I was involved in another discussion with a group of inventors and I asked the question: Do you know if your invention has a market? And followed up with the question: Do you really know your customers?
Invariably most think they have a market, but in reality they don't know very much about their potential customers, so they really don't have a market defined yet. Oh sure many inventors know which industry they think they should market their invention to, however they have no idea if there is an actual need in that market for their product. What I have found is that many inventors do very little real market research of their potential market and the customers that make it up.
So today I am giving away one of my secrets. You can find your market through the Internet.
Are you surprised? Probably not.
Here are five easy steps to help you find out about your market and your potential customers:
1. What problem are you solving with your invention or idea?
2. Who is leading company that is currently solving that problem now?
3. Find their web site
4. Go to http://www.quantcast.com/ and enter the competitor's web site domain address
5. Copy or record all of the data into a document that you can recall later (demographics, traffic, other sites of interest, etc...)
There you have it, the first stage to identify your potential audience. The next steps takes a little more work but at least now you will have a clue who might want your invention. You will need more information than that to build an understanding of demand, like how many units of your types of products are sold today and how many people are searching for a solution to the problem. These answers can also be found on the Internet. Stay Tuned!
Friday, August 28, 2009
Sunday, August 16, 2009
What If You Were Offered A Million Dollars? Shark Tank Week 2
It is not everyday that somebody offers you a million dollars for your business or idea or invention, but that is exactly what happened to 
one of the entrepreneurs on ABC's Shark Tank second show of the season. The second show featured a much more active engagement of the sharks who invest their own money into the businesses then in the season premier that appeared last week. And as you might expect with sharks there was some cooperation and also some in-fighting for the ideas they thought were worth their hard earned money.
Damond who obviously knows the business not only was asking the toughest questions of Craig, but he was also the guide for the rest of the Shark's who kept deferring to his expertise in the field. While Craig tried to sell the Sharks on the future potential of the brand there were many warning signs that signaled danger to the Sharks as well as Damond, who in the end gave it a negative potential.
It never ceases to amaze me how people believe that their inspiration will make someone actually want to invest. The reality was the company had only made $5,000 to date and had no national recognition, they also had no spokesperson and did absolutely terrible at there one and only Tradeshow taking zero orders. Damond hammered the nail in the coffin by saying that there are over 10,000 companies just like Craigs and right now he has nothing special to differentiate himself. The key here is this a belief in an idea by the owners of the company carries very little weight with investors. Get testimonials from influential people that can positively influence buyers in your genre or build a following, but don't come to the table empty handed like Crooked Jaw did.
LIFEBELT
Robert D. Allison III inventor of LifeBelt which is a safety device that prevents a car from starting unless the drivers seat belt is
buckled. He was asking for $500,000 for 10% of the business. He owns the patent on the technology and had test marketed selling it to three major automotive manufactures of which he indicated one was very interested. He presented a compelling story about how a family member was killed because she was not wearing her seatbelt and that was when he thought about a solution. Mr. Allison felt that if he could get his product known that he could save millions and millions of lives and protect children when they first start driving by making sure they buckle up. The safety statistics he noted regarding accidents and safety of seatbelts were helpful and he had some significant interest from Sharks Kevin O'leary and Robert Herjavec.
Kevin offered him $500,000 for the patent and that he never wanted to speak to him again. Robert offered him One Million Dollars for the Patent and he said he could call him once. Most inventors I have met would probably sell their invention for One Million Dollars in a heartbeat, but Mr. Allison did not seem to feel the same. He believed his idea was worth quite a bit more considering his request for investment would make the company worth $5 million.
So did he make a mistake?
