Ideas to Reality. An Inventor s Guide for transforming your concept into creation

Transcription

1 Ideas to Reality An Inventor s Guide for transforming your concept into creation 1 Page

2 Introduction: We here are Poly-Cast are continually delighted and amazed by the creative ideas and products that people ask us to look at. We can tell you, first hand, that creativity, genius and the entrepreneurial spirit are alive and well in the United States of America. We, like you, hope that ultimately your idea will achieve the same acceptance and success as the Frisbee or the computer mouse. Both have become integral parts of our culture - and they are largely plastic in composition. This short handbook is offered by the Poly-Cast team as a resource for creative entrepreneurs with a dream. We wish to help you achieve those dreams. We offer this guide to help you navigate the early stages of the development of your idea in order to build a strong foundation for success. Please accept this booklet with our compliments. Sincerely, Dan Leedom CEO Poly-Cast, Inc. 2 Page

3 Stages of the Development of a Winning New Idea: New ideas typically follow the following stages on their road to success: 1. Concept (the idea) 2. Market viability (the analysis) 3. Business Plan 4. Investment 5. Design 6. Prototyping 7. Market Testing 8. Design Adjustment 9. Manufacturing Plan 10. Market Launch 11. Full-Scale Manufacturing 12. Profits! For inventors and early-stage entrepreneurs that are not already in business, it may become apparent from looking at the list above that success is a journey - from concept to profit. Following a disciplined process has the following benefits: - increases the probability of success - reduces the total amount of investment required - improves the competitive positioning of your idea - assures that you select the best and most effective channel to market Note that the cost for each step increases as you work down the list. Following a step-by-step process assures that you never commit funding to the next step before you have adequately assured that the previous step is completed and that the results indicate that it is wise to continue. Why is this discipline important? Because research shows that up to 90% of all new products fail in the market place. Discipline and planning are essential to avoid this sad fate. 3 Page

4 But don t be discouraged! Following a disciplined approach helps in two ways: 1) it will help you commit to investment in the product only when it s the right time and 2) it will improve significantly the probability of success. How does one figure out how to follow these steps if you have never done it before? Good question! That s why we published this booklet to offer some helpful resources for you to consider. Building a successful product business will take time, discipline and patience. We often find that folks want to jump from step 1 to step 9 to just get an idea of what it might cost to tool-up new product. Here s why that is unwise and why we discourage that jump: - The cost of manufacturing tooling has almost nothing to do with a product s ultimate success in the market place. A product s success is most directly related to the value that customers see in the product, compared to what alternatives there are in front of them - Putting together a manufacturing tooling estimate and plan before a product design is complete almost assures the plan will be invalid when the final design is actually available. The purpose of this booklet is only to help you get through the first 5 steps. Once the design is solid, with the completion of step 5, the skills of Poly-Cast will come into play. Beyond that step, your investors will help you navigate the rest of the journey based on their expertise. But, back to the question: The answer is that if you have never done something like this before, you get help from folks who are experienced in following this, or a similar process. Fortunately, there are inexpensive and/or free resources available to help with steps 2 and 3. 4 Page

5 Market Viability Analysis: There is a marketing expression: There may be a hole in the market, but is there a market in the hole? Market viability simply asks the question: Will this new product idea attract customers in sufficient quantity to make it a success? Success means profitable. The answer to this question is essential to include in your business plan. There are a number of criteria for assessing market viability, but we will mention the critical few here to help you think the answer through and prepare. What is the Core Benefit of your product? This determines the degree to which there is a compelling customer need for your new product. Here are some questions to ask in this regard: Does your new product solve a problem that has never been solved before? How significant is this problem in the customers lives? For example, if your product could guarantee a cure for the common cold in a day, at no more than the equivalent of an hours pay then you d have a pretty strong core benefit. To what degree does solving that problem provide the customer a significant economic, emotional or physical benefit? How is your product different and better than other current solutions? Differentiation is the degree to which your product is better than competing alternatives. Here are some questions to ask in this regard: To what degree is your product so much better than competing alternatives that customers will want to replace what they currently have or use? Have potential customers actually told you that your offering is better? What have they specifically said? Why do they think it is so much better? 5 Page

