Modern Inventor

I just returned from the National Hardware Show in Las Vegas where we observed the soft launch of our new product, the Straptor. The Straptor is an innovative bungee cord that we licensed to Olympia Tools, Inc.. It has some cool features and a cool look and will show up later this year (on our site and hopefully in stores!). I was there with my Vice President of Sales, Andy Welty, and Abe Alexander, who is a project manager here at Trident… and also my realtor!

We met up with Allan Thorne (and his lovely wife Lacey), who is the inventor of the Straptor. We helped Allan develop his product and license it to Olympia. Allan is a guy who had an idea and believed in it and went for it. He came to us with amazing prototypes that won me over immediately. Very few people actually take it all the way, but Allan executed.

Olympia is a California (and China) based hand tool company. They are lean and mean and of a nice size to do business with. Big enough to get some work done, but you can still meet with the president. He is a very obviously sharp guy, as is everyone there. Hopefully they will have success with the Straptor and we can work with them to expand the product line. That’s how it works: you can’t expect a company to get whole-hog behind your product without establishing a track record first. You may want them to launch with 10 models, but realistically, they will usually start with one. And it makes sense. They want to test the waters before they jump in.  

Plus, there are always issues when you first launch a product. You ALWAYS learn something in the first few runs that makes you want to change something. Better to not have to change 10 sets of tools! The market will give you feedback about which path to pursue next. Of course, it is still helpful to conceptualize the potential future product family. This helps show your partner the potential value of your invention should it succeed enough to warrant further development. You want to spend just enough energy developing these line extensions that you can show a nice picture of something, but you shouldn’t sweat too much over the details until it appears there will in fact be further development.

Anyway, the Straptor was well-received, which means people said “That’s interesting. Let me know when you have pricing”. And then, of course, it will be time to try and write actual orders. So wish us luck!

I have been a professional inventor for 10 years, and one thing I have learned is that practically EVERYONE is an inventor. More often than not, when I tell people what I do for a living, they tell me about their “million dollar idea” that they have been nursing for months or years, just waiting for the right moment to unleash it on the world and reap the riches of their brilliance, if only they knew what to do next. Which, of course, leads directly to the question, “what should I do next?” A question I have tried to answer more times than I can count.

There’s no easy answer to this question, since every product idea has its own idiosyncrasies, and every inventor has different skills and means. However, today I will share with you a few simple steps you can take to move your idea closer to reality, starting with some wisdom gained from my experience as an inventor to try and help you avoid disappointment.

So first, the pieces of wisdom:
If your only interest is to nurse your idea in order to convince yourself that you are brilliant and you never plan on testing the idea, by all means, nurse away. You’re a genius. On the other hand, if you plan on starting to spend your hard-earned cash exploring your idea, you need to be realistic. There are 4 things you should know:

1. There’s no such thing as a “million dollar idea”, which implies that the idea itself is so valuable that it can magically turn into money, without any work being done, if you could only find the right person to tell it to! That’s a lovely idea, but the reality is that there are only million dollar executions of ideas, and the execution part usually involves LOTS of work. Making money from inventing is hard work!

2. Making money from ideas is actually a pretty expensive game, and as a general rule, the greater the potential reward, the greater the cost to monetize the idea. Even the simplest invention is going to cost thousands of dollars to even get the opportunity to find out for real if your product will sell. More complicated ideas can cost tens of thousands to develop. Before you begin on the journey to develop a product, you should make a realistic evaluation of your means to pursue your ends. Get professional advice, from a design firm, patent lawyer, or inventor like myself, on what your idea might cost to develop.

3. Avoid “invention services” firms. These are almost always scams of one sort or another. They will take your money gladly, but provide very little help in actually succeeding with your product, and have extremely low success rates. There’s no such thing as easy money.

And

4. Most ideas, even the good ones, don’t make money, often for reasons having nothing to do with the quality of the idea. Obviously, a well-considered execution can improve your chances of success, but there are so many factors at play, even the best executions can fail to make a return, so never risk more than you can afford to lose, financially, or more importantly, emotionally.

I don’t mean to sound negative, there is an upside to the inventing game as well. I just don’t want you to waste your money following your dream with illusions of how “easy” it’s going to be. On the other hand, a successful product can bring in residual income for years, and if the product is a mass-market product, like the PowerSquid, those residuals can be quite substantial.

So, if having considered these points of wisdom, you are still set on proceeding, here are the first 3 steps you should take to bring your product closer to reality:

1. Search: In an earlier post, I wrote about Googling your idea as the very first thing you should do. To reiterate, Google it. And then Google some more. Check to see if someone else has beat you to the punch.

2. Consult with a designer (Like Trident, or you can look at Core77.com’s design directory, Coroflot, for a directory of design firms) to find out what developing your idea would take, financially and effort-wise, and get an honest appraisal of how realistic your idea is. You also want to get their opinion of the market-feasibility of your product. Listen with an open mind. You don’t want to waste your money, and do not ignore good advice. If someone says something you don’t want to hear, instead of dismissing it, first say to yourself: “Maybe they are right,“ and give an honest appraisal of their feedback. You should be able to get this feedback for free. Talk to several firms of different sizes to get a range of options.

