17.2 Getting finance and organisational backing
Like talk, ideas are cheap. Even generating a prototype of an invention can be cheap compared with the resources needed to produce and market an innovation. The independent inventor or designer is likely to have to rely on family and friends for financial backing, particularly in the early stages. Seed capital is sometimes available in the form of innovation grants from government bodies, such as the Department for Trade and Industry in the UK, which offers development funding to individuals and small businesses. Eventually, however, most inventors need to access the sort of funds only a company or a venture capitalist can provide.
Some inventors decide to go into business for themselves because they distrust organisations or because they failed to persuade an organisation to take up their invention. The inventor of the Workmate portable workbench, Ron Hickman, was one such inventor-entrepreneur. Hickman had developed craft skills through 10 years of practical experience as a designer with Lotus cars. As mentioned in Part 1 he was also a do-it-yourself enthusiast who became dissatisfied with existing devices after damaging a chair that was being used to support a piece of wood he was sawing.
He designed and built a prototype of a combined workbench and sawhorse. After he found it to be unexpectedly useful, he developed it further and by 1968 he had the mark 1 Workmate design (Figure 63). Next he tried to persuade relevant organisations in the DIY field of the commercial potential of his idea. However none of them was willing to risk investing in a completely new product for which there was no clear demand, being an unusual hybrid of sawhorse, vice and workbench. In 1968 Stanley Tools estimated potential sales could be measured in ‘dozens rather than in hundreds’ – by 1981 the 10 millionth Workmate had been sold.
Hickman, however, had confidence in his invention and decided to manufacture the product himself. By 1972 he had sold 25 000 Workmate benches by mail order. Existing manufacturers of DIY products began to take an interest, including Black & Decker, which had been among the companies offered a licence in 1968. In 1972 Black & Decker finally took a licence on the Workmate. Even then the story was not straightforward.
It still required the efforts of a key individual within Black & Decker (Walter Goldsmith, general manager) to champion the product and persuade others that investing in the Workmate was an economically sound idea. He was helped in this by Hickman's success up to that point, which demonstrated the existence of a market for this unique product. Hickman would certainly not have been able to achieve sales of 10 million units over that period had he continued on his own. It was only by handing over control of his innovation to a large organisation for production and further product development that mass-market sales were achieved for the Workmate (Figures 64 and 65).
To be fair, potential investors often have to make judgements about whether to support an invention on the evidence of early prototypes. Perhaps it is not surprising there are many examples of companies that have turned down what became highly successful and profitable inventions. With hindsight it is easy to scoff at such apparent blunders but the decisions were often made for entirely sensible reasons. The invention might have been outside the company's existing product range at a time when their existing products were selling well and profitably. Some organisations resist investing in ‘outside’ inventions but rather prefer to develop their own in-house ideas – this is known as the not-invented-here attitude. The production, marketing and commercialisation of an unproven new idea are likely to be costly and run the risk of failure.
It takes a certain amount of courage to decide that an invention does have potential, particularly on the evidence of a partially developed prototype. Sometimes it takes a small, new company with an informal organisational structure, entrepreneurial values and little to lose to risk bringing a new technology to the market place. I will say more on this when I deal with sustaining and disruptive innovations later in Part 3.
As writer Arthur C. Clarke said,
Every revolutionary idea … seems to evoke three stages of reaction. They may be summed up by the phrases:
It's completely impossible – don't waste my time.
It's possible, but it's not worth doing.
I said it was a good idea all along.