05/11/2012 10:25 am ET Updated Jul 11, 2012

The Top 3 Realities of Inventing Today (Part 1)

So you have an idea? And you want to see it on store shelves and earn a small cut of every unit sold? For starters, join a local inventor club. This will help you with networking and resources, but most importantly, it will temper your enthusiasm and excitement. I know this is difficult -- whoa, do I ever! -- but impulsive and emotional decision-making is the number one reason first-time inventors fall prey to sweet-sounding promises by invention promotion firms and lose an estimated $300 million annually.

Yes, innovation and entrepreneurship are the key to unlocking vast personal wealth and ensuring continued national greatness. They're also over-hyped. So let's get real, here. Got an idea for an invention? Great. But we're probably talking about a cool new gadget, right? Just a simple solution to a simple problem. Not a time-machine or a revolutionary new motor powered by ambient static electricity. Speaking for myself, I'm no John Galt, just an inventor of a simple consumer product. As you prepare to also take the inventor"s journey, beware of heroic comparisons to Thomas Edison and one-in-a-million-poor-single-mom-success-stories! Prepare yourself to work (hard) and to take a calculated risk for the 1-in-100 chance of earning more than you invested in the first place.

Part 1: the Good News ... Inventing Has Never Been as Cheap and Easy

Yes, it's true. Anybody can do this. Since the Patent Act of 1790 and still holding true today, both mega-corporations and solo-independents get patent rights of identical legal value. In fact, fees are discounted for "small entities". Corporations therefore subsidize us independents. All it takes is a few hundred dollars to cover the Patent Office's nominal fees, and a few thousand to have a qualified patent practitioner write a proper application. (Don't even think of writing your own patent.) This is the least you should expect to spend. And in my opinion, access to patent rights was never the main barrier to inventing. Neither is access to capital. We, the 99%, can secure seed capital among increasingly active angel investor groups and crowd-funding websites.

The news gets even better. Over the past 20 years, and especially in the last five, there are five major phenomena that are truly breaking down walls and making inventing so amazingly accessible today:

  1. Incredible Shrinking Cost of Rapid Prototyping (RP) Low cost for short runs. It's that simple. No need to spend $150k on tooling. RP speeds the design cycle and allows you to demonstrate usability, appearance, manufacturability, fit, function, etc. A working prototype that might have cost $20,000 over 8 weeks in 1992 now gets done for $1,000 and delivered overnight via FedEx.
  2. Video-Demos are Virtually Free After securing minimal legal (patent) protections, nothing is simpler than shooting a 60-second demo of your prototype with your camera-phone, uploading it to a restricted-access video channel, like they offer on Vimeo or YouTube, and emailing potential investors or companies to take a look. No need to spend up to $10,000+ on travel and a trade show booth. If a potential backer likes your video, they'll ask to see a sample. If they don't, then seeing it in person would not have altered their initial decision. Better a cheap "no" than an expensive one.
  3. Quick Market Research / Consumer Feedback It has always been the inventor's burden to prove that a market exists for the invention, that it answers a real (unmet) market need. Today, a risk-averse manufacturer or retailer won't launch on a "hunch" alone. Thankfully, online polls, social media campaigns or in-person focus groups give the non-specialist arguably the same tools big corporate R&D departments with six-figure budgets use to glean statistically valid insights. How many consumers experience the problem that your invention solves? How strong is the purchase intention? What retail price would real consumer be willing to pay? All easily answerable now, in less than 72 hours and a few hundred dollars. Rapid consumer feedback informs rapid product design. Test and tweak until you get it right. This reduces the risk of expensive in-market "experiments" (aka "failure").
  4. Manufacturers & Retailers Accept Outsider Ideas Open Innovation is no longer a contradiction in terms. The "not-invented-here" syndrome is on the wane in corporate America. As GE's CEO Jeff Immelt recently admitted "we"ve got lots of smart people with good ideas, but we don't have them all". Translation: please give consideration to the previously heretical "unsolicited" inventor submission. Household names in every consumer product category are now wide open to outside innovation. Most manufacturers and retailers have online inventor submission portals and, it seems, they're actually staffing them. This is a sea-change in less than 5 years. Odds remain astronomically low, but at least we now get considered.
  1. Increasing Speed & Integration of Global Supply Chain In 1992, the lag time from idea to shelf was measured in years. Today it is measured in months. Again, make sure you have minimal patent rights in place. If you do, you can feel secure to send your design (digitally in a CAD file) for a real a production quote from a qualified factory. They are now so numerous (both foreign and domestic) that they are hungry for business. Your business. They might even send you a high-quality production sample for free. Use this sample to shop for a deal. If you score a licensing deal with a manufacturer... you're done! Royalty checks arrive in the mail. If you score a retail order, then you become the manufacturer. Get product insurance and contact a merchant bank to pre-finance large-scale production. This is called factoring. It'll cost you points, for sure, but you've just accessed the global supply chain into big box retail. Ka-ching!