Hockinson inventor takes security system to market
Sunday, July 11, 2010
Resources for Clark County inventors
10 places to take a great idea
Micro-Inventors Program of Oregon, Portland
Kedma Ough, executive director
A nonprofit resource center, funded by the Lemelson Foundation, that accepts up to 20 inventors each year in the consumer products, health care and clean technology industries for its free program that guides them through the entire process of taking an idea to market.
While the Small Business Development Center at WSUV works mostly with established businesses, SCORE, a national nonprofit with offices in Vancouver and Portland, offers free counseling to entrepreneurs with just a kernel of an idea. They’ll meet one-on-one with entrepreneurs to give them a realistic idea of the resources and persistence it takes to create and distribute a product. SCORE also offers training workshops and referrals to more specialized consultants.
Washington State Innovation Assessment Center, Pullman
Provides an early stage market assessment for a fee of about $800.
Market Accelerators, Vancouver
Consultants that offer custom or do-it-yourself market reports, marketing coaching and planning for a fee.
Corporate Growth Consulting, Camas
Lanz Fritz, owner
Works with entrepreneurs to develop a business plan and financial strategies for growth for a fee.
Hoffmann Consulting, Vancouver
Chris Hoffmann, principal
Does visioning and sketching to help inventors develop their ideas into a saleable product or business for $75 to $125 per hour.
Rex Plastics, Vancouver
Rich Clark, president
Works with inventors to develop custom plastic injection molds for a fee.
Weissert Tool & Design, Washougal
Designs prototypes and production molds for a fee.
Van-Port Design Inc., Vancouver
Pat Justice, owner
Mechanical design consultants that work with small businesses for a fee.
Masterpiece Models, Vancouver
John Geigle, owner
Builds prototypes for commercial and industrial products for a fee.
There wasn’t a light-bulb moment of clarity for Hockinson inventor Dale Tollefson. Four years ago, after thieves stole a bicycle and a cooler from his family’s campsite as they slept, Tollefson decided to devise a simple box to lock all of the gear to an RV without using heavy, awkward chains.
The ToyLok is a retractable steel cable that pulls out of a box, can be looped through lawn chairs, grills, coolers and other items and then locks back into the box. A tug on the cable reels it back in for storage.
It was one of many ideas he’d had over the years as a mechanical engineer for Columbia Machine in Vancouver. But its simplicity made it stand out from the others as an idea that could be doable as a business. His product is now carried by mega-retailer Walmart and other big-box stores nationwide.
Tollefson’s success was no accident. While every business develops differently, inventors almost always follow the same basic path to market that Tollefson took, said Paul Speer, a retired vice president of strategy for Hewlett-Packard in Vancouver and a volunteer small business counselor with SCORE. Start with an idea, test it a little bit, build in some business protections and ramp up production and take it to market, he said.
But no matter what the path, taking an invention to market is a long and complicated process with many potential pitfalls along the way. Having an idea of what lies ahead is crucial to achieving success.
Devise a plan
Before Tollefson rushed to production and potentially lost thousands of dollars and countless hours in the process, he picked up a couple of how-to books from Barnes & Noble and made a plan. That simple trip to the bookstore set him apart from many inventors, and may have been a key element of his success.
“Not every invention is going to make it, and they need to learn that early because they can spend an awful lot of money pursuing an idea if they don’t at least understand what’s involved,” said Jan Harte, an adviser for the Small Business Development Center at Washington State University in Vancouver.
Though Tollefson had some positive feedback from friends and neighbors who wanted their own versions of the first lock he’d built for his own RV, he needed to know it would sell in the broader outdoor recreation market. While working a full-time job, he took about six months to vet his idea through his own meticulous research. In 2005, he formed Peak Recreational Products LLC in order to develop the ToyLok.
“I pictured it on every RV out there and worked backward to develop my business plan,” Tollefson said.
An analysis of potential customers, the product’s price point, competitors, risk factors and marketing and sales channels will help identify the feasibility of a product. Combined with an initial estimate of production and labor costs, this market analysis will help a company determine whether to push ahead with a prototype.
“With a week (40 hours) of decent research, you can plug in most of the unknowns to see if it’s a business that you want to get into,” said Lanz Fritz, a financial consultant based in Camas who advises startups and small businesses on growth strategies.
Build a prototype
Once his business plan was in place, Tollefson set out to refine his homemade version into a product with more mass-market appeal. He built a crude prototype out of cardboard to help him refine the look and feel of the product. The low-tech, hands-on tinkering gave him more ideas to work with when he finally bought a desktop PC and some computer-aided design software. With the same tools and skills he used at his day job at Columbia Machine, Tollefson designed a 3-D model of the product. His goal was to design professional-looking drawings that came as close to the real thing as possible.
