Get Updates by Email

Saturday, 23 April 2016

Inventors And Innovators Need to Cross The Chasm, Part 1


Even If You Build It, They Might Not Come

Inventors and innovators tend to think that, people will buy whatever they invent. Is this true? Are they merely living a fantasy?

There is a famous movie from 1989 called "Field of Dreams". The movie starred Kevin Costner, Burt Lancaster, Ray Liotta, Amy Madigan, and James Earl Jones. The plot goes like this: Ray had a bad relationship with his deceased father. His father was a major, big-time baseball fan. One day, while walking in the corn fields, Ray hears a voice telling him, "If you build it, he will come." Ray sees the vision of a baseball diamond in his field. His wife reluctantly allows him to build the baseball diamond.

Eventually, the desperate Ray is able to see some baseball players come on the baseball field. These aren't just any ordinary players. They are the ghosts of famous baseball players. Ray gets visions, and seeks out players who did not live out their lives in baseball, and baseball players who are retired from baseball. The visions become real, and eventually, Ray meets his deceased father again, on the baseball field, as a young man....

Why People Don't Need Your Invention 

But that movie was a fantasy. If you build it, will they necessarily come? As the innovator or inventor of a new-fangled invention, would it be realistic to imagine that people will come in droves, knocking on their doors to buy the product. Think about it:
  • People already have an existing solution for whatever you have invented or created. Why would they need your product?
  • Early iterations of the product tend to be riddled with problems. Why shouldn't they wait for your technology to mature, so that they can enjoy a more stable and robust solution?
  • Early iterations of a product tend to be expensive, because the volume is small. When there is volume, costs go down, and product pricing goes down as well. If it is not urgent to purchase your product, why shouldn't they wait?
  • Waiting for a while before buying a product means, a consumer gets to choose from competitors' offerings. Competitors may have identified flaws in your product, which they overcome through their later solutions. If your product is not mission critical, why shouldn't they wait? 
  • Early purchasers of a product tend to be "guinea pigs" who might be left with outdated technology. Later iterations of a technology might not be backward compatible with earlier iterations.
Back to Top

Inventors and Innovators Who Ended Up Broke

There are real life case studies that you, as innovator and inventor, should be aware of. There are people who, despite being bright and brainy, ended up broke. Not every inventor will become a rich man. People who think that they might do well like Thomas Edison (founder of General Electric) actually miss the point. Thomas Edison was not only an inventor, he was also a marketer and a savvy business man. He knew how to promote his products. He knew how to compete against competitors in the same industry. He knew how to persuade other inventors and innovators to work with him. And he knew when to team up with his competitors for their mutual good.
Thomas Edison's life would be a great case study for this blog. I plan to cover it sometime in the future. But for now, look at these case studies, featuring Trevor Baylis, Nikola Tesla and Frank McNamara:

Case Study #1: Trevor Baylis

If you've ever heard of the wind-up radio, or used one, you've used an invention from Trevor Baylis. In 2013, Trevor Baylis was so broke that he told the Telegraph that he has to mortgage or sell his house to survive. He invented his wind-up radio, and other electrical items using similar technology, in the 1990s. Despite receiving honorary degrees, getting letters of congratulations from royalty, and even being photographed with Nelson Mandela, he did not profit from his invention.
From the Telegraph:
Despite the apparent success of his wind-up radio and several follow-up products employing similar technology including a torch, a mobile phone charger and an MP3 player, Mr Baylis says he has received almost none of the profits.

Due to the quirks of patent law, the company he went into business with to manufacture his radios were able to tweak his original design, which used a spring to generate power, so that it charged a battery instead. This caused him to lose control over the product.

Source: Telegraph, Trevor Baylis: I've wound up broke despite inventions (2013)
He has realised the problem, and the article states that since 2004, Mr Baylis has been funding a company to help inventors bring their products to market.

Back to Top

Case Study #2: Nikola Tesla

You've probably heard of Tesla Motors, the electric car company helmed by CEO Elon Musk. But the name Tesla refers to Nikola Tesla, a European electricity genius who headed to America and worked for Thomas Edison, and later became the inventor of more than 700 patents. His most important patent was AC (alternating current) electricity, which could allow electricity to travel long distances. Despite all his acclaim, he died poor and penniless. Some people think that Nikola Tesla had a sharper mind than Thomas Edison, but Thomas Edison died with a $12 million estate, easily one of the richest men of his time.

Nikola Tesla was a good looking European immigrant who became a great American inventor and innovator.
Sadly, he died broke.
From Forbes magazine:
With more than 700 patents to his name, Tesla invented radio, the coil transformer, wireless communication, fluorescent lights and the alternating-current motor, which allowed electricity to flow over long distances. He had about as much business savvy as a puppy; he might have been fabulously wealthy had he not signed away AC royalties to George Westinghouse and patent rights to a wireless broadcasting system to J.P. Morgan.

Source: Forbes, Pioneers Die Broke (2002)
Back to Top

Case Study #3: Frank McNamara

Frank McNamara was a businessman who, in 1949, had dinner with a business associate at a swanky upscale club in town. Unfortunately, he had forgotten to bring his money along! His wife, probably a very understanding lady, came to the club and settled the bill. She might have raised the issue once or twice after that, which led Frank McNamara to hatch the idea of using credit cards in restaurants. Mr. McNamara turned it into a business centered around credit for eating at restaurants, and earning interest on outstanding balances. Along with some friends, he made it a success. Thus was born Diner's Club - the first credit card. It soon attracted some serious competition from imitators.

His problem was that he believed that the credit card was merely a fad. By 1953 he had sold Diner's Club for $200,000. With the cash, he entered the real estate business. By 1957, at the relatively youthful age of 40 (I will be 40 in a while, so I feel it keenly) he suffered a heart attack and died, poor and penniless. (References: Biography.com, Fact or Fiction: Inventor of Credit Cards Died Penniless? (2014) AND "Frank McNamara and the Credit Card" (undated))

If only Frank had stayed the course.

Back to Top

What Next?

Obviously, as the case studies above show, inventors and innovators need to learn how to profit from their inventions and innovations. Even if you build it, it might not come. "It" refers to riches, wealth, prestige, fame and fortune. "It" refers to a better life. "It" refers to the Impossible Dream that Don Quixote had been singing about. And yet, there are, for sure, successes from among inventors and innovators, people who manage to make something of their inventiveness and creativity. The most important aspect of success for an innovator and inventor is to get people to start using the product. With more users, come sales. With sales, come funds for research, development, reiteration, redesign, promotion, marketing, and diversification.

But how do you get more people to use your product? We will cover that in Part 2 of this article.

Back to Top OR Why People Don't Need Your Invention OR Case Studies on Inventors Who Died Broke
Share this article :

0 Comments: