Unless you have all of the resources you need to create and develop your product, you are more than likely interfacing with a technical consultant or engineering company.  The more effectively you can communicate with the technical team, the better your chances of getting what you want. 

Writing it down and describing all of your ideas and how they will work together will be a very effective task for moving your idea forward with your technical team.  You will begin to see holes in the logic, stumble upon new ideas, and begin to document what is in your head.  Writing it down will also alleviate the constant ruminating of an idea in your head.

But you say, “I’m not an engineer!  I don’t know how to write a specification!”.  Well, both statements may be true, but if you want to pave the way to a successful product development venture, you’ll need to learn to communicate your ideas effectively to the engineers who can write a specification.  And with a few helpful tips, you too can write a basic specification.

An item of note, this list is for a somewhat validated idea.  This list assumes you’ve already performed the basics like validated a market, created a tentative business model, and you have performed some level of prototyping.

1. Brainstorm.  Your first step is to just get all of your ideas down on paper.  White boards, drawings, and short lists are a good place to start.  You want to focus enough on this so it is all out of your head and on paper.  You can move things around later, but now you have your concept documented and you can begin to refine it.
2. Strong and weak words.  Inventors tend to get very tied to their ideas.  Try to break away from that and begin to describe what you need done using some special words.  If you use a phrase like, “The device shall be made from titanium,” then the reader will expect that you are the expert in this material and there is no room for variance.  Other strong phrases are: must have, required to, and will.  Does it need to be made from titanium or is it that weight to be minimized?  There are weak words to use like may or should or can.  Think about what is absolutely required and what would be nice, and the real goal you are hoping to achieve.  Then write that down.  Keep in mind that opposites can also be valuable in your writing.  Phrases like cannot, shall not, and should not are equally useful.
3. Sketch.  As you have heard, a picture is worth a thousand words.  You may be amazed at how effective a simple block diagram in Power Point can be.  Show how things are connected.  Show the logical flow of operation.  There are great mock-up tools for software/apps these days you can also use.  The more you think and articulate your idea, the more effective it will be conveyed and possibly become a better product.
4. Write what you know.  You are probably not an engineer if you are reading this, so don’t try to be.  Yes, you should educate yourself in the technical field of your idea.  You should not spend your days looking over websites for microcontrollers and then specify the use of one in your project.  Describe the features and functionality you require, don’t try to engineer the product unless you have that skillset (before you had this idea).  An experienced engineer will have just that, a lot more experience.  Take advantage of that and let them do what they are good at.
5. Iterate.  A specification is a living document.  It can change as the market and business input is uncovered.  As you learn more about your idea, do more research, and develop your product and business, it will constantly evolve.  Now with that being said, once you engage a technical team, there can be costs associated with change.  You will want to get close enough to start engaging your technical team, but once you hand it over to them you should have a good assurance it’s right, and only make changes that absolutely have to be done.  Inventors tend to like to ‘tinker’ with their ideas which can keep products from ever reaching the market, so iterate until you have something to sell, then stop.  Let the market drive your iterations.  This is a subject for another posting.

What I’ve described above is generally referred to as Functional Requirements Specification or a FRS.  The engineering team will then likely create several documents from this which could be a Design or Product Specification, Test and Validation Plans, etc.  Those are beyond the scope here. 

Don’t worry about making it perfect.  From a non-technical perspective, you should put down the things that you care about.  However technical and non-technical that is.  If you care about the color, put that down.  If you care about costs, put that down.  If you don’t care what material is used, let the engineer figure that out.  In any case, your technical team will start to ask you a lot of questions to help flesh out your specification.  After the ground work is laid, then everyone can be on the same page for what needs to be done.

It may come as a surprise, but you can pay a company or a person for engineering design work, and not own the design that you paid for. It has happened to several of my clients working with other vendors in the past, and it happened just recently and I was compelled to bring this to light.

I refer you to the Copyright Law of 1976. It’s some nice light reading for a Sunday afternoon; it’s rough.  Here is the gist, if you create something, it’s yours. Yes it gets more complicated that than that, but in the case of engineers and other people who are typically in the business of creating, that’s the way it works. So you walk into Joe Engineering, Inc. (no offence, Joe) and pay them to create your new invention for you, they own the design and have every right to protect it. You could still very well have a patent on it, but without any additional contractual terms, they own it.

