Shark Tank, the television show is investor relations training for anyone even thinking about marketing a new product. If I am at home on Friday night at 9 pm, you can bet that I am watching Shark Tank. This program is reality TV at it’s best. Each episode shows several inventors/wanna be marketers, presenting their ideas to 5 proven business people in hopes of gaining financial support, connections and business savvy.
In most cases, it demonstrates how ill prepared most of these people are to effectively present their business proposals. While not exactly the same as presenting to a venture capital company, there are certainly many similarities. The one thing that is really different is the dynamics that take place between the competing sharks. Anyone watching the show should discount these interactions to a large degree. Instead, focus on the questions that are asked by the sharks as this is the best investor relations training that you can get to starting a relationship with venture capitalists.
“What is Competition doing now?” This critical question is frequently misunderstood by many would be inventors. How many times have I heard the response that, “I don’t have any competition, there is nothing else out in the market like my product.” It entirely misses the point that the prospective customer is doing something currently that would be replaced by your new product idea. Think about it for a moment. The automobile was totally unique, but people used horses to get around before. The ball point pen was totally unique, but it replaced the fountain pen. The cell phone replaced the phone booth. The iPod replaced the transistor radio. Virtually every product you can think of replaced something else that allowed the prospective customer to achieve a similar if not the same end.
If you don’t know what is being done now, how can you explain the features and benefits of your new product or service?
“How to market a new product” is a common search phrase on search engines. While it is a common search, it is the wrong search. It will not answer the question that is really at the heart of the matter. The real question should be, “how can I maximize my return on my idea given what I am willing to do to make my idea a commercial success”.
The truth is that there are millions of ideas and they grow in value as they approach commercial success. An idea that never gets exposed and promoted it has a very small chance of success. Marketing a new product takes: time, money, effort and knowledge. The person who asks How to market a new product doesn’t possess time, money, effort and knowledge then they are going to have to hire the talent to fill in their shortcomings or find alternative ways (See Three Options for Inventors) to market like selling the idea or licensing the idea to an organization with all the prerequisites to successfully market the new product.
Frequently in dealing with inventors, I find that they have multiple new product ideas. They think all of these new products are wonderful. They have a difficult time focusing on just one new product idea to market. Focus is critical. It is like shooting a gun at a target. If you don’t focus on the bullseye, it is unlikely that you will hit your target or successfully market your new product.
Deciding on a single product and doing everything that is required to be successful will require all of your time, money and effort. It is highly unlikely that an individual inventor will have enough of these three resources to pursue more than one product idea at a time.
Second, by focusing and getting one new product off the ground as quickly as possible will provide the resources necessary to to develop another one of your new product ideas. Rather than limit your resources per idea and slow your progress, it makes sense to focus on one at a time and build the resources that will allow you to pursue your other ideas.