How an Online Community Gave Birth to a Profit-Making Product in Nine Months

By Mike Drummond

Every winter, millions of people living in the snowbelt dutifully stab fiberglass poles along their curbs and driveways.

And every winter millions of those driveway markers snap or otherwise succumb to snowplows, autos and even the heft of mounting snow.

Driveway makers show snowplow drivers and others where roads end and private property or hidden turf and shrubs begin. For many, they are a seasonal necessity with built-in obsolescence. They’re also a pain in the ass to install in frozen or rocky soil.

For serial inventor Arra David, the product category was ripe for a makeover.

He invented the Rebound, a driveway marker equipped with an eight-inch spike and a stainless steel spring at the base. The Rebound, which drew its inspiration from slalom ski markers, bends but doesn’t break. And it can pierce tundra-like soil. The product, released this fall, sells for $5.49 apiece in the United States, about $1 more than a standard marker.

“The price point is right,” says David, “and it solves the two biggest problems with conventional driveway markers” – the difficulty of installing them after a freeze or snowfall and their fragility. Winters are rough on driveway markers, which experience a mortality rate of up to 50 percent.

“People who buy these,” says David, “are typically replacing ones they lost last year.”

The Rebound’s utility and simplicity make it among one of our best innovations for 2009 in our low-cost/high value category. At the outset of this year, we identified promising areas for innovation despite the wheezing economy. The categories included toys and games, baby boomer goods, green products, pet products and consumer electronics. Our best-of-breed list in this issue focuses on products from independent inventors.

We said back in January, “The key will be to give people what they want – to create products that align with consumer demand.”

The Rebound nails it.

Yet the Rebound offers more than just a useful product at a reasonable price. David and his business partner, Mike Collins, have created a “micro-business,” a lean and mean single-product company around the Rebound.

The New Hampshire company of the same name has gone from ideation to product commercialization to – and this is the important part – profitability within nine months. Their business model, based on razor-thin overhead, lightning speed to market, and input from a paid online community, makes it worthy of a Harvard Business School case study.

Collins is the CEO of Big Idea Group, an online product-development firm. Rebound’s first-year profitability miracle is due in large part to the informed feedback Collins and David got from scores of Big Idea Group community members. Rebound, in fact, owes its origins to a crowd.

Guided by the Crowd

Late last year Collins conducted a survey for an infomercial company. It was interested in generating product ideas to solve problems related to residential driveways or garages. Big Idea Group queried its Web audience for, well, big ideas.

More than several respondents mentioned the need for better driveway markers. The problem that feeble driveway markers posed resonated with Collins, a Yankee and veteran of snow. The infomercial client, however, wasn’t interested.

Undeterred, Collins returned to his online community and asked them to “solve the driveway problem.”

Arra David, a mechanical engineer who designs high-end gift products for a living, presented his product called the Willow, a “beautiful stainless steel marker with hanging décor.”

Collins and David had worked on marketing a backlit paper cutter, which was a finalist in a past Staples Invention Quest. Although Staples awarded the grand prize to inventor Todd Basche for the popular Wordlock padlock, Collins remained smitten with David’s Craft-Lite Cutter. Big Idea Group eventually licensed the product to Merchant Media, who successfully marketed it via print, internet, TV and stores.

When it came to the driveway marker, the two agreed to poll the Big Idea Group’s online community for feedback on the Willow. The verdict: It was “too different,” says Collins.

Collins paid respondents $25 for 15 minutes of their time and further feedback.

“We used the (online) panel to refine it,” says Collins. “It’s been really kind of this interactive thing.”

Based on the responses, David returned to the drawing board, created a stripped-down version of the Willow and the Rebound was born.

While David is skeptical of focus groups, he represents a breed of inventor who welcomes informed criticism.

“I think focus groups have two big disadvantages,” David says. “It’s hard to get people with relevant opinions and you tend to get this group-think effect. The first person to speak, whether they are charismatic or unlikeable, can really influence the outcome. You don’t get terribly valuable feedback.

“To some extent, an online community also is an artificial setting,” he adds, “but when you poll 300 who aren’t connected, it’s a wonderful resource.”

David and Collins enjoy a good working chemistry. David is adept at engineering and prototyping; Collins possesses administrative and business acumen. Rather than seek a traditional licensing deal, the two decided to forge a company around the Rebound.

They have an equal equity stake in Rebound and split all costs 50-50. And those costs are kept to a rock-bottom minimum through deft use of readily available technology.

“We talked about how we’d love to have no overhead,” says Collins, “and use subcontractors for everything. Basically, we said, ‘How can we create this as virtually as possible?’”

The nascent business used MFG.com to find an overseas manufacturer. They used commission-only sales people. They filed their own legal and business documents. And they used an hourly, part-time bookkeeper and Peachtree Accounting Software.

The company has no physical office space. Most communication is done via cell phones or Skype.

Some of their biggest costs involved attending tradeshows. That investment has paid off. Hardware stores throughout the Northeast and Canada clamored for the Rebound.

“To be quite honest, the product is selling so well we’re having trouble keeping it in stock,” says Jack Leggo, owner of Canada-based hardware chain Primeline Tools Inc., who saw the Rebound at a tradeshow in Las Vegas earlier this year. “This thing is a perfect fit for Canada.”

Leggo ordered 50,000 units.

“They can’t give me enough quantity to sell,” he says.

By early October, Collins was elated. Rebound already was in the black. Collins has been working with inventors for a decade and has helped license some 90 products. This is the first time he launched a company with an inventor and had it turn a profit within the first year.

He expects to sell a quarter of a million units this year, generating $2 million in sales. He expects to sell two million units next year. He and David already are working on an expanded line of more ornate driveway markers for next season – ones with Santas and other seasonal icons.

The effort has been so successful, Collins’ Big Idea Group launched a contest to create more companies around new products. A panel of three judges will review submissions and select the products they believe are most likely to succeed. The winner or winners – Collins said he won’t limit the contest to finding just one good idea – will get help from Big Idea Group. And, like David, the inventors will get a stake in the company.

“If we can do one micro-business a year with no overhead,” he says, “we’ll be profitable the first year and make a boatload the second year.”