Harvey Reese

associates

Marketing, Licensing Agent for Patents, Inventions and New Product Ideas
The foremost authority for helping inventors to market, sell or license their great new invention
or new product idea


Marketing Your New Invention:”The Chicken or the Egg?”

– article by Harvey Reese

I have lately been browsing the inventors’ newsgroup on the Internet, and although the level of intelligent discourse is impressive, the subject matter is sadly revealing. Someone will post a question about the patenting process, and like flies to honey, immediately a half-dozen patent lawyers or semi-pro patent appliers join in. “Should I get a PPA?” “What about an NDA?” “Can someone clarify the First to Invent laws here in America?” “How about a utility patent, or should I get a design patent?” “And what about the PCT?” “And the PTO?” And on and on. It’s not that the questions aren’t sincere, or that the responses aren’t informed, it’s just that so much of it is so screamingly repetitive and totally beside the point.

Assuming, of course, that the point is to make money by licensing ideas.

So much attention is paid to process that no one seems to have the time or inclination to ask about the business of inventing. No one asks, “How can I get an appointment with the chief executive?” “How should I prepare my presentation?” “What kind of questions should I be prepared to answer?” “How do I handle the not-invented-here syndrome?” “Do I need a prototype?” “Should it be in a consumer package?” “Do I need to worry about store displays?” “How do I line up appointments at a trade show?” “How do I get a professional appraisal of my idea?” “What are price points?” “Discounts?” “Markups?” Nobody asks these things; they only ask about patents and for advice about how to prevent someone from stealing their idea.

It’s not surprising that so few patented products are ever commercialized. Many, of course, are simply not worth a licensor’s time, but more often the inventor simply hasn’t a clue about what to do next. Inventing they know; patenting they know; everything else is a dark void.

Years ago, when Singer talked about his new sewing machine, he said he didn’t give a damn about the invention; it was the money he was after. Many inventors, I’m afraid, have it the other way around. How can they invent for the marketplace when they know nothing about it? Does that make sense? Does a tailor custom make a suit and then look around for someone it fits?

I don’t consider myself an inventor; I’m in the inventing business. I don’t invent for the joy of inventing; I create new products solely for companies to profitably manufacture and distribute. Whether any product of mine winds up with a patent is only incidental. Some do, some don’t. But that only has to do with the nature of the idea. It has nothing to do with its value. I don’t know how many products I’ve licensed over a long career (certainly more than a hundred) and while I can’t claim to have successfully licensed every product I’ve presented, I can say that I’ve never been turned down based on whether my idea was patented or not.

Someone in the inventors newsgroup recently posted that he and his wife created a new product that couldn’t be patented, and wondered if it was worth pursuing. Someone else immediately logged on to tell this poor guy with great authority to forget it. “No manufacturer would pay to license a product that his competitor could knock off without penalty.” This is utterly wrongheaded advice and serves to illustrate how woefully uninformed many inventors are about the business world. It should be obvious that manufacturers introduce non-patented new products every day of the year. In this fast moving economy of ours, they understand that the one who’s first with a product can add millions to his bottom line before the competition even learns of the product’s existence. You show a marketing executive a great product, patented or not, and he’ll be ready to do a deal. Those who run these companies may be venal, but they’re not stupid.

If your inventing activities haven’t yet brought you the rewards you feel you deserve, let me gently suggest a different approach. First, don’t invent anything . . . at least not yet.

Before you do anything, select an industry that interests you. Next, wander through stores, go to trade shows, read industry magazines, talk to retailers and wholesalers and keep at it until you feel confident that you understand how that industry works (along the way, it wouldn’t hurt if you also read a book or two about marketing.) Next, assured that you understand the industry, select a company that’s close enough to home so that you can easily get to it, and concentrate on inventing a product for that company.