And the answer is a resounding maybe, or maybe not. OK, why am I being so wishy-washy on this one, how can anyone turn down big money that is cash now in your pocket. Well it depends on what Mr. Allison reasons were for saying no. He may have already received legitimate interest from the major automotive manufacturers and let's assume that the product which retails for over $220 can be maded for less than $50 (which is almost a certainty especially in volume). Even if Mr. Allison sold the product to GM at the wholesale price of $100 he would still be making a healthy profit and if GM decided to just equip this in 20,000 vehicles with GM recently selling about 180,000 vehicles per month this would not be difficult to attain even on an annual basis. And if that is the case then yes, he made a smart decision.
However if his plan was to run the business and try to grow organically, unless he has a lot of resources he may have made a bad choice by passing it up. I think that both the Sharks and Mr. Allison lost in this deal. I think the Sharks were too greedy if they would have structured a licensing deal or even a small percentage for Mr. Allison, I think he might have had to think twice. And Mr. Allison's lack of charisma and some negative vibe he gave off turned the Sharks off dramatically that they did not even want to partner with him. I think the Sharks insulted him and that turned him off to any amount of money offered him. He kept saying he wanted to make sure his device saved lives and got to as many people as possible.
Well I submitted a form on Mr. Allison website and offered to start selling his product right away through the 150+ automotive accessory web sites I manage and I only received an automated e-mail response and nothing else for the last 4 days. Hopefully he is really busy with GM, Ford, Chrysler, Honda, Toyota or another manufacture moving the product. Otherwise like many other dreams, his product will get knocked off by someone else who can make it different enough to avoid patent infringement and he will wish he took that million dollar deal. Oh yeah and Robert call me or e-mail me.
A PERFECT PEAR
Susan Knapp is a gourmet cook who created a line of products that feature pears from jellies to
marinades needed money to handle her increased demand. She was asking for $500,000 for 15% of her company. She had tried the traditional method for getting money through banks and like many small businesses could not get a loan. Susan wanted the Sharks to take a bite, so she brought samples of her jams and jellies on pastries to try. Everyone seemed to like her story. Her problem was her profit margins were tight about 2.6% on $700,000 in annual sales.
The Sharks got an appetite when she told them that she had $100,000 in orders waiting to be filled. Kevin O'Leary offered the 500k for 70%, then Kevin Harrington and Robert Herjavec decided to combine forces and offer 500,000 for 50% of the business. Damon also came in with a bid of the $500,000 for 51% of the company. So now it was a matter of deciding between 1 partner 2 partners or walking away. She first countered to see if she could keep control and offered 49%. None of the sharks liked the idea of giving up that much money without some level of control. She accepted the deal from Kevin and Robert and Damon was regretting not matching the deal.
Susan had what many new businesses featured on the Shark Tank show lacked. Solid revenue a customer base of 650 which showed market acceptance, demand she could not meet and a growth strategy with increased profitability to 10% and 1.2 million in 2010. Plus she had a clear vision and confidence that her company would be a $20 million company in the future. For her the risk of taking on two new partners was both exciting and a little fearful. Could she have received a better deal, probably not because the profitability was not there. Plus I am sure the extra television exposure will help her product move better in the future. I think she got a pretty good deal and I think we will see her brand sold nationwide very soon.
ATTACH NOTED
The next contestant was Mary Ellen Simonson inventor of a new product Attach-Noted. This product was supposed to solve the problem of unorganized sticky notes all over your computer. It basically was a mini bulletin board that attached along the height of a small laptop. Ms. Simonson was asking for $100,000 for 20% of her company to launch the product. The business had no sales to date and the key feature of the product was that it could fold into the laptop when the cover is closed. When asked about the opportunity for the product she referenced statistics for how many laptops and computers are sold every year, but she had no market research to back up the claim that this problem is a real problem for people and how significant that problem might be. She then told them that the selling price was going to be $9.95 for this very small product and at that pint all of the Sharks passed on investing.
The reality is the product might be a viable product but Ms. Simonson did so many things wrong in developing a concept for it and creating a value proposition that no one got it. Her first problem is she was in love with her idea and never thought of getting input in helping her shape the use of the product. She never created the overall value because she defined the product based on a very narrow view of how the product was able to help her with her sticky note problem and this was her downfall. No one bought that this was the true benefit of the product, they could not relate with it's benefit.
