Episode 7: Inventions Part 1
Inventing something novel is hard work and is a great way to create a new business. As you’ll hear in this episode, a great invention is just the beginning. Listen in as Doug and Glenn share stories about inventions that have changed the culture, from heart surgery, to traffic safety, to packaged foods. Speaking of foods, Glenn paints a picture of one company so worried about cannibalizing it’s core business that someone else came along and ate their lunch! As an entrepreneur, you want to be that someone.
Transcript
Glenn Suart 0:00
He was so frustrated, five years after coming up with this thing, that he decided the only way to do this was to prove that his idea was valuable and so he… he made up 500 of these units and put them in San Francisco taxi cabs, and they were able to measure that the ones that had the Cyber Light in their cab were involved in 60% (six, zero) fewer accidents.
Doug Ross 0:40
Welcome to Conversations on Startups, a podcast brought to you by Douglas Ross, author of the book Spark Click Go: How to Bring Your Creative Business Idea to Life, and Glenn Suart of Today’s Great Idea, a radio series featuring over 300 origin stories of businesses, brands and inventions that have changed the culture. Welcome to today’s conversation.
Glenn Suart 1:03
…Today’s an interesting one, because we’re talking about inventions and lots of people have had successful inventions. Lots of people have had unsuccessful inventions. And, there’s nothing worse than watching somebody on Shark Tank or Dragon’s Den talking about an invention they’ve made, and it’s not good. And they’ve mortgaged their house to make this thing, and you’re just … you’re hoping that they know when to stop, because sometimes it’s not good. I don’t mean to be negative. But you know, lots of things have been invented, but lots of things have … you might think it’s new, but it’s not necessarily new. So, you have to be careful with what you’re doing with an invention.
Doug Ross 1:47
So are we talking about products specifically today, mostly? Or what about inventing a service or creating a brand or inventing some new business model? What do you think we should hone in on?
Glenn Suart 2:01
I like it all. Everything is an invention of some type. I… I’m thinking today…we’ve talked about a lot of service kinds of things previously. Today I was thinking more along the lines of a physical product [okay], and how some people have created some incredible inventions. I’m not talking about the wheel or things like that, I’m talking about products you might know. I’ve got a story here to share with you, and let’s see if you can pick it up. It was a crazy invention that has become a very successful billion dollar product. But it’s not easy, you know, type of thing. And, sometimes you get inspired to do something. So let me tell you. Frank, was a clever, very focused machinist in California. And, he and his family, his brothers had built a Fresh Food Company. They turned their farm fresh eggs into mayonaise, breakfast batter, and salad dressings, etc, etc, all under a single brand name. But they had a problem, which you can imagine, because when you’re doing dealing with fresh food, you can’t go beyond a certain distance from your farm or your plant, because you just can’t… it’s perishable. So they figured they might get into the frozen food business to sort of reach farther markets. And they did that. And they leveraged one of their popular egg based products. But what Frank did, because he was a machinist, he built this crazy contraption to cook the product using you know, multiple irons on a merry go round thing, then he had employees at certain spots turning the thing over. And then, you know, grilling it [on] the other side. Anyway, he packaged it up – it was pretty good, very successful. And then Kellogg’s came calling and said, we really liked this and they bought it from Frank and his brothers. They bought everything but they wanted the name. And then Kellogg’s took the product, and it’s in every supermarket everywhere has a very catchy slogan. They control 60% of this particular category, and make a billion dollars a year – Kellogg’s – from this one product. Any idea what I’m talking about?
Doug Ross 4:12
Leggo my Eggo?
Glenn Suart 4:13
Leggo my Eggo is exactly right. Eggo waffles [right], ya. And it was very cool, because it wasn’t like this thing… that… let’s make waffles. He knew that they were successful, but he built this machinery to create the waffles quickly and then freeze them, and then, it worked. So to me it’s like a great invention because they took the time and energy – it wasn’t obvious – they found somebody who had the marketing muscle to move it. Long story short is an invention can be very, very successful, but it can also be challenging.
Bridget 4:53
You’re listening to conversations on startups with Doug and Glenn. Thanks for joining us. Let’s get back to the show.
Doug Ross 4:59
Well, you mentioned that Kellogg’s came coming, you know, this is that kind of you make the invention, and then at the other end, it’s selling a billion dollars a year. What’s happening in the middle to bridge the gap between creating that invention and maybe selling it to somebody like a Kellogg’s, or to creating a business, out of it?
