Harvey Reese


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


– article by Harvey Reese

The Dirty Little Secret About Product Marketability

Lawyers don’t take themselves on as clients and surgeons don’t operate on loved ones. Both professions understand that where personal emotion is involved, good judgment often flies out the window. Why then do inventors think that they can objectively evaluate their own product inventions? Does anything involve more personal emotion than the creation of an idea?

Why do so many inventors still spend money on books and software purported to help them determine if their product idea will sell? No matter how many checklists they fill out, the result is always going to be a forgone conclusion… the idea is brilliant! I’m not suggesting that the folks who write these books or develop this software are being deliberately deceitful — it’s just that the facts speak for themselves. These books and programs don’t work. They never did and they never will.

Almost as bad is the habit of relying on the praises of family, friends, and patent attorneys, all of whom have a vested interest in saying what you want to hear. Friends and relatives want to please you, and NO patent attorney I’ve ever met will volunteer that your idea stinks. Why should he? What merchant tells a customer not to buy? And invention submission companies — forget it! Naturally they’ll tell you your idea is brilliant. How else can they sell you all of their services?

I appear on lots of radio talk shows and the host almost always asks what should be the inventor’s first step when he or she has an idea. My advice to them is FIRST get a disclosure number from the Patent Office and then immediately go to a business expert — someone with no vested interest in you or the success of your idea — to see if it really has merit. And if he tells you it doesn’t, and if he has the credentials to know what he’s talking about, my best advice is to drop the idea and move on. Don’t waste your time or your money. Attempting to prove the experts are wrong works once in a while — but it’s usually simply an expensive, wasteful pursuit. If you can come up with one idea, surely you can come up with another. Be a pro.

But wait! Suppose the expert say your idea will sell! Then what? This is where the dirty little secret comes in. If the expert say it WON’T sell, that’s valuable information. But if he says it WILL sell… that’s only of modest value — and is certainly not a green light to plunge forward.

If because you’ve been told that the product will sell, you are thinking of starting a business, first consider this: If you ask a Harvard marketing professor to name the four most important requirements for starting a successful business, he’ll tell you that the salability of your product idea comes in dead last. The most important requirement is to have sufficient capital. The next most important is to have the knowledge and aptitude to run a business. Third is to have boundless energy, an entrepreneurial spirit, and an unstoppable determination to succeed. And then, finally, lagging far behind, is the salability of your product idea.

If you ask why that is, the professor will explain that if you have the financial backing to keep going, and if you know how to run a business, and if you have the burning desire to succeed… even if the product idea you started with turns out to be lousy, you have the time, knowledge, and ambition to turn it into a successful one. However, if your idea’s great, but you don’t have sufficient capital, or you don’t know how to run a business, or you’d rather be on a golf course than putting in fifteen hour days, you’ll soon find the salability of the idea alone is not enough to keep your little company out of serious trouble.

The second part of this dirty little secret is that even if a product IS marketable, that doesn’t mean it’s licensable. In an affluent America, where we’re awash in discretionary income, almost any reasonably decent idea — if well designed and well packaged — will sell. In America we buy everything! However — that doesn’t mean it can be licensed.

The fact that your product idea will sell is only an entry level qualification.

Let’s say that you’re a marketing executive for a company that makes housewares gadgets and you come up with a new design for picture hangers that’s superior to the traditional hanger currently being sold. If you presented the idea at a new products meeting, the company president would probably pat you on the back and announce that they are going ahead with it. Why not? Tooling won’t cost much, and whatever they sell will be to the good. Spending money for a patent for such an itsy-bitsy item, of course, would be out of the question.

However, let’s assume you go as an outsider to the same company with the same picture hanger idea and tell them you’ll permit them to make the product if they give you a $10,000 advance and a royalty for every hanger sold. Suddenly the bar gets raised much higher and caution reigns. The same tooling, considered modest when the idea was an internal one, now is viewed as enormous. The attitude of “whatever sells will be to the good” is replaced by a shrug and a complaint about how modest the picture hanger market is. And, while when it was an internally suggested product, the decision to patent it was dismissed as a needless expense — it now looms as a large detriment when the outside inventor shows up with an unpatented hanger idea.

Yes, the product is an improvement over existing hangers — and yes, if the company produced it they would enjoy some sales success — but it really doesn’t meet the requirements of licensability. And more to the point, if the inventor had done his homework and learned something about marketing, he would have known that before he started and would have turned his creative energies elsewhere.

At least 75% of the products presented to us are marketable — but we know from long experience that very few can be licensed. It’s not because we’re so smart, it’s because it’s our business to know this, and we make a continuing study of market movements and trends. Further, from a personal viewpoint, having owned large, successful manufacturing companies, I know what these company presidents are looking for.

However, any inventor could know what we know if they first took the time to become knowledgeable about marketing and distribution in general and about their specific market before trying to invent for it. First learn — then invent.

Let’s go back to my picture hanger illustration. The reasons why a product isn’t licensable varies from instance to instance, but with the picture hanger there are two obvious factors that conspire against it ever being licensed. First is the fact that this is a zero-sum business. Having a better design doesn’t mean that more hangers will be sold; it only means that sales of the old hanger will suffer. “Yes,” you might say, “but wouldn’t the licensee with the better hanger get a bigger share of the business?” That’s a logical question, but the answer is probably not. The companies who sell picture hangers sell fifty or a hundred other gadgets. Retailers buy the line from a particular vendor because overall his quality and prices are good and his delivery is reliable.

The K Mart buyer doesn’t cherry-pick specific items because he knows his vendor can’t have the best and be the cheapest on every item, but he does overall. In other words, K-Mart wouldn’t buy twenty housewares gadgets from one company and just this new picture hanger from someone else. And the buyer certainly wouldn’t dump his primary gadget supplier over something as insignificant as a picture hanger. It’s not going to increase K-Mart’s sales. If someone wants a picture hanger, he’ll buy whatever’s on display. Adding a new vendor into the computer for companies as large as K-Mart is very expensive, and they wouldn’t do it just for a picture hanger.

If the product were invented internally the gadget company would probably go ahead because it’s not a big deal to do so — but licensing IS a big deal, and licensing the rights to this picture hanger, as wonderful as it maybe, offers no benefits to the manufacturer or the retailer — so why bother? If I owned the company I wouldn’t license it either… and if the hanger was presented to us today as a new idea, we wouldn’t take it on as the inventor’s agent. Not because it isn’t intelligently conceived or well designed, but because it won’t license. It’s hard to explain all of this in a rejection letter without hurting feelings, but we do our best.

As I say, this is one instance. There are others for other products. The point is, however, that this is not secret information. It’s out there for the learning. The purpose of this article is not simply to dissuade you from buying books or software to determine if your product will sell — but to convince you to instead use the time to study the marketplace. Your customer is not the consumer — your customer is the manufacturer. Worry should be in pleasing him — and let him worry about the consumer.

Learn the manufacturer’s problems and his needs — and design products with that knowledge in mind. Like it or not — this is a business. Yes, it’s nice for some book’s checklist to tell you your product will sell — but it’s far more important for you learn about the nature of sales, distribution and business trends. The more you know about how companies operate and the market forces that affect their decisions, the more likely you are to create the kind of products that they’ll love to license — and for which they’ll be happy to shower you with royalties.

It really does happen to others — and there’s no reason why it shouldn’t happen to you.

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