Why Are You Inventing?
Understanding the reasons will help you decide how to proceed with patents, prototypes and more.
Money, creative urge, ego, desire to help others, intellectual challenge and curiosity - inventors develop ideas for all of these reasons and all are valid. But money is the purest reason of all.
Money is motivation, success and a common language. However, before going on I need to say that if money is the only goal, there are much better ways to earn it than inventing.
The hard fact is that most inventions fail. Forget about the stats you find online that say, “only 3% percent of patents make money,” implying that patents equal inventions and that 3 in 100 is a low number. A 3% success rate is not a low number, it’s ridiculously high. A more accurate number would be closer to 0.01% (1 in 10,000). I write that based on three decades of experience and taking a deeper look at where patent statistics come from.
For example, an iPhone has hundreds of patents, some 40+ owned by Apple and others owned by companies that supply underlying technology down to the glass screen. So, in the case of an iPhone, a single successful product counts for hundreds of profitable patents and skews the statistic.
The bottom line is that inventing has odds far closer to a lottery than a mutual fund or McDonald’s franchise.
But even though inventing is a lousy way to make money, the only reason to do it is FOR THE MONEY. More accurately, the way to become a successful inventor is to focus specifically on money regardless of why or what you are inventing. The reason is that developing and commercializing an invention requires the help of many different people and the common language and primary motivation for all of them is money.
Presenting your invention to investors or retailers or manufacturers? Show them the money. Presenting to designers, engineers, patent attorneys, partners, employees, agents, reps, advertising agencies, fulfillment centers…? Show them the money.
Even if you are not motivated by profit, everyone else you talk to will be.
Showing the money doesn’t mean you have to put cash on the table (although that’s exceptionally persuasive). It means you have to show how the person you’re speaking with will profit. Here you can get creative, because profit can come from a share of royalty, a share of the company, increased sales of companion products, new customers and more. In the case of a product manager at a large corporation the personal profit might be a promotion or bonus, but that manager will use the opportunity for company profit to sell the invention to his or her boss and on up the ladder.
When thinking about presenting the profit aspect of your invention, it’s best to think of it as a simple box. Forget about all of the invention’s features and benefits, all of the things it does. To everyone but you and the final customer, It’s just a box of profit and can be easily substituted by another box of profit. That is precisely how Wal-Mart views the square feet and inches on its shelves and how Amazon views product listings at the top of search results: boxes of profit. Buyers for Home Depot don’t care what your product does; they care that it will make more money per square foot than alternatives.
If your invention is intended as an act of charity this same concept holds true. You may not care about profit, but everyone else who touches your product sure does, even the organization receiving your charity. The charity has only so much time and energy to devote to raising money and more profitable boxes will give them more money to do good work.
Where does profit come from? It comes from the difference between the price the product sells for and all of the costs associated with making and selling it. It’s not enough to say “My $10 product can be made for just $2” or, in the case of software, “once it’s designed, the cost of making my product is essentially zero.” You must consider the costs of making people aware of the product and what it does, the costs of getting it to customers, the costs of maintaining those customers and the costs of running and insuring the business that manages everything.
Each step of the way you should confirm that the box of profits is high enough to engage and motivate everyone needed in the process. This remains true even if you plan to pay suppliers and service providers directly out of your own pocket.
When you reduce your invention to a box of profit, emotion is removed and making decisions is easier. So, as you move forward with your invention, pause every now and then, take a hard look at it in your mind and say:
“Show me the money.”
Say it again:
”Show me the money!”
And again…
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