Repeat after me: Learn the market first, then create the product. When you do it the other way, you wind up supplying solutions to problems that don’t exist and providing answers to questions that have never been asked. When you understand the dynamics of the marketplace, how products are bought and sold and how profits are made, you won’t waste time inventing a product that could never attain sufficient volume to warrant a licensor’s capital investment. Also, before investing your time and money, get an expert without an ax to grind to give your idea an honest appraisal.

Next, because you targeted a company close to home, you’ll be able to make a first-hand, first-class presentation. When I present a new product idea to a prospective licensee, more time is spent in discussing how to market it than on the product itself. I show a great prototype in a great consumer package. I show him what it’ll look like in a store. I tell him what it’ll cost to produce, what kind of mark-up he can get, how my product beats out the competition, and a best-guess estimate as to how much volume he can expect to do. I give a turnkey presentation with all the bells and whistles. All my prospect has to do is nod “yes.” I even have a contract in my briefcase and have more than once walked out with a signed deal and a check in my pocket.

If you try to make a presentation by mail, nothing will happen. Your presentation will probably wind up in the wastebasket. If you visit personally, there can only be a few outcomes, all of which are beneficial.

The worst-case scenario is that the guy will think your idea stinks. So what? Maybe it does have a fatal flaw . . . isn’t it good that you found out? Move on. Be a pro. If you can come up with one idea, you can come up with another. In the meantime, you’ve developed a contact.

The next scenario is that the executive won’t like your idea, but if you listen closely, you’ll learn what he would like. “Nah, I can’t use this, but I’ll tell you what . . . if you could come up with . . . (fill in the blank) . . . then we’d really have something to talk about.” Now you have some direction. With the problem recognized, the solution is just a matter of application. Next, maybe there’s nothing wrong with your idea, you’re just in the wrong place. “Nope, it’s a nice idea but I’m afraid it isn’t for us. But you know what? If you show this to Universal Whiplash, I think it might be right down their alley. Ask for Frank Snerdley, and you can tell him I sent you.” Well, not only do you now have one contact, but you’re on your way to making another.

Finally, the best thing that can happen is the guy loves your idea, and is ready to do the deal. None of these events happens through an unsolicited mailing.

The professional product developers I know all work in this manner. Before I sit down at the drawing board to create a new product, I’ve already selected the industry, selected the target company (plus a few back-ups), and wandered through stores until I sensed a niche. Before I embark on a voyage of creativity, I know exactly where I’m heading, why I want to get there, and what to do when I arrive. There’s nothing serendipitous about it.

If you’re not yet successful, perhaps you’re going about this inventing business in the wrong way. Don’t get hung up on the process of inventing and protecting. Yes, of course certain products warrant patents and ordinary precautions should be taken. However, before worrying about the patents and the non-disclosure agreements and first-to-invent laws and the fears that someone might steal your idea, worry about its place in the market and the needs and requirements of the guy you hope will license and produce it. He’s the one writing the royalty checks. If you make him happy, everything else will fall into place.

Don’t worry about the egg, worry about the chicken.

Here are just a few e-mails from clients that shows what I mean:

"Thanks for the big check! And thanks for all your help and fine work. I believe it has been my good fortune to come upon such a professional and capable partner as you. May this licensing agreement serve as a foundation for a prosperous and innovative partnership in the future. "
- M.A., Scotts Valley, CA
"I have been meaning to contact you to congratulate, and thank you, for getting a licensing agreement for my product. I am, to say the least extremly happy. I am looking foward to submiting other product ideas to you - I think that you may like them! Your reputation is well earned!"
"...your evaluation shows me that you are a man of integrity and honesty. That is very refreshing to find. I plan on pursuing my ideas with new vigor in the direction you have suggested. Thank you."
- R.D., Willingboro, NC
"Getting an idea should be like sitting on a tack. It should make you jump up and want to do something."
-- E.L. Simpson
"Successful people are successful because they do things that failures don't like to do."
-- Albert Grey
"There is no adequate defense, save stupidity, against the impact of a new idea."
-- E.L. Bridgeman
"The future belongs to those who believe in their dreams."
-- Eleanor Roosevelt