Hello everyone, my name is David. The reason I am here is because I have a product idea that requires an electronic component. I have been working on the structural components for two years during my time off from work and family duties, which averages to about 30 seconds a week . Anyhow, it is time to focus on the design of the electronics now and I am not in a position to spend a lot of money on hiring a designer. However, I need to have a design that can be production ready. I have found a few people who are making components that are close to what I want with standard hobby electronics but I want to be able to take my design to market. My questions for the designers in the group are:

1) What would attract you to invest your time in a project?
Cold hard cash only!
Depends on the idea? or the track record of person?
Some payment up front, some on production?
Royalties?

2) Where would be a good place to start looking for a design partner?

3) If I do find a partner willing to work with me, what is fair equity? How do I determine the worth of the work it takes to design the component?

4) How concerned should I be about protecting my Idea and how can I do that? Is an NDA good enough?

5) How do I know that I am dealing with someone knowledgeable? Should I prepare qualifying questions? It has been my experience that just because a person holds a position does not mean they know what they are doing. At the same time I don't want to insult a knowledgeable prospect either.

As a side note, I have experience bringing a non electronic product to market which saw substantial sales and distribution. Also, I promise not to solicit anyone using the information provided. However if you wish to connect with me, please message me or express your interest in this thread.

Thank you in advance, any input on this is appreciated.

 

GM11
Hi sorry I am on my sons login name!!

Trust no one, this is business so conduct in a business like manner. Depending on how much input the designer needs to make and time he will need to spend, you may consider the offer of equity in a company. This gives the designer confidence your not a fly by night,but be prepared to have a full business plan ready.
I am not a designer but I am working with one, get a NDA in place BEFORE you even utter what the project is. Handshakes give you a warm fuzzy feeling but provide nothing in way of protection, try and get a designer in the same country as you, dealing with international law is expensive and a pain on the whole.
Dont be cheap!!!! If you need a lot of input from a designer then you NEED him, as such be prepared to have to give a fair slice of money/equity.
In my case the product is such that I decided to take a designer on as a partner, he has 39% share in the company, no pay until we hit market but its a LTD company and I provided a detailed business plan that was realistic. I decided this approach because in the future the product might need upgrading, it made sense to have the same guy do it.
Also as a partner he has as much incentive as I do to make this work, everything was done via a solicitor, we have become friends but only outside of work.

Hope that is some help.

If it's a small project goto one of those hire a designer sites, there are some good ones.

 

I did some design work for a friend, a former boss who opened his own place just before our company fell apart (long sad story, everyone saw it coming but the CEO dong the destruction). A former customer called me and asked me what was up with is job, and I told him I could not know as I no longer worked there, but flipped him over to my friend. That earned me a "sales" commission of 5% of gross sales (a standard sales commission in the industry).

The job took some miscellaneous work that I did as part of my commission, having plenty of time as I was unemployed at the time.

I also did several other products for him, and still collect some nice checks from time to time.

We had an established relationship so everything was done on a handshake, that was *my* liability, but I also wanted to help a friend get his business going; hey, he might hire ME there.

I dunno if this helps you unless you have a designer friend.

 

Before you even approach a designer or lay out any cash on this project, have you done an extensive patent search to ensure you're not likely to infringe anyone's intellectual property rights?

 

Also an important thing. You do not need a production ready device to get investors. What you need is working prototype as a proof of concept. This may close to what you think the production ready product may look like. But you will only waste money if you all by your self are trying to create a something that is production ready

 

GM11
Having thought some more I decided to add some reality. The following sounds very negative but is based on over 30 years running different business's and currently bringing a new product to market.
A couple of things you said worry me.
Time.
You will need more of this than you will ever have enough of! It will consume time beyond your imagination! If you dont have 30+ hours a week to devote to it then put it on hold. Meetings pop up out of nowhere, things needs taking care of straight away etc etc, it will cause you trouble at home because a new business needs you like a small baby needs it's mum. Just like a small baby there will plenty times you get little sleep, plenty times you want to do something else but cant because the baby need's this or that.

