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Guest: Tom Gray, Founder and Executive Producer of Make48.
Host: Kevin Mako, founder of Product Startup and the leading expert in hardware startup consulting. A hardware entrepreneur since 1999, Kevin has advised more than 1,500 founders and built and scaled MAKO Invent through its acquisition by TriMech in 2024.
From Inventor to Product Business Owner
Make48 founder Tom Gray explains paths from invention to licensing or a company, plus the proof, prototype, video, and sales materials each requires. The discussion also covers commercialization strategy, prototype planning, validation, licensing readiness, launch preparation, and partner conversations.
What You’ll Learn in This Episode
- Two choices: License or build a startup
- Licensing still requires you to move down the
- 4 things to present an invention idea
- Your first prototype is never the final one, do a few to get it right
- Make sure to have a quick and clean video
- Sales sheet, just one page
- Some IP protection, done well
- Small stepping stones in developing the product
Episode transcript
This transcript is provided for accessibility and reference. Download the SRT transcript.
Read the full episode transcript
Kevin Mako: Hello, product innovators. Today we learn from the founder of one of the biggest product TV shows in America on how to go from being an inventor to building a product success.
Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors,
Narrator: product developers, manufacturers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial
Narrator: idea to getting your product on store shelves. We're taking you. step by step to build a functional product and scale your product business.
Narrator: Hosted by Kevin Mako, one of North America's leading experts on hardware development for small
Kevin Mako: product businesses. Now, onto the show.
Kevin Mako: Welcome back, everyone. Today I'm very excited to introduce Tom Gray to the show. Tom is the founder and executive producer of the Make48 TV show, a show where
Kevin Mako: contestants have 48 hours to come up with an invention idea and build a prototype to showcase it to
Kevin Mako: the judges. The show is on PBS, Amazon Prime, and many other networks around the world. I will
Kevin Mako: actually be one of the judges on the upcoming season, so stay tuned for the release date of that in coming months.
Kevin Mako: Today, Tom is going to share some valuable knowledge in how inventors, startups and small manufacturers can grow from being an inventor, a maker, a tinker, a product ideator into
Kevin Mako: being a real product business success via either product licensing or starting a product manufacturing business. Now, on to the episode.
Kevin Mako: Hi, Tom. Welcome back to the show. Kevin, good to see you, So I'm going to see you in about four weeks from now at the finalist for the next season.
Tom Gray: Really looking forward to being a judge on the show. Yep. You're going to be there in Wichita, Kansas. It's actually three weeks.
Tom Gray: So to make sure you mark that on the calendar with a judging seat, we don't want you late, Kevin. Yeah, that's right. I'll be there.
Tom Gray: We're going to be filming season five for the PBS series. And it's the best of the best teams coming together.
Tom Gray: Wichita, Kansas at Wichita State University is our host location at the Go Create Makerspace. I think you'll be fascinated. It's going to be a thrill.
Kevin Mako: There's a lot of VIPs and the best teams coming together. That's amazing. I mean, just seeing the set-up set, some of the prior filmings, I know you do everything
Kevin Mako: top-notch, and it's such a cool TV show. And you're all over the place now. You're on PBS, like 95% of American households, Amazon Prime, a
Tom Gray: bunch of other places around the world. Yeah, just launched our major partnership with Roku in this old house. Came out two weeks ago. Oh, congrats.
Tom Gray: Thank you, a brand-new maker channel with all the influences on YouTube on that channel as well.
Kevin Mako: So never ending, always looking to get some more exposure for the brand of the maker movement.
Kevin Mako: You've got an incredible background, especially for today's conversation around going from a maker, a tinker, or an inventor, to a real business or
Kevin Mako: to monetizing that invention idea. Give everybody a bit of a background because you're not just the head of the big TV show in the space,
Kevin Mako: but before that and concurrently, you did a lot of work with developing products and getting products out to market with Handy Camel. So just to walk us back in history because
Kevin Mako: those two experiences really give you an incredible perspective on what it takes to truly succeed
Tom Gray: from inventor to a real product in the market. Yeah. So, Kevin, actually, before Handy Camel here in America, I was in Australia.
Tom Gray: I'm actually in New Zealand born and raised, but I was in Australia running my company and my background was working with inventors. I would license
Tom Gray: their inventions, put them under my brand, do the manufacturing, invest in tooling.
Tom Gray: I had my own distribution warehouse and the marketing, et cetera.
Tom Gray: And I ended up supplying a big box retailer in Australia called Bunnings. So think of Home Depot here down under they have the Bunnings retail stores.
Tom Gray: And I ended up selling that company in Australia with nine products on the shelf. So nine different skew items, all within the roofing and guttering industry.
Tom Gray: So I had the section, I had my own section in the store. If you can appreciate you, walk into a hardware store. And one brand sort of sells a lot of different things.
Tom Gray: one spot. And I got to learn that industry.
Tom Gray: Now, when I came, married my wife, we moved to America. I started doing the same thing. My first invention was a licensed invention from a German
Tom Gray: inventor, the Handy Camel bag clip. And what I did is I started back at Ground Zero and I started doing the trade shows.
Tom Gray: And we were doing 15 retail and distributed trade shows per year. So I got to learn at the systems and I got to grow my network.
Tom Gray: right, supplied places like Ace Hardware, QVC,
Tom Gray: became a retailer of Walmart, which is quite a long process.
Kevin Mako: But I got to learn everything, had my own distribution warehouse, but I got to work with inventors.
Kevin Mako: And that's sort of the background and how I got involved with Make48. That's an amazing backstory. Kudos to you for all the success to date. So let's talk about the inventors.
Kevin Mako: They're in that period of their inventive journey where they've got the idea, maybe they've been tinkering around in the garage.
Kevin Mako: Maybe they've been part of a university group in the maker space there or at some other community where they've kind of got something and whether it's just a baked
Kevin Mako: idea that they've been working on or whether it's something that's actually physical that
Tom Gray: they've created and they're really looking to monetize this. What are the options for them from your viewpoint for what you've seen work over the past few years?
Tom Gray: There's definitely two options that most people look at that's still very common is to license your invention to someone else or another company or a brand.
Tom Gray: exchange for a rorty so you get paid a small percentage providing that item gets sold to a consumer
Tom Gray: right licensing seems really easy that someone else is going to take your idea but you must consider that big companies are looking at innovation ideas all day long they
Tom Gray: also have their own internal design programs internally so they can invent their own things so they look at a lot of outside
Tom Gray: innovation they must look at trends they must work with the retailers to see whether or not they can get positioned for it there's just a lot of factors right
Tom Gray: Then you look at the other spectrum is taking the product to market yourself and starting a company, starting your own business, starting it in your garage or in
Tom Gray: a warehouse, whatever it
Kevin Mako: may be, a lot more reward with that, but a lot more issues, a lot more financing, a lot bigger
Kevin Mako: problems to face as an entrepreneur, you know, you're going to start a company and make decisions and hire people. So two very different ways to look at it. I appreciate that.
Kevin Mako: It's good to look at those two angles and understand them in depth as well because it's a big decision for a startup. So let's talk.
Kevin Mako: about licensing first, especially with modern day licensing, is how it really happens today, because that's one of those buzzwords, which is misconstrued quite a bit.
Kevin Mako: We certainly see it at our design house. People come in with a great idea, albeit, and they say, okay, how do I get rich off this? Who's going to pay me money to take this?
Kevin Mako: What kind of fees can I get up front? What kind of royalty am I going to get? And I would say that's probably one of the biggest misconceptions out there
Kevin Mako: to people who are not in the product space, is that just some idea, either, you
Tom Gray: know, is worth gold.
Tom Gray: So when we look at licensing, it's important to break it down, especially from your history working at it. What does successful licensing look like in 2022? Break that down a bit.
Tom Gray: Yeah, good. Good question, Kevin. So the more skid in the game an inventor has, the higher the chances will be of success of a relationship.
Tom Gray: Okay. So you mentioned it before. People have ideas. Ideas mean almost nothing, right? I know people, including myself, have ideas every day. They don't mean anything.
Tom Gray: There's four things we look at. And most companies look at the same four things. They want to see an inventor who has built a looks like, feels like
Tom Gray: maybe working prototype, maybe rebuilt it three or four times to make sure it physically works,
Tom Gray: because your first prototype is never going to be the final one. You're going to have to
Tom Gray: redo it over and over again to get to the point where you're happy with it and you can prove what you say is real.
Tom Gray: The next thing we look at and a lot of companies will not deal directly in person with inventors, even pre-COVID, they just don't have the time. They don't want to sit in a
Tom Gray: room with them. You must educate the buyer or the person you're showing it to. You must educate them with a one-minute clean video.
Tom Gray: How it works straight to the point. Your video is showcasing the invention how it works. It can be filmed on an iPhone. It doesn't have to be elaborate.
Tom Gray: Nice, clean voiceover of your benefits, etc.
Tom Gray: Then there's a sales sheet, which is a one-page document that a buyer or a potential partner can look at and take with them and write notes on.
Tom Gray: Again, it has a nice couple of photos and it has the points and benefits. It might have some manufacturing costs. Whatever you think you can put on there to educate them.
Tom Gray: And then finally, a lot of people are not putting the right or any protection
Kevin Mako: or starting the IP protection process.
