Invention

Invention
The art of realizing value from an idea

By Guy McIlroy Founder, Koliada, LLC
Copyright 2011 Koliada, LLC - 1
Guy McIlroy
Systems Architect
This presentation abstracts a process of invention and gives some specific examples to illustrate.
Where it all begins

It all begins with an idea
Some Important Characteristics

? ? ? ? ?
Ideas are; everywhere cheap ephemeral intangible Ideas have little value Ideas CANNOT be patented
Where it all ends

It all ends with an invention
Where it all ends

It all ends with an invention
?
$$
An invention is the embodiment of one or more ideas (that realizes value)
(realized value is not always $$) Copyright 2011 Koliada, LLC - 6
- Invention Getting from an idea to realizing some value
?
$$
Market
$$
Market
$$
Idea Validation Existing Products/Patents Product Limitations / Failures
Market
$$
Idea Validation Existing Products/Patents Product Limitations / Failures > Use Cases > Product requirements
Market
$$
Embodiment
$$

Use Cases & Requirements!!
Clarify Validate Rinse and Repeat
Market
$$
Prototypes
Proofs of concept Capability validation Design validation Usability testing
Embodiment
$$

Protection
$$
Patents
Prior Art Provisional Patent Utility Patent Design Patent
Market
$$
Embodiment
$$
Trademarks Copyright Branding US/International Chutzpah, Smart & Fast

Protection
$$
Analyze the risk / cost profile

Buying protection is like buying insurance Low risk of loss, low cost High risk of loss, high cost Manage process for low risk
Market
$$
Embodiment
$$

Protection
$$
Market
$$
Business
$$
Embodiment
$$

Protection
$$
Match to nature of market and ambition Business

$$
Market
$$
Start-up
Gold rush / Race
Lifestyle
Good revenue, poor scale
Licensing
Embodiment
$$
Limited Product Scope Individual capabilities Market dynamics

Protection
$$
Identify & Characterize

Partners Distribution Channel
Market
$$
Business
$$
Size the business

Potential Volumes Costs of goods sold Revenue. Profit, Loss
Embodiment
$$

Protection
$$
Product Design
Business
$$
Market
$$
System Industrial Electronic Mechanical Packaging
Embodiment
$$

Protection
$$
Product Manufacture
Market
$$
Business
$$
Manufacturability Logistics Distribution
Embodiment
$$

Protection
$$ Booty Pop an enhanced behind has become a must have accessory... "We didn't realize what we didn't know, the licensing, the legalities The partners had to learn about things such as manufacturing, packaging, importing and landing costs, "things that aren't as much fun as the creativity," http://www.usatoday.com/money/smallb usiness/2011-06-26-turning-nicheproduct-into-riches_n.htm
Market
$$
Business
$$
Embodiment
$$

Protection
$$
Market
$$
Business
$$
Embodiment
$$

Protection
$$
Market
$$
Business
Market Validation
$$
Embodiment
$$
$$
Zen of Invention
Invention has many paths
The landscape is continually moving
Your true path depends on circumstance and the players There is no one right way
Many have traveled the many paths

Talk to all of them and make your own path Understand and weigh risk / cost / benefit
Success is mostly insight & luck

Understanding makes its own insight Persistence makes its own luck
(Some of) Guys Maxims

Customer 'lock-in' is the key barrier-to-entry
Three barriers to entry:
Brand Recognition (good) Product Utility (better) Customer vested time/collateral (best)
Hardware only businesses do not scale

If you want a business to scale, make your hardware integrate closely with value add software / services Hardware as a Software / Services enabler does scale
Hardware businesses are roulette players

house always wins >unless< smart enough to figure the arbitrage and quit while ahead
Some Examples From Our Past
Airport
First successful consumer Wifi products
www.apple.com # 34 of PC World Top 50 products of all time http://www.pcworld.com/article/id,130207page,8-c,technology/article.html
Airport
Market
Key failings
Fragmented (incompatible) market offerings Complexity of operation Poor standards unification Expensive
Airport
Market
Key Factors For Success
Ubiquity every device needs same capability Ease of use Effective standards unification Cost effective
Airport
Embodiment
R&D
Extensive core R&D already available third parties Integration into products product design and features
Ubiquity
Huge software challenge multiple diverse groups in Apple, multiple departments to be aligned
Ease of use
Significant impact on user interface, system software, networking architecture
Effective standards unification

Closure of 802.11, emergence of WiFi
Cost effective
Volume manufacture (ubiquity) drove down costs
Airport
Protection
Few early protections Depend on market presence and momentum Product design
UI, Integration, Style (these are all protections)
Apple Factor
Airport
Business
Third party proxy selling
Initial market for an idea is internal This may be a big hurdle (why startups start)
The Apple Gladiator Effect

(SJ) Thumbs up everyone cheers (SJ) Thumbs dn everybody boos
Poker Genie
Texas Holdem Game Timer
First standalone timer to accurately time Texas Holdem poker games. #1 best-seller Amazon gaming accessories www.thepokergenie.com
Poker Genie
Market
Key failings
Existing market offerings needed a laptop/computer Some complexity of operation Poor understanding of game mechanics
Poker Genie
Market
Utility device to use anywhere (lounge/pub/bar/) Ease of use Understanding of game mechanics Cost effective
Poker Genie
Embodiment
R&D
From scratch development Define product design, features & requirements and use cases
Ease of use
Significant impact on user interface design and firmware design
Cost effective
How to be smarter in using low cost components Same CPU drives LEDs and does calculations
Elegant firmware / hardware combo design
Poker Genie
Protection
Provisional Patent (self filed) Followed by Patent Application (Attorney) High risk, low exposure
Was copied by ESPN, little to no recourse due $$ Poker Genie has prevailed
Superior UI design Better understanding of the game Better product design
Poker Genie
Business
Family and Friends test markets
Paper versions Little distributor validation (cause of some friction)
Started as a product business

