America has always been the land of opportunity, but for inventors it can seem more like the land of opportunities for people to fleece, swindle and steal. In 2015 alone, the U.S. Patent office issued 288,335 new patents. Many of those brilliant ideas will likely never see the light of day because inventors are unable to secure financing and find a manufacturer, or the people they do make contracts with have less than honest intentions.
As an inventor and entrepreneur, one of the most important steps to take during the startup process is research. Knowledge is essential to avoid costly mistakes and five areas that inventors should strive to become experts in, as well as errors they should avoid include:
1. Not Using Protection – Many inventors are lured by online services that offer to help them write their own patent at a fraction of the cost. While hiring a patent attorney is costly, so is losing the rights to a product idea because a competitor did it right and paid for an ironclad patent. Patent strength often comes down to one word that has caused a “grey area.” In which, the other company thought they could infringe or believed they were free to trade, and this one word can often be the trigger for court proceedings.
2. Falling for Scams – Just as there are no shortcuts without repercussions for becoming the best athlete in the world, there are no shortcuts for launching a product either. There are well marketed programs that offer to take inventors ideas and turn them into real products, but many inventors who have gone this route report that all they receive is a fluffy packet of one-size-fits-all business plans and a bill.
3. Entering Overcrowded Markets – Research is vital at every step of the startup process, but is incredibly important at the onset. Inventors need to spend time studying their intended industry to learn about similar products, potential customer base, pricing levels the market supports and future opportunities. Failure to investigate a market can result in an inventor wasting time to create a product for which there will be no investors, licensors or buyers.
4. Lackluster Pitching – An idea is only as great as how the inventor can express it. What most inventors don’t know is that it takes around $250,000 for a larger company to launch a product with tooling, marketing, trade shows, and sales staff. Then after a year of the company “working” on a product, there is no guarantee to see if the product was successful or not. Companies that know what it will take to make an inventor’s idea a reality are no easily impressed so before taking a meeting with a licensor or a buyer make sure a product pitch is professional, well practiced and noteworthy.
5. Cost Miscalculations – Crowdfunding platforms have become a wildly popular way for inventors to raise capital to turn their ideas into reality. But, many first-time inventors do not realize how much it actually costs to develop prototypes and packaging, how long it can take to find an affordable and quality manufacturer and the unending number of crises that can and will occur along the way that will blow the budget. Another fatal error that many inventors make is misjudging how much money they will need to sustain their business until they are able to land that golden retail deal. Inventor groups across the country can offer much needed support and “been there, done that” guidance that can prove priceless for novice inventors.
6. Ignoring Mistakes – One of the first lessons people experience in life as children is to learn from mistakes. If a square block does not fit in the round hole, move to the next hole. Inventors who are rejected by an investor or retailer need to rally in the moment. Leaving a meeting, ending a call or email exchange without asking what went wrong or why the answer was “no” is a critical error. Not asking why they are being rejected can keep inventors spending money when major problems are present. And then, the cycle of rejection will simply continue until the idea collapses or funding runs dry.
Tom Gray is CEO of Make48. A serial entrepreneur from the age of 20 who has achieved international success as an inventor, he sells his home and garden products in over 5,000 retail locations worldwide ranging from Bunnings in Australia to Home Depot, Sherwin Williams, QVC and Walmart.