Repeat After Me . . . “Know Thy Customer”

It’s no secret that Peter Lynch and Warren Buffet, two of the best stock investors of all time, recommend investing in companies where you are a customer and you understand the business. What does this have to do with inventing products?

I purposely create products where I’m a customer. There are plenty of benefits in doing this, two important ones being that I’m committed to my product, and I know what the customer (me) wants. I’d like to talk about that second point a little more today.

Knowing what the customer wants is incredibly important for design of the product, the marketing material for the product, product differentiation, sales points, packaging, keyword search terms, and even knowing where to sell your product. That’s why it is so important that you would be a customer of the product, so you can get in your potential customer’s head to know what he wants.

However, there are limitations when trying to get in someone else’s mind. People may buy things for different reasons; some may focus on cost, some on utility, some on emotion. To capture the largest market share for your product, you have to go after all these customers, not only the ones who think like you. The best way to understand why ALL of your customers is to ask them “why they buy” with a product survey.

I’ve used surveys to better convey what makes my products different from other products on the market. I’ve used surveys to improve my packaging. I’ve used surveys to make it easier to find my products online. I’ve even used surveys to find out where I should place my products.
So if you want your customers to be able to find your product and feel compelled to buy your product, then get to know your past customers with a survey.

There are numerous online tools you can use to send out a survey, including Zoomerang, SurveyMonkey, GoDaddy’s survey tool, and plenty of others. It doesn’t matter what tool you use, just as long as you use one! Here are a few questions you can start asking your customers:

1. Why they bought your prouduct? i.e. Price, Convenience, Gift, etc.
2. How they found your product.
3. Ideas they have for improve your product.
4. Where they would expect to buy your product.
5. Demographic information such as gender, age, occupation.
6. Psychographic information such as magazines they read, programs they watch, and radio they listen to.

Those are just a few questions to get your started. Trust me, although you’re already ahead of the game because [hopefully] you’re a customer of your product, you’ll still be amazed at the information you receive from your customer surveys. I know I was.

- Bryan Daigle

Getting The Headset Buddy Into Retail Stores

One thing I’ve mentioned before about product development, is that things must come on their own time, you can’t force them. The key to building a successful product is taking baby steps. Right after you finish your first prototype, you can’t just call up Wal-Mart and start selling a million units. That’s what most inventors thing, but it just doesn’t happen like that.

Instead, develop your product one step at a time. One of those steps, after you’ve started manufacturing your product, improved your packaging a few times, and tested it out online, is to approach brick and mortar stores and online retailers. The big retailers won’t want to see your product if it hasn’t been proven in a retail environment.

I finally reached the point with the Headset Buddy that I felt comfortable approaching some online and offline retailers. But how do I know what stores to contact?

Fortunately, ever since I started selling the product online, I’ve been getting customers to complete surveys. One question I ask them is “What retail store would you first look for this item?”

Based on their answers, I researched some of the companies selling headsets and contacted their purchasing department. I provided samples to at an independently owned Radio Shack, local computer store, and a local UPS store to see how sales would do in those markets. I also asked some chain retailers the best way to get into their system.

I’m still waiting for the results, but I’m hopefully that at least two of my traditional retail stores and several of the online stores will prove worthwhile. You just have to be patient because the turnover for small retail stores for a single SKU can be half a dozen to a few dozen units per year. So it can take anywhere from a few weeks or a few months for that store to determine if it’s worthwhile to carry your product.

Remember, you’re competing with other products on their shelf, so your product has to make more money for the retailer than something else on their shelf. If you keep in mind these tips, you’ll do much better when your product is ready to be introduced to the retail market.

- Bryan Daigle

A Good Friend on ABC’s Shark Tank

Earlier this week my good friend and previous IdeaTango business partner Lisa Lloyd was on ABC’s Shark Tank reality show, where entrepreneurs pitch a panel of investors. She was trying to raise money for her new line of plush toy organizers called TC Pets. Of course, she blew them away and had them fighting for her!

