Start Up Notes 2: From a cold back to a cool idea – Getting your product built

If you’ve read the “About Us” section of the IceMule Cooler site, you know the basics of this story…

A few years back, my then girlfriend (now wife) and I were planning a day hike around Brown’s Island on the banks of the James River in Richmond, VA.  Since we had planned to be out most of the day, I wanted to pack some sandwiches and water for a picnic lunch, but I didn’t want to carry a cooler around all day.  So a few days before, I went looking for a cooler I could carry on my back that would use real ice (I had used that blue pack stuff before and, while it might make it great icepack for a bruise, I don’t know anyone who thinks it will actually keep drinks cold in a cooler).  Simple enough, right?  Nope.  I went to every sports / hiking / fishing / camping store I could find and then I went online.  No portable, waterproof, leak-proof, backpack coolers were to be found.  Plenty of cheap sewn coolers that I knew would leak, but nothing good.

So, on the day of our hike I grabbed my trusty daypack and two kitchen-sized garbage bags and dropped in ice, sandwiches and bottled water.  In less than two hours the bags broke, the ice had melted and the cold water ran down my back and legs.

We finished our hike but I left that experience a little obsessed.  I looked even harder for the cooler I needed but I still could not find it anywhere.  I couldn’t believe it – this was SUCH an obvious need.  My obsession to find the cooler I needed morphed into an obsession to make the cooler I needed.  I was, in fact, becoming an entrepreneur.  Unfortunately, if I had managed a little less obsession and a bit more planning, I could have saved myself a lot of trouble.  This post is about helping other folks avoid some of that trouble.

What follows is my take on what you should do once your new business obsession sets in like a virus you can’t shake…including a few tips on how to conduct concept testing, getting a prototype made and finding the right manufacturer.

Do some concept testing on your idea

It was an obvious need (to me, anyway) but this is when I made mistake #1:  I conducted zero market research.  I didn’t even bother to ask anyone if they would buy the cooler I was envisioning (other than a few friends, who will often just support your idea to be, well, supportive).

Now, I got lucky.  Turns out I guessed right.  But you don’t want to be on the wrong side of an expensive and time-consuming multi-month prototyping journey to find out that no one wants your widget.

So – test the concept.  There are several ways to do this.  Tim Ferriss gives some great tactical advice on how to use Google Adwords to test a new product concept (see 4-Hour Workweek).   There are also several reasonable omnibus online testing services – google “product concept testing” and explore the options.

Do some market research on your industry

Although I didn’t do any concept testing, I did have good idea #1:  I researched the Cooler market.  I wanted to know how many people bought coolers, what the annual sales of the cooler industry were, who the big players were, etc.  The idea was to see if there was room for my cooler and, if there was, what that room would be worth in terms of annual sales.

Turns out this was more difficult than you’d think.  The “cooler industry” isn’t as closely followed as, say, the computer industry.  You can find decent market research on the Sporting Goods industry, you can even get some numbers on “sporting goods accessories”. But coolers?  Not so much.

Rather than giving up, I hired a specialty market research firm (google “custom market research”), spent about $350, and got a fairly good report.  That, supplemented by what I could pull together from public sources told me that between $600-$900 million of coolers are sold in the U.S. each year.  Igloo and Coleman are the big players (duh) and then there is a second layer of moderately-sized companies and then a big pile (50+) of smaller companies.   I reasoned that if this market can support that many companies, there is probably room for me – and a half-a-percent of market share would be worth $3MM in annual sales (not there yet BTW!).

Time to dive in!  Next, I had to actually make the cooler of my dreams.

