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This business coaching lesson teaches entrepreneurs about creating a prototype for their business.

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Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Lesson Nugget: You might be close to success, don't waste your time by giving up too soon.
  • Lesson Nugget: It would be wise not to spend a lot of money developing a product unless you are well-versed in doing so.
  • Lesson Nugget: You don't have to spend a ton of money developing a sample of your product. There are ways to keep the cost down when developing a prototype.
  • Lesson Nugget: Look into hiring an attorney if you have a product that is patentable.

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-So I just want to encourage anybody, any entrepreneur watching this, because as we interview you, Jill, and a lot of other successful entrepreneurs, we're finding, more and more, that hundreds and hundreds of hours are being spent on something that's not even good until the first sign of success.

-Yes, yes.

-So if you're watching this, and you're digging for gold, don't stop, because you might just be three feet from gold.


-I mean, you might be three inches from gold.


-You just have to keep going.

-Yes. And the more you get into it, the more of a shame it would be to stop, because you have invested so much time into it.

-There is a person, and I'm going to just be gender neutral so I don't get myself in trouble for sharing too much of the story. There's a person I know who has spent a ton of money on developing their product. And they've hired an engineer. They've hired a lawyer. They've got a patent. They now have a patent attorney who says, there is potentially another patent we need to file.

And so we're probably $80,000 into it. Not a single one has sold nor does anybody know about said product except for said person. Would you advise that anybody watching this should go out and hire an engineer, a lawyer, an attorney, and all that to build a prototype? Or do we just need to get in the garage and get a little crazy with some-- what is-- do you recommend we hire all these professionals?

-I think I know that same person.


-You know what I would recommend is the person who is going to go out and hire the lawyer, the engineer, invest the $80,000, that person should be somebody that already has done five, six, seven other products successfully and has the confidence, that knows that this is going to work. For-- it all depends. I mean, that's a lot of money for--

-And to be-- I'll just be transparent because I want to give this example some context here.


-This is a person who makes probably a teacher's salary and has just taken every dime for the next, maybe, four, five years of income plus all their life savings to do this.

-I truly believe there are other ways to do it than to take that amount of money and time and invest in something that you're not even sure. I really, really believe there are other ways.

-Now, let me ask you this. What kind of people do you not need to hire and what kind of people do you need to hire make your prototype? I mean, do you need to go out there and get an attorney? Do you need to get a lawyer? I mean, is there anybody you say that you go, you definitely need at least an engineer to help you, or you're going to need. I mean, anybody you need to hire or can it just be your friend?

-I think it depends on the product.


-If it's something that you feel is patentable and you need to get a patent on it ASAP, then, yes, I would hire an attorney. That is something I would invest in. As far as an engineer and the other people, there's so much that you can do to get a prototype without having to go and spend.

I mean, you can spend very little money on a sample. It does not take that much cash to get a sample for your prototype. But people don't even understand that and they think it's going to take it so much investment in different people, hiring, and going overseas, which I know we're not going to talk about that right now. But it really is not that difficult of a process to get a patent.

-It creates a barrier of entry--


--where people feel like oh, my gosh. Ive just spent all this money.

-No, it's not like that.


-Yes, I mean, for mine, mine isn't such a dif-- there are some products that are technical and they-- to get a prototype of that would require so much more of an investment. But there's still much easier ways to do


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Featured Coaching Excerpt - Notes & Transcript, Part 2
  • Lesson Nugget: Investing in a patent takes a lot of money; before doing so, you need to determine if there is a need for your product.
  • Steve Jobs: "Sure what we do has to make commercial sense, but it's never the starting point. We start with the product and the user experience."
  • Jill Donovan: "The feedback you can get from 100 people is worth more than any dollar you can spend."
  • Lesson: Nugget: Before investing a ton of money into your product/service, host an event where people can try it out.


-There is an adult I know who has made gross sales over $100 million of products. And he pulled me aside one time and I said, what's your theory on patents? And he said, well, what I do is I go through all the work of getting the patent.

And then as soon as I make a great product, overseas there's a couple countries-- in particular, this was the great country of China-- they would rip off this product within days of getting it and be selling them.

JILL DONOVAN: Absolutely.

-And he said, and good luck suing those people. So I said, so what's your theory? And he says, honestly. I go to market first and see if there's a need for if. And if there is, then I go for the patent. But I don't even go for it until I know someone wants to buy it.

-And I said, really? And he said, yeah.

-And this is a guy who sold $100 million of products. And I met another one of his friends, and he said the similar thing. Do you agree with that?

JILL DONOVAN: Absolutely, 100%. I think there are easy way to tell if people are going to like your product without having to invest the amount of money in a patent And like you said, good luck having a patent hold up in another country.


-Yeah. I don't think people understand that though, and that's very scary. It's the lack of knowledge on that that would scare people away.

