Wade Armstrong

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American Inventor: Episode 2 Recap

Posted Friday March 24, 2006 in Entrepreneurship

This week’s American Inventor was a bit less rollicking than last week’s episode, but it was still filled with all manner of interesting inventions (and interesting inventors). Three particular business issues were shared across many of the inventions in this episode:

• Low-volume products
• Easy-to-imitate products
• Inventors who sunk a lot of blood, sweat, tears, and time into a bad idea

Low-Volume Products

A lot of the products we saw just wouldn’t attract enough customers to sell millions of units a year. Now, that’s not a bad thing, but if you’re not going to sell a lot of units then you’d better be making a lot of money on each sale.

That doesn’t mean, by the way, selling each item for a lot — although that makes your job easier — it means that you need to have a large difference between the price for which you sell the product and the price at which you produce the product. If you sell a product for $1,000 and produce it for $999, or sell it for $1.99 and produce it for $0.99, you make a dollar on each sale either way; you’re better off producing a product for $5 and selling it for $10. That spread is, as your probably already know, your margin.

So: good is to make high margin on small total number of units sold (like, say, Boeing does), or low margin on high total number of units sold (Pepsi). Bad is to make low margin on small volume. Best is to make high margin on high volume (Intel). A lot of the inventors had products that fit into the bad space — although a few could potentially be premium priced.

One that could get seasonal premium pricing was the gift bow lingerie; this was designed so that, with a pull on the knot of the bow, the whole outfit came clean off. The woman on the judging panel was, not unreasonably, offended by this product’s demo, which culminated in a naked blonde striking sexy poses; but the fact is that stuff like this flies off the shelves of Spencer’s Gifts every Valentine’s day, and maybe at Christmas, too. The rest of the year, this product would sell, probably, below cost.

The bathroom stall door clip was also moderately low volume. This product, a little plastic gadget that fit in a purse, could be clipped to the top of a stall door to keep the door shut when the lock was broken (anybody who’s used a lot of bathroom stalls can tell you that too many have broken locks). Moderate margins are a real possibility here, however, with “impulse purchase” positioning at the checkout lane at, say, Target. Who wouldn’t pay $5.99 for peace of mind, even if it just costs $0.79 to produce the clip and get it to Target?

Another product, one that could get that nice, high price point and nice, high margin, was a contraption made to help athletes learn to catch footballs correctly. This tool, which the inventor claims to have made for $30 (any entrepreneur can tell you that this is the right price to make anything for) was cleverly-executed but probably doesn’t appeal to every kid on the block. Does it have to? No, tons of inventors make money off of golf club attachments and baseball tees just because people want to learn to play sports better; this product is ideal for Guthy-Renker’s late-night infomercials. The inventor for this product was a great pitchman, with the kind of Billy Blanks-style energy that seems to score with the target demographic.

But it was really the attention to detail that caught my eye here: the inventor had come up with a clever way to attach the product, which is a foam rubber guide that prevents the receiver from catching the ball incorrectly, to the receiver’s chest. My first thought on seeing the product was that the receiver would fall flat on his face reaching for a ball and that the guide would focus all the force of that fall onto the guide’s small attachments, which hooked into a vest; with a lot of force over such a small area, I saw broken ribs in someone’s future. But it turns out that the attachments were cleverly made of flexible rubber, which the inventor demonstrated pushed to the side easily. That made me think: could those attachments be patented? Which brings us to our next topic:

Intellectual Property (IP) Protection

The first episode brought us a lot of inventors who said “I have a patent on…” and then showed us what they’d patented (that even included a woman who apparently had a patent on a product that was already out there); nobody used those magic words in the second episode. Which was a pity, because a lot of the products looked easy-to-imitate.

For instance, the bathroom door clip is just a hinged piece of plastic; anybody who can buy one can copy one. There was a doll, Here Comes Naya, who spoke three languages; as one of the judges correctly assessed, all that needed to be done to imitate that doll was to copy the languages. A patent would help protect both of these products from imitators; the only question is, do the margins available justify spending the money on patents, which can cost over $10,000?

This is not to say that you can’t succeed without a patent; in fact, one of the Marshall school’s alums makes a good amount of money selling cheap, commodity products that have no IP protection at all. Earplugs? There are tons of imitators. A plastic soda can lid? He didn’t tell us how much it cost to produce one of those but if it’s a whole dime I’d be surprised. These are easy-to-imitate products, but the entrepreneur who sells them knows what the trick is:

• Access to manufacturing
• Shelf space on stores

The first factor is obvious, but the second requires a bit of explanation: stores have a limited amount of shelf space, and they don’t want to give that space to anyone they can’t be sure they’ll make enough money off of. That gives a successful incumbent selling a product that doesn’t justify tons of shelf space real staying power, because why would a store take away shelf space from a sure thing to give it to a risky proposition? Anyone with a small-volume product who can get into a store first has a real chance to stay there and to keep out competition.

Do Your Feasibility Analysis

Through both of the episodes we’ve seen a lot of inventors who really should have given up already. Last week we had the man with the Bladder Buddy and the woman with the TV remote caddy for the bed, a product which was already in the market; this week we had the inventor of Bullet Ball, a tabletop game. This man had been working for 26 years to develop this game, which was played with a small ball on a wooden tabletop arena; he’d sold everything he had, and probably lost his marriage, following this dream. Someday, he explained, he hoped to see the game in the Olympics, just like ping-pong.

What he really should have done first is run a feasibility analysis. Had he done such a thing, he would have learned, at a minimum, that his product’s success depended on the American public’s willingness to buy a tabletop game. While games such as Carrom may once have flown off of shelves and into living rooms, that market space has long been lost to Nintendos and PlayStations and Xboxes. By 1990, anybody with a feasibility analysis would have known that the family tabletop game segment was mostly gone, but that a product like Bullet Ball depended on this segment for success. That same feasibility analysis would have led to one inescapable conclusion: pull the plug.


When you love something it’s tempting to go after it, but hesitate a moment and spend a couple of months on a feasibility analysis. The payoff could potentially be great — it could potentially be 26 years of your life back, something this smart, passionate man clearly deserved.

Next week is the last cattle-call; hopefully, after that we’ll see less manipulation of the heartstrings and more real business and invention.