Baxter IP are patent attorneys (and good ones). What’s more, we can offer unique insights that you might not get from other patent attorneys, because we pride ourselves on being entrepreneurs too. We have hands-on experience in the commercialisation of our own ideas, and we take an active involvement in the commercial success of our clients.
This post will help you to understand the next steps you should be taking once your provisional patent application is filed, to start the process of transforming your idea into a viable business.
Right at the beginning, when your invention is just a concept in your head, it may represent a lot of potential value. But until you take steps to objectively research and evaluate your idea, that potential value is almost completely offset by risk.
From my experience, there are a huge number of questions you will need to answer in order to assess whether you can successfully market your invention. You can sort these questions into three separate ‘proof of concept’ categories, which collectively give you a solid picture of whether you might be able to make money out of your invention.
The first proof of concept is technical. At this stage you need to answer questions around the technology on which your invention is based. These might include:
It is usually quite simple to find the answers to questions of this type.
The business model proof of concept requires you to answer questions around costs, sales and profits, such as:
These are the type of questions investors are likely to be particularly interested in. Remember that investors, especially ‘angel’ investors, are always on the look out for exceptionally good investments that have a possibility of going really big, really quickly (to make up for those other risky investments that will not).
If you’re not very familiar with the business modelling process, a simple spreadsheet is a good place to start. This will allow you to make conservative initial estimates of things like material costs and mark-ups, which you can then adjust and refine as you gather more information.
By playing around with the variables you can quickly establish what sensitivities you have in your business model. For example, you could test what the impact would be if your material cost were to go up by a few percentage points: how much more product would you need to sell to make the same amount of profit?
You will also need to prove your market. To answer the unknowns around this you will need to take a very close look at whether there is a genuine demand for your product – or whether it is really just a solution looking for a problem.
The questions that you need to answer include:
One fact that is confirmed over and again in entrepreneurial talks and discussions is that the only real way to check whether there is a market for your invention is to ASK people.
However, if you simply put your product in front of people and ask them if they like it, there’s a real risk that you won’t get honest responses. On the whole, people are unlikely to be confrontational or uncomplimentary about a product when asked directly – especially if they will never see you again.
However, by taking the opposite approach and asking the kind of questions set out above, you can explore whether there is a common problem among your target market – and therefore a compelling need for your product. This will not only help you (and potential financiers) decide whether your product is worth investing in, it will also give you a strong marketing angle to convince customers that your product is worth the money they will pay for it.
When you make changes to your product design or strategic plan based on the answers to one of these concepts, you can affect the outcome for the other two. So you may need to reiterate this process a few times, until you have established answers to each of the three proofs of concept that complement each other and satisfy all of the requirements of each.
In addition to these three proofs of concept, there are some other important factors to consider:
As you answer more questions around these three proofs of concept, the potential value of your invention will start to crystallise into ‘real’ value – making a much more compelling case for why others should choose to join or invest in your venture.
If you have any questions, or if you’ve been sitting on an idea for a while, give us a call today and get expert advice on how to make it a reality.