Kevin Mako: So you may break down a door, you may get a great meeting with a prototype. But the first thing they're going to look at
Kevin Mako: is has this been protected and can we protect it for our own company in the future? The other big misconception is, and there is an issue with it, is the patent industry in
Kevin Mako: general. You need those four things to really impress a potential partner moving forward. Those four things are very powerful.
Kevin Mako: That's really great words of wisdom, because interestingly enough, the four things you mentioned there are generally what's considered the product startup route.
Kevin Mako: So you've mentioned those two categories, which is product licensing and product startup. The four things that you mentioned there are arguably also part of the
Tom Gray: journey to start a product business. I think that's the key misconception right there is that people who are looking
Tom Gray: to license their idea, need to understand that you need to do a lot of the legwork, let's say even
Tom Gray: pretending to start up a business and get it to at least a certain point where you have those four things and they're done well.
Tom Gray: Then you're in the position to look at either licensing or continuing on to manufacture the product yourself. Correct. Yeah. Yeah. The, the
Tom Gray: prototype itself, you're going to need that to show a manufacturer, right? The manufacturer is then
Tom Gray: going to ask for CAD design drawings that can manufacture the product so they can quote tooling, right? You may take your four things, create a business plan and show a
Tom Gray: bank. Probably the most important thing, you know, the banks are very particular about funding.
Tom Gray: It's high risk. You know, the product will is very high risk for a bank. So that's where you're looking for a seed investor,
Tom Gray: family, friends, a product person, you know, is going to want to look at that. And make sure it works.
Tom Gray: It gives them sort of the piece of mind that the inventor knows what they're talking about and the inventor has the skin in the game.
Tom Gray: But like you say, you need those four things no matter which way you look at this.
Kevin Mako: The other thing we see a lot is that a lot of people want to see some success before they invest, whether it's a licensing deal or whether it's an investment.
Kevin Mako: Think of Amazon reviews. That's now the hottest thing to look at. Someone wants to see 100 positive reviews before they're willing to take that next level
Kevin Mako: or a successful Kickstarter Indiegogo. So the more skin in the game you do yourself and investment you do yourself to prove what you're
Kevin Mako: saying is true, the more chances you've got of getting some type of relationship on the other side. Yeah, and that's quite interesting because if you can push towards the build a
Kevin Mako: startup business yourself, to the point where you have even a few hundred units in the market, but you've got those reviews.
Kevin Mako: Now you become exponentially more licensable or investable or even just for other stakeholders or other partners. it might be of value. Maybe it's brand partners, et cetera.
Kevin Mako: But the key is getting units into real users' hands and them saying that you like them. And even potentially before you look at a licensing
Kevin Mako: deal. Now, you can license earlier, absolutely. But as you said, the further you push it down that pipeline, the better you can license.
Kevin Mako: So another one of the big strategies that I like to see is leaving it till a little bit later in the game to really decide what direction you want to go.
Kevin Mako: I find that if you choose to prematurely, that you're certainly going to go licensing or
Kevin Mako: certainly going to go the business route, you may actually limit yourself from what might be
Kevin Mako: possible. Because one of the big things that happens, when somebody gets to that point where they've
Kevin Mako: got enough meat on the bones in those four elements where they are a good license and deal pitch,
Kevin Mako: well, what they don't realize is now they're an extremely good pitch also for an investing
Kevin Mako: or potentially growth financing, venture capital finance or even getting into your series A if you've proven it enough.
Kevin Mako: Well, at that point, you may be leaving a lot on the table by giving the business up to a small royalty licensing deal, as opposed
Tom Gray: to continuing and scaling and growing on your own, it may actually be easier to raise a funding partner than it is to get a licensing partner.
Tom Gray: Not necessarily, but the point is if you go into it with an open mind and you work hard at building a business, either way, that gives you the option and improves
Tom Gray: your odds of that option to decide at some point, you know what, I don't really want to grow this into a big company. That's too much for me. And like you said, too much risk.
Tom Gray: Therefore, I'm going to license out or if it's looking hot enough at that time, maybe you'll want to continue pursuing that path. So it's best to think that way from the get-go.
Tom Gray: Yeah. And now you've got the freedom, Kevin, to launch your own company.
Tom Gray: I highly advise launching your company from your basement every time. A lot of initial inventors want to go straight to Home Depot or
Tom Gray: straight to Walmart and think that's the only avenue to be mass market. When you work with the bigger brands, they require you
Tom Gray: to make a lot less money per unit because they want to sell it for next to nothing. You know, it's a numbers game. And you're going to have really deep pockets.
Tom Gray: And when you have deep pockets, you're going to have large quantity manufacturers.
Tom Gray: You've got to have large warehousing. You've got to have a large team to keep up with the demand of what happens at large retail, providing it even sells.