3. Consult with a patent attorney. The first consultation should be free. They will advise you as to the patentability of your product and what your options are for protecting your idea. They will not usually tell you if it is worth patenting your idea. That is a decision you will have to make. This consultation will give you valuable information as you consider your next steps, where you will begin spending money if your choose to proceed: a professional patent search and analysis and potentially a provisional patent application.

4. Evaluate the risk/reward equation for your invention. Not all great ideas are economic opportunities. Sometimes the cost to develop an idea, combined with the risk it won’t work, outweigh the potential reward. Other times the market is just too small. Should you choose to proceed, there are several ways to monetize your idea, falling into two main categories: licensing and manufacturing. The details of these is a topic for another time, but the path you choose dramatically affects your costs, and therefore the economic equation. Licensing is usually the best option for the independent inventor.

Now that you have some information from your searching and consultations with designers and lawyers, you can make an informed decision about whether to start spending money on your idea or just go back to nursing it and knowing that you’re secretly a genius and that if only you met the right person, you could be rich.

So, in answer to the question, what should you do, the answer is, first, be realistic, and then 1) search, 2) consult a designer 3) consult an attorney, and 4) evaluate your invention for economic opportunity.

Follow these steps, and you should avoid disappointment and bring your vision closer to reality.

When looking to license an invention to a company, the inventor’s first instinct is usually to go after the market leader, with the idea that the biggest company is going to deliver the best royalty stream. However, in my experience, the biggest company is usually not the best target. I have licensed products to companies with annual revenues ranging from $10 Million to $35 Billion. Here are ten reasons why I prefer the smaller end of the scale:

1. The market leader is less hungry for a new innovation to help them gain market share. They already have market share and typically are playing defensively and will resist innovations that endanger the status quo. Smaller companies will see a new innovation as more important strategically, as it may help them gain on the leader. They are hungrier and faster.

2. Big corporations are a royal pain to deal with. They have protocols for how they conduct business, most of which are very unfriendly to the individual inventor, or any human for that matter. The people working in them are often not trying that hard and just want to get their job done. Something new just creates more work for them with no reward.

3. Big corporations are greedy. They don’t want you to make money and don’t care if they are unfair. They will do whatever they can to reduce their royalty payment to you, pay late, and cheat if they can. They will also avoid paying you anything if they can.

4. Big companies make you sign disclosure documents. As an inventor, you want to get the companies you are presenting to to sign non-disclosure agreements, which protect your rights and obligate the other party to not steal your idea. The disclosure agreements from big companies (which are often found on their websites. Here’s a link to one from Black & Decker) are very draconian and heavily favor the corporation. I would never sign one of these documents unless I had exhausted all other possibilities.

5. Big companies are hard to negotiate with. Instead of negotiating with the president of the company who is concerned with driving the business, you’ll be negotiating with either a lawyer, who is definitely not going to take it easy on you, or a mid-level manager with no decision making power. This leads to dramatically drawn out timeframes and frustrations, as well as less generous deals.

6. Big companies often lack focus. A smaller company with fewer products will be able to focus on your invention in order to drive business. A really big company might have thousands of products, and yours will be just another item in the line, given no special attention. Therefore it won’t necessarily enjoy the benefits of the big company’s wide distribution or PR efforts. People in the company may not even be aware of your product after several years!

7. Small companies usually have more passion. Big companies rarely have the kind of entrepreneurial spirit that generates the kind of breakthrough results that the inventor would like to see. Small companies are much more likely to be staffed by people truly excited about their industry and the products they are selling.

8. Big companies have lots of internal friction. There can be competing individuals and factions inside a company, and your invention could be the victim of circumstances having nothing to do with your product. It could be cancelled even if it’s doing well, because much of what happens in large corporations has nothing to do with the common interest or rational decision-making, and everything to do with self-interest.

9.  Small companies have more fun. Corporations are driven by the bottom line almost exclusively, and therefore it is harder to create and nurture relationships, which make doing business much more pleasurable. In small companies, you can make friends with the people you work with and have much more satisfying interactions, which is important to your quality of life.

10. Small companies are more likely to treat you as a partner. A big company doesn’t see you as an equal, whereas the president of a smaller comapny may see you as a partner and resource for future inventions, and treat you like they care if you’ll want to do business with them in the future.

Obviously, all these points are not true for all companies, big or small, but for the independent inventor, it is usually going to be much easier to deal with a smaller company. Of course, if the company is too small, that’s no good either. They need to be large enough to have the resources to develop, market and finance your product. It’s always important to remember that a license is a long-term relationship, and there are things equally important to financial considerations to take into account, things that will affect your quality of life and long-term satisfaction with your licensee.