THE ONLINE INVENTOR – September 23, 2008 issue  

(c) 2008 Market Launchers, Inc.  


Editor:  Paul Niemann  


Dear Inventor –  

There’s less than 1 month to get signed up to attend InventBay.com’s National Inventors Expo. It is held in Las Vegas from October 18 – 19.  

InventBay.com realizes something that many large companies seem to ignore -- that innovation comes primarily from entrepreneurs with their inventions, ideas and vision. The article in this edition focuses on this topic.

Meanwhile, InventBay allows inventors to post their inventions or projects on the InventBay.com website for free, obtaining significant exposure in the process. They also provide inventors at all stages with resources such as capital sources, mentors, manufacturers, attorneys, advisors and licensee groups, just to name a few. They also educate and support inventors through free telephone or web-based “roundtables.”  

You owe it to yourself to visit http://www.InventBayExpo.com and get signed up while there’s still time. Please see their ad below for more information.  

Now, on with this week’s issue …  

Best Regards,
Paul Niemann

Paul Niemann


CLEVER QUOTE:  “Success is a matter of luck. Ask any failure”… Author unknown  


“The REAL cost of commercializing new products – for the manufacturer”
by Paul Niemann of MarketLaunchers.com  

In a recent article in this newsletter, I mentioned that it is very expensive for companies to create, develop, patent and commercialize new products. This fact alone should give comfort to you as an inventor when you talk with companies about licensing or acquiring your inventions, because it makes you become more valuable to companies when they otherwise would create all of their new products at their own expense.  

Obviously, relying on outside inventors lowers the cost for companies, but it also lowers the risk and the time commitment of the companies, making it a win-win situation for both company and inventor.  

A 1982 study by management consulting firm Booz Allen Hamilton put a price tag on the entire new product development process by showing how expensive it is for companies to create, develop, patent and commercialize new products.  

How much does it cost?  

(continued after the break)  


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So, how much does it cost companies to create, develop, patent and commercialize new products?  

The study showed that for a typical company that generates 128 new product ideas, half of these ideas will move onto the next stage -- SCREENING -- while the other 64 will be tossed out. At a cost of $1,000 per product idea, the total at this stage is $128,000.  

At the next stage -- CONCEPT DEVELOPMENT AND TESTING -- one half (32) of the 64 ideas passed to the next stage, which is the BUSINESS ANALYSIS stage, at a cost of $2,000 each, for a total of $64,000 for this stage.  

At the BUSINESS ANALYSIS stage, one fourth (8) of the ideas passed, at a cost of $5,000 each, for a total of $40,000 for this stage.  

Then at the next stage -- PRODUCT DEVELOPMENT AND TESTING -- one half (4) of the 8 remaining ideas passed, at a cost of $10,000 each, for a total of $40,000 for this stage.  

Two more stages to go: At the next stage -- TEST MARKETING -- one half (2) of the 4 remaining ideas passed to the next stage, at a cost of $500,000 each, for a total of $1,000,000 for this stage.  

At the next stage -- COMMERCIALIZATION -- one of the two remaining test marketed products succeeded while the other one failed.  

So the total cost of creating, developing, patenting and commercializing one successful new product was, drumroll please, a whopping $1,272,000.  

But wait – there’s more!  

Most new products fall from the market within two years.  

So the next time you find yourself trying to convince a company who has the “not-invented-here” syndrome to consider licensing your new product, be sure to explain what’s in it for him.  

If he refuses to consider products that were created outside of his company, then he’s missing the boat. And it will likely prove very costly to his company. 

# # #  

Paul Niemann runs MarketLaunchers.com, building web pages for inventors. Having your own web page allows you to show your invention to companies when you’re unable to present it to them in person. It serves as your “online brochure.” Plus, it can be seen by companies who search the internet for new products.  


You are receiving this free newsletter because you signed up for it either at my MarketLaunchers.com web site, or by sending me an e-mail. If you wish to unsubscribe, simply reply with the word “unsubscribe” in the subject line.  

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