Watch the full video clip on ABC’s Shark Tank site.

Good luck to Lisa and whatever she decides with her potential investors!

Bryan Daigle

How to manufacture a product in China

Myself and Billy Carmen of ProductNewsChannel.com recently put together a video showing inventors how easy it is to line up manufacturers in China for whatever kind of product they have. We give tips and websites that every inventor should know about. Watch the video about how to manufacture in China.

Why get a patent when you don’t have to?

I had a good friend of mine, Billy Carmen over at Product News Channel introduce me to his technique of inventing products. So here is a guy with over 60 products that he manufactures and distributes (in addition to the 1,500 he distributes through his company Wizard Distribution). And guess what, only one of his products has a patent, a high-end medical metal detector. Even his best selling item, the Lumber Wizard, a metal detector for woodworkers, doesn’t have a patent. Here is a video of his Lumber Wizard.

So how can Billy get away with selling all these products and not protecting them? Here is his philosophy…

So many inventors think they are out to make millions of dollars. However, studies have shown that only 3% of patents are commercially viable (MIT study). So the number of products that are both commercially viable and make millions of dollars, is a very, VERY small number. For most inventors, you’re lucky to make a profit, and really lucky to earn an full-time income from a product.

That’s where Billy’s philosophy really kicks in. If you assume your product will only make at most $200,000 or less in sales per year (what 99.9999% of inventions make), then why spend $20,000-$40,000 applying for, protecting, and litigating for a patent? In fact, if you are like most inventors who sell their product in small quantities to niche markets, then you don’t necessarily need a patent. Why would a Chinese company or an American company want to make your product if you’re only selling less than $200,000 of it per year? It is not worth it for them to copy it.

Copycats and big companies only want blockbuster products with potential sales in the millions. So what may be a treasure to you, making $100,000 selling your product, is peanuts to a corporation. The trick to creating a successful product that sells well enough for you to earn a living is this . . . create a product in a niche big enough for you, but too small for anyone larger. For example, Billy spun off a line of metal detectors for hunters, so they can detect bird shot in their catch of the day. That’s a niche. That’s a product that sells well, but doesn’t need a patent.

I think it’s calming to know that if you create a good, niche product, then you don’t have to worry about all the money, time, and energy you would be wasting on a patent.

Using this philosophy, Billy has created 59 products that sell well enough for him to live the good life, but not well enough for it to be worth it for companies to copy his products.

- Bryan Daigle

To Kindle or Not to Kindle

A little update from my last post . . . my Mom decided to join Facebook.

Back on topic, I’ve been hearing more good things about Amazon’s
Kindle 2. I have yet to go out on a limb and shell out the $359 for the Kindle 2 because right now I don’t have a problem carrying one book around at a time. My best reading (and thinking time) is on airplanes, and unless I’m reading Garfield, I probably won’t finish the book on one trip.

But I could definitely see the benefit for people backpacking around Europe, or living in a foreign country, where books in English might be as difficult to get as a fair taxi price. Downloading all your books and having them in one place might also free up a corner of my office.

Now if I could only turn all my old college textbooks that I don’t have the guts/willpower to throw away into downloadable PDFs. That would save a couple more cubic feet in the storage closet. I’ve already started saving storage space by converting pictures to digital images through a Photo Scanning Service.

But realistically, I think I’ll always have paper books. The Kindle, although it has it’s benefits, might be more challenging to consult on a time-to-time basis as I can’t quickly flip through the pages to a particular section. I do this with my business reference books all the time, and I think it would be tough getting use to the Kindle. Although on the other hand, the search feature might come in handy if I’m just searching for a particular topic.

In a way, the Kindle is like the Google Book Search is to Libraries. Yea, it’s nice to be able to search and read stuff with ease, but sometimes nothing beats a trip to a good ole fashioned library.

- Daigle

Should My Mom Join Facebook?

