Episode 8: Inventions Part 2
Benefits, benefits, benefits. What would you do if you and your fellow founders invented textured wallpaper and nobody seemed to want it? Listen in as Glenn shares the story of how an invention that started out as wall décor became a cushion virtually everyone has had in their home at one time or another. Find your use case and invent a business.
Transcript
Glenn Suart 0:00
Having a prototype allowed them to do something with it and try it and see if different industries would want it. They initially thought it was one way, but some other industry needed it and it became this great product, which you would never have thought would have come from textured wallpaper.
Doug Ross 0:29
Welcome to Conversations on Startups, a podcast brought to you by Douglas Ross, author of the book Spark Click Go: How to ring 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.
Hello, this is Doug Ross. Welcome to another episode of Conversations on Startups with Doug and Glenn. Today we are going to take a second look at inventions as a way to create a business. We discussed this and realized from that previous episode that there were a lot of things still unsaid about that important topics such as manufacturability, scaling, prototyping, etc. So I am here today with Glenn Suart to continue that conversation. How ya doing, Glenn?
Glenn Suart 1:29
I’m doing great, Doug, this is a great opportunity for both of us. Because you know, we get people, you get people, I get people talking about inventions, they want to do something with them and they’re not sure what to do. So, yeah, we left a lot of stuff that we didn’t talk about the last time. So let’s just jump right in and do that. When people come with an idea. What do you suggest to them at that point?
Doug Ross 1:51
Well, one thing I look for, you might see a pitch deck, for example, and I like to see that the inventor has done the work, the homework, to figure out what the manufacturing cost might be for said invention, which means that they’ve perhaps talked to a manufacturer, they’ve looked at what the raw materials are going to be, the process/ processes, maybe and they’ve got a rough idea of what that manufacturing cost would be, how it would change with volume and what the relation between that manufacturing cost is with their anticipated price. So that right away, in an advisory role, or as a potential investor might look at this, what kind of profitability could they be looking at here? And then secondly, how scalable is this?
Glenn Suart 2:54
Yep, that’s a really good point. Because people do not think about the business behind the invention. That’s half the battle that we talked about a little bit last week. You’ve got to know what it costs and there’s lots of ways – you don’t have to be a manufacturer, you don’t have to know one -you can figure out roughly what other people do. I’ve got a client right now who’s got an idea for an air filter that helps with Coronavirus, clearly industrial, commercial residential applications, etc. They don’t know what it costs, or they know what it costs now. But what they were able to do was get a sense of what other filters cost by going to places like Alibaba or elsewhere to see what a wholesale cost would be for a similar product, and they just applied that, and then they figure out what a good profit margin would be on top of that, and then they were able to sort of put some numbers together because of that. And then they could see if they felt right, and they’ve done now. So, for example, if you’re creating a widget, you can find out that you know, all the parts cost $1, terrific. But you got to, you got to sell it for more than $1.10. You got to sell it for maybe $2. Because you got to pay for your operating expenses outside the product. And then you got to make sure that, okay, you sell it wholesale to somebody, if you sell it wholesale, that those people can make the margins as attractive to them. And so that the price point for the end consumer or buyer is worth it. But you got to make sure you’re making enough money at the end of the day otherwise, not so good.
Ben 4:33
You’re listening to Conversations on Startups with Doug and Glen, thanks for joining us.
Doug Ross 4:41
Yeah, I agree. And I love the fact that you bring into it, the distributor here. If it’s not attractive to them, and they’ve got a bunch of other products that they’re pushing out there, then yeah, they’re not going to be too happy. So thinking about that whole chain I think is is really important. But your bigger point, thinking about the business side of it, I think that’s really important, because inventors tend to as a group, this is not obviously completely true, but tend to get wrapped up in their invention in the technology, maybe the application, but don’t think about the business side of things. So I think that’s right.
Glenn Suart 5:24
It’s a painful process. And of course, your first prototype, you’re going to spend a lot of money getting it right over and over again. You’re gonna polish it, figure it out, test it, the color could be an issue, all these things you don’t know, see, you spent a lot of money to get it to the right point and then you figure out whether you can actually… the prototype is manufacturable. Just because you’ve got it doesn’t mean that you know a manufacturer can make it. You might have to make changes, so the manufacturer could do something. For example, on our cooler business, we wanted to do something specific with our logo on the side of the drinkware – business we’re actually selling and doing as well as the cooler business. It wasn’t easy. We thought it was very simple in a prototype, but when you get to the manufacturing, it’s hard to produce that on scale so we had to make a few changes. These are the things you go through when you’re doing an invention. You might have the general thing, but to get it to market and to make it scalable, you might have to do, you might have to alter it, somewhat?
