Tag Archives: innovation

digital products

Digital Products – Why Relying on Customers to Tell You What They Want Won’t Work

digital productsIf you prefer to listen/watch a video instead of reading then click here to go to my youtube channel.

What’s the big deal with digital products? Why are so many people creating online products to sell? What are digital products anyway, and how do you create a digital product that sells?

Digital products are intangible assets, meaning they can’t be held, tasted, or touched.  What makes them especially appealing is that digital products can be created once and sold repeatedly to different customers without having to replenish your inventory.

Using digital media intellectual property assets such as downloadable or streamable files, MP3s, PDFs, videos, plug-ins, and templates – it’s possible to make products ranging from music to videos, ebooks to online courses, and more.  Be sure to check that you will own the IP rights as I’ve discussed in previous posts.

 

Low Overhead Costs

Digital products appeal to people because they involve low overhead costs to create and sell. 

You don’t have to hold inventory or incur any shipping costs. Once you have something that sells you benefit from extremely high-profit margins: There’s no recurring cost of goods, so you retain the majority of your sales in profits. You could even automate everything so orders are delivered instantly, letting you be relatively hands-off with fulfilment.

Digital products are ideal for creatives, artists, educators, and freelancers looking for new income streams that require less effort to maintain. The income can supplement the income that has to be earned on a traditional “time for money” consultancy basis. As such it should enable you to cover your regular running costs so you’re not on a roller coaster every month, constantly reliant on new business to cover your overheads.

An added benefit of creating digital products is that you can offer products for free to build your email list, or use them as part of your offerings. You could bestow a bonus or licence your digital products for use under a monthly paid subscription plan.  There are lots of options as to how to incorporate digital products into your business.

Due to their ease of distribution, many entrepreneurs build entire businesses around such intangible goods or launch digital product lines to complement the physical products or services they offer.

 

Some Challenges With Digital Products

Digital products come with specific challenges you’ll need to watch out for, particularly the fact that you’re competing with free content: 

With digital goods, consumers can probably find free alternatives to what you’re selling. You’ll have to think carefully about the niche you target, offer premium value with your products and build your brand in order to compete.

Selling digital products does involve having an online presence and being out there on social media platforms. If you run a business, that would be an appropriate activity in any event.

Digital products are susceptible to piracy and theft so take precautions to reduce these risks by making sure you’re using the right tools to protect your products and that your terms of business incorporate the right provisions.

Making sure your product offering is good is of paramount importance, so how do you go about making a great product?

 

The Journey to Product Creation.

It’s not uncommon for people to have little success initially when they launch their digital products, even if they hire mentors to help them through the process.

Some people gradually get there and achieve success with their online offerings.  Many don’t even achieve sales of £1000 after years of trying.

People tend to invest quite a lot of time and energy into creating their courses, using a trial and error approach, sometimes relying on surveying consumers to find out what they want.

But as Ford famously put it “If I had asked my customers what they wanted, they would have told me a faster horse” So, while it’s fair enough to ask people what they want, you are the one who will ultimately need to decide what to create. Take people’s responses into account by all means, but some of them need to be taken with a large pinch of salt.

Certainly, during my own journey of creating a digital course on the intellectual property, I have discovered that most people don’t even know what intellectual property is, let alone being able to tell me what they want from a course on the intellectual property!

I was also quite surprised to find that having any sales at all on your first attempt is considered a success!

People are pouring their heart and souls into creating their courses, some spending thousands of pounds on coaching and other support, only to have no sales or only a few sales and they are being congratulated on their “success” because they created something and achieved a handful of sales!

There must be a better way I think.

 

Ideas First Approach

The notion that you need to keep trying till you achieve success with new product creation generally probably lies at the heart of the prevailing attitude to digital product creation – that you need to just keep trying to make incremental improvements until suddenly something clicks into place and works.

The concept was developed by Tom Peters in his book, Thriving on Chaos  Peters said companies should, “test fast, fail fast, adjust fast—pursue new business ideas on a small scale and in a way that generates quick feedback about whether an idea is viable.”

