I admit it! I fell for it hooks, line, and sinker. It seemed so easy! Come up with an idea, file a provisional patent and pitch it to a manufacturer. The manufacturer is so giddy with excitement that they file a patent for you and let you retain the full exclusive rights. Not only that, the company would further develop the idea and give those rights to you too. On top of this, they would pay you royalties for sales of the patented product.
I got this idea from attending the talks of so-called patent gurus. Based on my experience, I now call them the false prophets of false profits. I wish I had done some research into their claims. I have found that most of these gurus have few patents within an extremely narrow scope. For example, multiple patents for one type of low margin product. But what they said sounded so good, and I wanted to believe. What a mistake.
It generally takes a lot longer and costs a lot more to get an idea licensed. New ideas are hard to sell. The capable companies are not interested because they are generating their own ideas. The not-so-capable companies might be interested but would probably drop the ball. Most workers at these companies just want to make it through the day. An unfinished product looks more like work than an opportunity. It is also risky. Employees are not compensated for risks but are punished for failure.
However, I did not let go of the idea of easy money quickly. For the longest time, I kept thinking that the next step would get the thing going. That is, if I just push the thing a few inches forward it would go over the cliff. However, it was more like pushing it up a mountain than over a cliff. It was not until I had the fully finished product that I was able to get it licensed. In a sense I got it to the top of the mountain. If I had known that I had to completely finish the product, I would have done things differently. I would spend more on long term goals and less on short term fixes.
Another thing I did was sign up for expensive intellectual property insurance too early. The product was complicated, It took about 3 years to get the blades right. We showed the blades to many cutlery experts and were told they could not make them. Despite this I continued to keep the insurance.
It was unlikely that the product would be knocked off before it started to sell. Again we are back to risk versus opportunity. Knocking off a successful product is an opportunity; knocking off an untested product is a risk. An unscrupulous buyer might hand a sample of the product to one of their suppliers to be knocked off after it showed potential but not before.
In addition, I found out late about the US governments Stop Fakes program. I could register my patents, trademarks, and copyrights with US customs and counterfeit products are seized at the border. The costs are far less than the insurance.
Now, there are many law firms that offer to take cases on contingency. I am told that all involved with the fake product are liable. If I had known, I would have registered the patents, trademarks, and copyrights with US Customs and talked to a lawyer about contingency work. The insurance would wait until after the product started selling through.
Too often in developing my product, I was lazy or in a hurry. Take the packaging for example, I did not want to take the time or make the effort to learn how to do it myself. So I spent upwards of $10,000 for results that were useless. The packaging was flimsy and the graphics awful. The text was white on a pale yellow background. The acrylic box cracked and fell apart. So I had to redo it myself. I spent 20 hours learning PhotoShop and redoing the packaging. The costs were around $900.00. If I had known, I would have done it myself from the beginning. Ignorance is not bliss; it is expensive. It pays to know something about the details of all facets of the product.
Dealing with contractors was challenging. I tried too hard to be the good guy. Because of this, some of the firms I contracted with gouged me. One firm charged me $15.00 to sign for a package. They also charged me $30.00 to watch an emailed video. They submitted a bid of $6,000 for the work and estimated that it would take 4-6 weeks. The final bill was about $18,000 and the project took 9 months.
If I had known, I would have put performance clauses in the contract. The time and costs would be specified. There would be penalties for missing either. In addition, I would ask questions about who was doing the work. There is no reason to pay a firm top notch prices for work done by an inexperienced worker. It is not unusual for firms to subcontract work.
Services stunned me with unexpected costs. The shipping company required an additional weekly payment to pick up packages. And I found out that the warehouse charges rent for the pallets and storage fees for inventory. Although I had done a detailed cash flow analysis, I overlooked these charges.
If I had known, I would have asked questions. Although the warehouse submitted a quote, I could not understand it. So, I let it slide. Now, I would probe until I understood and uncovered any additional charges. I would do the same for other service providers. The individual charges are not that great but on a whole there are a large number of them. An analogy might be death by a 1000 cuts.
I had a lot to learn about online advertising. I should have lain out a strategy before I started. I fired off a pay-per-click campaign. This was a disaster. The average costs per click were around $0.75 for a position on the first page. The conversion rate was about 3%. For 100 clicks, 3 people would purchase the product. The margin on the product is about $8. Therefore the 100 clicks would cost $75 and net $24. All this should have been apparent at the beginning. But I was in too much of a rush to build up sales to consider the numbers.
Another big mistake was not to register my pages with the top 3 search engines. This was a big oversight on my part. And when I did, I did so again without a strategy. I was not careful in my design of Web pages. I did not make the most of keywords, titles, descriptions and other features. The message was confusing and sometimes contradictory.
I continued the drunken walk approach when I registered my site with online directories. If nothing else I was consistently inconsistent. If I had known, I would have taken care to craft my message and lay out a strategy before launching an online advertising campaign.
Despite all the pain, I found this experience to be very rewarding. I have learned a lot and continue to do so. Looking back on my journey, I wish I had gotten better advice in the early days, although there is no guarantee that I would have listened. But now that I have a successful product on the market and have traveled a rough road to get here, the one piece of advice I’d like to give all new inventors is expect the road to be rough and be prepared to learn many lessons along the way.