Bubbles, Brains and Bright Ideas Descorjet S.A.
Converting an invention made in a single workshop into a product exportable throughout the world and patenting it in more than 25 countries makes Descorjet into a particularly significant case study for inventors and entrepreneurs in smaller businesses.
It all began at the start of the year 2000, when the Argentine Hugo Olivera, until then a manufacturer of mechanical spare parts, heard about a waiter having to uncork more than 60 bottles of sparking wine in the course of a party and ending up with badly grazed hands. The waiter’s problem became a challenge: with a friend, Olivera started to reflect on how to invent a means of uncorking bottles of sparkling drinks. Shortly afterwards his friend backed out of the project and Hugo Olivera continued, single-handed, relying on his personal savings, with the development of a working prototype and the filing of a patent application in Argentina.
The first patent was applied for in about mid-2000. After having produced a working prototype, Olivera felt bogged down and frustrated: he did not know how to progress further with his project and did not have the funding with which to manufacture his invention, or a team to do the work. For him, the main thing was to find partners with business experience who would be prepared to invest time and money in bringing the product to the market.
That was the position when Hugo Olivera heard on the radio about the Argentine Association of Inventors, and applied to it. First he was advised on how to organize himself better and how to develop a business strategy with which to advance his project, then he was warned that his original patent was badly worded, and that the claims did not actually cover everything that should be protected. So, as it had not yet been published, he withdrew the initial application and filed a new one after the appropriate corrections hade been made on the advice of a patent agent.
From that point on, Hugo Olivera joined forces with Eduardo Fernández, a professional inventor and entrepreneur, to improve the product and find a group of investors. Then, with the improved prototype, a patent application affording the benefit of a year of international priority and a preliminary business plan, the pair managed to put together a team including two investors with ample technical and industrial experience. The search for investors was long and hard, however: we knocked on more than 30 doors, explained Fernandez, and when eventually No. 31 opened we were in business. We were looking not only for money but also for people who would commit themselves to the project.
This team transformed the original prototype into a standardized, defect-free industrial product, worked out a detailed business plan and devised a marketing strategy. A meticulous anticipation search was conducted in the main data banks (www.uspto.gov , www.delphion.com and www.espacenet.com), and specific searches were made on the Internet.
Patents were applied for in more than 25 countries (Argentina, Australia, Brazil, Canada, Mexico, New Zealand, the United States of America and others) and in the European Union. Patents were granted in just eight months in the United States of America and in 18 months in the European Union. As Argentina is not party to the PCT, the inventors were obliged to file for patents in a great many countries very quickly, and were at risk while they did so. The team worked not only on the product itself but also on the trademark, the logo and the packaging, all of which were duly protected with trademark and industrial design registrations in more than 25 countries. And then, when the company Descorjet S.A was established, all the patents and other forms of intellectual property were made over to it as intangible assets.
The project was privately financed with contributions by the two investor-partners. Descorjet S.A was set up in Argentina, with an offshore company for the international business management. The initial investment was US$260,000, which was earmarked for the industrial development of the project, castings, patenting, travel, pamphlets and other paperwork, web pages, outside consultancy, etc.
The product was manufactured in Argentina to supply the Mercosur countries and in Taiwan to supply the other main world markets. Descorjet S.A. has not granted any licenses, and the company controls manufacture and marketing on its own. A number of improvements have been made to the product, and they too are protected by patents.
The main challenges were a lack of experience in international business and in financial matters. All this was overcome when the product won some important awards, both national and international (first prize in the 2001 International Invention Exhibition of Geneva, first prize in the 2001 Buenos Aires Regala Exhibition for the best industrial design and first prize in the National Business Plan Contest Naves - 2002, organized by the IAE Business School of Argentina’s Universidad Austral). All this made for extensive exposure in a range of communication media, which in turn attracted interest and commitment on the part of distributors, retailers and agents in both the international and the national sphere. By dint of forward planning and the press coverage, the product progressed from the design stage to the first sales in just 18 months.
The company now has annual sales of about 35,000 units, with an annual growth of 15 per cent. Of that output, 90 per cent is manufactured in Taiwan (for the European and North American markets and those of Australia and New Zealand), owing to the competitive advantages in terms of manufacturing and shipping costs, while the remaining ten per cent is manufactured in Argentina for the Mercosur countries.
As for staff strength, the company has just four full-time employees in Argentina for final assembly and packaging, while the partners themselves work on the day-to-day management. All the rest is contracted out, including cutting, welding and polishing, the manufacture of packaging, printing, customs clearance and so on. In all, if one includes the accountants, the commercial artists, those who take care of shipping, etc., the company provides work for some 40 people in Argentina and another 40 in Taiwan.
The company owes its success to its ability to convert what was just a good idea into a functional prototype with a professional business plan that afforded genuine business prospects on the market. For the inventors, joining up with investors who had access to funding and also business experience was the determining factor. Apart from that, winning national and international awards gave the inventors credibility, and allowed them to go out and look for partners in the certainty that they had a sound, recognized project to offer.
For more information see: www.descorjet.com