Now obviously in whatever you signed with Joe, you should have been assigned at least some rights to the work you are paying them to create, but that’s where the devil is in the details. And as I lay out these examples, one isn’t better than the other, they are just different and it depends on the company’s monetization model.

Work for Hire. This is an actual exception to the copyright law above. As I stated above, if you create something, you own it. Well we are all pretty comfortable and understand that if you are an employee of a company, the work you do is owned by the company. This is work for hire. However it gets messier if you work with an independent contractor, company, or freelancer. The entity that created the work for you owns the work, unless rights have been explicitly granted to the entity doing the hiring.

So you walk into Joe Engineering, Inc., sign the agreement, they do the work, you pay them, now what? If the agreement states that the work was a ‘work for hire’ or that you are granted full rights to the design, then you can do whatever you want with the work. If however if a ‘work for hire’ was not agreed to ahead of time, they could very well present you with a set of drawings and say thank you very much. Heck, they may not owe you anything, it just depends on your agreement. Typically they would just offer you the output documents (files to produce the product, but not change). Which brings me to the key point of this paper, read and understand your contracts.

This isn’t about the companies being mean, it’s just the way they chose to do business. What typically happens, is if a contracting company sells and assigns the entire rights of the design to the client, they have to charge more. They are selling their work at full price. On the other hand, if you have a company which tightly controls their intellectual property and maintains ownership of their designs, they generally charge less as they intend to monetize their costs other ways (manufacturing, change orders,etc.).

The typical case when a client finds out about the details of their agreement is when the client is no longer satisfied with the work of the engineer and wishes to split their paths. The client explains that they need all of their design files. These are the files used to create the design. They could be source code, solid models, schematics, etc. And you want the files used in the native software so they are easily editable so you can have someone else work on them. And the engineering company tells you no, you don’t own those files. You don’t have a lot of options here. You are either tied to that engineer on this project or you can pay another engineer to re-create the design for what might be a simple change at a significant cost.

As I said above, read and understand your contracts. You may get three bids from engineers on your development project and one is just so much lower, this may be a reason why. Sure, as an entrepreneur and/or startup company money is tight, but be careful of the long term implications.

Disclaimer. I’m not a lawyer. Seek good legal advice. I own an engineering company and have seen these issues played out numerous times when new clients want to use us instead of their other engineer. 

Consider the origin of the word “prototype”:

c.1600, from French prototype (16c.) and directly from Medieval Latin prototypus “original, primitive,” from Greek prototypon “a first or primitive form,” noun use of neuter singular of prototypos “original, primitive,” from protos “first” (see proto- ) + typos “impression, mold, pattern” (see type (n.)). In English from 1590s as prototypon.

So think ‘first impression’.

I try to use a few more specific phrases to help articulate what the various forms of a prototype.

• Proof of concept – This would be an early level prototype that includes many of the final features, but usually has a low level of customization.  Typically we can take a few off the shelf devices, modify them, program them, etc., and prove the concept the inventor has in mind is practical.  They can then be used for raising early stage funds and validating your idea to focus groups.  They are generally not the prettiest things in the world, but they are a good start.

• Functional Prototype – This is a mid-stage prototype which usually has a high level of customization.  Most components are custom or designed for volume purchasing at this point.  Most of the features are in place.  There may be some compromises on functionality due to cost or time constraints.

• Pilot Run – This is a late stage prototype which you have before you start production without the engineers.  At this stage the device should represent what you intend to sell.  If you find issues here, you iterate, make minor changes and try again.

It’s important to state that there is a large continuum of what your prototype will be.  You can start out with very low tech methods, as I call ‘Garage and a glue gun’, and work your way up to a professionally made, ready to show the market device. 

You must start though.  Don’t be afraid of making something ugly or that it won’t come out right. It won’t.  You will get better.  Failure is OK.  Start somewhere and keep on working on it.

Iterative Design

Design and engineering don’t happen all at once.  Most famous painters don’t paint the perfect picture first time out.  With oil paints, you can just keep painting on top of what you have until it looks the way you want.  Your product will not be perfect the first time.  Keep making prototypes until it’s the way you want it.  Of course this needs to be tempered with budget constraints and your time.  Experiment, permutate (make different variations), research, test, and do it all over again. Dyson famously made 5,127 of his vacuum.  Edison had over 10,000 attempts at his light bulb.

