The 4 Big Changes to Open Innovation During the Last 4 Years

How Much in Royalties Could You Generate Through Licensing?

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Like everyone else, I discovered that figuring out how to support myself while doing something I really liked was going to be difficult. I knew when I was very young that I had to find something that motivated me – something that would challenge my entire career.

Life seemed too short to do anything that didn’t satisfy me. I feel like I was lucky: at my first “real” job, at 27, I was lucky to be introduced to the concept of product licensing. I discovered that companies praised my ideas if they were good enough.

I started to create simple ideas. I was not extremely creative, but when I looked at the products on the market, I thought I could do better. I had learned the importance of creating products that sold at art and craft fairs. I knew people could tell me what they wanted. Better yet, to let the market tell me.

Related: partners are waiting for inventors who need help creating prototypes

So I focused on how to quickly test my ideas. Was there a market for an idea? I wanted to know without spending a lot of time or money. When I had a good idea, I presented it to a company that was well suited to market it for me. In my mind, it was as close as possible to an ideal partnership.

The companies had marketing, manufacturing, distribution and also relationships. I would let them do all the heavy lifting. I could continue to find ideas!

When I shared my idea licensing system with other inventors, they were successful. After teaching other inventors how to license their ideas for over a decade, I was asked to write a book about my process. So I did it.

I am happy to report that since A simple idea: turn your dreams into a licensed gold mine while letting others do the work was released in 2011, so much has changed about the open innovation game. More and more companies are opening their doors. There are new ways to contact companies with an idea. Communication technologies have made it easier than ever to get the help you need for a project. Patent law has evolved.

So what has changed must know about?

1. You do not need to call potential licensees to enter.

As open innovation gains popularity, companies are increasingly asking inventors to submit their product ideas online. This is great news! It doesn’t matter what you look like and where you call from.

You can’t just click “submit” and assume you’ve done enough. If you want to be successful, you need to connect with an employee who will champion your product idea with the rest of the business, or at least give you the feedback you need to improve your idea and resubmit or pass to something else. What you do not want to do is submit your idea in a black hole. So when you fill out a form that you find online, type a variant of the following statement in the comments section:

“Hello I am [your name]. I am a product developer at [name of your company]. I wonder, does anyone actually read these forms? I want to be sure. Can the person receiving these submissions send me an email to confirm? My email address is [your email address]. “

Make sure to read the fine print carefully each time you submit an idea. What do you accept? Unfortunately, some companies include language on their forms that harms your interests.

Related: The 4 qualities that inventors or entrepreneurs should look for in a partner

2. Filming a short “infomercial” is by far the best way to publicize your product idea.

In the past, I submitted my ideas using only a sales sheet. Sales sheets are still required, but you can and should go further. (This is true for most products, but not for all.) Video is king!

It’s easier to create a short video that showcases the benefits of your product idea than you think. Use your iPhone. Model it from the videos seen on direct response television. By that I mean spending only 10 to 15 seconds on the problem solved by your product idea. Then show how your idea solves it.

3. If you’re having trouble proving that the demand for your product idea really exists, consider crowdfunding.

Potential licensees are reluctant to take risks. They want to be as sure as possible that consumers want a product before investing in it. Successful crowdfunding campaigns beautifully demonstrate the proof of demand. Unlike most other ways to test the market, the evidence is unquestionable!

My students are increasingly conducting crowdfunding campaigns to get the attention of a licensee. They also get more lucrative deals. However, you can’t just launch your idea on a site like Kickstarter and expect great things. You must be prepared to dedicate a lot of resources to the success of your campaign, including support and awareness months in advance.

4. There is a way to negotiate so that everyone wins.

Most people think they need a patent to authorize an idea. They are wrong. What is important is to establish perceived property. I learned firsthand that patents are worthless in themselves. The only way to definitively determine ownership is to go to court. After successfully defending my “property” of an idea in federal court, I know I never want to go to court again.

So how can you authorize an idea without intellectual property? Here is what I tell my students to do when negotiating with a potential licensee. Ask the company interested in your idea to pay you a 3% royalty rate while your request is pending. Tell them that if a patent is granted, they should agree to pay you a 5% royalty. If the patent is never granted, the company will only have to pay you a royalty rate of 1% for your efforts. See? Everybody wins.

The updated and revised version of One Simple Idea is now available.

Related: 3 Things To Do After Registering A Trademark

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