So, I have an idea for a medical device. I'm a respiratory therapist and my colleagues all think it is a good idea IF I can execute it well. I've contacted an engineering company and they quoted me at thousands of dollars more than what I have in my bank account.
After your due diligence, I assume this product will have a moderate demand. If the only thing holding you back is the money to engineer it, finance it. You can finance a 10,000 loan for $858 a month (edited earlier mistake here) at 5.5 interest for one year. Or cut that payment down by taking a four year loan. A two year loan for the same payment could get you some serious cash to work with! Eat that elephant one bite at a time, and you can do it. Don't try to swallow that thing whole!
Would you recommend going all in on an invention in general? I realize I am not giving you a ton of details but I am more interested in your philosophy.
I touched on these points before, but let me add a bit more detail...
Inventing and getting to market is a very time consuming task. Do NOT jump in all gung ho. Pace yourself because this is going to be a long journey, even for a simple product, which I assume yours is not, being medical.
Also, being a medical product, you are going to have this tested, verified, and endorsed that it is safe, by multiple agencies. Being in the medical field, do you know how long it takes a drug manufacturer to be approved for a new drug? Many years - and that's AFTER they have it all figured out and ready for market.
So - what to do with a high end custom product like yours?
After it is engineered, and perhaps a prototype is made, you can file a provisional patent which is good for one year. That gives you patent protection to some degree, without going through the slow and expensive process of a full patent. You will want to do this so you have a year to "test the waters" of how this will be accepted in the marketplace.
I would highly recommend you do not manufacture and sell this product yourself. Too complex, just being medical alone. Instead, find the top four makers of similar devices and propose your product to them, under a licensing deal. They already are set up for the testing phase, which is a huge bonus for you. And they will have the muscle to see this through and get it to market. It's a no lose situation for you. Then you can finish the patent process, or even sell them the patent for a lump sum. And you're off to the races!
Another idea, if you're really adventuresome and brave - is to do a kickstarter to fund this. That has it own perils, as someone could see your product and beat you to market. You could lose big time. Of course, you could win big time too. I throw that out there as an option. You could remain private and not have your idea ripped off (hopefully) by going to angel investors. Despite their innocent name, they are expensive to work with and sometimes want some measure of control. That works for some people though.
Being this is a niche product, I'd lean towards a licensing deal. You can win this game by pitting the companies against each other. Unfortunately, they are already successful and don't need you to help them. You need them. That limits your clout, but you can still work things to your advantage. Licensing fees typically start at 7%, and go to 15% - usually. That's just a guide. For a high tech specialty product, I'd go for 18-20%. That's where you're going to need leverage of pitting the players against each other. You could do better than that even.
You can even file a provisional patent first, and THEN start the selling product, without the engineering and prototype being made. The famous case of "The Pebble Watch" was funded on Kickstarter and did things this way. The guy raised millions, and then went "shopping" to find a developer and manufacturer. He had the money, so it was easier to launch - and it worked out fantastic. A true success story.
I applaud you in looking at the big picture first and formulating a plan of attack. I knew a guy many years ago that made custom artificial limbs. He made a lot of money and loved his job. I lost track of him when he moved - too bad. You don't meet many people of that caliber. He had the resources to make almost anything he wanted to, and I think he invented some small things for his business which he licensed.
You can do the same thing, if you don't waste time on the details and go for the big deal right away. That, btw, will also give you credibility and access to the big companies development labs. Tools - engineers - support staff - what more could you ever want? Yeah - look at the big picture. You might even be able to work out a consultant kind of deal where you are on salary. Not pay, where you have to show up and have a boss - salary, where you do your own thing on your own schedule and maybe submit monthly progress reports. I worked at IBM, and knew several people that had positions like that.
You know where IBM makes big money? Not by making PCs, for example. They license their patented designs to the people that make the PCs. That's where the money is!
You better call ME if you get a deal like that. I need that kind of support to work on my stuff!
The sky is the limit. You *can* have it all.
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