Garage and a Glue Gun

This is where you just have to start somewhere.  Everyone can use tools to some degree.  The more you use them, the better you’ll be with them.  Sketch, illustrate, research, learn, experiment, modify, and create.  Repeat.  It will not be perfect.  The greatest obstacle to finishing a task is starting.  Also, this is a good time to take out your camera phone.  These early documentation steps will provide great entertainment for later and possibly help you defend your ideas.

Professional Prototype

After you’ve done some of your initial experimentation, and you have a plan, it’s time to consider a professional prototype.  You don’t need to be an expert at everything.  You should be very familiar with your product and have some very specific ideas about what it should be in the end.  When you approach a professional, you should have a written document.  It doesn’t need to be a full specification, but it should have the things that you care about along with the known unknowns; the things you know you need their help with.

A professional prototype development company should have a wide range of resources.  They will have better tools, machines, toys, skills, and disciplines.  Generally, a combination of electrical and mechanical engineering will be required for most projects, however if there are other specialties required, make sure they have access to those other skill sets either through contractors or partner companies.

When working with a professional service, especially product development services, be sure you understand your agreement.  Various companies have vastly different business models that may or may not be agreeable to you.  Be sure you understand what you are paying, what you are getting, and who owns what.  It is possible for you to pay for a design and not own it.  Some firms will work for sweat equity in part or in full which is great to save you money, but treat them like you would any other partner, as you will be working with them for a long time.

Conclusion

While I’ve tried to make this exhaustive, it by no means is.  Every idea and business plan will have its own nuance and particulars.  Product development is a tough road no matter how you slice it.  I think the hardest part of it is that the capital required to physically create something just to sell the first one is usually pretty high.  On the other hand, there is a lot of activity in software and web products there is more of a gradation in how quickly you can start marketing your product and the intangible aspect of it.  There are still many great product ideas out there waiting to be found and executed.  I personally love creating tangible products and entrepreneurship, so that’s what I do every day and I feel it’s all worth it.

Resources

• Anidea Engineering Blogs

–      http://www.anidea-engineering.com/blog/

• LMP, Inc.

–      http://www.lmp-solutions.com/

• Inventing Daily

–      http://www.inventingdaily.com/

• Sketch Up

–      http://www.sketchup.com/

• TinkerCad

–      https://tinkercad.com/

Web References

• Documenting Your Idea

–      http://www.docie.com/patenting-help/documenting-your-idea/

• Document your Invention or Idea

–      http://www.veritek.com/Media/EDocs/documenting_the_idea.pdf

• 3 Things You Need to Know About Launching a Product Business

–      http://www.entrepreneur.com/article/230068

• Launching a Product Business

–      http://www.entrepreneur.com/article/230068

• How to Build a Billion Dollar Business Plan

–      http://www.forbes.com/sites/alanhall/2012/08/26/how-to-build-a-billion-dollar-business-plan-10-top-points-2/

Angel Groups

• Angel Forum of Florida

–      http://www.aiffl.org/

• Gulf Coast Venture Capital Association

–      http://gcvca.org/

• New World Angels

–      http://www.newworldangels.com/wp/

• Tamiami Angel Fund

–      http://tamiamiangels.com/

IP Strategy

Intellectual property (IP) is a big buzz word these days.  It’s important stuff.  If you can convince the US government (or other government) that you have an original idea, they will help you protect and give you exclusivity of it for a period of time, generally 20 years.  That sounds great, doesn’t it?  You can also file a provisional patent that is kind of places a foot in the door which discloses that you are working on an idea, but you aren’t ready to file a patent yet.  If you file a patent based on your provisional, you’ll get an earlier file date. 

Ultimately what you want is a Utility Patent.  You want to patent the actual utility of what you’ve created.  Those are the good ones.  There are other types like Design Patents, but they are more easily circumvented.

