Surviving the Dead Zone: Working on Inventions before they have value.

Are you an inventor who's just starting out and looking to commercialize your intellectual property? Do you have multiple ideas and are unsure of where to start? Or are you seeking funding or a commercial partner?

If so, you're not alone. In my practice, I come across many struggling inventors who are full of enthusiasm and positivity but unsure of how to turn their ideas into that successful business venture.

One of the most common questions these inventors ask me is, "How much would my idea be worth?" and "How much do I need to give away to any prospective investor?" Interestingly, these questions generally have a common answer, which I'll delve into shortly.

However, before we get into that, let's talk about the early-stage commercialization process. At the ideation stage, your idea has little or no intrinsic value, regardless of whether you have a patent or not. To start building value, you need to develop your idea into a concept. While a concept has promise and opportunity, it may still not have provable intrinsic commercial value.

This is where many early innovators go wrong. They focus on developing multiple ideas into concepts before pushing them to investors. When investors don't materialize, they move onto the next idea. Alternatively, some more focused inventors believe that adding value involves applying for a patent.

While a provisional patent may be cheap, it can quickly become expensive. Patent attorneys exist for a reason - to help you survey the current field and determine if your idea is unique or novel. It can take up to 12 months and a lot more money to find out if your idea is patentable.

Additionally, a patent attorney's ability to predict your marketing success for the project is still zero, as they have no access to independent market validation. They also can't prove from design drawings whether your invention can be built and made to work.

So, what's the common answer to the two questions we started with? The value of your idea is determined by the market. To find out its true value, you need to validate it in the market. This means reading all of the articles and publications ABOUT THE PROBLEM, and getting feedback from potential customers. By doing this, you'll be able to gauge whether there's a demand for your product and what price customers are willing to pay.

Once you have market validation, you can start to calculate the potential pricing and value, to negotiate with investors. When it comes to how much you need to give away, it depends on the investor's risk profile and the amount of capital you need. If you need a lot of capital, you may need to give away a larger percentage of your company. However, if you have market validation and a proof of concept, you may be able to negotiate a better deal.

In this early stage, some more focused inventors decide the best way of adding value, is to apply for a patent. A provisional patent in itself is cheap, but it can get expensive very quickly.

Firstly, there are patent attorneys out there for a reason. If you do this yourself, you will not know how to survey the current field to determine if what you have is actually unique or novel. It may take 12 months and a lot more money for you to find that out.

If you spend money on a patent attorney, he will need design drawings, descriptions and much more, in order to search the available public domain and then register what he believes might give you that novelty.

BUT, as a patent attorney, his chances of predicting your success in the market are still ZERO, because he has no access to any independent market validation. He also can’t prove (from design drawings) whether you can actually build this and make it work.

This is why instead of a patent application at the ideation stage, you are best spending the money you have on just 4 things:

1.??????A non-disclosure agreement; this is what everyone you disclose this idea to, will need to sign, in order to maintain your ownership of the secret ide, before you patent it.

2.??????Market Validation: This is not about paying $50,000 for a marketing report on when buyers think of this. It is more about hunting down industry reports and talking with prospective users about THE PROBLEM you will be solving with this idea.

3.??????Proof of Concept: This is more difficult if you focus on a full PoC. But all you will need to validate and proceed, is for your idea to convince users this could solve their problem and their problem is worth solving, and

4.??????Pricing, Costing and Sourcing: It is critical at this early stage that you can prove that you can build this concept into a product, for a price far less than the people with the problem would be prepared to pay. The difference will become the margin and if this isn’t close to or above 75% the idea might not make it past the concept stage.

You also need to know you can have or source the skills to design, build and service the product and you can get every component or ingredient in the quantities and the quality standards you require, to be able to meet the demand from the people who need to solve this problem.

Once you have acquired all of the above, you have almost completed your Concept stage and are ready to source and plan your project for funding. The next step is to implement your ownership and protection program (step 2 of the six steps) and you can now know with certainty the idea can build you an income that could potentially cover its expenses.

You now have what you need to visit your patent attorney and start that process. Once your provisional patent is registered (provisional patents are global) you can build out the Commercial Model you planned in the ideation stage (that was Step 1 of the six steps) so you can raise the capital you will need to bring this to market.

Funding (step 3 of the six steps) can be difficult if you have focused on building an information memorandum or any other formal offer documents in order to attract sophisticated investors. However, there is a far easier way to raise these funds, which I will elaborate on next week.

If you want to learn more about how these six steps of IP commercialization can work for you, I have a free video-based course of around 3 hours of content, broken down into bite-sized learning modules. They have been designed to help novice inventors understand how the process works, so they can be careful with their limited resources and pre-qualify what you eventually spend your funding on, in terms of patenting, design, prototyping, marketing and other needs.

If you would like to have this free video-based course, just go to www.SixEasySteps.com

Its free.

I want to make sure as many inventors as possible, will only spend their funds where and when they need to.

Next week I will show you why traditional funding pitches don’t work for inventions and how we fix this for inventors. If you need to raise early-stage capital and you cant afford the years it can take to recruit enough sophisticated investors, then you are going to get a huge benefit from my next article.?