Money
No money no project, simple as that. Dont fool yourself into thinking you can do X or Y with Z amount. There will be expenses you havnt even begun to imagine that have to be paid upfront, yes you can borrow, but that my friend often ends in tears!! Have a long hard think about your creation, does the world really need it as much as you want them to?
Dont even think of trying to launch a product without cash behind you, you will fail. Never EVER put your home at risk if you have a family, far better to let go of your project than put the family on the streets, trust me poo happens and it happens alot.
If your idea is THAT GOOD, then approach investors with the idea, good investors will want a huge chunk of your idea, but talking to them will give you a realistic idea if your product is likely to fly, if you get people snapping at your hands for a slice of the deal, then you can start to think about maybe getting a loan. At that stage get a good accountant on board, it will cost but it will save you money long term and most are realistic!
Sorry if it's all negative but it has to be, if it puts you off then great you wernt meant to do it. If it dosnt then think hard, be honest to yourself about how its going to feel if you loose the house the wife and the car, in over 30 years in business I have seen some really harsh situations that have destroyed families and people. I had a farm in the UK at the time of Foot and mouth disease, my best friend 4 weeks before the out break, took out a huge loan and upgraded his cattle herd and facilities.
He was in over £1M, but things had been going well for over 6 years for him so no risk. Then F&M struck out the blue, it decimated British farming! 6 weeks into it he walked into his barn and swallowed the end of a shotgun.
Now whenever I want to take a risk I think to myself, am I prepared to do that.

I wish you luck but you need more than luck , be smart dont take silly risks

 

a little info on that the project is would help, designers specialize in different areas, like rf, audio, digital, ect.

 

If you can, I'd avoid divulging any IP that you don't have to, regardless whether you have an NDA or a patent or whatever. At the circuit level, it's unlikely you have anything novel and the circuit designer doesn't need to know about your final finished product as long as he is given good specifications.

If the designer cannot reasonably do his work without knowing your secrets, then by all means get an NDA. But in my experience, most legal crap like that gets shoved in a drawer and never looked at again. The important thing is the trusting relationship that develops over time, that make such documents just a formality.

 

The business like approach is to look beyond the first product and focus on producing a string of products. Then ask yourself how you should convince someone like yourself to look at the long term picture.

Above everything else don't waste time on patents and other legal folderol. The only way to beat the competition is to out innovate them. The people who intend to infringe will do it and dare you to sue them. They will win; trust me on this.

 

Not from my personal experience.

A friend of mine, part owner of a very successful company, told me this: if you find someone that could work side by side with you to create more business / opportunities, eventually make him your partner but to get any job done, hire people or outsource but do not offer partnership.

He is already around 15 years doing very well (and sticking to his rule).

I am convinced he is right.

Hope you can succeed.

 

Great input so far! I've been down this road before and yes, you have to be at terms with what you are willing to give in order to launch and maintain any business. My last business became a casualty of the Great Recession and it was a slow death, which has given me a more conservative perspective.

Part of why I believe my business failed was because I had taken on investing partners and was forced to comply with decisions I knew went against the interests of the company I started. But as a result I learned quite a bit about how to manage limited resources, as well as a healthy caution of partnerships. I've decided to build this business debt free from the start which also relieves me from the pressures of polished business plans and potential investors. Don't get me wrong, a business plan is important but if I bootstrap this effort I will need to allow the product to live or die largely based on it's own merit. I plan to make a production purchase commensurate to a predetermined budget. Then sell, revise and plan for the next purchase.

I may put company ownership on the table for a person to work side by side with as atferrari suggests, but I live in a rural community in the deep south and the likelihood of finding someone to fit the bill out here seems slim. Royalties on every product sold or a combination of some payment and some commission would, I think, fit better with inventors in similar situations. This also builds in a form of protection in case the person you are dealing with abandons the project. By the same token, there is no guarantee that the inventor will sell their product. But, that is an assumed risk that I believe most people considering an investment relationship understand and weigh out.

Touching on the question of protecting ideas. I agree, as some of you suggested, a trust relationship is the ideal setting for this to work. Which is the dilema of the inventor/entrepreneur that needs help beyond their technical ability. How much is too much information to divulge in order to garner interest? Especially in a situation where the person you are working with is in another city. Which is why I think it is good for inventors to know other potentially motivating factors to consider when trying to generate interest.

 

Take a look at Kickstarter.

https://www.kickstarter.com/start?ref=home_start