December 8, 1997 in Nation/World

Stephanie Graff, Steve Danzig Development Team Good At Promoting Their Own Products, Those Of Others

By The Spokesman-Review

Steve Danzig and Stephanie Graff have hit a winning streak that would make a major league team jealous.

Their three-year-old product development company has churned out five inventions that have been scooped up by major companies and will appear at stores within the year.

“We’re batting 1.000,” said Danzig, 44, chief executive officer of the twoperson company simply named Product Development Co.

Their company, run out of Danzig’s South Hill home, creates, markets and promotes new products. Many of the items are for children.

Shoppers nationwide and internationally already have access to the first product, Splash Guard. The plastic sheet attaches by suction cups to a bathtub wall to keep children from splashing water onto the floor while bathing. It’s available in children’s products catalogs in this country and England and should be in stores later this month, Danzig said.

Like many Product Development Co. items, the Splash Guard was invented by a member of Danzig’s family. Danzig’s 20-year-old daughter was bathing her children when she came up with the idea. Within six weeks, the idea became a licensed product, Danzig said.

Other products include a disposable bag of baby bibs, invented by Danzig’s wife, a diaper bag with lightweight plastic drawers, created by Danzig’s daughter-in-law, and a retractable safety gate, which Danzig designed. Danzig and Graff, 34, also promote products brought to them by outside inventors. One example: a ceramic fireplace log.

Fireplace logs are nothing new, Danzig said, but this one is unique because the flame emits from the log itself, rather than from a burner underneath, creating a more authentic look.

Danzig and Graff say the biggest competition they have is the bad reputations of many product development companies. Companies nationwide prey on naive, over-eager inventors, promising to successfully market their products and make them millions. Inventors pay the companies thousands only to see their products go nowhere.

Graff and Danzig want to convince potential customers that’s not their game. For example, they don’t charge customers anything up front. They pay all initial fees to promote and market products. They make money only when their customers make money, taking 40 percent of everything earned from the product, including royalties.

Royalties in the childrens’ products industry are 5 percent of sales, Danzig said.

“If it does not get licensed, we’re out a tremendous amount of cost,” Danzig said. “You know what the inventors are out? Nothing.”

Since Graff and Danzig take big financial risks to promote products, they are overwhelmingly selective of the ones they choose. They reject about 97 percent of all products presented to them.

“People are calling us from all over the country,” Graff said.

Only about 2 percent of inventions are ever licensed, Danzig said. “It is like winning a lottery.”

That’s what makes Danzig and Graff’s track record so impressive.

Some people spend a lifetime searching for one idea that will sell. Danzig and Graff have a knack for recognizing good ideas and have sold five new products in less than three years.

Patents are pending on all of the products Graff and Danzig are marketing. They require their customers to begin the patent process before they do any promotion.

Graff and Danzig joined forces after working together at a Spokane marketing company. Both planned to leave, and they decided to form a new company together.

They set up shop in Danzig’s beautifully furnished South Hill home. Income from previous companies, including his family’s 25-year ownership of the Pepsi-Cola franchise in this region, allowed him to take the financial risk of starting the company. He supplied the initial start-up investment of $10,000.

It’s a different story for Graff.

Because the company only makes money after selling products, Product Development Co. literally had no income for a year and a half. To survive, Graff worked a second job, waiting tables at a Spokane restaurant.

Once, Graff’s phone, cable and power were shut off and she received an eviction notice. A few days later, the company signed its first big contract and received enough “up front” money to pull her out of the hole.

Since then, advance payments have come from several of the companies who’ve licensed their products. The largest check was for $80,000.

“Entrepreneurship itself is a big risk,” said Graff, who’s obviously willing to take a chance. The license plates on her White Chevrolet Blazer say, “INOVATE.”

“I couldn’t fit the other “n,” she said with a grin.

, DataTimes ILLUSTRATION: Photo

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