As I sit here today I can see many other potential uses for the product as a true bulletin board concept that can do more than just hold sticky-notes. If she had done some focus group testing even with friends from different walks of life and did not have a pre-conceived notion of what the product was to be used for she may have come up with many other potential solutions. Just off hand I can think of several others like a picture frame, a plastic sleeve to hold small sheets of paper that are not sticky notes, maybe even a pen holder. If she could have envisioned her product to be more flexible and then put together some real market research data that could show demand for such a product I think she would have had a very different outcome with the Sharks. Whenever you think that you are like the rest of the world and your problems are the same as everyone else with no market research you our bound to fail.
CLASSROOM JAMS
Mark Furiguy a Chicago high school teacher turned a new way of teaching classic English literature into business opportunity.
He was looking for $250,000 for 10% stake in his new record label and publishing house called Classroom Jams. He used popular music to help kids learn otherwise difficult school subjects into language they could relate to with modern words and sound. He envisioned his products being sold to classrooms throughout the country. For the first time every Shark wanted in, so they teamed up to offer him the $250,000 for 100% of record label and provide him 5% Royalty on profits. He wavered and needed time to decide and was noticeably overwhelmed with the offer. To add to the confusion Robert actually competed against the group and offered 250,000 for 100% stake in the record label and the ability to earn back 49% of the company based on profits. Mark countered with 8% royalty and wanting to be an equal partner with the other five but liked the idea of five partners instead of one. The agreed in the end to provide him ability to earn 20% back into the company based on his royalties from sales being put back into the company to get until he could get his equal share.
I think I know why the Sharks really liked the products. First he was selling to an industry that is finite but has budget for these type of learning enrichment programs and is virtually recession proof. Second, the products did to classical literature what Baby Einstein did to classical music and that was find a better way to teach young minds that made it easier for them to understand. The single segment of the toy industry that has grown the fastest is the educational toy industry, which shows that his products could have demand outside of the educational system as well. Third he picked the most popular works that were sold worldwide and had it copyrighted which is Shakespeare to start. His packaging and professionalism was very polished for a school teacher. It was still a big chunk of his company, but since he had not sold any product as of yet this is probably the best deal he could get. It would be very similar to the way a record label would have approached him.
I think he should have spoken to a few record labels first just to get a feel if this deal was going to be good or not. I also think if he had the time to run the business at about $500 a set he could would only have had to sell 500 sets to get the same money. However if you do not know how to execute this type of strategy it is better to team up with those who can. I just hope he knows what it means to have 5 partners.
one of the entrepreneurs on ABC's Shark Tank second show of the season. The second show featured a much more active engagement of the sharks who invest their own money into the businesses then in the season premier that appeared last week. And as you might expect with sharks there was some cooperation and also some in-fighting for the ideas they thought were worth their hard earned money.If you read my previous post you know that I take a pretty critical look at how these entrepreneurs and inventors approach pitching their products to the sharks and let you know if they made a good deal or a bad deal or if they really needed to rethink their overall strategy. What I am finding with the sharks is they are starting look and sound a little like vulture capitalists who are in it to see how much they can steal great deals from these entrepreneurs. However you can't go on this show and expect anything less.
CROOKED JAW
First up was Craig French who developed a clothing line called Crooked Jaw. He was asking for $200,000 for 20% stake in his company. While the company was an inspiration from an accident Craig suffered playing lacrosse and now he believes his brand is ready to take off and he was hoping and putting a lot of faith that Damond John who has built a very successful clothing line FUBU will buy in.
CROOKED JAW
First up was Craig French who developed a clothing line called Crooked Jaw. He was asking for $200,000 for 20% stake in his company. While the company was an inspiration from an accident Craig suffered playing lacrosse and now he believes his brand is ready to take off and he was hoping and putting a lot of faith that Damond John who has built a very successful clothing line FUBU will buy in.