Tom Gray: What you want to do is make 1,000 units or 500 units or 100 units.
Tom Gray: Aluminum manufacturing and tooling is designed to be a lot. less investment on the tooling, but it's only good to make, you know, 5,000 units, right?
Tom Gray: But those 5,000 units are the most important ones of a lot.
Kevin Mako: Most innovation fails when it gets to the point where the consumer uses it for the first time. Because you can do your own internal focus groups.
Kevin Mako: You can have mum and dad try it out or whatever. When you sell 100 units, the consumer is going to decide your fate right there.
Kevin Mako: When the consumer picks it up and tries it out and finds out it doesn't work and you get your bad reviews and you get your complaints. And that'll tell the story.
Kevin Mako: So don't invest heavily on the front end, invest to pay a premium for your tooling, for aluminum tooling, and pay a premium for per unit, you know, instead of mass market
Kevin Mako: for a dollar a unit, make it for $2 a unit, but you're only going to spend so many thousands
Kevin Mako: of dollars to make 100 units or 500, and then get them into the marketplace, and that will tell the story. And you can do all of that from your basement.
Kevin Mako: You do not need big overheads to start a company. I love it. That's all the stepping stone model and really looking at small
Kevin Mako: but progressive steps forward in the product development journey. I'm a huge fan of short run manufacturing, even if it's additive, which is expensive per unit,
Kevin Mako: but for the first run or even two runs for the first 100 to 500 units, don't look to make money. Just look to get products out into users' hands.
Kevin Mako: Not only is that creating a tremendous amount of equity value for you, but if you do put your first 100 units out, and inevitably, this is going to happen to everybody.
Kevin Mako: Even if you make such an incredible product out of the gate, there's still going to be certain things that 100 users saw that you didn't or you know and you meaning
Kevin Mako: you your design team any of those test folks there's going to be some improvements there and the beauty is if you've taken tom
Tom Gray: your stepping stone model there of starting small you can then take that feedback even the negative
Tom Gray: feedback and then work it into those improvements and that's the concept of iterative design or agile
Tom Gray: design which is very much taken out of the tech world agile development improving progressively over
Tom Gray: time, starting to bring that into the hardware world and say, look, I'm going to start small,
Tom Gray: work my way up. But each time that I work my way up in volume, I'm going to make small tweaks
Tom Gray: and adjustments to improve the product so that when I am at that thousand or 5,000 unit run, you've already gone through multiple hundreds of real users
Tom Gray: giving you feedback to make that
Kevin Mako: top tier product, which now is a very good either licensing, growth scaling model, or is possibly
Kevin Mako: approachable to those bigger and bigger buyers, retailers, etc. Yeah, exactly right. I think that it's something we struggled with back in the day is we built a beautiful prototype
Kevin Mako: and tried it out with limited amount of help and people trying it naturally.
Kevin Mako: And then you go straight into tooling, right? Making steel tooling, injection molding, that tooling can make a million units. But guess what?
Kevin Mako: It's a huge investment up front, $50, $100,000. You go and make your first two or three runs or first run to find out that you've
Kevin Mako: got problems. And all of a sudden, it's a huge investment up front, $50, $100,000. You go and make your first two or three runs or first run to find out that you got problems. And all of a sudden,
Kevin Mako: it's another 10 grand to tweak the tooling, maybe 20 grand. And that could be the killer right there. So, yeah, make a short run, pay a premium for it, get it right,
Kevin Mako: and then you can worry about making anything bigger after that. I like how this ties into your second comment about the video,
Kevin Mako: making sure that you have a good video. I think this is something that's under appreciated in the product development world, especially with new startups,
Kevin Mako: is they don't realize the power, not just of a video, but of a very professionally done video, something that really hits home in, as you said, 60 seconds.
Kevin Mako: I love that time frame, too, because it really used to be three minutes was kind of the de facto length that an explainer video should be,
Kevin Mako: but the attention span is reducing society in general. And that's not just your end users. That's also the investors. That's your business partners. Everything else a long way.
Tom Gray: Attention spans are shrinking at least for their initial understanding of what your product does. People want to know quickly,
Tom Gray: But in order to do something quickly, if you only have 60 seconds to explain it, you have to do this video at a professional caliber.
Tom Gray: And that's one of the things I watch people spend $50,000 plus thousand dollars in developing their product, multiple rounds of prototyping, nailing it.
Tom Gray: And then they go out with their cousin and shoot on an iPhone, a 60 second and 90 second video that misses the mark on so many different pieces.
Tom Gray: And essentially it makes their product look a fraction of the value that it actually is.
Tom Gray: So that's one of those things, spend a few thousand bucks, get a professional crew on board,
Kevin Mako: have them scripted out and really get into the viewer's mind with people who've done this for hundreds of videos that know how to truly explain a product forward.
