Some considerations for satisfying your customers—as well as your investors
BY LAWRENCE J. UDELL
It’s hard enough for inventors to come up with a product or service that is a perfect fit for consumers. But satisfying the needs of potential investors adds to the challenge.
During my more than 60 years inventing and introducing new products, I have learned a great deal from the consumer, retailer and new venture investor. All seek that “perfect product.”
Let us eliminate the marketing hype and examine this from the customers’ perspective as well as that of the investor—corporate, venture capitalist or private.
We should be realistic. According to Harvard Business School professor Clayton Christensen, each year more than 30,000 new consumer products are launched—and 80 percent of them fail. Other statistics set the failure rate at 95 percent.
There are various definitions of “new product”—but in my terms and for this article, it is a product that the potential buyer has not seen before and one that is not on the shelf as a “me too.”
A few simple examples are the cell phone (invented by my friend Marty Cooper), whose new book, “Cutting the Cord,” was recently released. The Hula Hoop and the Frisbee were also new products.
If you conceive of a brand-new product, can it be on the market long enough to discourage potential competitors? Even with an issued patent, can it be defended if necessary?
Let’s look at the potential perfect invention.
From the customer’s point of view, the product must:
- Have large and immediate advantages. (Which one do you pick off the shelf? Is the package color influencing?)
- Address and fulfill strongly felt needs.
- Be easily accessible and easy to try.
- Be simple to understand without requiring a lot of instructions.
- Have benefits that are easily observed and easily communicated.
- Be compatible with existing standards and cultural contexts (safe to use and in compliance with legal requirements)
From the investor’s point of view, the product must:
- Cost significantly less to make than its possible dollar return.
- Have customers who are brand loyal (less sensitive to price).
- Be habit forming, yet safe and non-reusable.
- Be explained in 10 words or fewer (or with a single picture), simple enough for anyone to understand.
- Have significant pre-existing orders and a very large market potential.
- Be proprietary and market-ready today (requires no R&D), with issued patents.
- Weigh little, be manufactured and delivered easily, and sold in bulk (a mass merchandising product).
- Have an experienced, accomplished management team.
- Have many enthusiastic mentors and “champions” who are committed.
Of course, it is nearly impossible to check all these boxes—but if you can check the vast majority of them, you could be on the right track.