From the January 2001 issue of Startups

Anyone who loves basketball as much as Jason Parr does would understand his need to shoot hoops during the workday back when he worked at a Farmington Hills, Missouri, media management firm in 1995. Lunchtime, of course, was the perfect time to do this, but hauling around a cumbersome portable basketball hoop in the bed of his pickup truck didn't sound too appealing. Hence, a brainstorm: "Why not install a basketball hoop in a pickup truck?" he thought. Parr then went to work with his uncle, an engineer, and created a hoop that folds up and down (similar to a convertible top). Presto! Instant basketball, any time there's a paved parking lot.

Parr, now 35, has two patents on his invention, called Pickup Hoops, and has even sold two units to Nike, which uses the hoops to set up basketball demonstrations. But the product hasn't gone any further yet, as Parr has focused on getting a licensing deal from a major sporting goods store or pickup truck manufacturer.

When potential buyers didn't bite right away, Parr decided to create interest in his product by organizing events and displaying it everywhere he went. He has provided the hoops for a wheelchair basketball league, run his own tournament, set up Pickup Hoops at the last three Final Fours and even set his product up at big rest areas whenever he travels. "I attract a big crowd [everywhere I go with it]," says Parr.

The Manufacturing And Protecting Challenges

Parr has considered making and selling the product himself, but the costs are prohibitive, with both liability insurance and major marketing efforts being paramount. The easiest thing Parr could do would be to get a manufacturer for his product, which he would then sell for a commission. But finding a manufacturer has proved difficult: Parr has talked to the big three hoop manufacturers-Huffy, Lifetime and Porter-and at this point, they don't yet see the benefit of Parr's Pickup Hoops. What can he do?

For starters, Parr should collect as many orders as possible before he even approaches manufacturers. Once he's got at least 50 orders, he can improve his position even more if he gets a 10 to 25 percent down payment on each order. Manufacturers will be more likely to work with Parr if they see a need (and financial backing) for his product.

From there, things ought to fall into place: If a manufacturer makes Parr's product, he will be covered under their product liability policy. And because the insurance company is already on the hook in case of an injury, it will give Parr a rider (usually costing less than $500), which also protects him in case of a potentially damaging claim.

Alternately, Parr could also set up a joint venture agreement, where part of the manufacturer's responsibilities would include providing limited liability insurance.

The key here is choosing the right manufacturer. In Parr's case, hitch manufacturers or manufacturers of other transportation-related items are the perfect fit, as they already pay a high liability rate for transportation-related products.

I've found time and again that the most remarkable characteristic of successful inventors is their ability to face long odds and numerous obstacles and still come out on top. Parr's situation is a good example of the frustrations inventors inevitably face, but he also has the determination that won't allow him to fail. He continues to promote his product in the Detroit metropolitan area, and he is still hopeful he'll land a major deal with a pickup truck manufacturer. He's going to keep knocking on doors until he finds the one that opens to the path to success. The secret, as always, is to cut down the number of doors you have to open. You can do that by getting all the expert advice you can. Don't stop trying; just try smarter, and you may succeed a lot sooner than you expect.

Options For Protection

Polly Want A Patent?

Patentauction.com is a new site where inventors can list their inventions for sale. While most inventors dream of a mad bidding war for their product, in reality most patents are doing well to attract just one interested party. According to Byron Donzis, patentauction's founder, the site currently has about 375 patents listed, receives more than 150,000 visits per month and has been the catalyst behind eight licensing agreements over the past two years.

However, patentauction only lists a brief patent description and doesn't provide financial, marketing or development services for a product, so Donzis urges inventors to also list a Web site where interested parties can find more details. The $195 to $3,500 cost for a six-month listing can be renewed at no charge for a second six months if needed. The site also charges a 10 to 20 percent commission for any license agreement signed. Notes Donzis, "Inventors who have successfully marketed their products have the best chance of getting a license." Inventors who haven't produced and sold their product have a lower chance of success; however, according to Donzis, "some patents on products that have never been sold have attracted substantial interest."

Rest Insured

Product Liability Insurance is available from many independent insurance agencies that specialize in business insurance.You can often find these agencies in the Yellow Pages in metropolitan areas. Product liability presents problems for many inventors because it requires an upfront fee of $2,500 to $20,000, depending on the product. That fee only covers a certain level of sales, and total costs can go up if a product is successful. For example, your liability insurance could be 4 to 5 percent of sales for a transportation product. A $10,000 initial fee will only cover $200,000 in sales; if sales exceed that amount, inventors have to pay an additional insurance fee. Bicycle accessories, where liability claims can develop, have higher rates than simple hardware products. Many retailers require suppliers to have liability insurance before they'll sell a product.


Don Debelak is a new-business marketing consultant who has been introducing new products for more than 20 years. He is the author of Bringing Your Product to Market(John Wiley & Sons).

Contact Source

  • Pickup Hoops, c/o Jason Parr, P.O. Box 251322, West Bloomfield, MI 48325, (313) 534-8734