For inventors who aren’t engineers, a host of local companies exist that work with inventors to design and build prototypes. In some cases, these shops also offer a wealth of knowledge about taking an invention to market.
After 18 years in the business, for example, Jeff Weissert can easily identify potential problems with a design and recommend strategies for addressing the issues. He also offers referrals to other service providers if necessary.
“Sometimes the customer comes by with an idea on paper, sketched out, or a crude prototype carved out of wood or plastic or a formal designed product, and then we design and prototype as needed,” said Weissert, owner and president of Weissert Tool & Design in Washougal. “If we feel a patent is warranted, we’ll point that out.”
Protect your idea
But before Tollefson started shopping around his drawings and prototype to potential customers, he talked to a good patent attorney.
Several of Tollefson’s business associates had advised him that a patent wasn’t necessary. It was much more important to be the first to get the product to market, they said — advice echoed by many business consultants.
The legal cost of defending a patent can sometimes endanger a business much more than the threat of a late-market competitor, said Kedma Ough, executive director of the Portland-based nonprofit Micro-Inventors Program of Oregon, which offers free consulting services to inventors.
“A lot of inventors think a patent is a big part of the puzzle, and it’s not,” Ough said. Before her organization recommends filing for a patent, “we make a determination with the inventor if it’s really necessary. A lot of times the inventor is on a fixed income and it’s not worth defending.”
Tollefson filed for the patents anyway to safeguard the effort and expense he’d already incurred, he said. The lock was so simple and easy to replicate that he was afraid the idea would be stolen.
With his registered trademark, patent pending and a nondisclosure agreement in hand, he took his product to a family friend with an RV dealership, who then arranged a meeting with a plant manager at Forest River, an RV manufacturer in Morgan Hill, Calif. The company liked the idea but had some suggested modifications that would make it easier to mount on an RV trailer frame.
Tollefson returned one month later with the improved design, and Forest River ordered 200 ToyLoks on the spot.
Go to market
Filling his first order was a massive undertaking. After consulting with his wife, Tollefson gave two weeks’ notice at Columbia Machine so he could focus entirely on his new business venture, and cashed in his 401(k) to fund it.
Using his own drawings, Tollefson contracted with local manufacturers to build the parts, and he set up an assembly line in his home garage.
For nearly two months in the heat of the summer, Tollefson’s wife and kids, parents and closest friends worked to assemble and test cable locks for his first customer. Then he rented a U-Haul and delivered the first shipment to Forest River.
“They used them up pretty quick; then they’d order as many as I could make,” Tollefson said.
At the manufacturing stage, money is typically the biggest problem for an inventor. Even if a customer has placed orders for the product, the down payment on an order isn’t always enough to cover the costs of tooling and production — if there’s a down payment at all.
“Typically, there’s a sizeable investment and it varies significantly on the complexity of the product and the market,” Weissert said. “If it’s a general commodity widget, generally you need to manufacture tens of thousands to earn a return on the investment.”
Tollefson self-funded his first round of production, paying his vendors with money from his retirement account, and eliminated his labor costs by recruiting family and friends for the assembly.
License the product
In the first two full months of production, Tollefson’s family was cranking out 100 ToyLoks per week, fueling more than $150,000 in sales for his company, Peak Recreational Products. That’s when he realized he didn’t want to be a manufacturer anymore.
In fall 2005, Tollefson took ToyLoks to a trade show in Kentucky, near the heart of RV-making country, where he met the company that would later license his product. By early 2006, Tollefson had reached a licensing agreement with Quest Technologies to manufacture the ToyLok. Quest sold the product for $129 to $149 each through several RV manufacturers and aftermarket distributors, while Tollefson earned a cut of the profits. Then in 2007, Cequent Performance Products — a subsidiary of the multinational TriMas Corp. — bought Quest, along with the licensing agreement for ToyLok. With its national reach to big-box retailers, Cequent signed a contract with Walmart in 2009 to carry SureLok, a re-branded version of ToyLok that sells for $49 to $59.
These days, Tollefson is back at work full-time at Columbia Machine and collecting a monthly royalty check that’s larger than his paycheck, he said. He’s also working on his company’s second product: a cross-body tool box with a built-in ToyLok for hauling and securing toys in the back of a pickup truck.
“When I first got the book, it said the odds are 100,000-to-1 that you’ll make money. I disregarded that,” Tollefson said. “I worked really hard … and went from an idea to on the shelf at Walmart in four years.”