Product Development – Financing

This is a part of product development process that, unfortunately, being underestimated or even denied by most inventors. There are thousands of people inventing new toys, games, collectibles, consumer products, industrial products and medical devices. Many of them eventually starting to seek resources in order to develop the invention, prototype it and manufacture or sell the idea to a suitable established company. Even if if the inventor is not going to manufacture the product by himself, it should be developed to the stage of pre-production prototype (or appearance model) so the inventor could present it to an interested party and convince that party to buy his idea.

Most of the inventors have no idea about the product development process, they cannot draw or render, or fabricate. Many of them have only a rough idea represented by handmade sketch. So they take the idea to the professional, to the model maker, which in this case is a product developer.

Here where the problem begins. It will be right to say that in most cases inventor is a regular guy, living paycheck-to-paycheck. He has an idea of a product, and wants to see it come to life. He also already sees himself set for life and able to retire after the product will start selling. Often the getting rich idea prevails over the product’s idea so much that the person loses the ability to analyze the invention and to see its weak sides. But this is a different aspect of inventor’s psychology, which deserves to be described in a separate article.

Let’s go back to the financial aspect. An average inventor unfortunately does not realize that product development costs substantial amount of money. He has no savings, no investing partner and usually, no intention to start looking for a financing options. Instead, he is looking for product developer that will agree to work without compensation or for a hideously low compensation. Instead of looking for financing, most of inventors keep looking for a partner, promising a share in future rewards.

Fellow model makers, be aware that some of inventors might be quite persuasive and convincing. You have to set it as one of your core rules never to agree to a partnership offer, as I guarantee you that you will hear such offers very, very often, and each one of them will be presented as your lifetime opportunity. Be prepared that many inventors approaching you will be offended by your refusal. They will see it as a lack of believe in ingenuity and success of their idea. They will blame you that you are greedy, that you put profit before the progress and well being of human kind, that you are turning them down because they are poor and will lick the boots of rich… So brace yourselves…

Here is an interesting observation. Each inventor is utterly confident in the success of his product. However, from the inventors that approached me, not a single one risked life savings to fund his product, not a single one refinanced the house or sold his possessions, despite the confidence.

It is not a sin not to realize that it will be a cost to develop a product. What is sad and odd is that after the inventors that I’ve met learned that, non of them turned and went to look for financing. They went to look for another product developer that will work for free or for a bowl of soup. Countless times I tried to explain that a product developer that will agree to work on such terms will be low qualified, that it will end the product, that whatever little the inventor will spend will be wasted. Countless times I was pointing out that even if the inventor will find someone to develop the product for free or low pay, manufacturing will require funding as well, and no manufacturer will agree to produce the product in exchange for promises of future riches. My words were not heard…

From time to time I walk into a dollar store and just walk along the shelves looking at dozens of products – toys, collectibles, accessories, candles… Poorly sculpted, poorly developed, poorly manufactured. Poor, unprofessional, cheap work, products that where made cheap, were not sold, thrown on the shelves of a dollar store for the lowest possible price, and still, not demanded even for that price…

Dear fellow model makers, stand for your expertise, for your knowledge, for your right to be compensated and for the quality of products surrounding us. I saw very appealing product ideas that fail because of under funding. I saw much less appealing products that had funding and were developed and sold quite successfully.  Inventors have to understand that having a project funded is the key to success. It is a part of our job to point that out and to encourage inventors to turn and seek funds rather than seeking a cheap and low professional source.

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