Hey Mom, I just wrote on your Facebook wall

I received a VERY surprising phone call from my mom the other day. While I was expecting the usual fare like “where is Laura’s internship for the summer,” or “have you called your niece/sister/brother lately,” she busted out with the question “SHOULD I JOIN FACEBOOK?”

I must say I was taken aback. She never asked if she should get on MySpace. She gets my Dad to upload her photos to her computer. i.e. She doesn’t tweet.

I must admit though, in the 2-3 months leading up to this question I noticed some of my over-40 relatives all of a sudden joining Facebook. It was like a virus. It started with some distant relatives in New York. Then my sister in Louisiana. Then my cousin in Dallas and one in Austin. THEN my Mom!

Facebook must be doing something right if she is asking that question. Twitter didn’t prompt her to ask that question. Neither did craigslist, myspace, friendster, or any of their predecessors, spin-offs, and look-a-likes.

Okay, to get to the point of this post, what did I tell my mom when she asked if she should join Facebook?

I have issues with facebook. Although I’m in the target facebook crowd – actually maybe a two or three years older than the original facebookers (now 24-25) – I don’t like to use it that much. I admit, it’s been a great way to find old friends from when I lived in Dubai. Or check out what the ex is up to. But is that stuff that really better’s my life?

Does it better your life to know what some random dude from your middle school is up to? What about high school acquaintances? Actually, when I first joined facebook, I spent WAAAAY too much time on it (as I’m sure others have had issues with as well). There were two things that convinced me that I needed to minimize my interaction with Facebook.

1) Facebook is just another website in a long line of similar sites. In 3-5 years, there will probably be another, much better site. Internet sites come and go. Remember AOL? Remember Prodigy? Shoot, remember Yahoo? Soon, we’ll be saying remember Facebook? And when that time comes, we’re all going to have to start our profiles, networks, etc. from scratch. So I decided I didn’t want to put too much time into one social network site because they fizzle and pop. Although facebook is bigger than I thought it would be, which I’m happy for because maybe it’ll stick around and all my time spent won’t go to waste, it still burns through cash like me through Girl Scout thin mints.

2) I realized that my building my online social network, I had less time for my actual real-life social network. Some people spend so much time on the site, they don’t actually interact in person with any of the friends.

This is what I told my Mom. I told her that she probably didn’t need to join. I told her that she would wind up spending so much time catching up with people that aren’t really in her life anymore, that she would have less time for the people THAT REALLY MATTER AND ARE IN HER LIFE NOW.

Of course not everyone may agree with me. And I still have some marketing tricks I want to try on Facebook, so I’m glad it’s there. But I just don’t want to spend time on my social network at the expense of my friends.

- Daigle

What’s the Deal with Twitter??

Don't talk, just tweet

Last night I was at TechNow09, where they told us to twitter the event. Last week a friend of mine who has an online retail site is adding an automatic twitter new product feed to his system. Two weeks ago Jon Stewart mentioned the word “tweet” on The Daily Show with Jon Stewart. Demi Moore bends over in a bathing suit and Ashton Kutcher catches a snapshot and tweets his Twitter followers his praise for god, along with that picture.

All this has happened in just the last few weeks. I first noticed everyone was mentioning Twitter when I heard something on CNN about Twitter. Now I’ve known about Twitter (and pondered on whether/how to use it) for over 2 years.

A guy by the name of Marc Nathan with the Houston Technology Center was the first person I knew to REALLY use twitter. I’ll admit I don’t know why people use it. I didn’t even get a texting plan until last month. I don’t enjoy texting, so I don’t know why people would want to text to Twitter and tell other people what they are doing. And what about the followers? I have enough going on in my life, do I really have time to follow other people, most of whom I’ve never met or had a real conversation (much less an email) with.

In Inc or one of the magazines I read, they did a cover article on the guy behind Twitter last year. So it’s nothing new, but all of a sudden, tweeting is the thing to do.

I made me really appreciate two things, Macolm Gladwell’s Tipping Point theory and the publicity snowball.

