick In The Seat Of The Pants," by Roger von Oech

7.    "Roger von Oech's Creative Whack Pak," by Roger von Oech

8.    "Conceptual Blockbusting: A guide to better ideas," by James L. Adams

9.    "Imagineering; How to profit from your creative powers," by Michael LeBoeuf

10.    "Applied Imagination," by Alex F. Osborn

11.    "Winning The Innovation Game," by Denis E. Waitley & Robert B. Tucker

12.    "Innovation; The attacker's advantage," by Richard Foster

13.    "Unleashing The Right Side Of Ile Brain," by Robert Williams and John Stockmyer

14.    "The Creative Spirit, Daniel Goleman," by Paul Kaufman and Michael Ray

15.    "Driving Fear Out Of The Workplace," by Kathleen D. Ryan and Daniel K. Oestreich

************************************************************

Feel free to forward "The Online Inventor" to your inventor friends and colleagues. If you change your e-mail address, please subscribe with the new address in order to continue receiving it each month. To unsubscribe, reply with the word, "unsubscribe" in the subject line. If you would like to request a topic for an upcoming issue of this newsletter, just send me an e-mail or give me a call. To view past issues of the "The Online Inventor," please go to www.marketlaunchers.com/archives.html. Thanks.

Until next time, Successful Inventing To You!

Best Regards,

Paul Niemann;
Humble Proprietor of Market Launchers
(800) 337-5758
(217) 224-7735 (outside the U.S.)

************************************************************
************************************************************

Click here to read the December 1999 issue.