Damond who obviously knows the business not only was asking the toughest questions of Craig, but he was also the guide for the rest of the Shark's who kept deferring to his expertise in the field. While Craig tried to sell the Sharks on the future potential of the brand there were many warning signs that signaled danger to the Sharks as well as Damond, who in the end gave it a negative potential.
It never ceases to amaze me how people believe that their inspiration will make someone actually want to invest. The reality was the company had only made $5,000 to date and had no national recognition, they also had no spokesperson and did absolutely terrible at there one and only Tradeshow taking zero orders. Damond hammered the nail in the coffin by saying that there are over 10,000 companies just like Craigs and right now he has nothing special to differentiate himself. The key here is this a belief in an idea by the owners of the company carries very little weight with investors. Get testimonials from influential people that can positively influence buyers in your genre or build a following, but don't come to the table empty handed like Crooked Jaw did.
LIFEBELT
Robert D. Allison III inventor of LifeBelt which is a safety device that prevents a car from starting unless the drivers seat belt is
buckled. He was asking for $500,000 for 10% of the business. He owns the patent on the technology and had test marketed selling it to three major automotive manufactures of which he indicated one was very interested. He presented a compelling story about how a family member was killed because she was not wearing her seatbelt and that was when he thought about a solution. Mr. Allison felt that if he could get his product known that he could save millions and millions of lives and protect children when they first start driving by making sure they buckle up. The safety statistics he noted regarding accidents and safety of seatbelts were helpful and he had some significant interest from Sharks Kevin O'leary and Robert Herjavec.Kevin offered him $500,000 for the patent and that he never wanted to speak to him again. Robert offered him One Million Dollars for the Patent and he said he could call him once. Most inventors I have met would probably sell their invention for One Million Dollars in a heartbeat, but Mr. Allison did not seem to feel the same. He believed his idea was worth quite a bit more considering his request for investment would make the company worth $5 million.
So did he make a mistake?
And the answer is a resounding maybe, or maybe not. OK, why am I being so wishy-washy on this one, how can anyone turn down big money that is cash now in your pocket. Well it depends on what Mr. Allison reasons were for saying no. He may have already received legitimate interest from the major automotive manufacturers and let's assume that the product which retails for over $220 can be maded for less than $50 (which is almost a certainty especially in volume). Even if Mr. Allison sold the product to GM at the wholesale price of $100 he would still be making a healthy profit and if GM decided to just equip this in 20,000 vehicles with GM recently selling about 180,000 vehicles per month this would not be difficult to attain even on an annual basis. And if that is the case then yes, he made a smart decision.
However if his plan was to run the business and try to grow organically, unless he has a lot of resources he may have made a bad choice by passing it up. I think that both the Sharks and Mr. Allison lost in this deal. I think the Sharks were too greedy if they would have structured a licensing deal or even a small percentage for Mr. Allison, I think he might have had to think twice. And Mr. Allison's lack of charisma and some negative vibe he gave off turned the Sharks off dramatically that they did not even want to partner with him. I think the Sharks insulted him and that turned him off to any amount of money offered him. He kept saying he wanted to make sure his device saved lives and got to as many people as possible.
Well I submitted a form on Mr. Allison website and offered to start selling his product right away through the 150+ automotive accessory web sites I manage and I only received an automated e-mail response and nothing else for the last 4 days. Hopefully he is really busy with GM, Ford, Chrysler, Honda, Toyota or another manufacture moving the product. Otherwise like many other dreams, his product will get knocked off by someone else who can make it different enough to avoid patent infringement and he will wish he took that million dollar deal. Oh yeah and Robert call me or e-mail me.