First I wondered if Twitter was just an early adopter thing, and not really meant for mainstream . . . that was until one of the major news channels picked it up. I wonder if that news channel helped Twitter get over that tipping point, because since then, it’s been all about Twitter this, Tweet that, I just Twooted.

Second, it made me appreciate the snowball (or lemming-like if you prefer) mentality of publicity. Yea, Twitter had made the rounds in the early adopter world. But that was just a small snowball compared to getting press on CNN , Headline News, Fox News, etc. So I’m not sure if CNN was the first to do the cover story, but for whichever big news outlet was the first, did they just add some significant size to the Twitter publicity snowball?

Publicity as I’ve come to find out, will build on itself. Start small, build up. Don’t try to go after USA Today right from the get go. Use your past publicity to slowly, but surely, climb up that publicity ladder. The Twitter publicity proves the snowball effect.

And is there really a difference between the snowball effect, and the tipping point? I’d have to think a little more on that. But whatever your opinion, you gotta admit Twitter is one big a** snowball. I wouldn’t want to get hit by it!

Now onto tweeting about this blog post. (PS I’m still trying to find a good way to use Twitter without getting cramps in my thumbs.)

Daigle

Another Adventure into Art of Living

Some of you might recall my earlier story about the 5-day meditation (the first time I typo’ed this “medication”, I guess it’s a form of that). Well I decided to hold my end of the bargain an actually do the Part 1 course (which I was supposed to do before doing Part 2, doh).

I’m glad I did, because in some ways I got more out of the Part 1 program than I did from the Part 2. The Part 2 was very physically an mentally challenging, and focused very heavily on meditation. Part 1, although mentally challenging, wasn’t as physically challenging. For example, in the Part 1, we didn’t have to sit cross-legged for hours straight – as we had to do in the Part 2 course.

I still felt the same connection with the people around me, even though we spent significantly less time together – about half the time you would spend with the people in a part 2 course.

Another benefit of the Part 1 course, it can be done locally, and on a working man’s schedule. They recommend doing the Part 2 course two times per year, but that would be all my vacation time! The Part 1 can be done in most major cities, and just on the weeknights and weekend.

A less tangible benefit that may differ between participants, but I was able to stick with the breathing techniques much better after the Part 1. Maybe because I did the Part 2 already, so I was pretty indoctrinated into the program. But I think it’s because I understood what I was doing better. I personally have a hard time doing things if I don’t understand why I’m doing them.

Although I’ve been remiss in the program recently, I did find myself feeling better physically and mentally. I also kicked my morning caffeine habit, and feel better eating less red meat.

I still recommend for everyone who is looking to become a better person, give the Art of Living a try.

On a side note, I recently met an individual who has a developed a program that helps one accomplish the same goals, but using needle-less Acupuncture theories.

Daigle

An Investor’s Stimulus Plan

Unless you’ve been living under a rock, you’ve heard the term “economic stimulus plan.” Mark Cuban, one of the original “dot.com billionaires,” has introduced his own version of an economic stimulus plan.

In his blog earlier this week, Cuban announced a concept he called “open source funding.” The idea, aside from investment stimulus for businesses, is the sharing of lean and profitable business plans. The only way one can hope to qualify for investment is to meet all of Mr. Cuban’s criteria, including posting your business plan publicly for review.

Of course, there are some dissenters who complain about the criteria but hey, when you’re giving away money, you have to make some rules. There’s also the general ruckus about stealing ideas but that’s also part of the reason for the public posting – “sharing” ideas. If someone else has the means to start a business using your idea, that’s another new business start-up. The idea is to get more Americans into business.

However, a by-product of this open air discussion and sharing of ideas on the internet is the dozens of other potential investors jumping into the arena, posting on the blog, offering additional backing, and taking notice of the flow of ideas. Whether it’s for the chance to do business with the Dallas Maverick’s owner, or the for a share of the spotlight, the end result is that the gauntlet has been thrown for these big money moguls to re-invest in American know-how.

It’s time to check your patents and dust off your spreadsheet.