Kevin Mako: And that is the power of a short video to really highlight everything that you've done up until that point.
Kevin Mako: And I think the big thing there, Kevin, is to showcase the product working in the first five seconds. Because if you're putting this on the internet on Instagram, like if you're
Kevin Mako: going to market yourself and have your basement full of products and now you're going to try to sell them. Social media still is the only way to do this right now. And people are
Kevin Mako: flicking through their feed, right? And they have three seconds. You've got three seconds or less right there to educate someone on what it does.
Kevin Mako: You do not want this big 10, 20 second intro that means nothing. You've got to get someone's attention really, really quick. And that will make them
Kevin Mako: stop and then watch the rest of the video.
Kevin Mako: So that's something we see a lot too is they just don't create that video the right way around. Yeah, first few seconds are key. And it's almost like you have
Kevin Mako: to do an intro, give it that five second really quick pitch and then go into, if you want to
Tom Gray: storyboard it a little bit, go in there. I definitely see a lot of videos where they spend way too much time on building the plot.
Tom Gray: Somebody's not sitting there to watch a movie. They're sitting in there to very quickly understand what you're doing. The other nice thing is when you have, let's say you
Tom Gray: have a 60 second clip, or even you stretch it out to a three-minute clip, if you've done it well
Tom Gray: and done it professionally, they will have designed and engineered it to the point where they
Tom Gray: can break that out into micro clips, which can be used for different media formats. You should
Kevin Mako: have everything from a 5, 15, 30, 60, and three-minute clip, all within that one three-minute
Kevin Mako: clip broken out into those certain second videos and all of those different videos have different use cases.
Kevin Mako: The beauty, too, is if you've done that full explainer and done it well, you can use it for a variety of different stakeholders, whether it's bringing employees on that you might
Kevin Mako: want to first hire, getting an investor on board, getting a retail partner or a marketing partner or even just some other brand celebrity.
Kevin Mako: In addition to actually selling units themselves, you can use that one video and repurpose it in a number of different ways if it was done well from the get-go. Yeah, correct.
Kevin Mako: And the most important thing is getting the quality consumer
Kevin Mako: and the three-minute or one-minute and three-minute videos are perfect for your website. Because if you've got someone that's now going onto your website to review your company
Kevin Mako: and your product, they're interested. And they have time. They want to purchase it. They're going to watch every video they can find before they make the decision to buy.
Tom Gray: So yeah, you're totally right. Everything from a 15 second commercial right through to three minutes will be utilized in different ways.
Tom Gray: And that's so powerful to be able to highlight all the hard work that you put in. It takes a lot of work to get to the point where you've got your final prototype,
Kevin Mako: which is usually when people start to spin up these videos. If they're going to do it to sell or pre-sell for Kickstarter, Indiegogo, or even just pre-selling
Kevin Mako: to prospective buyers, or getting letter of intents from prospective buyers, usually at your last
Kevin Mako: final prototype where you're very happy with it, generally your sexiest prototype, most functional, that one's the one you throw a bit of movie magic on to really tell the story
Kevin Mako: generally before you're going into production. If you do have the liberty of going into production and then shooting the video with actual
Kevin Mako: production units so that you can have either a fully finalized flush one or maybe even multiple products in the video.
Kevin Mako: That's great. But not generally necessary. If you have a really good prototype, it's a great time to shoot the video. You could do a lot with videos these days. Again,
Kevin Mako: if it's shot well with a professional crew to really highlight all the best features and paint the picture quickly, that can just simply amplify everything that you've
Kevin Mako: done up to that point in time. And with the technologies, Kevin, of 3D printing, SLAs, you name, and all these latest middle 3D printers,
Kevin Mako: there's no excuse now that you cannot make a finished looking prototype that looks identical to the one you would find on a store shelf. It's funny you bring that up.
Kevin Mako: We do a lot of that here where we're simultaneously doing the hardcore internal product engineering while we're also building just a, we call it like a looks like presentation
Kevin Mako: prototype with a fit and finish, all that sort of stuff looks like it was straight off the production line.
Kevin Mako: But it's not slowing down the necessary work of doing the hardcore mechanical and electronic engineering on the inside.
Kevin Mako: So it's something where they want it maybe a little bit earlier than when the final prototype's ready. Maybe they're starting to plant the seed or get early followers
Kevin Mako: or even just raise investment rounds. So they don't necessarily want to wait until all the hardcore engineering is done.
Kevin Mako: So you can kind of, there are ways in the industry to kind of have your cake and eat it too. But at the end of the day, it really comes down to the value of that of that
Kevin Mako: prototype, which of course can be amplified by video, but also needs to highlight a lot of the there. Lots of pieces.
