Inventors can always strike a better licensing deal if their products are already successful in the market. In some cases, it can even double the final negotiated royalty rate. Ronald Demon has decided to introduce the Raven, a sports shoe with his ThinkShoe technology, in 13 cities nationwide (including Los Angeles, Boston and Seattle) where there are high percentages of runners who have been known to embrace new shoe technology. Demon has also arranged for some of the top runners in the Boston Marathon to wear the Raven shoe. Demon selected a smaller market for three reasons:
1. He doesn't have the funds to promote the product nationwide.
2. He wants the product to be a big success in its early sales so he can strike licensing contracts with better terms. Going to markets with a large number of early adopters should improve his chances of having a successful introduction.
3. Demon's limited-introduction strategy-pre-selling his product in 13 target markets-is the best approach for most inventors. Potential licensees just want to know the product will sell, and selling it in 13 markets reduces the chances of the product flopping in markets where it wouldn't receive the proper marketing and pre-sale support.
VectraSense Technologies Inc. (maker of ThinkShoe), (978) 232-9778, www.thinkshoe.com