A PERFECT PEAR
Susan Knapp is a gourmet cook who created a line of products that feature pears from jellies to
marinades needed money to handle her increased demand. She was asking for $500,000 for 15% of her company. She had tried the traditional method for getting money through banks and like many small businesses could not get a loan. Susan wanted the Sharks to take a bite, so she brought samples of her jams and jellies on pastries to try. Everyone seemed to like her story. Her problem was her profit margins were tight about 2.6% on $700,000 in annual sales.The Sharks got an appetite when she told them that she had $100,000 in orders waiting to be filled. Kevin O'Leary offered the 500k for 70%, then Kevin Harrington and Robert Herjavec decided to combine forces and offer 500,000 for 50% of the business. Damon also came in with a bid of the $500,000 for 51% of the company. So now it was a matter of deciding between 1 partner 2 partners or walking away. She first countered to see if she could keep control and offered 49%. None of the sharks liked the idea of giving up that much money without some level of control. She accepted the deal from Kevin and Robert and Damon was regretting not matching the deal.
Susan had what many new businesses featured on the Shark Tank show lacked. Solid revenue a customer base of 650 which showed market acceptance, demand she could not meet and a growth strategy with increased profitability to 10% and 1.2 million in 2010. Plus she had a clear vision and confidence that her company would be a $20 million company in the future. For her the risk of taking on two new partners was both exciting and a little fearful. Could she have received a better deal, probably not because the profitability was not there. Plus I am sure the extra television exposure will help her product move better in the future. I think she got a pretty good deal and I think we will see her brand sold nationwide very soon.
ATTACH NOTED
The next contestant was Mary Ellen Simonson inventor of a new product Attach-Noted. This product was supposed to solve the problem of unorganized sticky notes all over your computer. It basically was a mini bulletin board that attached along the height of a small laptop. Ms. Simonson was asking for $100,000 for 20% of her company to launch the product. The business had no sales to date and the key feature of the product was that it could fold into the laptop when the cover is closed. When asked about the opportunity for the product she referenced statistics for how many laptops and computers are sold every year, but she had no market research to back up the claim that this problem is a real problem for people and how significant that problem might be. She then told them that the selling price was going to be $9.95 for this very small product and at that pint all of the Sharks passed on investing.
The reality is the product might be a viable product but Ms. Simonson did so many things wrong in developing a concept for it and creating a value proposition that no one got it. Her first problem is she was in love with her idea and never thought of getting input in helping her shape the use of the product. She never created the overall value because she defined the product based on a very narrow view of how the product was able to help her with her sticky note problem and this was her downfall. No one bought that this was the true benefit of the product, they could not relate with it's benefit.
As I sit here today I can see many other potential uses for the product as a true bulletin board concept that can do more than just hold sticky-notes. If she had done some focus group testing even with friends from different walks of life and did not have a pre-conceived notion of what the product was to be used for she may have come up with many other potential solutions. Just off hand I can think of several others like a picture frame, a plastic sleeve to hold small sheets of paper that are not sticky notes, maybe even a pen holder. If she could have envisioned her product to be more flexible and then put together some real market research data that could show demand for such a product I think she would have had a very different outcome with the Sharks. Whenever you think that you are like the rest of the world and your problems are the same as everyone else with no market research you our bound to fail.
CLASSROOM JAMS
Mark Furiguy a Chicago high school teacher turned a new way of teaching classic English literature into business opportunity.
