4

Develop and Launch New Products and Services

You might think that only big companies with deep pockets can launch products. Not so. More products are dreamed up and executed by small, innovative companies or individuals. In 2007, small companies invested about $50 billion on research and development (R&D), according to the National Science Foundation.

In 2010, as the economy improved, all U.S. firms were projected to spend $260 billion on R&D, down slightly from the $268 billion spent before the recession in 2008.

Often, just one or two people dream up a staggeringly great idea. Facebook was founded by Mark Zuckerberg, a Harvard undergrad, and some friends. A few years and several lawsuits later, he turned down a billion-dollar offer to sell Facebook, and by 2010, the privately held company was estimated to be worth about $33 billion.

Feisty entrepreneurs founded Napster, the company that pioneered digital music sharing. Napster's colorful history included high-profile lawsuits filed by musicians and music publishers, bankruptcy, and an ultimate revival and sale to Best Buy for about $130 million. (My friend Chris Gorog resurrected the bankrupt company when he served as CEO and turned it around before it was sold.)

Being a pioneer isn't easy. Jann Wenner dropped out of UC Berkeley to start a new music magazine called Rolling Stone. He borrowed $7,500 from family and friends to print 40,000 copies of the first issue. It was a flop. Magazine dealers sent 34,000 back. Undeterred, he worked on the second issue. The magazine is still around and kicking ass.

In this chapter, you'll meet the cab driver/composer who invented Magnetic Poetry as a way to overcome writer's block. You'll learn how Frieda Caplan, a mom who wanted to spend more time with her baby, pioneered the importation of exotic fruits and vegetables, bringing new tastes to the American table.

With tens of thousands of practical and zany ideas floating around out there, it's no wonder the U.S. Patent and Trademark Office is overburdened with applications. The backlog is estimated to be 700,000. It can take up to three years to obtain full patent protection, prompting David Kappos, the patent agency's director, to admit at a public hearing that “we are currently operating the most senseless system of delayed and delinquent examination imaginable.”

Congress is supposedly trying to speed up the patent process, including a fee for “fast-tracking” an application. Although the fees for small companies are modest, it can cost about $10,000 or more to hire a patent attorney to navigate the complicated process.

Small business owners and inventors are launching and promoting new products every day. They push products on eBay and buy ads on Google. They line up to pitch their products to QVC and other popular shopping channels. It's tough to land a spot and even tougher to be invited back. If you are selling beauty products, you need to sell thousands of dollars' worth of products a minute, according to entrepreneurs who gave it a try. Direct selling is tricky and you have to be prepared to fill orders quickly.

Don't be discouraged. Bringing your vision to reality is easier than ever. If you've ever designed a piece of jewelry, picture frame, napkin ring, or flower vase, you can buy software for about $100 and design a 3-D model. That digital file can be e-mailed to a company like Shapeways (see Great Idea #87) for “rapid manufacturing,” or 3-D printing, as it is known. Within a day or so, you can post the product for sale in the Shapeways' online store.

Read on to learn how to license your product to a bigger company or make a distribution deal with an industry leader. You'll meet two women from New Jersey who fell in love with handmade Italian pottery and ended up importing it for use in gardens and homes across the country.

This batch of great ideas will inspire you to go for it: develop a product, create a prototype, mass produce it, and sell it.