-I just want to encourage you, if you have a product idea right now, and you feel like it's going to cost you $100,000 of legal fees and all these professionals and engineers to make a prototype, don't let that stand in the way. Just get in the garage, get some crazy glue, and get started.

Now, Steve Jobs, he's the co-founder of Apple-- he's the man who grew Pixar into this filmmaking juggernaut that is today-- he says, "Sure what we do has to make commercial sense, but it's never the starting point. We start with the product and the user experience." What does that quote mean to you? I mean, because you're a big from-the-gut person. What does that made me to you?

-It means that I can draw out a plan, and I can figure out how it's going to work in wholesale and retail. But really, if it is not going to work with the person I want to sell it to, then why would I even continue on with that? So I would say for anybody that has a big idea, there are such simple ways to even test it out to see if it's going to be marketable.

-I know somebody who had started a food company. And the food was so rough. But they brought it by in the packaging. And it was super nice packaging. We're talking maybe $20,000 in the packaging and everything. And they were like, (QUIETLY) we're in stealth mode.

I'm a stealth mode. They would actually use this phrase, I'm in stealth mode. Mum is my word-- mum. And I'm like, well, can I have some of the mum? And they're like, yeah, sure.

And it was truly awful. And they never had gone outside of the building. Do you recommend going outside of the building to get some feedback once you have something?

-Absolutely. Yeah, I think when I first started, and only a few people saw them, when I had a party there were 100 people there who had not really seen them before. And the feedback that you'll get from 100 people is worth more than any dollar that you could spend, because that's free-- that is free.

You have 100 people coming to a party looking at your cuffs, you see what they're going to buy. You see what they don't like, what they leave alone, what they're attracted to. And you cannot pay for that. That is so, really-- I'm not saying you need to throw a party and have your prototype there, but--

-Anyone needs to throw a rustic cuff party.

-Exactly. OK, that's a great point. But I think that it does not hurt to have people come and see if it's even marketable, or see if it's even something that would sell without having to invest $50,000, $80,000, $100,000.

-Now, did you have anyone working for you as you were making the prototype? Was it you and a dude or a lady friend or was anybody helping you?

-It was me.


-It was just me for a year.


-A year.


-Yeah. It was a hard, hard year. But that's because I'd never thought that I needed an employee, because I was so into that I just want it to be my thing.

-At what point did you hire your first person to help you either develop the product or at least get the product going? When did you hire somebody?

-The point that I hired my first person was a year after started and it was when I realized I could not handle the emails that were coming in. Because that was a full-time job. And so I needed to do what I did best and that was design and then create and make.

And I could not handle-- which was a full-time job-- the constant communication every day of all the people that were now starting to buy them. I loved that part, but I just couldn't do both.


Featured Coaching Excerpt - Notes & Transcript, Part 3
  • Lesson Nugget: When the quality of your work begins to slip because of your workload, you need to hire someone.
  • Fun Factoid: There are markets set up all around the country throughout the year where you can set up a booth to get critical feedback on your product or service.
  • Lesson Nugget: As your company grows you won't be able to do everything. It is okay to hire someone and delegate some of your tasks.
  • Lesson Nugget: When going to "market", a good way to save money is to build your own booth; keep it simple.
  • Lesson Nugget: At "market", buyers are walking around the booth looking for new products to put in their store.
  • Fun Factoid: 1. A line sheet is also a wholesale sales sheet used by a manufacturer in the garment/fashion industry providing information on a product. It allows a garment to be listed with the sizes in its size range, great for inventory tracking.
  • Factoid: Going to "Market" can cost anywhere from $2,000 - 20,000 depending on where it is located and the size of the booth.

-I have a confession.

-Tell me.

-This is pretty funny. With the DJ company, I was so worried about hiring people. Because I would answer the phone. I would say, "Thank you for calling DJ Connection. This is your ultra-humble host, DJ Clay. How can I help you?"

And they're like-- am I on the radio? And I had a certain way I would do it. And I thought no one could ever learn this.

JILL DONOVAN: I thought so, too.

-Because I'm the only person ever. Literally, when I hired people-- and this is embarrassing, but I did this up until 2003-- we're doing almost 1,000 weddings a year at this point. And I had one phone. And I called it the money phone. And I had dollar sign I drew on it with a Sharpie.

And if the phone rang, I was like "Phone!" And everyone would run to the phone and bring me the phone. And then, if it was not a sales call, I could pass it off-- if it was an advertiser or somebody. But if it was a sales call, I would do it. And I never wanted to hire somebody, because I thought-- well, no one could do it like me. Where I got to that email mode and the call mode where I couldn't possibly, that's when I delegated, too.

-In my mind, nobody could make it like I could, because I was the only one who had ever made it. So the product you're getting needed to be made by me. That was my big thing. But when I started getting hundreds of orders at a time, when I hired my first girl, we were on Good Morning America, and I think we sold 2,000 in the first day. And I knew then that I was in big trouble. And so I had to give up some of the-- OK, I cannot do this all by myself. And that's when I had my first girl.