IBM founder Thomas Watson also reportedly said: “If you want to succeed, double your failure rate,”. He supported this thinking and adopted a management style that did not punish failure.

As a result of such “ideas-first” thinking, which is still in widespread use in many organisations, innovation cannot be counted on for predictable growth and is inherently doomed to failure.  Companies using this approach to innovation struggle to achieve success rates greater than 10 to 20 percent.

 

A New Approach to Innovation

According to Anthony W. Ulwick in his book  Jobs to Be Done companies struggle to predictably create winning products because they fail to define their customers’ needs with the rigor, precision, and discipline that is required to discover, prioritize and capitalize on opportunities for growth.

So, extrapolating from his message, to avoid this trial and error approach to digital product creation involves looking at customer needs in a totally new way.

This involves gaining a deep understanding of what a customer is trying to accomplish. What “job” is your customer looking to get done? Understanding what they’re trying to achieve is the key to creating products that are likely to meet their needs.

Having delved into this Jobs to Be Done Theory which was developed by Clayton Christianson, Harvard Business Professor in his book Competing Against Luck I’m committed to using the approach to get to the bottom of what outcome people desire when they look to “protect their IP”. What job are they really trying to get done?

If one can uncover related jobs that they’re trying to accomplish, particularly the emotional and social aspects of them, it’s much more likely you would create a product that customers want to use.

However, it’s worth noting that wants, needs, requirements, benefits, problems, tasks that the customer is trying to accomplish, and jobs which the customer is trying to get done are all terms that people use. These are not conceptually the same. The trick is to understand the nuanced differences between these terms and use Jobs-to-be-Done Theory to work out what your customers want.

I feel that the Jobs to Be Done Theory represents a breakthrough in innovation which I want to fully introduce into my own business, and then help my clients with.

I will discuss it in future pieces. For now, the important message I want to convey is that the current approach of trial and error when creating digital products is wasteful of time and resources. You would do better to focus on understanding what outcomes your customers are trying to achieve before attempting to create any digital products.

Patents - Novelty or Reform?

Patent Registration – Does It Lead To Greater Innovation?

Patents - Novelty or Reform?Patent registration is the first form of IP many businesses want to explore when they have an idea for something new. A patent is defined in the dictionary as a sole right to make, use or sell an invention for a set period.

The key word here is ‘invention’ which presumes innovation.. Therefore, patents should lead to the spread of knowledge and greater novelty. However, arguably the patent system has the effect of setting innovation back according to a recent article by the Economist.

Problems with patents

The article suggests that stronger patent systems do not result in more private research or an increase in productivity. The broadening of the patent regime in the 1980s following the USA’s recognition of the potential of crop science failed to galvanise progress in agriculture, and the article  also highlights how patent litigation is on the rise.

As a popular article recently stated: “most of the wonders of the modern age, from mule-spinning to railways, steamships to gas lamps, seemed to have emerged without the help of patents. If the Industrial Revolution didn’t need them, why have them at all?”

What is worse, as we wrote in our previous post “Patent Troll Problems – The Good, The Bad, And The Ugly”, the system has created a ‘web’ of trolls and defensive patent-holders which exist solely to exploit rights in patents often obtained from another company to block innovation.

Too expensive

The patent system is extremely expensive and even if individuals can afford to register a patent, any litigation afterwards is likely too costly to fund. This is also noted by Rubin who points out how “most inventors barely have enough money to file for a patent application. Even if the inventor can afford to get the patent to grant, patent litigation is exorbitantly costly, frequently requiring millions of dollars to fund. Individual inventors, and even small or medium-sized companies, cannot afford such fees without another company to finance the litigation or at least to license or buy the patent…The inventor may never realise any benefit from his toils.”

If patents lead to innovation and are so expensive to uphold, then it turns out innovation is expensive – probably more expensive than it should be. As innovation “fuels” the knowledge economy, it is the engine of development, and perhaps what we need is a “clear, rough-and-ready patent system” – to  encourage novel and fresh ideas. One that does not set innovation back.

