September Newsletter
Our September Newsletter is hot off the presses, to see it click here. We’d also like to say congrats to our friend Mark Reyland for becoming the new director of the UIA! Good things are sure to come!
Inventors Digest: Contingency Caution
When a Deal Seems too Good to Be True, It is
by Kenny Durham
[September 2010 issue of Inventors Digest]
I’m unsure who first said, “If an invention marketing company really believes your product is a moneymaker, it should work on a contingency basis.”
My guess is that it was either a desperate inventor grasping at one of the few options left, or an opportunistic invention marketing representative preying on said inventor.
More than likely, it was a combination of the two.
Some invention marketing companies often promise they won’t make money unless you make money on a licensing deal. Don’t believe it. These companies will charge you fees to produce template-like marketing materials of dubious value. The up-selling of more materials of even more dubious value is sure to follow. Meanwhile, you’ll likely end up waiting in vain.
Companies that perform evaluations based on contingency typically position themselves as having expertise across multiple industries. This should be your first red flag. Few companies have the resources to be expert in a vast array of industries.
Inventors are vulnerable to the false promise of contingency deals because too often they’re seeking validation. They’re dying for a so-called expert to confirm they have a valuable idea and that they haven’t wasted time and money.
Yet the words “evaluation” and “contingency,” when used in the same paragraph, should send inventors running.
The truth is, if inventors followed common sense steps to commercialization, they already would have gained confidence and wouldn’t need reassurance from opportunists.
The U.S. Patent and Trademark Office reports between 1-3 percent of all patents issued will be commercially successful. The success rate of some invention marketing companies runs about .001 percent. Yep – about one in 1,000.
Inventors often think invention marketing companies function or ought to function like real estate agents, who agree to sell a home for a percentage of the selling price. The agent is an expert in the real estate industry and well-versed in the nuances of the local market. In real estate, everything has a value – 100 percent of real estate property will eventually sell, it’s just a matter of price.
And this is where a lot of inventors end up acting out of desperation. Unlike a real estate agent, who’s an expert in the housing market, invention marketing companies are likely not experts in your industry.
People spend lifetimes becoming experts in a particular subject area. And how can they know each particular industry well enough to judge whether a product or idea has potential?
When it comes to intellectual property, it’s difficult to determine value because much of the time none exists. This is intellectual property, after all, a novel idea, a potentially revolutionary product that right now has nothing but a patent to back up its promise.
American enterprise universally accepts the notion that marketing plays a pivotal role in the success of products and services.
More than $285 billion dollars are spent annually in the U.S. on advertising. McDonald’s alone spent $2 billion on advertising in 2008.
The fact is advertising works. Its success can be measured through return on investment, market share and various other marketing metrics. It’s understood and embraced by every successful business enterprise, whether a sole proprietor or multi-billion dollar corporation.
If McDonald’s operated within the basic marketing tenets of the intellectual property industry, the fast food giant would have ad agencies lined up around the block begging for its business on a contingency basis.
Imagine if McDonald’s marketing executives sent out a request for proposals, promising the selected marketing agency 10 percent of all McDonald’s revenue following a particular promotion or ad campaign, whether or not the sales were a direct result of the agency’s work.
There’s no way McDonald’s would entertain such an offer. It just doesn’t make sense.
What’s an inventor to do? Like the invention marketer who works on contingency, the lone inventor can’t be expected to be an expert in all phases of product development. It generally takes a team.
“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work,” said legendary football coach Vince Lombardi.
Focus on what you do best, and hire a creative marketing team to do for you what they do best.
I understand that sometimes inventors believe they have no choice. The patent process is exhausting and can take a heavy financial and emotional toll.
For these individuals, a contingency deal may be their last option. And so at the final crucial moment, they give away control of their product in exchange for magic beans.
Countless times I hear patent owners say something like, “I’m not greedy; I don’t mind sharing. If they get it done for me then I don’t mind giving them 10,000 times more money than they deserve.”
That’s the sound of the desperate. And every time I hear it, I’m thankful that Thomas Edison or Henry Ford didn’t think that way.
Want to commercialize your idea?
Five common-sense first steps
Step 1. Start with a Big Idea
Innovation starts with a big idea of something you can do better, faster or cheaper than the way it has been done before. But it takes more than just a big idea. Here’s what Thomas Edison had to say on the subject:
“What’s The Value of An Idea? Zero. Ideas that are implemented and become new products and services are very valuable. The value of an idea lies in the using of it.”
Step 2. Do Your Homework
Do your own market research. Make sure someone else hasn’t already had your idea. If your idea is pioneering, try to be realistic about why no one has tried it before.