-So if I'm watching this and I am struggling to decide whether to hire my first person to come help turn my big idea in this big-time product, how should I decide whether it's time to hire someone or not?

-Really, I think that you'll know. Because when you can't do it by yourself anymore, when your quality is slipping in any area because there's only one of you, then I think it's time to at least try, even it's just part-time. Have somebody relieve you of something so you can do what you do really well. Because when you have to start spreading yourself too thin, then you're not really doing what you do well.

-I think it's important, too-- two rules that I've used in my career. I don't know if you agree. I want to get your feedback. I always try to staff my weakness, whatever I feel like I'm weakest at-- maybe the quality's slipping or that. And I always try to only hire when I need to, as far as I try to keep-- in a startup-- a very Spartan workforce, where you have very few people. It's lean. And you only hire when you need to? Do you agree with that, or am I off?

-100% agree. I don't want to have somebody standing around going-- OK, now what's your job? So I would almost rather wait until we were desperate and then fill that need. All of us work until we can't handle any more, and then fill that need.

-Last week, we had a guy named Dan. He said, "I'm scheduled 18 of the next 24 hours every day this week. Can we hire somebody?" And I was like-- Yeah, we probably should. But I'm so into it I don't even notice, because I'm passionate. Because I'm passionate, I don't even notice, really. And I think that as an entrepreneur, we have to make sure we keep it lean. Staff our weakness.

Now, if I'm watching this and I feel that I've developed this prototype, and I feel like I know there's a market for it, did you immediately start marketing it, or do you recommend that if I'm an entrepreneur and I have my prototype done now, do I immediately start marketing it? Or do I try to go out and find a factory to mass-produce this? I mean, what is the next step? I have a prototype. I think people want it. Do I rush to market? Do I find a factory? What do I do?

-You know one of the greatest ways that you can really test it? This is my opinion, but I would not go to a factory to get it mass-made right then. Because really, there are great ways that you can test it. One of the great ways is that you can go to market and set up a booth, and you can get a lot of feedback from a lot of different locations and different personalities. And that will be one of the big telling things.

-So go to market. When you say market, is this a physical place? When you say go to market, what is market? How do I find a market? Walk me through what you say. When you say market, what is that?

-So it depends on what product.

-Can I pick one, just for a second?

JILL DONOVAN: Pick a product.

-Let's say that I am making jeans-- a new kind of jeans.

JILL DONOVAN: So you would go to an apparel market. And it could be apparel and accessories, but there are many different types, some more popular than others, around the country-- Vegas, New York, Dallas, Atlanta. Several times a year. You would pick one of those, and then you would go set up a booth. You would pay the fee for a booth.

-How much does it cost to be in a market?

-The ones that I just told you, it can range anywhere from $2,000 to, I think, at least $10,000. That's a range.

-I just want people to understand-- if you go online you find a market and they're asking for $10,000 or $4,000, don't be freaked out . That's normal.

-Depending on the booth size, and depending on all the goodies that you want with the booth, I think we paid $10,000 when we went to Vegas market last year.

-And you had to design your own booth on top of that.

-Yes, we had to design our own booth. Yeah. And then, of course, you have all the expenses of going out, too.

CLAY CLARK: What does a booth cost to design?

-We did it ourself. And, believe it or not, we went and bought from Ikea, because it was cheaper to do it this way, and got six different sets of shelves and then just put it together at market. We did it right there. We kept it very simple. And they have stuff there that you can use.

We had never done market before. It's a great way, because you have hundreds and hundreds of retail stores that are coming through-- all different kinds, from high-end to very small boutiques. And they're all walking through, and they're seeing-- it depends on the market, but there's 300, 500 booths in one big space.

And they walk through, and they have x amount of budget. They decide what they want.

-Buyers for the stores are there, and they're walking around, going-- I want to see if I want to buy this product or that product and put in my--

-Let's see what's new. Let's see what's fresh. And let's see some of our suppliers that we've purchased from before. A lot of them go back for that purpose-- to rebuy for the coming season.

-Do they ask you for any information? Do they expect every vendor there to have a certain thing?

-Yeah. We need to see a line sheet. And this was all new to us, because we had never done anything like this before.

-I'm going to harass you here. When you say we want to see a line sheet, what's a line sheet?

-Line sheets are what your retail prices, what your wholesale prices are-- what they would be for that store. So it's basically a list of everything that you sell, and then what the wholesale prices would be if I were to sell to this store.

-But they'll just say-- do you have a line sheet?

-Yeah. They'll say-- do you have a line sheet?

-And you don't know what that word means unless you're watching some Thrive.

-What's your MOQ, what's your minimum order requirement? There's a lot of language that you don't know or that you don't even know that you'll need until you get in there if you're brand-new at this.

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