This article is part of our collection from the Imagine 2019 conference. Click here for more.
The Grommet is an online marketplace and product discovery platform for the maker community to sell their inventions to the world.
According to Jules Pieri, co-founder and CEO of The Grommet, 135 million Americans call themselves makers—anything from a crafter to an inventor to an entrepreneur. And Pieri founded The Grommet to help these innovators launch their products.
“Human creativity is a very good bet,” Pieri told attendees of Adobe’s Imagine 2019 event in Las Vegas. “In fact, if you have a product or service idea, don’t assume that if no one has already done it that it must be a bad idea.”
Small Is The New Big
Pieri spoke about Irena and Jean, founders of a small company who she met four years ago at an event. They were developing a line of natural and affordable hair and body care products for kids.
Prior, they had proposed the business to the consumer packaged goods giant where they both had worked. While the savvy executives at the company fully appreciated the product, they declined Irena and Jean’s proposal.
Why? According to Pieri, for a large CPG company, a new product line has to make enough revenue in its first year to take the risk of displacing an existing product line from the shelves. That leaves an open door for small businesses to fill the gap. That’s precisely why Jean and Irena left the company to launch the Fresh Monster product line.
“This pattern is being repeated all over the world, and the CPG companies have lost 19% of market share in food alone over the last six years,” Pieri said. She added that this is a “seismic shift” caused by spending too much on marketing and not enough on research and development.
Earlier this year, Pieri wrote a book, titled “How We Make Stuff Now,” to help today’s entrepreneurs create and launch new products, package and market them to consumers, and build a thriving business. She shared five lessons with the audience.
Tip No. 1: Save Money, Save Time, Save The Planet
Making the case for saving money, time, and the planet is easy, and it’s behind the success of companies such as SodaStream. The company launched its flagship product in September 2010 with the promise to help consumers save money and time by not having to go to the store and purchase soda. And, of course, homemade soda doesn’t use packaging or plastic, thereby helping to save the environment.
Tip No. 2: Always Think About What’s Next
Many founders work so hard to birth their first product or service that they don’t consider what might be next, according to Pieri, and correcting that can be expensive. For example, TaskRabbit was started under the name RunMyErrand because that was the first set of offerings by the company. Its founder, Leah Busque, may not have considered the range of handyman needs, business tasks, or IKEA furniture building that the business would grow to offer, which resulted in an expensive endeavor to rebrand.
Tip No. 3: Secure Trademarks And Patents
“Copycats and counterfeiters are the bane of our makers’ existences,” Pieri said. Her advice was to secure trademarks and patents. Counterfeiting has become a growing problem over recent years, and the sad truth is there is little companies can do without legal protection, she said.
Tip No. 4: Prototype The Heck Out Of Your Idea
Makers and entrepreneurs shouldn’t rush to create beautiful CAD drawings or refined models with their first idea, Pieri said. Instead, iterate like your life depends on it—because your business does. Professional designers, she said, work with low-fidelity materials such as cardboard, clay, and foam core to work up rough approximations that are suitable for provoking feedback.
“Prototypes are like truth serum,” Pieri said. “You don’t want to fall in love with your idea until a stranger does.”
Tip No. 5: Make Sure You Can Make A Profit On Every Unit
According to Pieri, a good rule of thumb is that if a product (fully packaged and delivered) can be produced for one-fifth of the retail price, you are safe. Of course, this will not be the case when in the early phases with low-scale production, she said, but entrepreneurs and makers should be able to see a path to that cost structure at volume.
“You need to have enough margin to cover all the costs of reaching the ultimate customer,” Pieri said. “Too many founders do not anticipate things like retailer margins and distribution costs.”