6 What is the Market Potential for your product? Market potential is an estimate of the total number of customers that will be attracted to, and be willing to purchase and use your product. If you are considering a product that is used by households, then this number may be the total number of households in the United States or a region. Often, inventors are so enthusiastic about their new product that they say, Everyone can use it! This may be true, but it is important to establish a foothold in the market first so don t be discouraged if your business advisor recommends that you consider segmenting the total market and approaching one segment first the one with the highest need or benefit first. The probability of success will go up significantly if you do. If you can answer these three Market Viability questions prior to beginning the business plan, you ll be in good shape assuming the answers are positive. If you do not answer these questions, the business plan will require you to do so. If the answers to these questions are inadequate, investors (you, your relatives, the bank, an independent venture capital fund) will likely not be interested in your idea. Business Planning Resources: Here is a short list of resources to help you with your business plan. Oregon Entrepreneur s Network (OEN): OEN promotes itself as the one-stop shop for young Northwest businesses. OEN s experts will review your business concept and ask the tough questions to help you make it the next big thing. Once you have the concept down, you can attend one of their business plan development seminars to learn the vital information to put in your business plan. This is important, so that you can communicate your idea in a way that is compelling to potential investors. The OEN Website is 6 Page

7 SCORE - Service Core of Retired Executives: SCORE is a group of retired Business executives who volunteer to help small business startups needing expert assistance in planning and problem solving. Score provides both counseling and workshops. In Portland, OR they are located at 620 SW Main Street -Suite 313, Portland, OR Phone Website Local Universities: Local universities that offer MBA (Master of Business Administration) programs are continually looking for projects for their students. Some of these resources are free and some require a small stipend. The One Page Business Plan: This offering can be accessed on the net. While it is not detailed (how much can you fit on one page) it can be extremely helpful in helping you organize your thoughts about your business. Small Business Administration: A small business administration business plan format can be downloaded at Investment: Unless you are already a mechanical part designer you will need some cash to hire the capabilities of a designer. There are many sources of investment and you should have an idea of what the preliminary design step will cost before you start to gather investment. To get this estimate, you will need to share your concept idea with a designer. We will cover what a designer does in the next step. Here we wish only to cover investment. We recommend that when tapping your sources for investment purposes, or loans, you are very clear that this is a preliminary investment that will only get to the design phase or if you ask for more than preliminary funding that you have counseled with a business planning resource. It is simpler and easier to just ask for funding for the next step Design 7 Page

8 Sources of Preliminary Funding: There are numerous sources of funding. The difficulty of gathering funding is directly related to the degree of risk perceived by the potential investor. Banks are probably the most conservative and the most opposed to taking any significant risk. Your own bank account is probably the most likely to be a source of investment because your willingness to invest will be motivated by your enthusiasm for your product idea and you re the only one needed for the decision. Between those extremes, most new ideas are funded by a range of other sources. Because you have to tell a convincing story to get investors interested, we suggest you spend a lot of time and energy to truly and objectively work through your Market Viability Analysis first. Here are some alternative sources of preliminary funding to get you through the design phase: Design: Friends and family: Many entrepreneurs start here. Love may overcome risk but you owe it to your relatives to do your homework in the Market Viability phase first. Small Business Administration: These are really bank loans guaranteed by the Federal Government. Most banks have a section that deal with SBA loan requests 401K borrowing: It is possible to borrow from a 401K to start a business. Connect with the firm that is managing your 401K to learn the details Credit Cards: Again, this is a common source of early stage funding. Before you do this, remember interest rates are typically highest for cards. Design is the step in which a professional and experienced engineer or designer creates a drawing of the parts critical your new product. The word drawing may be misleading so let me explain. 8 Page

