That's one reason why American Pop Corn, in Sioux City, Iowa, which makes Jolly Time Pop Corn, allocated 100% of its new-product-development dollars to Food Marketing Support Services. Among the hits that Rodriguez's company has created for American Pop Corn: "Blast O Butter." The theater-style microwave popcorn quickly became the large company's number one seller, increasing revenues about 28% the first year. "Before we introduced Blast O Butter, our sales had plateaued and our market share was 3.5%," says Tom Elsen, vice-president of marketing at the 160-person company. "Now our market share for microwave popcorn is 10% and growing. Based on that success we're believers. We really rely on Nancy and her team. They are our R&D arm."
Now, imagine trying to invent the next gourmet popcorn, a novel talking doll, and a new way to remove paint -- all at the same time -- and you have a good idea what invention farms do. There's almost nothing these innovators for hire won't try. And that's why large companies actively seek them out for assignments. Despite the humorous name, invention farms are serious business. "Great ideas come from a lot of strange places," says Jeff Dufresne, managing director of a product consulting shop called BrandStorm, in Cincinnati. He should know. In his 18 years of working at Procter & Gamble, he saw a number of outside inventions turn into major hits for P&G.
One invention farm, Invent Resources, in Lexington, Mass., has increased its sales 30% to 40% a year since its founding in 1991, says president Richard Pavelle. The four-person company, which spun out of MIT, accepts assignments from companies large and small. And sometimes it creates new products out of the ether. Recent work for Bath & Body Works, part of the Limited Brands empire, began with a casual visit from the R&D director. "He asked, 'What do you have?" Pavelle recalls. That conversation eventually led Invent Resources to formulate and patent a sunscreen product for Bath & Body Works that will debut on its store shelves next year, says Pavelle. (Limited Brands once maintained its own central R&D lab for personal-care products, called Gryphon, but its wings were clipped a couple years ago, when the retail company decided to close it down.) Invent spent a year developing the sunscreen in exchange for consulting fees. Those fees generally range from $4,000 to $10,000 or more a month depending on the project.
The new twist is that Invent no longer works for fees alone. "We now benefit from a royalty stream. We're at the beginning of several royalty arrangements that should last 20 years," says Pavelle. Typically, Invent sells an invention to one client exclusively. Recently, for instance, it built a hand drier for one customer; that product is on the market now. And the company is in the midst of developing a tornado-warning system for another client. "The science is the same whether it's a toy or a big machine," says Pavelle. "It's all physics." (For more on Invent Resources, see " If You Come ... They Will Build It," November 1999.)
The job of an invention farm usually ends with the delivery of a working prototype. The farms typically don't take their own products to market. And for that reason they often toil in obscurity. (See "Almost Famous: the Dynamic Bra and Other Woes," below.) But maybe that's why they can continually conjure up crazy new concepts. "We're sensitive to the realities of the market, but that doesn't stop us from dreaming the impossible," says Invent vice-president Ze'ev Hed.
"We want to stay independent. We're having too much fun."
Invention farms are not the only consultants being asked to envision new products. So too are industrial-design firms, which historically have been confined to creating the look of already conceived products. Dennis Boyle is a senior engineer at the noted Palo Alto design consulting firm Ideo. He says, "We are getting more and more requests to do what we sometimes refer to as 'phase zero' or 'before the brief' explorations to come up with new products and services." Boyle says the $60-million company has recently entered innovation partnerships with longtime clients Steelcase, Eli Lilly and Co., PepsiCo, McDonald's, and Procter & Gamble. "The express goal is to bring innovations to targeted business areas," he says.
In that way, design firms are beginning to act more like invention farms. Herbst LaZar Bell, an 80-person Chicago-based product-design and -development firm, has its own invention laboratory, called the Vision Projects. Founder and chairman Walter Herbst says the firm runs the lab to keep its designers challenged. "We just want our people to go play," he says. But their Brave New World-ish inventions have led to paying work. For instance, Herbst says that Nike called on the firm to create a new product, still under wraps, after it glimpsed a Vision Project called Gooru. The colorful award-winning invention is a futuristic education gadget for kids that consists of two parts: a communications device called a GooBall and a high-tech backpack with a flexible LCD screen. (For more on how the design world is changing, see "Driven by Design," on page 58.)
It's no coincidence that all the companies in this story hone their innovation skills by making time for blue-sky inventing. For instance, Ogio's Michael Pratt has devoted himself full-time to what the company calls simply "the lab." Why? In part to capture any and all zany ideas. "Blue sky is the first thing that gets cut usually at other companies, but for us it's the first thing we're spending money on," says president Wunderli. "Because we're privately held, we have the luxury of lowering earnings to continue to innovate." Two full-time designers work with Pratt in the lab, which is equipped "with all the mad-scientist tools they need," says Wunderli.