Read the full Economist article

Intellectual Property & Food Photography – 3 Steps To Innovation

What are you doing with your food?

We all have something to say when it comes to food but the real question is what are you doing with it? Other than eating it of course, the movers and shakers of the digital age have found innovative ways to give you more than just a culinary experience.

Recently we wrote about ‘Is Posting Photos On Twitter A Breach Of Chef’s IP?‘ where we explored the relatively new phenomenon of taking pictures of the food we eat while at restaurants. Albeit commonplace, many restaurants, particularly some chefs, have seen this as an appropriation of their intellectual property.

1.       Identify your intellectual property and where its value lies

In our post ‘Is Posting Photos On Twitter A Breach Of Chef’s IP?‘ we looked at what intellectual property elements are involved in making and preparing food, as well as taking photos of it. We concluded that intellectual property will not protect your meal because of the underlying element of fixation that is required in order to be able to define what it is you are trying to protect. You can’t eat someone’s copyright nor would you expect to eat their trade mark, as Lord Justice Jacob expressed in his ruling referring to Bongrain’s cheese trade mark application.

Sombre news as it may be for some, others in the industry have taken advantage of the phenomenon, embracing innovation and turning it into profitable opportunities.

2.       Don’t do what everyone else is doing, take advantage of what it is they are doing!

In the last couple of months we’ve stumbled across some truly innovative ideas. Israeli based winery ‘Carmel Winery’ have come up with an interesting take of photographing your food with a viewing to uploading it onto social media. It is called: Foodography, and it is a project born by the “art of food image capture using a smartphone”. In essence, it involves a series of specially designed plates which (are protectable through Design law) allow you to take the most artistic image of your meal possible using your smartphone, see the how it works here.

Those of a more traditional disposition may see this concept as completely bizarre, however, it is more than just a mere gimmick. A recent article in business insider reveals that some chefs are embracing this digital phenomenon, also known as #Foodporn, and using it to their advantage. A good food shot can result in increased publicity and bookings for the restaurant. Certainly those restaurants equipped with specially designed plates that turn every amateur using their phone into a professional food photographer, and critic, wield a lot of commercial power.

3.       Go the extra mile

The trail doesn’t stop there, however. A new app developed by Google can now count the number of calories in your food through your Instagram photos. Im2Calories incorporates artificial intelligence which uses algorithms to estimate the number of calories in your food photos. Unlike the food you eat, this software is protectable by copyright and patent legislation. The real challenge is how big can you stretch your idea?

One thing is certain, the #Foodporn revolution is real and companies are commercialising it. The key is to understand where the value of your idea lies. Chances are that your winning recipe will only be half the ticket. Your appetite for innovation on the other hand extends the commercial opportunity beyond mere gustatory and olfactory senses.

Startups – Where Will The Next Tech City Be Located?

Which tech city will you start your start-up

Now that the Conservatives have gained another term in government it is likely that they will press ahead with many of their pledges. Of particular interest are the proposals set out in George Osborne’s recent Budget Plan for 2015.

The Chancellor of the Exchequer has offered a series of measures to support the technology sector, including:

  • £11m in tech hubs in Manchester, Leeds and Sheffield
  • £60m in energy research to develop energy technologies of the future
  • Funding to develop a financial technology incubator in Leeds

He has also offered greater incentives such as tax breaks for video games makers, £100m for automotive groups working on driverless car technology and a £40m in investment into research into the “internet of things”.

In summary, the 2015 budget offers a substantial investment for the technology sector and a real opportunity for entrepreneurs and enterprises to gain a foothold in our increasingly profitable technology sector.

Where is the next tech city?

