Novelty alone may mean nothing if your idea does not have good commercial potential. Very few people will buy a product simply because it is an invention. They will buy it only if they have a use for it and prefer it to competing products.
Therefore, if you hope to interest companies and investors in your idea, you must convince them that it offers a lucrative business opportunity with as few risks as possible. They must see enough profit potential in your idea to recover their investment many times over.
Thinking commercially also helps to reduce your own financial risk, which will increase as you develop your idea.
When thinking about the market potential of your idea, you must consider how it might cope with competition.
You also need to study competition for another reason: if your idea is completely new, what you can find out about competing products or companies may be the only reliable market data available.
Competition does not just mean products exactly like your idea. It means anything currently used or done to solve the problem your idea addresses.
For example, if your idea is a novel mousetrap, competition is not just all other mousetraps. It must include all methods of getting rid of mice - even cats!
Unless you are already an expert in your field of invention, assessing competition usually involves three stages:
Using the internet, it should be quite easy to find competing products and technologies anywhere in the world. Do not ignore a product simply because it is not sold in your country. Markets are now global, and products currently sold in only one country could be available worldwide within months.
As with prior art, look also in shops, trade-only outlets, catalogues etc. Read industry journals and visit trade exhibitions to find out what people are buying and not buying, and to find out about new product launches.
Talk to people who work in relevant trades or professions. Ask them which products and methods they use or do not use, and why. (Do not, of course, disclose your invention.) Retired experts in particular may be able to give you valuable information that they would not have been free to disclose when they were employed. They may also have time to spare, and if they like what you are doing, they may be happy to become involved in your project.
You need to know as much as possible about each competing company. If the company sells many products, consider only those that will compete with your idea. For example:
Be aware that a company's ability to compete may depend more on marketing than on technology, so do not underestimate the threat from a technically inferior product if the company selling it can afford to spend a lot of money marketing it.
Launching a new product is never easy because the market already belongs to the competition. They are known, experienced and perhaps trusted, while your product is an unknown quantity. You must consider carefully whether your idea really does have the potential to take enough of the market to be a tempting business opportunity for a company or investor.
Questions that you may need to consider include:
Does anyone actually need your product?
The problem your invention solves may interest you, but do enough other people feel the same way? If they do not, the market may be too small and unprofitable to be worth bothering with.
What is the best market for your product?
This is rarely as easy to answer as many inventors think. The same invention can often be developed in different ways, so look for gaps in the market - areas where existing provision or competition is weak.
What is the easiest market to enter?
Minimising risk has to be a priority when launching a new product. If your ‘best' market is costly to enter, it may be a good idea to start with one that is cheaper to enter, even if it is less profitable. Success in this market may make it easier to enter more profitable markets later.
Is it growing or shrinking? You should hesitate to enter a declining market unless you feel your product can revive it. Looking into the future, are there any emerging technological, social, regulatory or legal changes that might radically affect its fortunes?
At what price might your product have to sell?
If the price of your product is not similar to prices charged by competitors, you may find it difficult either to make sales or make a profit. Your competitors have done much of your research for you: they have discovered the price the market will bear.
Most products need to meet national or international standards of safety, performance etc before they can legally be sold. Achieving compliance can be a long and expensive process, so find out what will be required.