Above while I was talking about the government helping you protect your idea, they will only do so much.  The patent office does try, and they do a decent job, of making sure the patent they give you is unique, however they are not the only opinion that matters.  In the case where two issued patents have overlap, people can go head to head for years dumping tons of money into lawyers trying to get injunctions or other compensation in place.  Alternatively, you may have protected IP and someone else is selling a product which infringes on your patent.  It will cost a good bit of money to make them stop. The old line is that a patent is only as good as your pockets are deep.

So why patent at all?  It’s a reasonable question.  In general, patent what you can with the finances you have, but don’t go overboard.  Or, you can always take advantage of some other techniques like “first mover advantage” or “first to market”.  Coke doesn’t have a patent on the drink itself, but people can’t copy the true ingredients.  Coke has a trade secret on their recipe and they have proven that they go through extraordinary efforts to protect it.  The proof of how hard they protect it, and it actually being unique, provides them protection.

Footnote: I’m not a big fan of patents.  Not because I don’t think a patent is cool, but that they get way over used and big business has ruined it for the common inventor.  I do think they are very good for impressing your mother, and who doesn’t want to do that.

General Protection Mechanisms

So you are going to need to talk to someone about your ideas, as no one can do it themselves and you have to build a team.  So the first step is to have a Non-Disclosure Agreement (NDA).  This is a basic agreement between you and to whom you are talking to that they will not disclose your discussions and they will not benefit from them (unless you end up hiring them in some way).  These are basic agreements.  You can download them for free/almost free.  They are a good first step.  If nothing else, it sets a clear expectation that you expect your conversations to be between you and the other party.  If you don’t trust the other person, the NDA probably won’t mean much.  Also, many people won’t sign them.  Investors typically won’t as it exposes them to risk, as they tend to see a lot of deals and ideas.  They may already know 3 people working in that space.  The suggestion here is start out slow, and make sure they have a legitimate interest.  As the relationship grows, they may sign an NDA and get more involved with your venture.  On a side note, most professionals only have their integrity and reputation.  We know not to talk about other people’s ideas or to try to leverage information given in confidence.

Keep your mouth shut.  Not everyone at the bar on a Saturday night needs to know about your whiz bang idea.  Be careful about who you speak to about your idea.  Think of it as a need to know kind of thing.

Also, as you getting started with your team, you may be thinking, “We’ll figure out the money later” type of thoughts.  No, do it now, while there is nothing to argue about.  Money makes people weird.  At the very least create a rough operating agreement that you sign with your ‘friends’.  Talk about the ownership distribution, who does what, and how a person can leave or come in.  Just get some basics out of the way.  If the money starts rolling in, the last thing you want to do is start fighting with your co-founders about who owns and does what.  It will be over before it begins.

Also, keeping ownership straight, everyone should read up on the Copyright Law of 1976.  It talks about who owns things when you hire a contractor if not otherwise agreed to.  Make sure you understand the agreements you sign with contractors, especially dealing with ownership and rights. Yes, it is possible for you to pay for something and not own it or full rights to it.  There are all sorts of variations here where a contractor may become part owner (sweat equity) or a manufacturer may partner with you.  The key here is to make sure you understand the agreements.

Read the next installment.

For the last year or so I’ve given presentations at my local SCORE chapter about how to take ideas from concept to reality.  It’s titled, “I Have an Idea, Now What?”  It’s been very well received and I keep getting invited back so I guess they feel it’s helping people; however, for those of you who don’t know what SCORE is (in which case I hope you will look in to the organization) or don’t live in our local area where I speak, I decided to write a multi-part blog detailing the presentation.  Here is my first installment.

My name is Gabriel Goldstein and I own Anidea Engineering.  I started it in 2001 while I was working in conventional employment.  During that, I was head hunted to work in a startup to develop some automated lighting equipment for music and entertainment venues.  When that startup was written off by our financier, I took Anidea full time.  Over the last 13 years, myself and my company have developed dozens of electronic and mechanical systems.  Everything from little things that blink and beep to GPS golfing assistants, and cow mating detection systems.

Before all that, I attended University of Central Florida and graduated in 2000 with a BS in computer engineering.  I worked as an engineer most of the time I was in school.

I come from a long line of entrepreneurs.  My parents are entrepreneurs, all of my grandparents were entrepreneurs, and 2 of my 3 siblings are entrepreneurs.  You can argue nature or nurture, but you can’t argue it’s not in my family.

