I recently had a very interesting conversation with Andrew Krauss, President of the Inventors Alliance and co-founder of InventRight, about the vast number of entrepreneurs and inventors who use the same, ineffective methodology to get their businesses and products going. We shared a number of observations. First, many starting out are convinced that they must apply for a full patent immediately before speaking a word to anyone about their product. Thus, they find a patent attorney who will take them through the patent search and application process for a mere $3,000 to $20,000 dollars, so that after months of time and money spent, the entrepreneur or inventor can then begin to explore how they will actually make money off of their product. I think Andrew and I arrived at the same conclusion that the question isn't whether patent attorney's fees are a good investment--but the question is when to invest? The same question could be asked of prototyping as well as when to approach manufacturers?
Stephen Key of InventRight (Andrew's partner) is one of the most successful inventors you will find. He has developed and licensed products to companies like Disney, Nestle, and Coca-Cola, as well as manufactured and sold his own products. Andrew and Stephen formed InventRight to teach inventors how to license their products. Whether you are licensing or building a business around your product, their advice in these areas holds true.
In a post on the InventRight Blog, Stephen answers a few questions regarding the issues of patenting, prototyping, and marketing. This post regarded the question of obtaining a provisional patent versus a full patent. Stephen comments:
I’m not an attorney and can’t offer you legal advice. I will tell you what I use the Provisional Patent for.Simply put, the Provisional Patent gives you one year to fish off that pier and see if a manufacturer is interested in your idea. It’s super cheap and I can file it myself due to it’s much less demanding requirements.If it’s a statistical fact that 97% of all patents don’t make any more money than the inventor spent on the patent, why would you want to go out and spend 6 grand or more on a patent. I’m not saying you shouldn’t file patents, what I’m saying is that you should get some interest from a manufacturer before you do.
In another post, he addresses the decision of when to pursue a prototype. He responds to a reader's question on this issue:
A better question to ask yourself is what is your plan once you have a prototype. I talk to many, many inventors that spend a bunch of money on a prototype and a patent before they even have a plan as to how they plan on selling their idea. You need to understand the process of selling an idea before you spend money on patents or prototypes.
One of the biggest and most important challenges in building your business around a product is selling your product. Selling is hard. Most aren't comfortable with the rejection, numerous phone calls, time spent, and hard work involved in getting people and companies interested in your product enough to lay down their cold, hard cash for it. Before you can even do this, you need to figure out the game plan on how you are going to sell your product.
Before splurging on a prototype, you can file a provisional patent yourself, undertake some preliminary market research, and begin to formulate your gameplan. How big is your market? Who are the competitors? Where are they selling? How much are they selling for? And, what messages are they driving at their customers? Who will you need to contact to get your product out there? Retailers? QVC? PR agencies? Names? Phone numbers? Your sell sheet? How does the whole puzzle fit together step-by-step?
During this time, you may want to consider fiddling around with a home-made prototype on the kitchen table if you can. But there is certainly no need to go out and spend $5,000-$15,000 dollars on the best prototype money can buy at this point. If you're going to approach a manufacturer and build and sell the product yourself, a simple, looks-like/works-like prototype will suffice in getting the ball-rolling. They should be able to provide ballpark costing, or walk you through a few steps to get you to the point where they can provide information like this. The general point to take away is to investigate, as much as you can, whether you will get a worthy financial return on your time and money spent before committing a large amount of your time and money.
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