He was looking for $250,000 for 10% stake in his new record label and publishing house called Classroom Jams. He used popular music to help kids learn otherwise difficult school subjects into language they could relate to with modern words and sound. He envisioned his products being sold to classrooms throughout the country. For the first time every Shark wanted in, so they teamed up to offer him the $250,000 for 100% of record label and provide him 5% Royalty on profits. He wavered and needed time to decide and was noticeably overwhelmed with the offer. To add to the confusion Robert actually competed against the group and offered 250,000 for 100% stake in the record label and the ability to earn back 49% of the company based on profits. Mark countered with 8% royalty and wanting to be an equal partner with the other five but liked the idea of five partners instead of one. The agreed in the end to provide him ability to earn 20% back into the company based on his royalties from sales being put back into the company to get until he could get his equal share.I think I know why the Sharks really liked the products. First he was selling to an industry that is finite but has budget for these type of learning enrichment programs and is virtually recession proof. Second, the products did to classical literature what Baby Einstein did to classical music and that was find a better way to teach young minds that made it easier for them to understand. The single segment of the toy industry that has grown the fastest is the educational toy industry, which shows that his products could have demand outside of the educational system as well. Third he picked the most popular works that were sold worldwide and had it copyrighted which is Shakespeare to start. His packaging and professionalism was very polished for a school teacher. It was still a big chunk of his company, but since he had not sold any product as of yet this is probably the best deal he could get. It would be very similar to the way a record label would have approached him.
I think he should have spoken to a few record labels first just to get a feel if this deal was going to be good or not. I also think if he had the time to run the business at about $500 a set he could would only have had to sell 500 sets to get the same money. However if you do not know how to execute this type of strategy it is better to team up with those who can. I just hope he knows what it means to have 5 partners.
Tuesday, August 11, 2009
Ideas Flounder in The Shark Tank
ABC's Shark Tank debut this week and they presented 5 entrepreneurs, looking for money to help launch or grow their businesses. They presented their case to five savvy, successful business people including Robert Herjavecreal a technology guru, Barbara Corcoran a real estate mogul, Kevin Harrington the “infomercial” expert, Daymond John a fashion clothing millionaire and financial expert Kevin O’Leary. who had to invest their own money into any idea the liked.
They called these experts sharks because they would eat you alive if your idea had no real future or you overvalued your idea. And that is exactly what they did.
As I watched the show I tried to put myself in the seat of the sharks and I evaluated the ideas that each entrepreneur brought to the table. I can tell you my conclusions in most cases matched those of the Sharks. However, I am also someone who helps those same types of entrepreneurs raise capital or generate successful businesses, so I have some words of advice for each of the contestants, if they ever get a chance to read my blog.
The first contestant was Tod Wilson of Mr. Tod's Pies, he was in need of $460,000 to increase his production capacity and improve sales and was willing initially to give up only 10%. His business generated approximately $850,000. He also explained that 50% of all of his revenue came from his pumpkin pie product and primarily in the wholesale business where margins would be tighter. He also revealed that he had a potential deal with McDonald's but did not elaborate as to the validity or true value of that deal.
So what did the Sharks think, well the first thing they stated is that he overvalued his company. a 10% stake equated to a valuation of $4.6 million for a company barely making it at $850,000. They also thought he should focus on his most profitable products and not spend money on non-profitable areas like his mascot. Therefore Daymond and Barbara paired up to counter with a offer of 50% of the business. Tod accepted it as he seemed desperate to get the cash influx. So the real questions is did he make a good decision? Could he have done something to improve is chances in front of the sharks? The answer is absolutely.
First he focused too much on the quality of his pies and not the quality of his business. While he mentioned how he planned to use the funds he never talked about how the additional capital would actually increase sales. If he had tried to get a letter of intent from the local McDonalds willing to carry his pies and shown a clear revenue gain from the cash infusion he could have negotiated from a position of strength instead of weakness and retained a greater share of his company.
The second contestant was Darrin Johnson an inventor of a bizarre new concept which was called the ionic ear. A surgical procedure to implant a bluetooth hearing device. He perceived a problem with blue tooth devices falling off the person's ear and therefore a need for a invasive surgical procedure which actually needs to be charged nightly. As expected the Sharks not only wanted nothing to do with investing the $1 million he was asking for they also thought he was crazy.
They called these experts sharks because they would eat you alive if your idea had no real future or you overvalued your idea. And that is exactly what they did.
As I watched the show I tried to put myself in the seat of the sharks and I evaluated the ideas that each entrepreneur brought to the table. I can tell you my conclusions in most cases matched those of the Sharks. However, I am also someone who helps those same types of entrepreneurs raise capital or generate successful businesses, so I have some words of advice for each of the contestants, if they ever get a chance to read my blog.
