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When family invest in you
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August 9, 1999: 1:33 p.m. ET
Turning an invention into a 'hit' can cause stress and financial strain for all
By The Applegate Group
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Last of two columns on family businesses.
NEW YORK - Like most good parents, Gene and Sandee Nabat did everything they could to give their three kids a comfortable upbringing; they lived in West Bloomfield, a suburb of Detroit, and sent the kids to good schools.
But the Nabats never planned to invest more than $500,000 in their only son's invention -- a small black plastic gizmo called the "Findit." The trademarked Findit, which emits a high-pitched beep when you clap your hands three times, is designed to help absent-minded folks locate small things like remote-control units and car keys.
"I have friends who think we're certifiably crazy, but if this thing flies, we'll be heroes," said Sandee, who once spent weeks at her dining room table, gluing together thousands of the original, since-discarded prototype.
Channeling absent-mindedness
Craig Nabat, 28, is the baby of the family. His parents said he had many challenges as a child, including eight operations to repair a cleft palate. Easily distracted, Craig attended four colleges before finally graduating.
Although he wasn't sure what he wanted to do for a living, he had a passion for making money. As a teenager, he washed and detailed cars and sold T-shirts to earn extra cash. In college, he sold pepper spray to sorority girls.
Reading Napoleon Hill's classic book Think and Grow Rich prompted Nabat to dream up something he could sell to the masses via infomercials.
He wasn't sure what "it" was until he came home late one night and couldn't find his TV remote control. That's when the brainstorm hit: He'd invent something to help people find lost items.
"I'm absent-minded," Craig said in an interview. "I'd lose my head if it wasn't connected."
Although he didn't have a clue how to make what he wanted, he believed it "was something everyone could use."
His original goal was for the device to be small enough to fit inside a remote-control unit. But after several attempts and spending thousands of dollars, he settled for something larger.
The current Findit, which retails for $20 to $25, is about 1 inch wide and 2 inches long.
Investing sweat capital
Those who know him say few inventors have Craig's persistence and determination. He works seven days a week, on his own, with a group of freelance artists, designers and producers. He put his current romance on hold to devote all his time to his invention. When dozens of electronic engineers refused to meet with him, he flew out to northern California and finally got an appointment at one company.
The engineering firm agreed to make the microchips on one condition: If the product was a bust, the rights reverted to the company.
When his parents balked at contributing any more capital, Craig hired a consultant to draft a formal business and financial plan, which indicated the Findit could actually make money -- if it was a hit.
But more challenges awaited him. When it became too expensive to make the plastic casings in the United States, Craig flew to Taipei to find a manufacturer, and didn't come home until he found Mike Chen, a Taiwanese entrepreneur willing to back him.
Gene Nabat said Chen's factory is gearing up to build 200,000 Findits for the Christmas season, although Craig is begging him to make a million.
Long haul to Easy Street
Although things are looking brighter, the Nabats aren't counting their chickens -- or dollars -- yet. A recent four-minute pitch on the Home Shopping Network attracted only 170 sales, far below the 1,000 units the family was counting on. Craig Nabat blames the poor showing on a lackluster demonstration of the product.
"A senior buyer at HSN told me the woman who pitched it did a horrible job," he said. "Next time, we'll get someone else to do the spot."
An expensive infomercial Craig produced a few years ago was considered a flop, according to his parents. A new infomercial is due to start airing around the country in October. It's filled with happy people finding their lost possessions.
Craig's parents admit the past six years have been very tough. Gene, an accountant by training, manages the money for a property-management firm. He's planning to retire at the end of September, and would like to have his money back. What was initially going to be the $35,000 they had set aside for Craig to attend graduate school somehow ballooned into half a million dollars.
Craig's sister, Jacqueline, also invested money she hopes to see again.
"He keeps saying to me, 'Dad, we're going to be rich!' " said Gene Nabat. "He's convinced he'll sell millions."
Although the Nabats are feeling positive about their son's dream finally coming true, they've cut off his funding.
"I finally said to him, 'It's enough,' " Gene said. "Parents have to decide how much they are willing to spend to back their son or daughter. If I had known ahead of time it would be half a million, I would have said 'No.' "
Despite all the stress and financial strain, he's still the apple of his mother's eye. "Craig's a terrific salesman," said Sandee. "He's the baby; that's how he's gotten away with it."
A word to the world's inventors
Craig Nabat's story is not that unusual. Most small businesses and new product launches are self-funded with the help of friends and family members.
Craig offers the following tips for fellow inventors:
- Read Napoleon Hill's Think and Grow Rich.
- Write a business plan that's a life plan. "If I didn't have a plan during this process, I'd be lost."
- Don't give up, no matter what.
- Don't listen to what other people say, but tell many people about your plans.
- Don't worry about where you are going to get the money. "If you stick with something long enough, you'll eventually find the money to do it."
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