The Knock-Off Effect

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This is how the Knock-off Effect works: someone has an idea for a new product which they release after research, development and investment. Someone else copies it for less money (because that is their nature) and in a much shorter time span as the hard part has already been done. The parties may or may not fight over it in court, but regardless, the premium the innovation commands is diminished. The innovator reacts to protect their market share by going out and making something new (because that is their nature) and the cycle repeats, meanwhile the original innovation is now available to the consumer for less.

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The Knock-Off Effect

  1. 1. The Knock-Off EffectThe Role of Copycats in Innovation
  2. 2. All products get knocked off This is inevitable! More companies exist that copy than who innovate and with modern technology and the “flat world”, it is easier than ever before. This happens to both hugely successful and less successful products. No one is immune.
  3. 3. What is a Knock-Off? The nature of “knock-offs” is always to be cheaper. When is the last time you saw a copy BETTER than the original? An “innovation” is what we call a “knock- off” that makes something better rather than just cheaper. Regardless of patents, which can only slow things down, the knock-offs will appear.
  4. 4. Why do companies copy? While some blatant copying is nefarious, some is merely the result of human nature. Once people see a possibility they didn’t see before, it opens their mind... to something very similar to the new innovation. They become blinded by the innovation and can’t see any other possibilities.
  5. 5. Patents & Lawsuits Inventors’ objective: come up with an innovation that can be reasonably protected with a patent. However, a patent does not enforce itself and you will have to be proactive to protect your territory. Lawsuits can get very expensive (over $1 million), so it will typically only make business sense for big-time products, like smartphones.
  6. 6. The Knock-Off Effect The Knock-Off Effect is the name of a cycle that occurs in the innovative space of any industry wherein new innovations inevitably spawn coypcats, driving the price of innovations down for the consumer and forcing new innovation.
  7. 7. How it all works...step 1 Someone has an idea for a new product.step 2 They release it after research, development and investment.
  8. 8. How it all works... Someone else copies it for less moneystep 3 (because that is their nature), and in a much shorter time span, as the hard part has already been done.
  9. 9. How it all works... The parties may or may not fight over itstep 4 in court, but regardless; the premium the innovation commands is diminished.
  10. 10. How it all works...step 5 The original innovation is now available to the consumer for less. The cycle repeats...step 1 The innovator reacts to protect their market share by going out and making something new (because that is their nature).
  11. 11. The Knock-Off Effect someone has an idea for a new product 1 the original innovation is now they release it available to the after research & consumer for 5 2 investment less Knock-Off Effect 4 3 the parties may someone else or may not fight copies it for less over it in court money
  12. 12. What you can do... As an innovator you need to recognize when to move on, and not merely sit back and bemoan the inevitable. Use your patents to recapture some of the value taken by pirates. Just remember that with the Knock-Off Effect, speed is your best friend. Speed to innovation, speed to market and speed to general awareness in the public eye.
  13. 13. Case Study 1: Pizza Cutter Zyliss came out with the idea that the handle of a pizzastep 1 cutter doesn’t have to be a stick, which opens up the mind to non-stick-and-wheel pizza cutters. old new Zyliss achieves market penetration with a new pizzastep 2 cutter.
  14. 14. Case Study 1: Pizza Cutter Zyliss is selling their pizza cutters and thenstep 3 Alibaba Factory X sees this, and they are already making pizza cutters, so they can replicate the new design easily.
  15. 15. Case Study 1: Pizza Cutter Now Zyliss has to decide to whether or notstep 4 to pursue a patent lawsuit based the value of their intellectual property and the cost of the legal battle. The knock-offs are on shelves regardlessstep 5 of lawsuit putting price pressure on your products, this good for the consumer because now they are getting better prices due to the competition.
  16. 16. Case Study 1: Pizza Cutter Now someone, Trident Design (my company), creates a new innovative pizza cutter, the Pitzo, which improves upon every design advancement made to date. Now we will inevitably go back into the cycle again.
  17. 17. Case Study 2: iPhone Apple’s iPhone spawned many copycats. Samsung was found by a court to be violating Apple’s patents and fined $1B
  18. 18. Case Study 2: iPhone Hopefully as a result of Apple’s win, companies will try and walk further from the copycat line, yielding more product diversity. Meanwhile, while Apple is snagging an extra billion dollars from an already old design and dealing a blow to a major competitor, don’t think it is not already moving on to the next innovation.
  19. 19. Case Study 3: Dyson Dyson’s vacuum also spawned many copycats. Dyson
  20. 20. Conclusion Knock-offs, while annoying, are absolutely inevitable. They drive the price of innovations down for the consumer, forcing new innovation. Even though it’s frustrating for inventors to be copied, it can’t be prevented, so you must plan for it and keep innovating to stay ahead of the copycats. Today, due to the Knock-Off Effect, you can buy a pizza cutter that is more effective than anything before it at a price point comparable to older, inferior designs.
  21. 21. 24 E Lincoln St Columbus, OH 43215info@trident-design.com tel: 614.291.2435 fax: 614.291.9473www.trident-design.com

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