Build your prototype

Okay, so the first thing I’ll tell you is that, unless your product is really, really simple to make, it is much better to build prototypes of your product with a professional firm rather  than trying to do it yourself.  There are two reasons for this:

1. Unless your product is an offshoot of something you are already expert in, and you also have manufacturing expertise and the right materials & tools, you may not be able to do much more than mock up a prototype, as opposed to building one that truly works like you envision, and
2. There are a ridiculous number of firms out there that will build your prototype for you at a reasonable cost.  In many cases, OEMs (original equipment manufactures) will make your prototype for you at a reasonable cost in hopes of getting your manufacturing business.  Another avenue is using a marketing firm that will help you build a prototype and then help you find a manufacturer, typically in exchange for handling your marketing.

Of course, I did not do any of the above.  This was mistake #2.

In my case I had a good idea of what I wanted the cooler to do – how it should perform &  the attributes I knew it had to have (waterproof, leak-proof, soft-sided, able to fit into a backpack, collapsible, and with cooling properties as good as a hard cooler).  But I had no idea how to build it.  I was so clueless that I actually, in a fit of entrepreneurial madness, went out and bought a sewing machine and a few yards of plastic coated material.  Never mind that I had never so much as sewn a button back on a shirt.  Or that sewn seams would leak (duh).  Or that I had not even sketched out a proper design.  None of that mattered – I was an inventor now.  Ha.  Take my advice here, knock your self out with rudimentary mock-ups if you have to, but when you really want a working prototype that people could see themselves buying, work with a pro.

For the IceMule, I finally stumbled onto a dry-bag in a sporting goods store (dry-bags are used by paddlers to keep their gear dry) and it occurred to me that the waterproof seams in a dry bag were exactly what I needed.  It still took me a couple of months of messing around with “waterproof zippers” – which I found to be difficult to use – before I finally realized that creating an insulated dry-bag was actually the simplest, most elegant design.

If you’re anything like me, you have to go through the most difficult, complicated set of options you can imagine before you settle on the simple path that actually works.  So, when you’re knee-deep in a complex execution of your idea and your brain is aching from trying to figure out how to make it all come together, stop.  Then step back and ask your self how you would do it if it had to be so simple you could describe it to a manufacturer in one sentence.

Find the right manufacturer

To find my first manufacturer, I used the Thomas Directory of Manufacturers (now ThomasNet).  Back in the day, you had to go to the library to find this.  Now, it’s online and very easy to use.

Still, though, I made another mistake (that’s mistake #3 for those of you keeping up).  After talking with literally dozens of potential manufacturers – some even before I figured out how to make the product – I settled on a firm in Chicago that was willing to give it a go with a very limited production run (500 units).  It took us several weeks to get a working prototype and after the initial run they decided they did not want to make any  more IceMules because they were so difficult to manufacture.

Why didn’t this manufacturer work out?  Because they were not already a dry-bag manufacturer.  They were experts in radio-frequency welding and working with waterproof fabrics (the right expertise to make the IceMule), but they had no real expertise in my kind of product.  The lesson for me (and you) here is – find a manufacturer that has build something so similar to your product before that they can build it with a short learning curve, good cost estimates and a reasonable chance that they will be there for the long haul.

After so many mistakes, I was due for another good idea, and I finally had one.  That’s good idea #2 (the mistakes were still winning 3-2 for anyone keeping score).  The idea was this – get a referral from a trusted source.  This actually happened quite back accident.  I was talking with my brother-in-law about the product and he mentioned that he had a friend who ran a company that had it’s product manufactured in Asia.  I contacted his friend and was in turn introduced to a manufacturing broker in Taiwan.  Now here is the important part – my new friend trusted the broker.  After working with him now for a few years, I trust him also.  He prices fairly (and I have gotten other quotes) he provides good quality control, and he stands behind his work.  In fact, if we have too many defects in a production run (over an agreed-to percentage) he will set up a production run specifically to replace defective units, at his expense.  That’s the kind of relationship you want.  So – find someone who makes a similar product and ask for a referral to their OEM – that’s a better route than any directory can provide.

That’s it for this round, folks.  Thanks for hanging in!

Next – Start Up Notes 3: Final touches and liftoff – Protecting yourself, outsourcing your fulfillment & building a web presence