Unqualified overly ambitious BUT a very good validation of market value
Evolved to a licensee business

Starting as a product validated the market
Improved licensing deals
Peel Fruit
Entertainment Control for SmartPhone

CES 2010 Honoree http://www.youtube.com/watch?v=WWVBqRtahI http://online.wsj.com/article/SB100014240527 48704506004576174624099755848.html
Peel Fruit
Market
Key failings
Content integration
Expensive & too complex OR Cheap and too simple
Emerging standards move slowly Content Discovery non-existent
Peel Fruit
Market
Ease of automating the mapping of digital content to device setup for view. Low cost device integrated into existing user devices and the internet
Smartphone integration Cloud Content & Discovery TV guide, online content, pictures, curation Cloud leverage of IR codes Online IR database reduces device complexity
Peel Fruit
Embodiment
R&D
From scratch development Define product design, features & requirements and use cases
Battery life
Must be comparable to existing
Ease of use
Significant impact on user interface design and firmware design
Cost effective
How to be smarter in using low cost components
Peel Fruit
Protection
Provisional Patent (self filed) Followed by Patent Application (Attorney) High risk, high exposure
Fast paced market Easy to replicate hard to defend
Primary defense:
Be smarter (product design) Be faster (bring products to market) Be cooler (real protection is your product in the basket over someone elses)
Peel Fruit
Business
Family and Friends test markets
Little external validation Award winner very early
Started as a product business

Latest round $16M VC funded
Software /Service is core IP

Discovery, social & viewing data key to scale & $$
Hardware is an enabler
Key value delivered by software/services
Conclusions
Invention has many paths
The landscape is continually moving
Your true path depends on circumstance and the players There is no one right way
Many have traveled the many paths

Talk to all of them and make your own path Understand and weigh risk / cost / benefit
Success is mostly insight & luck

Understanding makes its own insight Persistence makes its own luck
Koliada
Koliada exists to help large and small businesses leverage technology into products
We are in business to help your business to be successful We are not in business to create our own business based on your idea / invention
Koliada
Koliada exists to help large and small businesses leverage technology into products
We are in business to help your business to be successful We are not in business to create our own business based on your idea / invention
Services Collaboration
$$
$$
EQUITY
EQUITY
Koliada
Bruce Lundeen
Hardware Logistics Manufacturing Industrial Design Unisys, Sun
Guy McIlroy
Software / Firmware Project Management Business development System Design Apple, Palm
+
=
Product oriented, end to end (Full Cycle) Product Design
Some of Our Projects

Large
Aviat Networks TI Tivo Trimble
Small / Start-up
Fiddle Games Quidillum Peel Technologies Go-Kitty RadioLAN Weemote
Bugs Life Clip
Portfolio

Invention

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Invention

The art of realizing value from an idea

Copyright 2011 Koliada, LLC - 1

Copyright 2011 Koliada, LLC - 2

Where it all begins

Copyright 2011 Koliada, LLC - 3

Some Important Characteristics

Copyright 2011 Koliada, LLC - 4

Where it all ends

Copyright 2011 Koliada, LLC - 5

Where it all ends

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 7

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 8

- Invention Getting from an idea to realizing some value

Idea Validation Existing Products/Patents Product Limitations / Failures

Copyright 2011 Koliada, LLC - 9

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 10

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 11

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 12

- Invention Getting from an idea to realizing some value

Trademarks Copyright Branding US/International Chutzpah, Smart & Fast

Copyright 2011 Koliada, LLC - 13

- Invention Getting from an idea to realizing some value

Analyze the risk / cost profile

Copyright 2011 Koliada, LLC - 14

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 15

- Invention Getting from an idea to realizing some value

Match to nature of market and ambition Business

Limited Product Scope Individual capabilities Market dynamics

Copyright 2011 Koliada, LLC - 16

- Invention Getting from an idea to realizing some value

Identify & Characterize

Size the business

Copyright 2011 Koliada, LLC - 17

- Invention Getting from an idea to realizing some value

System Industrial Electronic Mechanical Packaging

Copyright 2011 Koliada, LLC - 18

- Invention Getting from an idea to realizing some value

Manufacturability Logistics Distribution

Copyright 2011 Koliada, LLC - 19

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 20

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 21

- Invention Getting from an idea to realizing some value

Copyright 2011 Koliada, LLC - 22

Many have traveled the many paths

Success is mostly insight & luck

Copyright 2011 Koliada, LLC - 23

(Some of) Guys Maxims

Hardware only businesses do not scale

Hardware businesses are roulette players

Some Examples From Our Past

Copyright 2011 Koliada, LLC - 25

Copyright 2011 Koliada, LLC - 26

Copyright 2011 Koliada, LLC - 27

Copyright 2011 Koliada, LLC - 28