How to Get Your First Great Idea

Rule 2
Take every complaint you hear seriously

Company: Misty Mate Inc., in Tempe, Ariz.
Time from idea to start-up: Two years
Initial investment: $80,000

What Steve Utter was hearing from employees couldn't have surprised him: it gets hot in Arizona in the summertime. Nonetheless, he was unhappy that the oppressive 110-degree midday heat was melting away productivity at his Phoenix-based construction company. "We'd start before the sun even came up," recalls Utter, "and we'd be lucky if we made it to noon."

A logical response might have been for Utter to switch over to interior remodeling. But all he could think about was that if he could boost productivity, he could add as much as $100,000 to his bottom line. Just as he was sweating out a solution in 1987, he came across a fog nozzle used with garden sprayers to spread insecticide in a fine mist. If he could somehow connect the nozzle to a tube and a portable water supply, Utter figured, he might be able to create a personal misting device to cool his workers. He also realized that the product would have broad appeal. "I had million-dollar signs in my eyes," he admits.

Over a two-year period, Utter's employees served as guinea pigs, testing out the device as he toyed with it. Once they were satisfied, he applied for a patent. The original Misty Mate cost $175 and consisted of a backpack water supply with a flexible tube and a nozzle. "We started showing it to other construction companies, and they said, 'We want to buy these,' and we ended up getting a lot of media coverage because the original ones were a large size and very conspicuous."

Misty Mate now costs $25 and consists of a fanny pack that straps to the waist and a stiff but flexible tube that clips to the shirt collar. Sales of the device have doubled every year, reaching around $7 million in 1997.

Rule 3
Wait for your boss to say no--then go

Company: Steeplechase Software, in Ann Arbor, Mich.
Time from idea to start-up: Six months
Initial investment: $30,000

Mike Klein's story sounds like something right out of the panels of Dilbert: an eager employee spots a great new innovation, takes the concept to the management, and is told his project would be perfect--as a candidate for a slow corporate death. "They said, 'You could do it,' but they would treat it as an R&D project and probably kill it," Klein recalls.

Klein, though, had done enough work on his concept as part of a night class in entrepreneurship that he thought he might know better. So he raised $30,000 and went into business.

The idea for Steeplechase came from observations he'd made working at Allen-Bradley, the Rockwell International Corp. unit that makes industrial controls. Klein heard customers complain that Allen-Bradley's mainframe systems, which run factory lines, were complicated. He wondered if those costly systems could be replaced with lower-cost PCs.

It was around that time--late 1992--that Klein approached his managers at Allen-Bradley and asked them how the company would receive his idea. Their clear message: don't pursue it. Later he heard a senior official say that it would be at least a decade before PCs were running the factory floor. "To my mind that translated into at least a five-year window of opportunity," he says. On New Year's Day 1993, Klein launched the company, which has grown by 400% a year.

Richard Ryan, who knew Klein at Allen-Bradley and is now president of Rockwell Software Inc., says he isn't at all surprised to hear that Klein was actively discouraged. "It wasn't something that the big company understood back then," he says. "You needed to have the entrepreneurial outlook to see beyond the current revenue stream to what was going to happen in the future."

Rule 4
Assume everyone has the same problem you do

Company: HealthCare Financial Partners Inc., in Chevy Chase, Md.
Time from idea to start-up: One year
Initial investment: $500,000

The inspiration for healthcare financial Partners began with a headache. John Delaney and Ethan Leder had bought a home-health-care company in 1989, quickly positioned it in the profitable niche of delivering drugs to patients at home, and then ran into a problem--a cash-flow crunch. To expand, they had to add nurses, so expenses rose. But revenues didn't keep pace, because it often took government and private medical insurers 90 to 120 days to pay for services.

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