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THE
ONLINE INVENTOR –
(c)
2008 Market Launchers, Inc.
http://www.marketlaunchers.com
Editor:
Paul Niemann
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Dear Inventor –
There’s less than 1 month
to get signed up to attend InventBay.com’s National Inventors
Expo. It is held in
InventBay.com realizes
something that many large companies seem to ignore -- that innovation comes
primarily from entrepreneurs with their inventions, ideas and vision. The
article in this edition focuses on this topic.
Meanwhile, InventBay allows
inventors to post their inventions or projects on the InventBay.com website for
free, obtaining significant exposure in the process. They also provide inventors
at all stages with resources such as capital sources, mentors, manufacturers,
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and support inventors through free telephone or web-based “roundtables.”
You owe it to yourself to
visit http://www.InventBayExpo.com
and get signed up while there’s still time. Please see their ad below for more
information.
Now,
on with this week’s issue …
Best
Regards,
Paul Niemann
Paul Niemann
http://www.MarketLaunchers.com
800-337-5758
217-224-8194
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CLEVER QUOTE:
“Success is a matter of luck. Ask
any failure”… Author unknown
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“The REAL cost of commercializing new
products – for the manufacturer”
by Paul Niemann of MarketLaunchers.com
In a recent article in this
newsletter, I mentioned that it is very expensive for companies to create,
develop, patent and commercialize new products. This fact alone should give
comfort to you as an inventor when you talk with companies about licensing or
acquiring your inventions, because it makes you become more valuable to
companies when they otherwise would create all of their new products at their
own expense.
Obviously, relying on
outside inventors lowers the cost for companies, but it also lowers the risk and
the time commitment of the companies, making it a win-win situation for both
company and inventor.
A 1982 study by management
consulting firm Booz Allen Hamilton put a price tag on the entire new product
development process by showing how expensive it is for companies to create,
develop, patent and commercialize new products.
How much does it cost?
(continued after the break)
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So, how much does it cost
companies to create, develop, patent and commercialize new products?
The study showed that for a
typical company that generates 128 new product ideas, half of these ideas will
move onto the next stage -- SCREENING -- while the other 64 will be tossed
out. At a cost of $1,000 per product idea, the total at this stage is $128,000.
At the next stage -- CONCEPT
DEVELOPMENT AND TESTING -- one half (32) of the 64 ideas passed to the next
stage, which is the BUSINESS ANALYSIS stage, at a cost of $2,000 each, for
a total of $64,000 for this stage.
At the BUSINESS ANALYSIS
stage, one fourth (8) of the ideas passed, at a cost of $5,000 each, for
a total of $40,000 for this stage.
Then at the next stage --
PRODUCT DEVELOPMENT AND TESTING -- one half (4) of the 8 remaining ideas
passed, at a cost of $10,000 each, for a total of $40,000 for this stage.
Two more stages to go: At
the next stage -- TEST MARKETING -- one half (2) of the 4
remaining ideas passed to the next stage, at a cost of $500,000 each, for a
total of $1,000,000 for this stage.
At the next stage --
COMMERCIALIZATION -- one of the two remaining test marketed products
succeeded while the other one failed.
So the total cost of
creating, developing, patenting and commercializing one successful new
product was, drumroll please, a whopping $1,272,000.
But wait – there’s more!
Most new products fall from
the market within two years.
So the next time you find
yourself trying to convince a company who has the “not-invented-here”
syndrome to consider licensing your new product, be sure to explain what’s in
it for him.
If he refuses to consider
products that were created outside of his company, then he’s missing the boat.
And it will likely prove very costly to his company.
#
# #
Paul
Niemann runs MarketLaunchers.com, building web pages for inventors. Having your
own web page allows you to show your invention to companies when you’re unable
to present it to them in person. It serves as your “online brochure.” Plus,
it can be seen by companies who search the internet for new products.
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Until next time, Successful Inventing To You!