I’ve been creating and licensing new product concepts to companies around the world for more than a decade and thought I knew just about all there was to know about the process. After all, I’ve always been pretty successful at it. A few months ago, however, I almost made what I thought would be a modest career shift, and was almost instantly made aware of how little I really knew about the state of inventing and licensing.
For the first time, I decided to offer my services as an agent for other inventors whose products I like. The number of submissions has been overwhelming and with almost each one I find myself shaking my head in amazement. At the smaller end, I’m amazed at how wonderful some of the ideas are, and I get excited about getting great licensing deals for these folks. But, alas, it’s my amazement at the bulk of the submissions, which I’d like to comment on. It’s amazing how little knowledge many inventors have of the nature of a licensable invention itself.
First of all, an inventor must understand what the licensee is paying for. The licensee, usually a manufacturer, gets up every morning thinking about ways to get ahead of his lousy competitor across town or across the country. He’s constantly trying to exploit the other guy’s weaknesses while promoting his own strengths. It’s a very serious battle, and it never stops. Simply stated, if you come along with some kind of weapon that will give one of these warriors an edge over the other, he’ll gladly pay you for it. What he’s NOT going to pay you for are mere suggestions, simple product adjustment, tweaks, or ideas that he has to do the work on. He wants you to give him a new sword for his battle, not just a pound of steel and a rough pencil sketch.
Here’s an example of what I mean: “Hey, Harvey, I have this great idea for a new toy. It’s a teddy bear, with green fur, and when you squeeze its paw, he jumps high in the air, does a double flip, lands on his behind, opens his mouth and says, ‘YO, MAMMA!'”
“Wow, that sounds great!” I say. “How does it work?” The inventor looks at me funny and says, “I already told you, . . .there’s a motor inside and you squeeze his paw to start it.”
Here’s another example. There’s a certain product that comes in 6 oz. and 12 oz. sizes and the “inventor” determined that there would be a great sales increase if the manufacturer also made it available in 4 oz. sizes. It made perfect sense to me – until the inventor asked me to get her a royalty deal on each 4 oz. size sold.
Many of the product submissions I receive are like that; they are informal little suggestions, ill-conceived “inventions” and ideas that are at best fodder for a helpful hint column. It makes me wonder what people’s perception of inventing and licensing is really all about. I don’t expect an inventor to know how to make a dramatic visual presentation, how to get to the right licensee, or how to negotiate a contract. That’s why there are people like me. However, I DO expect to see something of value, a fully formed idea based on some experience or knowledge. My company will dress up the design, make the prototypes, draw the pretty pictures, make the mock-up packaging, and knock down the doors. However, the inventor has to at least supply us with something real, something that works, and something that gives the licensee enough of a competitive edge so that we can get his signature on the contract.
AND PLEASE ….. make sure it’s something that hasn’t been thought of before.
It’s so automatic for me to confirm the originality of my own product ideas before moving forward that it astonishes me how seldom others do it. Wouldn’t this be a logical first step? Isn’t that what you do when you invent something? After all, virtually all of today’s fresh, new ideas stand on the shoulders of yesterday’s breakthroughs – so no matter what you think up, there’s always a good chance that someone beat you to it. I’m not even talking about a patent search, which understandably most people know nothing about. I’m talking about a common sense search – visiting stores, looking through catalogs, talking to people in the business.
I hate to write rejection letters because I understand the passions and hopes that are invested in each new idea, but I wouldn’t be doing these inventors a favor if I gave them anything less than the truth. However, it’s one thing to turn down an idea because of insufficient potential, but quite another when the rejection is simply because the inventor didn’t make the effort to see if his idea was truly original.
If none of this applies to you, thanks for reading this far. But if you think it might, follow these few common sense steps and you’ll greatly increase your chance for licensing success.
Before you start dreaming up a new product, you should really study the market in which you expect it to be sold. Only after you really begin to feel like an expert should you turn your attention to looking for niches and new product opportunities; that way you don’t try to solve problems that have already been solves or provide answers to questions that aren’t being asked.
One of the most difficult concepts for folks not otherwise involved in the commercial world to grasp is the amount of sales to expect from any given product. This is a very imperfect science and I can only hope for common sense to prevail. I see some perfectly logical inventions designed to solve the most obscure, teensy-weensy, nit-picking little problems that you can imagine. When you consider the tooling, the production, the inventories, the packaging and merchandising, bringing any new product to market represents a major investment and no licensee will do it unless there’s hope for a decent payoff at the other end. By studying the market and seeing the space given in shops to respective categories, I think you can get a sense of sales proportionality.
A licensee is far more interested in seeing a good idea in a hot category than a brilliant idea in an obscure one. A ten percent share of a $100 million business is a lot better than a 65 percent share of a $500,000 one.
The owners of companies may be blood-sucking capitalists, but no one ever accused them of being stupid, blood-sucking capitalists. If you think they’re going to send you fat royalty checks just for laying out a problem for them to solve, then you’d better think again. You’re the inventor, you’re the one who has to invent the darn thing. I mean really invent it, down to the last nut and bolt.
And finally, assuming what you’ve created is wonderful, the first thing any sane potential licensee will want is assurance that the idea is truly new and original. The minimum you should do is an extensive practical search and a free patent search.. Most new product ideas, by their very nature, are designed to solve a problem. Wander into a store, engage the owner or manager or salesclerk, say nothing about your own idea, but ask if they know of any products that already exist for that purpose. In moments you’ll be well on you’re way to getting the information you need.
Many of the product ideas I see cry to be patented, but just a quick look and some common sense tells me that it’s impossible that it hasn’t already been done. I’ll suggest to the inventors that they do a free patent check at the IBM or Patent Office website before we go further, and they almost always come back, angrily, to report that someone beat them to it. You just had to look at the idea to know that would be the case. Why do I have to be the bad guy?
I love to say yes to great new ideas. I love it when I can tell an inventor I think his idea is terrific and that we’ll be honored to be his agent. Someday I hope I’ll see one of your ideas . . . and if you’ll just follow these few simple guidelines, there’s a good chance we’ll be on our way to making a lot of money together.