Turning your Idea into a Business: Market Research, Prototypes and Product Evaluations
By CO Staff @canadaone | October 31, 2002
Okay, you've taken all the personality tests and feel that this idea of yours really would make a great business, what's next? You'll have to map out the best route and decide what supplies you'll need to get there.
Before you set off for parts unknown you need to collect some information that will help you reduce the risk of failure. It's time to do some market research.
Market research serves many purposes. The first is to find out if you're idea truly is "new." You will need to take a good look at your competitors. How are they currently solving the problem that your innovation will address? This research will also help you identify the size of the market as well as helping you answer important questions like: "Is there enough demand to justify the cost and risks of commercializing my product?"
"Many innovators that we see think that everybody is going to purchase this particular product," says Linda Hendry, General Manager for the Canadian Innovation Centre. "That's not necessarily true. When you're looking at marketing you not only have to look at the products that are out on the market place that are competitive to yours, but what solutions have individuals found that does the job for them?"
Market research often starts by investigating your local market. Scope out local competition, read trade magazines, and spend hours online researching the industry. This process will allow you to identify the opportunities and threats that exist for your potential product.
An objective appraisal
Your next stop in the journey is to evaluate your idea and get some honest feedback. While you may be hesitant about sharing your idea with the outside world just yet, there are places and programs that are equipped to do this. The Innovation Centre, located in Waterloo, ON offers services and programs for budding inventors. To date the Centre has seen and evaluated over 12,000 ideas. Through these programs your idea will be put through a process to determine if it could survive on the market. Issues that you will consider in these programs are feasibility, costs, and how you can protect your idea. Most importantly you will be in a better position to determine if there is a market for your product or idea.
Gary Ecklund, inventor of the Ecklund Drive-Thru Gate, cautions that while it's important to protect your idea you can't hide it away and expect that it will grow into a profitable business. "I've had different phone calls from people just calling to chat. Sometimes they're absolutely fearful of telling anybody what they're doing. But if you do that you're not going to get feedback on what you're doing. You really do need people to tell you what they think of it. If you're too secretive and you don't tell anybody how do you know it's any good. People are busy doing their own thing; they are not likely to change course 180 degrees just so they can take advantage of your idea. There's bills to pay, there's a whole life you've set up around a certain area you're not going to turn around."
After putting your idea through the ringer you may have to fine-tune the concept. This doesn't have to mean incorporating all of the suggested changes, after all this is your idea. However, ignoring them could mean losing time and money.
Creating a Prototype
Now that you have got your idea past the product stage it's time to get back in the car and set off for the next leg of the adventure. It's time to give your idea a physical form. Possible investors and distributors will want to see how the product works and what it can do. Even if you are looking to sell a method for doing something you'll need some way of providing visuals.
Depending on what the product is you may need anything from popsicle sticks and crazy glue, to steel and welding equipment to build the prototype. If you fall into the second scenario you will need to sink a large amount of cash into these early development stages. Before you move ahead it would make sense for you to draw up a plan for raising funds. This plan will come in handy for when you do an overall business plan later on.
"No question, it is absolutely the toughest part of the whole process," says Beverly Sheridan, president of Technology NOW. "Depending on what it is you're developing if you haven't mortgaged your house, hit up all your friends and relatives, you're not a true entrepreneur. Very early seed stage money is extremely hard to findâ€¦It's basically who you know. Angel investors are really the ones that come to the rescue in the early stages."
There are also some government programs that could provide help. If your prototype is deemed technically challenging it may be eligible for funding through the Industrial Research Assistance Program (IRAP).
Other parts in this series:
Part 1 - Getting an idea and getting started.
Part 2 - Market research, prototypes and product evaluations.
Part 3 - Creating an effective business plan for your new product.
Part 4 - Before the product launch...
Part 5 - Protect your product with a patent.