When it comes to commercialising your concepts there are a lot of factors that play into the overall success of an enterprise. One of them is being in the right place at the right time. So, a few things to look out for when assessing the market landscape are:

Location of Growth Opportunities:

A survey of the digital economy by Tech City UK has found that 74 per cent of companies and 85 per cent of workers are now located outside the capital. With rent prices increasing in London, the surge in competition and tight venture capital practices, the North sets to be a go-to destination for those who wish to keep costs low and take advantage of government investment. For those entrepreneurs in the FinTech sectors this is notable. With the industry growing from $4Bn in 2013 to $12Bn to 2014, you may want to consider nestling up in Leeds where a new FinTech incubator is on the cards as it may well become the hotbed for investors in the near future. For those who like the sea, consider Bournemouth and Liverpool which have already outstripped London in terms of growth while the Midlands is set to be home to new energy technology research hubs.

Increased Revenue:

So far Greater Manchester, Belfast, Sheffield, inner London and South Wales are home to tech clusters. However, about 90% of all digital companies in the UK, which are mostly small and medium-sized, expect revenue growth this year. For would be investors and those looking to set up shop it is important that opportunities outside of London’s silicon roundabout should also be considered. .

Consolidating Market Position:

Depending on your business, operating from London might limit your opportunities as there will be increased competition or limited regional capacity. Branching out may help you consolidate your market position but could also help in minimising your competition in the long run.

Fortifying your domestic position by taking advantage of this significant investment may also have a positive effect on international opportunities. Currently, the Euro is very weak and given competitive prices and the rate of growth, this may attract a lot of foreign investment, which everyone should keep an eye out for.

New Innovation Group Launching Soon

While we had made good progress, we have now decided to park the Innovation Group for the moment to help the Islington Chamber of Commerce push ahead with the Camden & Islington business awards on October 27th.  We will pick it back up when the Chamber is ready.  To find out more about the 2011 Business Awards, visit the ICoC site here.

This is a group being launched jointly by Shireen Smith of Azrights and the Islington Chamber of Commerce.  The objective of the group is to foster inventions and innovation, by bringing entrepreneurial businesses and inventors together to act as a catalyst for new ideas.

Through bi-monthly guest presentations giving insights into starting up or growing a successful business or taking new products to market, the group will become a forum where like-minded individuals will be able to meet and share views.   Members and guests will have an opportunity to learn about particular facets of innovation, and intellectual property rights, and get to know one another informally.  The emphasis is on helping businesses find out what they need to do to get to market, and bring them together to speed up the process.

The ethos of the Innovation group is:

  • While one person may be able to come up with an innovative business model, invariably to put that idea into practice requires a whole range of skills and experience.
  • Different businesses can collaborate to realize a project in a shorter time, and to a better standard, to the mutual benefit of them both.
  • Practices which are normal in one line of business may seem revolutionary in another. If professionals from different fields meet in the right context there is a chance they will discover a better or novel way of doing business.

By networking informally over food and drink once the guest presentations have been delivered, members will discover opportunities for collaboration.  Exchanging ideas could lead to interesting new relationships and opportunities for participants to progress their business plans.

We’re excited to have the possibility of sponsorship from London Metropolitan University whose digital media business incubator programme has supported 70 early stage SMEs over the past 4 years with work space, business advice, education and mentoring. Their tech startup venue, the Accelerator is the planned location for the group’s inaugural meeting on September 6th.

Jeremy Phillips of IPKat fame is to deliver a presentation on the Intellectual Property Rights, and we are in talks with a well known inventor to share his experience of successfully taking his invention to market.  Keep an eye on this blog for further updates.

The meeting will be open to all, although ICOC members will have preferential rates.  Bookings will open in mid June. If you want to be notified when the link becomes available drop us a line here.  There are a maximum of 50 places, and it will be first come, first served.

13th October: The 2010 Protecting Innovation Conference

Safeguarding the New: How to Use IP Rights Effectively

Shireen Smith will be speaking on the special role of brand names, trade mark protection, and managing your brand online at this conference, which focuses on the effective protection of innovation through the prudent application of intellectual property rights.  This is a very practical conference aimed at both in-house and private practice lawyers.

Download the brochure.