Disclaimer

So here is where I tell you what I’m not.  I’m not a lawyer or patent attorney.  The content here is based on my 18+ years’ experience as an engineer and entrepreneur, your mileage may vary.  Everyone’s situation is different and needs specific evaluation. 

How Invention Works

So most people think this is the way invention works.  You wake up one day with this idea and get all excited.  You do some Google searching (maybe), find a manufacturer, then you sit back and wait for the money to roll in.  Keep an eye on the dollar signs in the presentation, they are proportional. 

How Invention Really Works

So this slide is still overly simplified.  There are many, many ways to get your idea to a profitable state.  The key decision is whether you want to start and run a company or license.  Sure there are lots of people who will offer free or cheap help, but you usually get what you pay for.  In this world, the more you put into something the more you get out; the higher the risk, the higher the reward.  There are exceptions (they are called luck), but you should be familiar with these life concepts by now.  There will be more on this later.  The key thing to understand here is that it’s a lot of work and it’s quite complex.

Why Am I not Rich Yet?

So you have this idea, you’ve toyed around a bit with it, and you have expectations that it is really a good idea.  So you may be wondering why the world isn’t blazing a path to your door.  Thomas Edison said “Genius is 1% inspiration, and 99% perspiration”.  Another famous person, Ashton Kutcher stood up at the Teen Choice Awards in 2013 and stated, “I believe that opportunity looks a lot like hard work.”  He didn’t discover this thought.   Credit goes back to the 1900s or so.  You have not yet begun to perspire.  So yeah, I get that quoting Kutcher may sound strange. For those of you reading this, people used to tell me I looked like him a lot when I was younger and he was more famous.  I’m also just trying to be relevant to the ‘kids’ out there. J

Idea

Time for some definitions.  So an idea is just the most basic starting point.  It has little intrinsic value.  People have lots of ideas, some are good; most are bad.  Don’t get too caught up on any one idea.  Ideas need to be nurtured and researched.  Linus Pauling said, “The best way to have a good idea is to have lots of ideas”.

Things to consider:

Do You Have an Invention?

So how do you know if your idea is an invention or not.  A time ago, this would have been a relatively difficult task.  Nowadays, one word, “Google”.  Google it, Google it again.  Use alternate search phrases.  Ask close friends how they might describe it, then Google that.  I can’t stress this enough.  Many times I’ve been sitting in new client interviews and as they start describing their product, I find it on Google, Ebay, or USPTO (United States Patent & Trademark Office) in 5 minutes.  After you’ve exhausted Google, move to the USPTO.gov site and search there for a while, then pay for a professional patent search.

Is Your Baby Ugly?

This is a tough one.  Not all your ideas are good ones.  Some are ahead of their time or just don’t have the marketability to sustain a profitable product development cycle.  Talk to trusted associates.  Get honest feedback on your idea.  Validation is key.  Investors always want an idea to be proved out to some point.  You are your own investor.  Validate your idea before sinking too much time and effort into your idea.  You will need to strike a balance between keeping your idea confidential and talking to enough people and assessing the marketability of your idea.  Remember, you need to think about this like you are starting a business.  If you are not out to make money and run this like a business, it’s a hobby.  There is nothing wrong with hobbies, just keep that in mind as you make what are really business decisions.

Risk Assessment

One should consider what they are willing to put on the line to achieve their dreams.  Not all ideas should be a bet-the-farm, let it all hang out, all-in venture.  Most should not for that matter.  However, this is what sets apart the men from the boys.  All businesses and ideas take risk.  You have to.  Few things in life are guaranteed, just death and taxes.  Do you have a lot of ideas to build a company around?  Are you prepared to quit your day job?  What will be sacrificed for you putting in another 30 hours a week in at night while you do the leg work to build your new business (something will, no exceptions). 

My point here is that you need to take smart, calculated risks.   Don’t dump your life savings into an idea before you know you have a market.  Do spend some seed money for a proof of concept for some market research to prove your direction is solid.  Do get enough validation, convince others, and get help.

This is entrepreneurship.  Believing in something before anyone else believes in it.  If you are going go down this path, you have to be prepared for a rough road.  You get out what you put into it.  At this point you are likely to have more time than money.

Read the next installment.