Advice for inventors and start ups

Supporters - Friends, Family and Fools ...

We’re often approached by small start-ups and inventors and asked the best way to bring an idea to market……unfortunately there is no easy way, just a lot of hard work!

Unfortunately, creative people often seem to struggle to get anyone to take notice of their invention however ground breaking and many great ideas fail to be developed, let alone turned into widgets and sold! So we have put together this short article to help you develop your invention and identify some of the companies that specialise in this type of work.

Legal matters and your Intellectual property

If you do nothing else, you should protect your invention with a patent, otherwise you cannot prevent others from copying your invention and you will find it very unlikely that anyone will invest their time and money to turn your invention into a product.

Patents give their owner the sole ‘rights’ to the invention for a certain period of time (usually 20 years) and are granted by a national body provided the idea is “novel” and an “inventive step” i.e. “non-obvious”. In order to be novel, you must not disclosure your invention in the media or to anyone that hasn’t signed a “Non-disclosure agreement” (NDA) with you. As with many things associated with the law, patents are expensive and it would be a false economy to write a patent yourself, because you may find it worthless should a future claim arise. Normally, you can spread the expense of the patent by drafting one application which is filed in your home country, before filing the same application in other parts of the world through the PCT (Patent Cooperation Treaty) system.

This could be advantageous, as your local patent office will undertake a search of their database before granting a patent which will often cost less than separate searches in each jurisdiction and could find similar inventions to your own more quickly than the PCT search. Alternatively, your idea is unique and you will then be in possession of a patent that could be valuable if you need to look for investors or to sell your product in your home country.

Either way, it is worth discussing the options with your patent attorney as he will be able to advise you of the best way forward in your case. In the UK, all patent attorneys must be registered with the Chartered Institute of Patent Attorneys (CIPA), where you can find your local agent.

Building your prototypes

For all but the simplest invention, you will need to make prototypes. The early versions don’t need to look good and yes, we do mean more than one prototype, as it is unlikely that the early ones will work first time, but eventually you should be able show how your invention will function reliably.

We’ve all heard of how James Dyson spent five years and made 5,127 prototypes before he invented the world’s first bagless vacuum cleaner. Hopefully, you will be just as successful and a little faster, although we would suggest that in the early phase of development this should be something you produce yourself in your ‘shed’ so to speak, unless you have very good financial backing!

So you now have something cardboard and stuck with tape, where should you go from here? Naturally that depends on how complex your invention is, but it is worthwhile paying for the expertise to make it look good from the start as you will want it to look professional.

If it is just a mechanical model, then it is perhaps worth considering a professional model-maker. They can create almost anything in small quantities using a mixture of resin moulding and 3D printing. However, if your invention doesn’t require any fancy mechanics, maybe you can leap ahead and make your prototype an early production model?

In that case you should carefully consider using a good mechanical engineer to produce a CAD model which can then be used to manufacture the mechanics on a small scale. There are several companies that can do this. Some specialise in modifying standard plastic case, whilst others will manufacture a more custom style case, but if you need something a little smarter, then you can’t beat a moulding.

In the past, mouldings have cost serious money (>£20K) and are still used for high volume items. However, for small quantities e.g. <200pcs or start up situations where money is tight, then silicone moulding is a great way to straddle the cost/quality divide between a case or 3D printed model and an injection mould tool!

Industrial design and your product

However, before spending any money on a prototype it may be time to consider your industrial design. Engineers and inventors are not renowned for their flare as product designers and you are unlikely to win any customers if your invention looks like an ‘A’-level students engineering project!

Any money spent is likely to be well spent in our experience, although be careful to make sure that you understand how the perfect CAD model of your invention can be manufactured when the time comes. Provided this is the case, an industrial designer will normally supply a 3D and 2D CAD model which can be used for producing a prototype or in small scale production.

Usually a 3D printed space model is produced which can be useful for testing the fit of any components before a full prototype is made. It is even possible to use the CAD designs for marketing purposes in brochure or adverts.

Do I need Electronics?

As the cost of electronics has fallen, the number of products containing some form of electronics has risen substantially in the last few years. Greeting cards now contain simple electronics and many other products contain quite powerful microcontrollers or Digital Signal Processors (DSP).

However, as bill-of-material costs have fallen, the complexity and cost of developing these systems have increased. There are a number of ways to improve development time and so reduce cost using the multitude of development environments available such as Arduino or mBed, but often specialist knowledge is still required to overcome many problems that lurk within these systems.

So for this reason and to ensure product reliability we strongly suggest using a design service rather than developing the electronics yourself. Try and choose a company that specialises in the area of electronics you need e.g. embedded systems, radio, audio or software and their service includes all the necessary services such as PCB layout, prototyping and ‘pick and place’ so that you can ensure the robustness of the design before it is launched.

How to get funding

Despite the recession, investment is still available for the development of good ideas. Crowdfunding has become very popular in recent years with many inventors receiving funds to produce prototypes or even as advanced orders. Crowdfunding relies on many people putting a small amount of cash into a company/inventor’s pocket and so tends to work well for small low-value items, or the cheaper end of the technology market, e.g. <£500 per unit. It doesn’t tend to work for higher value items where you will either need a Business angel or self-funding.