The first contestant was Tod Wilson of Mr. Tod's Pies, he was in need of $460,000 to increase his production capacity and improve sales and was willing initially to give up only 10%. His business generated approximately $850,000. He also explained that 50% of all of his revenue came from his pumpkin pie product and primarily in the wholesale business where margins would be tighter. He also revealed that he had a potential deal with McDonald's but did not elaborate as to the validity or true value of that deal.
So what did the Sharks think, well the first thing they stated is that he overvalued his company. a 10% stake equated to a valuation of $4.6 million for a company barely making it at $850,000. They also thought he should focus on his most profitable products and not spend money on non-profitable areas like his mascot. Therefore Daymond and Barbara paired up to counter with a offer of 50% of the business. Tod accepted it as he seemed desperate to get the cash influx. So the real questions is did he make a good decision? Could he have done something to improve is chances in front of the sharks? The answer is absolutely.
First he focused too much on the quality of his pies and not the quality of his business. While he mentioned how he planned to use the funds he never talked about how the additional capital would actually increase sales. If he had tried to get a letter of intent from the local McDonalds willing to carry his pies and shown a clear revenue gain from the cash infusion he could have negotiated from a position of strength instead of weakness and retained a greater share of his company.
The second contestant was Darrin Johnson an inventor of a bizarre new concept which was called the ionic ear. A surgical procedure to implant a bluetooth hearing device. He perceived a problem with blue tooth devices falling off the person's ear and therefore a need for a invasive surgical procedure which actually needs to be charged nightly. As expected the Sharks not only wanted nothing to do with investing the $1 million he was asking for they also thought he was crazy.
While I would like to think I could help this person the first thing I would say regarding this idea is what other human on this earth actually thought this was a good idea. If he asked anyone regarding the actual feasibility of people wanting to do this procedure he could have saved everyone including himself the wasted time his idea occupied.
The third contestant was Kevin Flannery of WiSpots an advertising system for patients in waiting rooms. He was asking 1.2 million for a 10% stake in his business. He quit his job, mortgaged his house twice and spent his daughters college fund to fund his business. And with over 550,000 spent he did not make a sale that generated any revenue. The sad part was that everyone of the investors realized that his idea was not feasible at $9 thousand per system and told him to cut his losses.
So what went wrong, how do you spend that much money without testing the feasibility, the market demand and price sensitivity. Ideas can be dangerous especially if you fall so in love with your idea that you risk your family and your future. Always do you your homework and never quit your day job until the idea you have can generate enough money to allow you to continue living.
The fourth contestant was a nanny turned inventor Tiffany Krumins. She was trying to raise $50 thousand investment to assist with her patenting and building a production prototype for her animal medicine dispenser. Clearly she had no business experience and was looking as much for a mentor as the money. She only wanted to give up 15% of the business but in the end gave up 55% to Barbara, who liked her idea but knew she would have to be able to control the business for it to have any chance for success.
Tiffany probably gained more by having Barbara as her partner than by the 50k she was going to get to move her idea into a reality.
She made so many mistakes but she really did not have the ability to find someone who could actually produce her product. If she looked at companies who could have produced the product, she probably could have made more money and done less work.
The final contestants were Nick Friedman and Omar Solomon who were trying to raise $250,000 to launch College Foxes Packing Boxes. This was an obvious spin-off from a successful business they already had been running called College Hunks Hauling Junk. They had the best business resume of the group of contestants and they came in with a little bit of ego to back it up. They intended to leverage their current company to help with the expansion to with their new business, but all of the investors wanted a piece of the business that was generating revenue and they asked them to make an offer for a percentage of both companies. They offered$1 million for 10% stake in both business. All of the Sharks balked except for Robert who offered $250,000 for 10% of the $3 million dollar Hunks business plus 50% of the new College Foxes Packing Boxes. Omar and Nick discussed it but decided that their current business was worth more and they decided to decline the deal.