Kevin Mako: You know, of those four things, Tom, you know, we've talked about the prototype and the importance of that. That comes down to designing for production. That's a really
Kevin Mako: important thing to highlight just before we move on for the last two pieces of that because it's
Tom Gray: not just about roughing a prototype together and then trying to get a license and deal.
Tom Gray: Because when we look at the prototypes, one of the biggest things that somebody who's looking to license it is looking for is how easily can they actually spin this up and produce?
Tom Gray: So you talked about something earlier is how many reviews do they have? have another review is good. Well, that paints the picture to the market.
Tom Gray: The product is just as important because that needs to be manufacturable. It needs to be built well. It needs to be
Tom Gray: reliable. All of these things, which accompany, if they're about to license your product and put
Tom Gray: their brand behind it, they want to make sure that that stuff shored up. And I think a lot of the
Tom Gray: big misconceptions out there also come to the fact that somebody says, well, I've got something rough together. And the company is a big company.
Tom Gray: They probably have lots of design resources. they'll fix it up and get it done the way they want it and get it professionally done.
Tom Gray: That might be true. But again, the further you push it, the less resistance they're going to have. Because keep in mind, you're not the only one coming to the table with new ideas.
Tom Gray: As you said earlier, Tom, they've got their internal R&D. They also have lots of other people pitching their ideas too.
Tom Gray: So the more flushed out you are, the more manufacturable you are, or if you're in production,
Tom Gray: the more user reviews you have, you're simply making it easier and easier and easier for them to understand and implement it into their business model.
Tom Gray: And don't forget, these companies, the bigger the company it is, the harder it is, right,
Kevin Mako: to get their attention and to get a deal. Some of the big companies, they need a product to potentially generate $100 million in sales before they'll even consider it.
Kevin Mako: Well, that wipes out a lot of innovation right there.
Tom Gray: So you have to go to a mid-size or even a small company that's a lot more flexible that can appreciate, well, we could make a million dollars out of this in its life cycle
Tom Gray: and then move on to the next product. So there's a whole game to play there. Now, the other thing, too, with a bigger company, most products, inventors
Kevin Mako: do not have R&D departments, or like I say, they've got to engineer it now so they can manufacture it. They may have to invest, maybe $100,000 to $200,000 of their own money
Kevin Mako: to get it to that next level to potentially see whether or not they can still do a deal, right?
Tom Gray: So if you go to a big company and say, here's my rough prototype. I've done very little with it. I want you to take it and pay me money.
Tom Gray: They might have to invest another quarter of million dollars before they can even know the answer. of whether or not there's life in that product. So they just instantly like,
Tom Gray: if you're too hard to work with, we're going to go over here with this inventor or this design firm who's made a polished unit, it's ready to go, we've got projections.
Tom Gray: We can take that one to market a lot cheaper and simpler and don't have to put any time behind it than this everyday inventor who's not realistic.
Tom Gray: So the more you do, yeah, the more you do, the more chance you'll have to impress them. That's, you know, that's amazing because it all comes down around the subject here.
Tom Gray: How do you go from that maker to that startup? And it really comes all down to pushing it forward, small baby steps, getting it more
Tom Gray: and more exciting to these prospective partners. Yeah, yeah, yeah. People love to look and touch, right? Everyone can understand something when they see it and touch it.
Tom Gray: And we see it every time we've had investors on products before.
Kevin Mako: And if they can see, they're in touch it, it's a game changer for them to make the decision. Definitely. It's a big deal.
Kevin Mako: And it brings that forward to the next phase of your steps, of your four steps. You've talked about the first two quite a bit. The third step here is the cell sheet.
Kevin Mako: Just talk a bit about that and the importance of and what are some of the key elements on a cell sheet that you want.
Tom Gray: And also keeping it into it to be a one-pageer.
Tom Gray: Yeah, it has to be a one-page. Now, a sale sheet is just like watching a one-minute video, right? They're both informational. One, you have to watch for 60 seconds.
Tom Gray: One, you should be able to read on a one page.
Tom Gray: a clean photo of your product is primarily what they're going to look at, right?
Tom Gray: Description of what it does, possible name and brand. People get really tied up of naming a product, but in reality, if you're going to license
Kevin Mako: it to another company, they're probably going to change the name. Then you look at the benefits of what the product does.
Kevin Mako: You might want to bullet point them, you know, you might want to look at, you know, who your target market is, you know, potential manufacturing costs.
Kevin Mako: Again, the more that they know you've done your research, and it lines up, the more they're going to trust and listen to you.
Kevin Mako: Patent pending or a patent number would be vital in that situation as well because they're going to do a lot of due diligence.
