What do potential licensors look for in inventions, anyway? After eight years in business, Hound Dog has reached the level where it prefers to work with in-house products rather than take outside submissions. In the early days, however, Miller had strict criteria he used to weed out the good ideas from the bad. The first thing he wanted to know is whether the product would fit his market: unique tools used outside the home in a suburban yard. Inventors who want to succeed with licensors have the best chance of hitting a hot button when they describe their product in terms of the same narrow market opportunity their contacts already operate in. So the next time you talk to a potential licensor, concentrate first on finding out what market they target. Next, explain how your product fits that market. Whatever you do, don't talk about how your product can be sold in dozens of markets-your contact will just end up thinking you sell to a different market than they do.]
Miller, for one, uses several guidelines-applicable to every invention-when evaluating new ideas. "First and most important," he says, "the product has to have a 'wow' factor." All inventors must ask themselves the key question of whether their products are innovative enough to make it in the target market. The truth is, an invention with just a few minor improvements will be considered a "me, too" product or a product-line extension-not a true innovation. Small improvements alone aren't enough for you to succeed as an inventor.
One way to generate that "wow" factor is to meet a significant need or desire consumers share. Miller explains: "I want to know what my target customers' problems are. I'm going to get everyone's attention when I provide a product that solves a problem."
Miller's next criterion is that the product has to be the best of its kind by a significant degree. Retailers and distributors are reluctant to carry products from inventors or small businesses not only because of the work involved in adding a new vendor, but also because small companies are less likely to stay in business. They do, however, like to carry new products that are superior to the competition. If your product immediately stands out to consumers, retailers and distributors, they're much more likely to consider it the best product on the market.
Miller's final criterion for prospective products is this: "There [must be] nothing I can do to break it. We offer a lifetime guarantee, and I won't sell a product if I can figure out how to break it." Product quality may be important to consumers, but it's even more important to retailers. Many large retailers fear that if they buy from a small business, they'll get stuck with product returns due to quality problems if the supplier goes out of business. Retailers will feel more comfortable about carrying your product if you prove to them it simply can't be broken.
Chances are, there's someone out there willing to license your innovative idea. Unfortunately for inventors, it's not immediately obvious just who that person might be. You may approach 100 people before finally finding the right one. Inventors must be both persistent and innovative when looking for the right licensing candidate. So take every approach possible and don't give up. Remember, the right contact might just be the next person you talk to.
No takers on your tech invention? Try intellectual property management firms.
Inventors frequently search for established businesses to help them license their products. Generally, though, established licensors are hard to find and very selective about the products they handle. A better approach is to check out intellectual property management firms, which license products, especially tech products with huge sales potential. To get more information about licensing agents and intellectual property management agents, check out the Licensing Executives Society. This trade association publishes a magazine and a newsletter in addition to several publications related to licensing agreements. For details, call (703) 836-3106 or log on to www.usa-canada.les.org.
Don Debelak is a new-business marketing consultant and the author of Think Big: Make Millions from Your Ideas (Entrepreneur Press). Send him your invention questions at firstname.lastname@example.org.