9 A drawing is not a sketch. A drawing is a detailed plan and design of the parts needed for your product. Some people call it a blueprint through it is rarely found in blue-paper form these days. Today, designs are all done with specialized computers and software call Computer Aided Design (CAD) Systems. A good designer will deliver a reliable design file that can be communicated easily from business to business. Designers can also assist in providing ideas to make the product better, more useful to the buyer and more easily assembled with the other components of your product. A design will comprise the following: - The part drawn with views from several perspectives (side, top, underneath) - A CAD file of the part for electronic transfer and use by manufacturing Equipment - The measurements (called dimensions) and tolerances (the allowable variability of those measurements). Tolerances are critical because nothing in this world is perfect, and machinery that makes parts has minor variations which cause dimensions to vary over a range. Those variations, though inevitable, must be controlled to assure that parts can always be assembled together. - Material Selection: There is a wide range of plastic materials available. The material for your part must be selected to allow the part to operate in the anticipated range of environmental conditions it will eventually see in use (temperature range, humidity range, atmospheric pressure, vibration, shock, etc). A completed design is essential for the following reasons: - In order for a mold to be designed the shrink and flow rates of the material must be known - Material is a significant part of the cost of a part. Knowing the material allows for accurate parts quotes - The complexity of the part directly affects the complexity of the mold. - Since a steel-hardened mold may be the single largest upfront cash outlay required for launching a new product, the details of the part design and tolerances must be known. 9 Page

10 - Material selection affects the time it takes to fill a mold cavity and the time it takes to set or harden. The longer each of these steps takes the more expensive the part will be. Poly-Cast offers the following list of design specialist for your consideration. These capable professionals have worked with our team in the past. They are experienced in working hand-in-hand with inventors and our engineering team to optimize a part design for highest quality and lowest cost manufacturing. Nathan Satter Covalent Engineering Nathan@covalentengineering.com (503) th St West Linn, OR Bill Huseby Sigma Design bhuseby@sigmadzn.com (360) Broadway Street Vancouver, WA Doug Porter DesignPort doug@designportinc.com (503) PO Box Salem, Oregon The bottom line is that a rigorous design phase is required prior to requesting a part price, tooling cost estimate or quote from a molding company. That s where Poly-Cast comes in. 10 P a g e

11 Prototyping: Prototyping allows a part to be assembled into a final product to reality-check its appeal in the market place, for functional and environmental testing and for demonstrating the concept and its value to potential investors. There are two paths to prototyping: 3D Printing: Creating parts with 3D printing is a mechanism whereby a very limited number of parts can be created with a specialized laser printer. This special-purpose printer works by shooting a laser into a liquid bath of material that looks like molasses. The laser beam crystallizes the liquid in a series of sweeps slowly building the prototype part, layer-by-layer. When complete, you have a part that is exactly what your CAD file design says it should be. 3D printing is slow and therefore expensive. It is only reasonable to consider this approach for prototype quantities of a part. On the other hand it is easy and fast to deploy. Temporary Tooling: Occasionally it is important to create many prototype samples for testing, distribution as samples or because there are simply a lot of similar parts needed in each of the final products. In this case prototype molds are the right choice. Prototype molds are typically fabricated from aluminum. These molds allow many more parts to be created, less expensively than 3D laser fabrication and the aluminum mold will last for some time before the need for hard tooling in steel. The down-side of this approach is that the tooling costs are higher than a 3D laser approach (the mold needs to be cut from a block of aluminum) and once the parts go into full production a harder, steel mold will need to be produced. A discussion between you, your designer and Poly-Cast can help guide you to the correct approach for prototyping. 11 P a g e

12 Moving on Down the Road toward your Vision: We are truly excited when we see one of our customers take an idea from concept to production and success. We have offered this booklet as a tool to help you achieve your vision. We hope you find it useful Compliments of Poly-Cast, Inc ********** 12 P a g e