Glenn Suart 5:26
In my mind, one of the things is, you got to prove you can sell your invention by, you know, find a market for it, and sell it to them. Lots of people come up with, you know, for example, a blue screwdriver. Okay, Stanley and other manufacturers have thought of screwdrivers, why is yours gonna to be much better? The way you do it is you show them that there’s a market for it, and then if you can go to them and say, look, I made a hundred of these blue screwdrivers, and I charge $200 for each one, and I sold them all, well, then Stanley is going to be very interested in what you’re doing. That’s what this sort of did here. Anybody could make waffles, anybody could have made frozen waffles, I guess, at that point. But, what they did is they proved they could sell those waffles locally. And so then when Kellogg’s had their… are looking for a product to sell, they know that a. the product works; b. that people want to buy it and, c. they just need a good distribution arm. That’s how you… you move it forward. After you invent something, you’ve got to find the market for it and show people, that people will buy this invention. That’s the middle part, I think,
Doug Ross 6:39
Ya, it can take time and money to do that. There’s a company called Baylis medical, which is a Canadian company, just recently in the news. And this is a company that was creating technology which would improve the predictability and the safety of certain heart surgeries on the left side that you need to do… needed to do, and there was no market for this whatsoever, but the creators of it felt that this was an important need. And they built it up over many years, probably, in this case, close to a decade, prove that there was a market, and this was a better way to care for patients. And they just sold that company to Boston Scientific, and took home a $1.75 billion check.
Glenn Suart 7:37
Not too shabby [not too shabby at all]. They wouldn’t have bought that company, unless there was a quality product with the intellectual property and a proven market for it, in the sense that… a potential market for it.
Doug Ross 7:53
Ya, absolutely. And let’s talk about patents. Is this essential when you’re inventing a product, in every category would you say?
Glenn Suart 8:02
Yeah, I think it’s very valuable. Because if you want to sell something, there’s a cost of duplication that other people could just do it. But I think intellectual property is very important, but don’t get hung up on it, because too many people get hung up on spending all their money protecting this particular idea, but they don’t spend the time and energy finding out whether that market… that there’s a market for that product. And so therefore, it’s not that valuable. But I’m not saying don’t do it. I’m just saying, be very careful. I think you have to be careful with inventions. Have you seen any other inventions, Doug, that resonate with you that you think they’ve done it well in terms of getting to market?
Doug Ross 8:47
Well, one that I can think of is something that we all use every day, all day, pretty much. The technology goes way back, but this advancement of the technology was absolutely essential. There was a company called Finger Works and the inventor of this interface, let’s call it, thought they could do much more with a touch screen than what had been done before. We’re all sort of familiar with… picture a slot machine in Las Vegas, and you can touch a few buttons and so on and it will respond or maybe a gas pump or something like this. But wouldn’t it be much more useful if we could make a screen that adapts to the application that it’s running and creating this multi-touch display was an absolutely essential component of smartphones. And smartphones would not have taken off as they have today without this multi-touch display that was invented, not by Apple, not by Blackberry or by Nokia or Samsung, but by this smaller company, that, to your point, not just invented it, but showed that it was it was workable and at least [in] one use-case that people would pay for, and grew it from that. And that really attracted the interest of what we sometimes calling in the trade, a strategic. You know, your Kellogg’s… it’s a big company. They’re sometimes called, strategics, and they have money, and they have an interest if you can show that you’ve got customers and you’ve taken some risks out of the business.
Hey podcast listeners, we’re going to take a short break. If you’re enjoying the show, feel free to invite your friends, remember to subscribe, and if you want to help spread the word, leave us a review on Apple podcasts or your favorite podcast app. Each episode of Conversations on Startups focuses on a single topic. If you want to comment on something you’ve heard on the podcast, or suggest a topic for us to cover in a future episode, send an email to go@todaysgreatidea.com, or douglas@sparkclickgo.com. Glenn and I appreciate you, and hope you find our uncut and unrehearsed stories, perspectives and tips helpful. Speaking of helpful stuff, let’s pick up where we left off.
Glenn Suart 11:19
So the invention I guess, at the end of the day is not just the physical or the intellectual property behind the invention -it still is – selling the idea that the idea of a better mousetrap, that people want to buy. Here’s another example… [it’s] very cool. I did a story on this one. I won’t bore you with all the details, but this guy named Steve was working in the r&d lab at a… at a major company, and he was given this charged coupled device, and he he was told to invent something. And he did. It worked really, really well. And then his guys… he told… he showed his bosses and the bosses thought this is really wonderful, and then they said, what are we gonna do with it. And then they decided to do absolutely nothing with it, because it was going to cannibalize their existing business. And we’re talking about the digital camera at the end of the day. And it was invented by a small company called, Kodak, which of course, was dominant in chemical cameras for over a century. They were very smart in r&d, they spent money there, they invented lots of things, but they couldn’t get it out of the lab. And they couldn’t figure out a way of marketing it correctly, because they didn’t want to cannibalize their existing billion dollar business. But because they didn’t, others people invented other versions of the digital camera, and essentially ate Kodak’s lunch, and Kodak went bankrupt finally, because they… they weren’t ready to move. But they’re the ones who invented it, but didn’t do anything with it. And if they had just done something else, created a side version of the business, they could have dominated this space forever.