If it has been tried but is no longer on the market, find out why. Conduct a Web search and a patent search. Google Patents is a good place to start. Consider things like ease of manufacturing, production cost, distribution issues and financial commitment. But most important, think about how your invention will make life better for others.
Step 3. Build Your Plan
Construct a plan. Ask yourself if you possess the financing and skill to see your plan to fruition. If not, locate helpful resources. Inventors groups are a good place to start.
Step 4. Own your Idea
File for a patent, copyright, trademark or whatever intellectual property protection is appropriate. At this stage, you likely will have to hire a patent attorney.
Step 5. Treat Your Idea as a Business
Do what successful businesspeople do – concentrate on the things you do well and build a team to fill in your gaps. Focus on the financial bottom line, keeping costs as low as possible.
Design Competition
Click the link for all the details!
http://pbskids.org/designsquad/contest/index.html
Inventor’s Spotlight
Check out Norman Burress, a patent owner from Virginia, getting some local press time with NBC 29 news! Way to go Norm!
http://www.nbc29.com/global/Category.asp?C=175568&clipId=4912765&autostart=true
Inventors Awarded for Excellence at Inpex
I have attended Inpex for about 4 years now…and I do believe that this past year (the 25th anniversary show) was my favorite. I firmly believe it’s the people that make the show and this year the folks were great. Great new technology and superfun people showing it. A big congrats to all the winners (listed below) for outstanding excellence!
Great job innovators!
for full press release click here
Five Steps from Big Idea to Profit!
Five Steps from Big Idea to Profit!
Home » experts » Five Steps from Big Idea to Profit!
Taking an idea and building it into a business that is profitable takes a team. We asked our Expert Team to share some tips. Here are five steps to get you started from Kenny Durham , founder and CEO of Innovators Warehouse.
Step 1. Start with a Big Idea!
Innovation starts with a Big Idea of something you can do better, faster, or cheaper than the way it has been done before. But it take more that just a Big idea…
“What’s The Value of An Idea? Zero…… Ideas that are implemented and become new products and services are very valuable. The value of an idea lies in the using of it.” Thomas A. Edison
Step 2. Do Your Homework
Make sure someone else hasn’t already had your idea. If your idea is pioneering, try to be realistic about why no one has tried it before. If it has been tried but is no longer on the market do your homework and find out why. Make sure someone hasn’t beat you to the punch and already blocked you out of the market by doing a Google search and a patent search. (Google search is always a good place to start. If you find your concept on line – read the fine print – look for patent information – you can save a lot of time and money by looking on line.) Consider things like ease of manufacturing, production cost, distribution issues, and financial commitment required. But most of all, think about how your invention will make life better for others. That is the foundation of your business and our marketing message later.
“I never perfected an invention that I did not think about in terms of the service it might give others… I find out what the world needs, then I proceed to invent….” Thomas A. Edison
Step 3. Build Your Plan
If everything in step two looks good then try and construct a plan. Ask yourself if you are truly equipped financially and skill set wise to see your plan to fruition. If you’re not, which you might not be alone, try and locate the helpful resources. People are out there to help you with your Big Idea if you take the time to look for them.
“Four steps to achievement: Plan purposefully. Prepare prayerfully. Proceed positively. Pursue persistently.” William Arthur Ward
Step 4. Own your Idea
Gain ownership of your Big Idea. Patent, Copyrights, Trademarks, or whatever is appropriate.
“Before then any man might instantly use what another had invented; so that the inventor had no special advantage from his own invention. The patent system changed this; secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things.” Abraham Lincoln
Step 5. Treat Your Idea as a Business
Now you’re in it to win it. Make sure you treat your project like a small business. You must surround yourself with the right team, be capitalized, and get ready to launch your big idea.
“Individual commitment to a group effort, that is what makes a team work, a company work, a society work, a civilization work.” Vince Lombardi
About Kenny Durham : Kenny Durham is President and founder of Innovators Warehouse. With 10 years of practical experience commercializing new products in every way possible. He specializes in sharing a common sense PATENT TO PROFIT approach. Through practical education Innovators Warehouse, led by Kenny Durham , is changing the way individuals and small businesses maximize their new product opportunities.
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Cool new camera
This is so cool. It’s a camera that you have to throw in the air to take pictures. Wishlist for sure! Read the entire article here. Think of the great unexpected shots you could get with it.
The Art of IP War
This article popped up on my Google alerts and I wanted to share. If you have IP, it’s a good rule of thumb to put the same tireless effort that you did inventing the IP into advertising and marketing it.
http://patent-warrior.blogspot.com/2010/06/marketing-and-enforcing-your.html
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