Doug Ross 6:28
Yeah, I can totally relate. The diagnostic company that I’m embedded with now and have been for almost two years… we are creating a saliva collection kit and so two things with that: we had a prototype created and took it around on our summer vacation and would let people try this thing out, and it was interesting to see if you just put it into somebody’s hands, they could quickly maneuver a movable part there and you see it break in front of you and you just kind of go “oh, okay, that needs to be a little more robust, you know, or we need to sell it… we need to include directions or something.” The other thing is the material types, whether it works technically in this case, it’s a diagnostic kit, so you can’t just pick any material. Your imaging technology might not work with it, you might get the saliva or the reagents sticking in the in the wrong way. All these little factors come into play, so I think manufacturing is a really important thing. There are good ways, though, to get a good estimate as to what that might cost.
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 8:21
I like keeping it simple. What is it? How much does it cost? Do people want to pay for something? One of the stories I did here… you ever heard of textured wallpaper, Doug?
Doug Ross 8:33
Not as a product per se, but I’ve heard those two words put together before.
Glenn Suart 8:37
Well, there’s these three guys, Al, Mark and Fred who thought they’d come up with the greatest idea ever, textured wallpaper. And they thought, hey, let’s, let’s put these two shower curtains together and that’ll create this effect. There’ll be ridges and all that kind of thing because there’s air in between the stuff and it was fine. So they formed a company and they started to try to sell it. It didn’t go anywhere. Nobody wanted this textured wallpaper. And then they thought, oh, okay, well, this isn’t working. Then they try it, oh, maybe greenhouse insulation, that’ll work for that. No, that didn’t work either. And they’ve been working on it for three years and then one of the guys, Fred, had an idea that IBM was introducing their new brand new computer, which of course was a very sensitive piece of equipment, and they thought that maybe their product would help that computer arrive in pristine form. They pitched it to IBM and IBM loved it and pretty soon every IBM product came wrapped in this textured wallpaper. Do you know what I’m talking about as a product?
Doug Ross 9:42
Well, I’m thinking it’s either bubble wrap or it’s that sort of wavy, corrugated cardboard?
Glenn Suart 9:46
It’s bubble wrap! It was those two shower curtains put together to create a product that… for the wrong / it was for something completely different. And I guess the point I’m trying to make here is that having a prototype allowed them to do something with it and try it and see if different industries would want it. They initially thought it was one way, but some other industry needed it and it became this great product, which you would never have thought would have come from textured wallpaper.
Doug Ross 9:47
It’s a great idea, and I just think prototyping is so important. It just has to be sort of functional. It doesn’t have to be pretty. [Yep] Do it quickly, change it up where it’s not working and get it into the hands of in this case, they tried it with target users, and had to keep looking. So that’s, that’s interesting.
Glenn Suart 10:38
And they had the wherewithal to do that. This is that term that people use – minimally viable product. Create something that’s got… that delivers the benefits that you’re talking about, so people can see it and touch it and smell it, and they go oh, okay, I get this, refine it some more and we’ll do it. Yeah, really, really important in an invention.
Doug Ross 11:00
Yeah, I agree with you. Another quick story on the manufactureability is … do you know. Burt’s Bees? Yeah. Okay. So, Roxanne Quimby is the person behind that – she wasn’t the only person but really was the primary driver – and they started with candles, because there were bees, it was Burt’s Bees, and this was I think, Maine or Vermont. Turns out candlemaking is not necessarily that scalable. But one of the things they thought of was lip balm, it was only a couple of ingredients and she thought, ah, that we could manufacture at scale. And that was their most successful initial product -t hey have a lot of other products – but she had that in mind when she was thinking about how could she go from a very labor intensive, let’s-create-this-product-take-it-down-to-the-farmers-market type of scenario to something that could go into big boutique, sort of gift shops, something like that. You know where she started and then on an upward from there, but very few ingredients, very manufacturable.