Kevin Mako: So it just shows that you've done your homework and got it ready for the next level. So the sales sheet's pretty simple. They're going to take that.
Kevin Mako: They can put that on someone's desk and say, have a look at this. They can write notes on it and put it away.
Kevin Mako: It's just a handy thing to have in your arsenal for when you're showing somebody. That's a really easy thing to put together. and you make it so simple and shareable,
Tom Gray: that thing could be emailed as a PDF, it can be printed out and mailed to folks, it can be sitting there in copies as part of a meeting. It's very, very easy to do,
Tom Gray: but it's a nice little piece, which if you have it and someone else doesn't, it makes it that much more top of mind for that prospective partner. Right.
Tom Gray: And if you just have a website or something, people can forget the name and they're never going to find it again. Yeah, that's so she, it's just your manual thing,
Tom Gray: we put in a book and put in a stack of documents, you know where it's at. if you're a product development person looking for a company with open innovation,
Tom Gray: they may have a stack of 20 that they work down to the top five, but it's all right there. They can quickly point, touch with their groups,
Tom Gray: say we like this product over here and they're pointing to a sales sheet.
Tom Gray: So it's used a lot of different ways, like I say, really similar to put together. It doesn't have to be fancy whatsoever.
Tom Gray: Let's jump into that last point here, which is the patent, which can be part of the sale sheet as well.
Tom Gray: But the patent is, one last piece, which is a bit of a formality in one way, but it's also a large part of what can
Tom Gray: form your equity valuation, your intellectual property value of your actual
Kevin Mako: company. So it is an expense and it is something that is frustrating when you're putting your time and effort into actually building a product and prototyping it and all of that.
Kevin Mako: But the patent, even still to today, is very important and it is a piece of the puzzle and something that if done well can be a
Kevin Mako: large part of the value of your company as you push forward. You have mentioned that as one of these key pillars. So why don't you just talk a bit about patenting?
Kevin Mako: And I'm happy to weigh in as things that I've seen work as well from the hardware perspective.
Kevin Mako: So I've seen it on all different levels. Now, your patent is only good as the person that can protect it, right? So let's just say you put a lot of money on a patent.
Kevin Mako: You take a product to market. We have no money and people start infringing. There's not much you can do. There's no one policing the infringers out there,
Kevin Mako: which is really sad, but it's true. So you've got to protect your own patent and take them to court if you have to.
Kevin Mako: When you take it to a potential investor or to someone to license your innovation,
Kevin Mako: they're going to look at that first and foremost.
Kevin Mako: Home Depot doesn't want to spend $5 million launching your invention to find out that Lowe's has a free will to release it as well, right?
Kevin Mako: Because innovation now costs millions of dollars to launch on large scale.
Kevin Mako: So if you go to a big company and you've got no protection, and they know they're going to have to spend at least $2 million to get to the next level,
Kevin Mako: and they know that they can't protect it if someone copies it, and people will copy it. Anything successful is watched by a lot of people and will get copied.
Kevin Mako: So you must have the best protection you can possibly get or afford
Tom Gray: and have it in motion. Now, patents take a long time to be approved,
Tom Gray: but you can put patent pending stage in motion really cheap and easy, and that gets you going. that's all you need to start conversations right yeah and that's the best part
Tom Gray: when you look at that kind of a blended strategy of at least getting your documents in doing it well building the foundation
Tom Gray: well with a good patent agent or a patent attorney yeah you don't necessarily have to spend the big bucks up front to do the whole patent all the appeals that
Tom Gray: are required and this and that let alone different countries but if you at least build the foundation well especially with what
Tom Gray: we find on the design side when we're working with patent attorneys they want to know all the
Tom Gray: little details of the product, generally they want that final engineered, either the final
Tom Gray: manufactured product or at least the final engineered prototype of the product so that they can look at all the little technologies you built into it.
Tom Gray: And it all comes down to micro technologies blended together. Nothing really on its own as no one of those technologies is generally novel on its own.
Tom Gray: It's when you start putting these little things together and how they're woven together, which is something that a good patent agent or patent attorney can look at, pick out the
Tom Gray: pieces that they can protect because you won't be able to protect everything on your product.
Kevin Mako: You'll be able to protect certain things and not other things. And it's by them figuring out a good attorney to figure out exactly how broad and how narrow
Kevin Mako: to protect which different claims, which different pieces allows them to forge the patent that
Kevin Mako: they think is most powerful, but at least just to apply for it at the gecko to have those materials built in from the gecko so they understand what's there.
Kevin Mako: So giving your patent attorney enough meat on the bones that they know what to put in there,
Kevin Mako: but also giving them a strong foundation that as this thing starts to take off down the road,
Kevin Mako: you can put more money into it, securing it, solidifying it, and then adding other countries or other resources to it to make that patent even stronger.
