Showing people your concept is a great way to determine potential. Can’t go simply off your gut otherwise you’re only designing for yourself. I created a website for my product idea back in late 2007 and was floored by the amount of exposure it received. Had people calling me and urging me to make it. I wasn’t too awful worried about secrecy since I’d already submitted a provisional patent application. In hindsight, however, that doesn’t mean crap.
So you have a bunch of people saying they want your product. Well, no skin off their teeth. What you have to consider is this:
- There are a TON of business start-up fees. You will find yourself filling out forms a lot. You’ll have to put your own finances on the line because nobody is going to give a new company credit terms.
- Maybe you can design the entire product yourself but then you have owner’s manuals, legal mumbo jumbo, UPC codes, etc. If it’s electronic, you’ll have to get it certified CE, FCC, etc. This is all expensive and will take time.
- Tooling costs can maybe be amortized over your first production run but you’ll still need to put up at least 50% of the entire order up-front. This is where the capital crunch happens.
- Once you have your first batch, you’ll have to start selling them. Shipping them, preparing invoices, tracking all your finances in Quickbooks, quarterly tax returns, taking customer phone calls, setting up online merchant accounts, etc.
- You will have to dive straight in and leave your full-time job. Have fun getting and paying for health-care. However long you think it will take to get things started, it will take twice. And twice the money. Even if you get going it will be a long time until you see a dime. Do you have enough money in savings to work yourself to death while not bringing anything in?
Investors are bad. Or rather, I should say I had a bad experience. Remember that investors have to be accredited. They need to make over $200K a year or have over a million net worth. Some guy off the street offering you $10,000 isn’t going to work. Heck, you’ll spend that much in legal fees just getting the documentation done. Many of the investors I’ve met are pompous businessmen that think they know everything because they can push an Excel spreadsheet around. They probably don’t know product or what all is involved in bringing a new product to market. Some may say they’ll take a hands-off approach but that can lead to problems too because there are decisions that have to be made on a daily basis. You may make these decisions off your cuff but only update them once a month. In doing so, the company may have gone in a completely different direction than what they were understanding.
I hope everyone sees this as being sound advice. Not saying not to do it but only to be super, super cautious. I left a good ID job, lost about $150,000, had the most stress I’ve ever experienced, and missed out on 3-4 years of prime professional experience. I’m right back where I started but with a lot of business knowledge but little additional design skills. In the end, I want to be a designer. If you want to be a designer, don’t start your own business around bringing an idea to market.