The curious thing to me is why they were there in the first place. Their current business apparently threw 500 thousand dollars to the bottom line so why try to raise money at all when you have the capital in house and the ability to use existing resources from a similar business. Plus they can scale up within their own network, so this seemed to me to be more about advertising their businesses then actually getting an investment. Only time will tell.
If you missed the show, You can watch it right at the following address: http://www.hulu.com/watch/88498/shark-tank-series-premiere
If You Build It They Will Come
Marketing an idea or invention is usually the last thing the inventor or business person ever thinks about. Most are under the belief "If you build it they will come" just like in the Field of Dreams.
And that is exactly why most fail miserably.
The reality is that any invention or idea must go through careful analysis and thorough testing to make sure that it is in fact a viable idea. We call this stage "Proof of Concept". However, almost all of the people with their great ideas sell this stage very short by testing their idea on only 1 or 2 close friends over a couple of beers and everyone thinks it is a great idea.
So they mortgage their house and quit their day job throwing thousands of dollars into a poorly thought out idea. Unfortunately disaster sets in and at that point it is too late for me to help them. Don't Do That - Read everything here and save your money.
It's Free, so enjoy and learn.
And that is exactly why most fail miserably.
The reality is that any invention or idea must go through careful analysis and thorough testing to make sure that it is in fact a viable idea. We call this stage "Proof of Concept". However, almost all of the people with their great ideas sell this stage very short by testing their idea on only 1 or 2 close friends over a couple of beers and everyone thinks it is a great idea.
So they mortgage their house and quit their day job throwing thousands of dollars into a poorly thought out idea. Unfortunately disaster sets in and at that point it is too late for me to help them. Don't Do That - Read everything here and save your money.
It's Free, so enjoy and learn.
Idea and Invention Marketing
I have never ever met someone who did not like their own ideas. In fact quite the opposite has happened throughout my career whether it's a small entrepreneur who has risked his entire personal savings or a Fortune 500 executive who is sure his company needs to try this great idea of his. In fact most people are just totally in love with their idea because it is their "Baby" and nobody loves that baby more than they do.
So if you have a great idea and you want to know how to market it then you came to the right place. And if you think that your idea is the greatest in the world and that everyone should invest in your business idea or invention I am hear to tell you that "Your Baby is Fat" . You heard me I am calling your Baby "Fat". Why? Because you need to hear that no idea is perfect and virtually every idea needs improving and in many cases needs to be dumped completely.
And through the coming weeks and months I am here to educate you on how to improve your idea how to look at it with critical eyes and your potential customers critical eyes and your potential investors critical eyes.
I will be starting by reviewing all of the ideas on ABC's new TV series Shark Tank where business ideas are presented to successful entrepreneurs and investors to invest in their companies. And what I will give you the inside scoop that those business experts are not going to tell you which is why the idea or invention will become successful or will ultimately fail. And I will tell you what they did wrong in presenting their idea when asking for capital.
So if you have a great idea and you want to know how to market it then you came to the right place. And if you think that your idea is the greatest in the world and that everyone should invest in your business idea or invention I am hear to tell you that "Your Baby is Fat" . You heard me I am calling your Baby "Fat". Why? Because you need to hear that no idea is perfect and virtually every idea needs improving and in many cases needs to be dumped completely.
And through the coming weeks and months I am here to educate you on how to improve your idea how to look at it with critical eyes and your potential customers critical eyes and your potential investors critical eyes.
I will be starting by reviewing all of the ideas on ABC's new TV series Shark Tank where business ideas are presented to successful entrepreneurs and investors to invest in their companies. And what I will give you the inside scoop that those business experts are not going to tell you which is why the idea or invention will become successful or will ultimately fail. And I will tell you what they did wrong in presenting their idea when asking for capital.
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