Kevin Mako: I think also the big key here is that when you apply for your patent stage and you've got one year of patent pending, meaning you're in line, you're in line
Kevin Mako: waiting to be reviewed by the patent office. If you show a potential licensed partner in that bracket, you have that whole year to then improve on the patent
Kevin Mako: because you as an inventor are only going to see certain things. If you show it to a big corporation, they're going to go, wait a minute,
Kevin Mako: we can patent three or four other things here and make that pattern a lot stronger. Let's do that in that one year window.
Kevin Mako: So it's really important for them to have some say, if you wait until you've got your patent and you go show a company like, you patent all the wrong things.
Kevin Mako: Because like you say, an invention is not patentable usually. It's a feature of your invention. It may be a latch. It may be a device, it may be a handle.
Kevin Mako: You've also got several different patterns you can look at. Design patterns are easy to get, but they're not, they're harder to protect, you know.
Tom Gray: Utility, you got your copyrights, your trademarks, all that good stuff as well. The thing is to get your protection done, do it right.
Tom Gray: I see a lot of people doing their own and they will never stand up in court whatsoever.
Tom Gray: Because a patent attorney is, when you go up against some of the best patent attorneys, they will pick you apart like you wouldn't believe.
Tom Gray: And you can't fight those guys, you know.
Tom Gray: So a good patent attorney that can, that is inventor friendly is what we always suggest you look for. Yeah, absolutely. It's great insight, Tom.
Tom Gray: And I love looking at it from the different
Kevin Mako: perspectives there because it is one of those things where you can kind of have your cake and eat
Kevin Mako: it too. If you, if you do this correctly and do it strategically, it does not cost an arm
Kevin Mako: and a leg, but you can build the foundation to plan for how you're going to scale and grow the business down the road and the same thing on the production side.
Tom Gray: Like you said, you don't necessarily need to jump into full steel tooling out of the gate for a million part mold. You can look at
Tom Gray: stepping stones, starting with additive, then into aluminum tooling, then into steel tooling as you're starting to scale.
Tom Gray: All of this comes back to those themes of stepping stones. And something I want to wrap this all together with these, because these are four fantastic points.
Tom Gray: I think that anyone who's looking to go from inventor to successful product startup, whether it's on your own as your own business
Tom Gray: or whether you're planning to license it, these things are so powerful. But I think one of the big things you said that ties all this together is that you can do
Tom Gray: this out of your basement. You can do this part-time while you're still working full-time at your job.
Tom Gray: I get asked constantly from clients whether they should quit their job now and start working on development.
Tom Gray: And almost all the time, I say no, until you hit a certain point again, these stepping stones where you've either got enough investment or enough buyer interest that you have
Tom Gray: proven the model and it makes sense to with much less risk at that point in time to say,
Tom Gray: okay, I'm going to transition out of my current career, whatever it might be, and into this new career, which I've now really gained some snowball traction on.
Tom Gray: All this comes down to the stepping stone steps that you refer to in conjunction with the fact that you can do this from home.
Tom Gray: You don't need to quit your day job to jump down the journey that we've been talking about today on the show.
Tom Gray: Totally agree, because if you've got a successful career and you're starting this side business, the side business may take two to three years to
Tom Gray: be to actually make profit because if you're starting small any money you make you're going to have to keep reinvesting to the point where
Tom Gray: you're a good enough size that you can sustain a paycheck for yourself and that may mean starting
Tom Gray: off with just you know 500 units next thing you know if it's going good wow I now have to buy 5,000
Tom Gray: that's going to take another big chunk of money so it's really hard to quit early in the game
Tom Gray: and start on your full time on your product business until you know you've got success moving and you can take that leap. Love it, Tom.
Tom Gray: Great tips of advice for everyone out there that's looking to migrate, that big step from idea to startup.
Tom Gray: So much appreciated for coming back on the show again, Tom, looking forward to seeing you in a few weeks at the film of the season finale of Make48.
Tom Gray: And thanks again for being on the show. Thanks, Kevin. Always good to be here, buddy. Appreciate you.
Narrator: Thanks for tuning in to this episode of the Product Startup Podcast, the show that teaches you what it really takes.
Narrator: to bring your product to market and turn it into a big success. This podcast series is brought to you by Mako Design + Invent,
Narrator: the original and leading firm in North America to provide global caliber in-to-in physical consumer product development to startups, inventors, and small product
Narrator: business clients. If you're looking for product development help on your invention, head over to MakoDesign.com. That's
Narrator: M-A-K-O-D-D-D-com. For a free consultation, from one of Mako Design's Ford Design Studios from coast to coast.
Narrator: Thanks for listening and see you next time.
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