Carmel company helps clients determine next big thing

Rakes, shovels and picks line the wall of Tom Foust's Carmel office. A few doors down, Jerry McColgin puts together a
wheelbarrow he can take for a spin.

It's just another day at work for the executives at product innovation firm Insight2.

Today's marching orders: Find out what people do to get their yards ready for winter. By the end of the three-month project,
they should be able to help Pennsylvania-based Ames True Temper develop a new line of lawn and garden tools.

That's what product-innovation consultants do, after all. Forget old-school market research that helps companies refine
the newest version of their best-selling widget–this is all that and more.

Insight2's nine employees talk to customers, sure, but they also watch and videotape them using various products. That
footage then is dissected to see how consumers deal with problems they encounter. More times than not, the result is a new
product intended to satisfy needs consumers didn't even know they had.

Finding those unmet needs is what sets Insight2 apart, said McColgin, a former Whirlpool Corp. executive who founded the
company in April.

"There's a hunger for [new products]," McColgin said, "so what we do is help satisfy that hunger."

Companies nationwide are spending billions to develop products because they recognize innovation is what distinguishes them
from foreign competitors, said Mark Adkins, vice president of marketing for the New Jersey-based Product Development and Management
Association, which has 3,200 members.

"The trigger has been global competition," he said.

The time when companies could develop one product and ride the revenue for years is gone, experts said. All the better for
innovation firms like Insight2.

It seems to be paying off. Insight2 revenue is expected to reach $1.4 million this year, and its leaders have a goal of $2.5
million for 2007.

Consider it a sign of the times. If the 1980s saw an emphasis on product quality, and the '90s focused on cost reduction,
Adkins said, this decade is devoted to new ideas.

Although the numbers are hard to pin down, he has noticed more market research, industrial design and innovation firms springing
up. Insight2 is the only innovation firm in Indiana, McColgin said.

Innovative approach

So how did he get the idea to build a business around ideas?

After a 15-year stint at Whirlpool, McColgin, 45, spent 10 years as a consultant helping companies with new products. He
soon saw the need for someone to figure out what consumers wanted before they knew it themselves.

Enter Insight2.

"We're after what even they don't say out loud," said Foust, the firm's vice president.

As they explain it, consumers tend to develop ways to work around faults they find in products–often subconsciously. By
watching someone use a product, Insight2 can see that fault and fix it.

"Consumers tend to think if a product could be made better, it already would be," McColgin said.

Traditional market-research firms don't usually go out and spend time with consumers, something Insight2 routinely does.
Company leaders put more emphasis on the quality of information provided by consumers than the quantity, said Pete Moyer,
vice president of marketing for Desa LLC, a Bowling Green, Ky.-based company that manufactures heating and specialty tools.

When Desa came to Insight2 for advice on developing patio heaters, the innovation firm took an unusual approach. Instead
of studying patio heaters, it studied outdoor entertainment in Minnesota and San Francisco. The company even paid homeowners
to throw outdoor parties so its staff could observe.

"We take the company into the consumer's world," Foust said.

After poring through all the data, Insight2 developed a bistro patio heater that doubles as a table and a gas-light patio
heater that provides light and ambience.

"They get the articulated and unarticulated voice of the customers in a way that in my 35 years I've never seen
before," Moyer said.

And the heaters have been a hit. They're available nationwide at Lowe's home-improvement stores, and have been featured
on a segment of HGTV's "I want that!"

"Jerry's research is so good that you rarely ever miss," Moyer said.

Keeping it fresh

Even so, not all of Insight2's assignments turn out as expected. Sometimes a project can change course in midstream.
That's what happened when Tennessee-based Oster Professional Products asked the firm to develop a better blade and clipper
for horse grooming.

After interviewing and watching consumers, Insight2 discovered the clipper wasn't the problem–but other tools like brushes
could be improved. Insight2 ultimately developed an entire line of horse-grooming tools for Oster.

That would not have been possible if Insight2 had simply asked consumers what they liked and didn't like about Oster's
clippers, McColgin said.

The innovative approach appears to be keeping customers happy. Almost all of the nine companies Insight2 worked with in 2006
have said they expect to come back with additional projects, McColgin said. And word-of-mouth marketing has kept business
steady so far.

Like its customers who must innovate to stay relevant in today's marketplace–"It takes incremental improvement
just to stay on the store shelves," McColgin said–Insight2 expects to keep reinventing itself.

He said everyone at the company is responsible for developing new ways to gauge the consumer's needs. It helps that the
employees are an eclectic, creative group with diverse backgrounds. Foust, for example, has a doctorate in philosophy.

If the momentum continues, the company likely will grow, but McColgin wants to keep the staff small–no more than 20 people.
Still, that doesn't mean he's not aiming high. McColgin envisions Insight2's becoming a national leader in product
innovation.

To that end, he's hoping to train project leaders in 2007 so he can spend more time working on innovative ways to get
there.