If you are an inventor, entrepreneur, technology start-up, or a small company with one or two products AND you need basic up-front assistance with new products off the ground at minimal cost, this "Getting Started" service is for you. If you have an idea or a concept, "Getting Started" provides assistance in expressing the product concept, conducting a patent review and competitor analysis, and in determining preliminary market potential and economic viability.
The idea is to provide key preliminary research during the early stages of product development to avoid critical missteps that studies show result in 6 out of 7 new product failures. This service consists of two stages: feasibility, and product design and development. During each stage, there are points at which the company or individual is presented with findings or deliverables that require one of the following decisions:
These built-in decision points allow an individual or small firm to better manage its investment in developing new products. In the event there are intrinsic problems, for example, lack of an identified customer base or real application, incompatible materials and performance specifications relative to targeted costs and price points, or competitors or competing products, then the company can stop the product development process and redirect funds to more promising products. The problems note above are typical, and unless discovered early and addressed during the product’s development, can lead to failure.
This service begins with developing a clear product concept, conducting a patent review and preliminary marketing research to assess whether a market exists for the idea, and making a preliminary technology assessment, if needed. The goal of this assistance is to determine the idea’s commercial feasibility at a minimal cost to the individual or company. The feasibility stage includes the items listed below and takes about 6 to 8 weeks to complete after the service agreement and non-disclosure agreement (NDA) have been finalized:
Phase 3 Consulting LLC will explain to the individual or company at the completion of each step involving preliminary information - patent review, market research, technology assessment, and competitor search - the information acquired and its implications so that decisions can be make to continue, delay, reevaluate, or terminate the project.
The service agreement covers the initial tasks and costs for determining the idea’s commercial viability. Initial costs typically include helping the individual or company develop or refine the product concept, conducting a patent review, preliminary marketing research, preliminary technical assessment (if needed) and determining if competing products or processes exist.
The service agreement is set up initially for $7,500 (about 5 days of assistance) and is a cost-reimbursement arrangement whereby the individual or company pays only for the services used; it is not obligated for the entire $7,500. The individual or company will not be invoiced in excess of $7,500 unless it agrees in writing to an increase in budget. The individual or company can terminate the agreement at any time and pay only for the services used that point. A summary of services and their estimated costs is shown below.
If there are no "red flags" (for example, no findings of comparable patents, existence of direct competitors, non-existent or small market, technologically difficult or complex, etc.) in the feasibility stage, and that additional research is warranted, then additional funds can be added to the agreement. At that time, the individual or company and Phase 3 will negotiate a budget for the additional research.
Phase 3 Consulting LLC and the individual or company will execute a standard one-way non-disclosure agreement (NDA) to protect the latter’s intellectual property. This NDA basically says that the individual or company will disclose to Phase 3 confidential and proprietary information or material about its new products and/or processes and that Phase 3 will not disclose that information or material, subject to certain conditions set forth in the NDA. If the individual or company is represented by an attorney, it is recommended the attorney review the NDA and propose modifications to language that might be more suitable than found in the standard agreement. Please note that modifications to the standard NDA can incur several iterations between attorneys, depending on the specifics of the proposed modifications, and take up to several weeks to resolve
In the early stages of developing a new product it’s very helpful, if not critical, to provide some information about the product, such as who the end user is intended to be, the problem the product will solve or the benefit to the user, whether there are existing products and, if so, how the new product is better, some idea about the cost to produce the new product and\or about the selling price. Understandably, the answers to some of these items might not readily be known at this stage. However, without some data pertaining to these items, it will be difficult, if not impossible, to progress.
Preliminary Patent Review
Phase 3 can conduct a patent review on behalf of the individual or company or they can provide instruction for searching in and maneuvering through the U.S. Patent Office’s on-line database. The fee for Phase 3 to conduct this review is about $400. We use language and/or words provided in the Product Concept Form as criteria for "key word" searches in the U.S. Patent Office’s database (http://www.uspto.gov/) to locate patents that contain the "key words." While matches to "key words" might confirm an existing similar or identical product or concept, the absence of a match does not necessarily mean that a patent or product does not exist that is similar or identical to the individual’s or company’s. If the individual or company desires a more thorough, robust patent search, a patent attorney should be hired.
Preliminary Market Research
Information provided in the Product Concept step will allow Phase 3 to make a preliminary determination of the market for the new products and/or processes. Research pertaining to consumer markets will be based upon common demographics and descriptors for mass markets, such as geography, age, gender, race, household income, buying patterns and preferences, etc. Research pertaining to business-to-business markets will be based upon SIC codes and employment size ranges of establishments meeting search criteria used by marketing and prospecting databases. This will produce the number and locations of "suspects" - entities meeting the search criteria but unknown as to whether they are in fact purchasers or potential purchasers of the type of new products and/or processes under consideration.
This approach is called "secondary" marketing research, or desk research, and does not identify specific "prospects" - those who are interested in, do purchase, or use the new products and/or processes. "Primary" market research, which is not provided in the scope of the feasibility stage, requires a very focused effort to personally contact suspects to determine their interest in or use of the type of product\process being researched. Should secondary market research show a potential market for the new products and/or processes, and the individual or company wants to further pursue its commercialization, primary market research can be conducted under an extended or new service agreement.
Preliminary Technical Assessment
A preliminary technical assessment can be conducted by Phase 3. This is a broad overview of the technology and/or process - a reality-check - to determine if obvious "red flags" exist that could or should terminate the project immediately. The cost for this assessment, which is part of the scope of work in the service agreement, can range from a couple of hours to possibly a couple of days at about $125 to $150 per hour - the exact cost will depend upon the complexity of the products and/or processes.
Information from the patent review, preliminary market research, and on-line searches will indicate whether there already are existing products and processes similar to or identical to the products or processes under consideration. The findings of this step are critical to the feasibility study because research shows that most new products and processes are not unique. As such, individuals or companies should want to know this early in the process to minimize committing resources to projects that ultimately will fail because someone has already "beat them to the starting gate."
Even though a product or process is found to have competition, there might be room in the market for another entrant - one with some differentiation. In this case, knowing early in the process that competitors exist, allows the individual or company to develop marketing plans and launch strategies to exploit the differentiation.
Preliminary Business Case Development
At this point, the following information should be available:
Assuming the project has progressed to this point and the individual or company has not ended it due to "red flags" pertaining to market, technology, competitors, etc., there is a possibility the product or process is commercially viable and that committing additional resources could be justified. The information provided will be used to develop a preliminary forecast, based upon the broad market potential and unit costs and pricing (if these are available). The individual or company will need to decide whether to commit additional resources to subsequent steps in commercialization such as product design and development, focused primary marketing research, or other activities.
Summary Of Steps In The Feasibility Study
The following steps are provided in the scope of work covered in the initial service agreement for $7,500. The costs shown for the various steps are estimates, since each project is different and will require different levels of research and analysis. The service agreement is a cost-reimbursement type, meaning that only the services used will be invoiced. An individual or company is not obligated for the entire $7,500.