Doug Ross 13:05
Always better, I think, to cannibalize your own business than to have somebody else come out with something like that and eat your lunch, and make you (really) irrelevant. It’s amazing. But from an entrepreneurs perspective, this shows that there’s reasons that big companies will not be the most innovative. They’ve got so much invested in their existing technologies and the distribution networks and everything else, they can’t see the next curve of innovations coming out, and necessarily how that’s going to benefit them. So, I think that’s a great reason that entrepreneurs are better suited to creating a new future.
Glenn Suart 13:52
Yes. So what you get is that there’s gonna be a lot of rejection of your idea and your inventions for long periods of time. People might just not want to do anything with it. And it might cause all sorts of problems, but if you stick with it, you might be able to get somewhere. You know, sometimes also, a great invention outlasts stuff and people. There’s another invention, I think is worth talking about here… because it talks about, you’re not going to get rich overnight, you might have to prove it out, prove out the value of your idea. This other story that I find really compelling because it’s about people saving lives and everything else. There’s this guy named John who was a psychology student at Stanford, California, and one day, he was driving along and he witnessed a terrible, gruesome, multi-car accident on a San Francisco freeway. He was so shocked that he thought there’s gotta be a way of helping prevent big accidents. And so, he took time off from his PhD and he created a thing called the Cyber Light. And he went to automobile manufacturers and suppliers, they weren’t interested. He applied for government agency grants [and] got turned down. He was so frustrated, five years after coming up with this thing, that he decided the only way to do this was to prove that his idea was valuable and so he… he made up 500 of these units and put them in San Francisco taxi cabs, and they were able to measure that the ones that had the Cyber Light in their cab were involved in 60% (six, zero) fewer accidents. So suddenly, of course, a. taxicab companies wanted it, then the government was interested, and insurance companies, of course, were crazy interested in this. And what this device essentially became, is the third rear brake light on a car, you know, the one at the top? [I do, ya.] And, he didn’t make a huge amount of money off this – very little as I believe – but talk about what he’s done, it’s now standard equipment for the last 30 years on every single car and truck manufactured and sold in North America, saving like literally countless lives. Apparently over 200,000 fewer accidents across North America every year. And it’s just this great, wonderful thing that this guy invented out of nothing and had to prove to everybody how great it was.
Ali 16:28
You’re listening to Conversations on Startups with Doug and Glenn, merci pour nous avoir joindre.
Doug Ross 16:33
Well, that’s a key point you’re making – it’s proving it somewhere. Pick a group of users, find some innovators out there that are willing to try something new. There are always customers that are going to be looking to try something new, there may be on the edge of what’s happening now and they’re looking for that. Find that, you know, or find somebody, as I think your example points out very well, who has a big financial stake at play, like the insurance company here, get them to sponsor a test, maybe… I think the idea of showing it – show, don’t tell – is just worth so much more to investors, to employees, to companies that might be interested in buying your invention. I think that’s the key thing in that story that I hear from you. But you know, you also point out to the fact that didn’t turn into much of a business for that person. So there’s probably a flip side to this, too. He left out the business model part, or maybe the patenting [that’s right] part or something there.
Glenn Suart 17:41
Ya, there’s lots of stories about that to too. Just because you invent something, it’s possible that people will take advantage of it. To your point earlier about intellectual property, I think a key thing for anybody who comes up with an invention in their own mind is to see if it already exists in some form. [Absolutely, so you should do a patent search], go to Alibaba. [Oh, good point, right.] You know, Alibaba is great, because it’s Asian manufacturers, and you gotta search for keywords, of course, but if you can find something out there, [or] if you can’t find something there, that’s a good chance that hasn’t existed. [Yup]. So it’s important that… not to reinvent the wheel. [Totally agree]. You’re the first guy to do it.
Doug Ross 18:26
Totally agree, you could waste so much time if you’re doing it, find something that has not already been done. I think those are good things to do – a Google search, obviously, when it comes to patents, now, there are services out there that help you do patent searches, applying things like artificial intelligence, for example. There are patent lawyers, you know, if you’re serious, I would recommend finding a patent lawyer. Somebody especially who has experience in the field that you’re in, and have them do a search to see if there’s already intellectual property – prior art out there, or a real product, like you say. I think all those things are essential steps in… in taking your invention and creating a business out of it. It’s one of the best ways to create a business. I love it, but it’s got to be done in the right way.
Glenn Suart 19:18
So to summarize, what would you say our summary is for today for somebody who’s got an invention and wants to do something with it?
Doug Ross 19:27
I think the summary is to realize that it’s more than just the invention. The invention itself is important. Make sure it hasn’t been done, as you were just saying, but it’s more than that. Where’s…. show me a customer, show me five customers, show me 15 customers. Show me that it’s working in some functional way, it can meet a standard or do something better than an alternative that’s out there now. Build a prototype, all of these sorts of actions, these physical actions and mini tests, put you in the right direction, but realize having just something that works isn’t enough if you don’t have a customer out there that’s going to pay for this. I think Thomas Edison actually had that as his proof of a worthy invention – that somebody was willing to pay for it.
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