Most people are familiar with Dragon’s den, where inventors and entrepreneurs ‘pitch’ for investment from a ‘Dragon’. Business angels use similar principles but usually need a detailed business plan before they will listen to a ‘pitch’. Their aim is to make your invention commercially successful as quickly as possible with a view to selling the company in between 3 and 5 years’ time. Often they are looking for a 30 to 40% stake in your business for their investment and this means some control by the inventor is lost, although a business angel can bring good business knowledge and marketing as well as money with them which can grow the business faster and larger than would otherwise be the case.

For those inventors needing full control, self-funding is the only way forward. Investments may come from the 3F’s (Friends, Family and Fools) and will probably need topping up with loans or re-mortgaging of your home. To soften the cost, the government supports small business through 3 agencies that may be worth contacting. The Manufacturing Advisory Service helps business by providing ‘matched funding’. These are grants (not loans) which share between 30 and 50% of the cost of development, but the grant total doesn’t usually exceed £5K in any one year.

Growth Accelerators, is another government agency providing support in running your company. However, this can extend to market surveys and mentoring which may be useful in the later stages of your project. Finally, if you are working on something ground breaking then the Innovate UK (previously known as the Technology Strategy Board) also provides funding through ‘innovation vouchers’ and ‘smart grants’.

Selling and marketing your idea

Selling and marketing your idea couldn’t be easier in the days of the internet, or at least that is what we are led to believe these days. The reality is that it is still tough to find customers and you will need to knock on doors just as much as in days gone by. But there are things that you can do to make your presence on the web better known.

The obvious first step is to create a website which looks professional and contains useful information about you and your product. There are many web developers willing to write and host one for you. Most will boast about their abilities to get you noticed by Google and the other search engines, but the truth is there is no magic bullet to Search Engine Optimisation (SEO), only a few tricks that you can try yourself. Bear in mind that you will need to update the website with your own content and this could mean an ongoing cost if you use a web developer.

An alternative, is to use one of the many hosting company tools which produce some quite impressive websites in a user friendly way. However, they do involve higher hosting costs and moving to a different hosting company can be difficult should the need arise. An alternative solution is to write your own website with tools such as NVU, Blue Griffin and Fileziller that are freely available and use a hosting company that charge by the web page and has freephone customer support. Don’t forget to check your code before uploading it with one of the free website code checking platforms.

Social media should also play a role in your market strategy and linking your company Facebook/Twitter/LinkedIn pages will help with SEO. It is also worth investigating how Amazon and eBay can be used not just as a selling tool, but also for ‘Fulfilment’ of your orders and for warehousing. Bear in mind that product size as well as weight affect these costs and consider these before your product design begins. Otherwise, the extra centimetre in product height could cost you a lot more than just the box.

Finally, it is always worth joining the old fashioned business directories such as Yell, Scoot, FreeIndex, Streetlife and Lacartes which are free and always introduce your website to Google and Yahoo once uploaded.

Contract manufacturing

Perhaps by now you will realise how much work is involved in product development and you are wondering whether there is an easier route to success?

Technology licensing is often used by individuals to get their product to market. Normally, a good prototype is all that is needed and some persistent marketing skills to get your foot in the door with another company. Detailed market research and meeting your chosen company at a tradeshow are often more successful methods of meeting your licensee than simple cold calling, but if you are successful the royalties can be substantial without the sweat of running your own business.

Alternatively, there are contract manufacturers who will make your product for a price. If you have high volumes planned, then there are large companies who will undertake the design, development and manufacture of the whole product including manufacturing in the Far East (if desired).

Should you need something a little more home grown, there are many smaller companies which undertake smaller volume manufacturing and shipping. Some manufacturers will make only certain items like the PCB, whilst others will undertake complete product assembly. Initially, the costs may appear more expensive, but after factoring the cost of several trips to the Far East and the long lead times involved this could be a small price for the added flexibility afforded by a UK supplier. .

CE Marking and product safety

Under EU regulations the equipment supplier is ultimately responsible for the safety and compatibility of their products which ultimately means you will be liable unless you can show due diligence that a process has been followed. To show your product conforms to the regulations, each is sold with a ‘CE’ mark and certificate of conformity.

In our experience CE testing is quite an involved process and not for the faint hearted! We would strongly recommend using a registered test house for all but the simplest equipment. They will perform all the Radio Frequency Emissions and Immunity tests and will also assess the products safety and should be able to offer advice should your product fail.

Tax and VAT

After all the expense of turning an invention into a product, your funds may have been depleted to such an extent that you may need extra capital to start the manufacturing process. An alternative source of funding which is often forgotten is to register and claim back the VAT you have already spent on goods and service to develop your invention into a project.

This can amount to a substantial amount of money and it is legally yours to claim provided you are a VAT registered company and you have kept all your receipts.