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."
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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.
Electric
avenue
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
dondebelak@qwest.net.
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