Glenn Suart 12:10
Okay, well, this is good. So, it really comes to understanding your market, figuring out what the product can and cannot do. That prototype is critical. You’ve got to be able to demonstrate it in some way. But that’s why inventions take so long, and they’re not easy to do at the end of day. One thing that I find always helpful for inventors is to think – because some people think they’ve invented something special, and they may not have invented before – and again, to look at a couple of sources totally free. alibaba.com is a great source of what people are manufacturing in Asia. You can sort of, type in some keywords and see if you can find something similar to what you’re talking about because you can then… you can make a difference. You could find something similar, that’s great, you now know that somebody else is selling it. The other thing is to look at the US Patent and Trade Office (USPTO.gov), that you can easily search for keywords for patents and the published applications and get a sense of people are creating stuff similar to what you’re doing. Doesn’t mean because a patent exists that you can’t do anything, but it’s a helpful thing to know, when you’re talking to investors and others what your thing is and what your thing isn’t, and to show that you figured out that there’s no competition or there’s somebody else, but they haven’t done it well. That’s really important.
Din 13:37
You’re listening to Conversations on Startups with Doug and Glenn, thanks for joining us. Let’s get back to the show.
Doug Ross 13:46
I think so too, when you can do it on your own, it’s a good start. But if you’re moving along, and you’re putting time and dollars into this, I highly recommend getting a patent lawyer involved, especially one that’s familiar with the field, just to see like you say, are you stepping on anybody else’s…can you create a patent here, and of course, there’s other things you need to do beyond creating a patent – but you need to be thinking about whether you can defend it, but at least that’s a good first start. You know, why put blood sweat and tears into something that that’s not defendable, and that’s not investable. You may not find an investor willing to come in and take a risk, but if you’ve got some good protection and you know the patent space, that’s going to make you a lot more attractive.
Glenn Suart 14:33
Yup, so, have an idea, have some intellectual property if possible, make sure you understand whether you have intellectual property or not. Those are critical things in talking to an investor.
Doug Ross 14:46
Yeah, that plus the manufacturing and then if you have any of this customer contact and traction, is it clicking with customers, and which customers, what’s the use case. If it doesn’t work to make for nice decor on people’s walls, keep shopping it around, you know. Bubble wrap is everywhere now, it’s a great thing. I’m not so sure it’s great from a 360 degree, take the product all the way to the end, but you know, I think it probably stands up well compared to styrofoam. That stuff you can’t break down, it takes up so much space and takes forever, but yeah, you know, find the use case. That you… told another story in a previous episode that we had, which was the Post It notes, which is a similar kind of thing. Where does this non sticky glue work? So, I think all of those things are really going to round out any inventors quest to create a business. It’s gotta be a more holistic approach than just hey, I can make this thing and I can make it work. Okay, that’s great. Step one. Is there a business opportunity here? Yeah, that’s really the question we’ve been talking about in today’s episode.
Glenn Suart 16:00
Benefits, benefits benefits. That’s what you’re selling at the end of day one, no matter what invention or service you have, you’re selling the benefit of what the invention will do for somebody else. All right. well, this has been a great episode. I think we’ve covered off a lot of the stuff we didn’t cover off last week with inventions. What do we want to talk about next time?
Doug Ross 16:19
Well, there are a lot of myths around being an entrepreneur. Oh, you know, they’re risk takers. Excessively taking risks would be one that comes to mind right away, but there are many others as well. So I thought it would be interesting if we did a little bit of myth busting. What about you?
Glenn Suart 16:39
I think that’s an excellent episode because there are a lot of myths and you see these people like on Shark Tank and Dragon’s Den again, who…who think that they’re gonna, you know, be really successful instantly, because somebody put some money into their business, and that is not the case. There’s so many myths, I want to knock them down a bit. So you go into what you’re doing being entrepreneurial, eyes wide open.
Doug Ross 17:13
Conversations on startups is a production of Glenn Suart and Douglas Ross, we hope you’re having fun listening, but mostly that you take action on your business idea. For more inspiration, visit our websites todaygreatidea.com and sparkclickgo.com. Another episode of Conversations on Startups will drop soon or is already available to binge. Thanks for joining us and remember to subscribe and invite your friends. See you next time.
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