Entrepreneurship Group Coaching Call
1. What makes a good idea?
a. solves a problem
b. fills a need
c. applicable new technology
Example: Quite books
2. No one knows if an idea is a good one or not.
It must fill a need or a new product or idea.
hoola hoop- Filled no need but was a new toy that was fun.
New coke- One of the biggest marketing failures in business history. They thought their customers wanted a sweeter drink like Pepsi. They decided to introduce new coke into the market and take old coke off the market so it would not cannibalize the new coke sale. Bad decision. Customers rebelled and they were forced to put old coke back on the market.
Twister- You could say it filled the need for entertainment, but people had plenty of entertainment before the twister game came along. Here is an example of simple, simple,simple. A sheet of plastic, colored dots, a spinner and it generated millions and millions of dollars and is still selling today. Simple is better.
Example: Bible stories on cassette- I didn’t know if it would work. I had an idea that was innovative. A friend and I decided to produce the stories. It was a very new product. Nothing on the market like it. Even though we didn’t know what we were doing we made it work and learned a lot in the process.
Example: Idea people- there are a lot of idea people but they won’t develop the ides. Why? You won’t have the money to create and market the product or service.
Idea is one thing, developing it is another.
Develop some prototypes and use them to sell a buyer.
Sell the idea to a company- Some say I want to sell my idea to a company. That will never happen.
Example: My beverage product- I developed 50 prototypes to send to CEOs of beverage companies. Kraft accepts no outside proposals for product ideas.
4. What to do with your idea? If you are worried about someone stealing your idea do the following:
a. Poor man’s protection- letter to self
b. Write a detailed description and illustration- mail copies to yourself and don’t open it.
c. Hundreds of thousands of patents are granted each year. A very small percent are ever created and brought to market.
d. Patent search- you can do it yourself. Costs a few hundred dollars.
e. Provisional patent good for 12 months and low cost.
5. Patent will cost $5000+ and you may need to get out of country patents.
6. Create prototypes- find where to get product made, get a tight quote on manufacturing costs
7. Marketing- packaging, logos, costs- most people developing a product never consider the marketing costs, from brochures to mailing labels. You must know whether you can make a profit.
8. Sell it to large chains- Large companies have buyers at the corporate offices. They determine which new products the company will sell. Send you prototype, don’t go there. It sometimes takes months to get an answer from them.
Sell it to manufacturer reps- These are the people that sell products from many different manufacturers, and sell to independently owned stores. You must sell them on carrying your product. It could take months
9. Total cost model- will there be profit? Figure manufacturing costs, marketing costs such as brochures, logo for your company, logo for your product, packaging, cost of mailing, boxes, packing materials, mailing labels, returns etc.