New hit products can be based on very different ideas: the idea can be an entirely new invention (for example, a mind-reading device or a method of reading thoughts) or a concept of a new type of product (for example, a quark ice cream bar that combines ice cream and quark) or it can be based on a service with a new kind of operating model (for example, a guided aerobics class that combines roller skating and salsa music).
Innovations normally refer to new things that are implemented based on a single idea and that can be utilised in a commercial capacity. In other words, a product innovation is a new product or service that is entirely new or an improved or altered version of a current product or service.
In order for an idea to burgeon into an innovation that can be sold to customers, it must be productised (developed into a saleable product) and commercialised – i.e., put into production and distribution, launched and marketed. However, not every new idea is worthy of productisation and commercialisation: you must able to separate the wheat from the chaff.
Assessing the potential of a product idea
The path of a product or service idea into a commercialised product is fairly long and often costly. Therefore, before investing resources into product development, it is advisable to thoroughly examine whether the new idea has the potential to become a successful product.
It makes absolutely no sense to base product development on ideas whose development is not likely to succeed (perpetual motion machine) or that have no actual purpose (a refrigerator designed for an igloo), no one would purchase (a sweet that tastes rancid) or that are impractical (a shopping bag made of cast iron). This also applies to ideas that may already have been developed, commercialised and possibly patented by someone else.
Nevertheless, studies show that up to 50 per cent of the product development of companies is conducted in vain, due to insufficient analysis of the factors affecting a product’s eligibility for development.
Before organising product development based on an idea, it must be examined – at least at an approximate level – whether or not the idea has what it takes to be developed into a product or service:
Who owns the idea? Who has the rights to it?
Is it an invention, i.e. an entirely new idea?
Does the idea include a sufficient number of quality factors to be developed into a practical product?
Does the market have room or demand for the idea?
It is useful to contemplate these questions with third-party experts, as they have diverse experience in evaluating ideas, identifying the potential for development and providing guidance for further measures.
Moving product development into full gear is unwise until the preliminary analyses indicate that the product is likely to have the potential for productisation and business.
Before your product or service is protected with a trademark, patent, design right or similar method, it is fair game to everyone – so remember to keep your ideas to yourself! Do not present your ideas in the media or at trade fairs or events before you have identified what rights to them you can secure for yourself.
Your own idea or a borrowed one?
SMEs typically productise product and service ideas that have been thought up by the entrepreneurs themselves or their employees, but the ideas can also come from external sources.
Product and business ideas can be bought from inventors and inventor entrepreneurs, they can be imported or adapted from foreign models, or they can be forged through research and development cooperation with various educational institutions, research facilities and partners, for example. In fact, companies can make the strategic choice to focus on collaborative networks and actively seek and purchase good ideas, in addition to developing their own ideas.
The commercialisation of purchased ideas normally begins based on a licencing model, in which case the inventor of the original idea is compensated. A beginning company can find a profitable business idea for starting its operations, even though the entrepreneur has not thought of any new product ideas. Enterprise Finland’s “Starting a business” pages provide more information about creating a business plan and business idea.