Inventors, entrepreneurs, and new ventures are always looking for an exit strategy for their idea. Do I sell my company? Am I an IPO candidate in the future? While those questions for the fortunate few may be asked after several years of sustained, continuous growth – there are two import ‘exit’ questions, which face the new entrepreneur much earlier. The question is: do I make the product myself or license it? Many inventors and entrepreneurs dream of the easy out : “I have an idea, I’ll patent it, and license it. Simple.” Visions of beach vacations while collecting lucrative licensing fees dance in the entrepreneur’s head. However, the reality is much different. The likelihood of licensing a product or technology in the early stages of development is very small. Many spend copious amounts of money securing patents – ready to license, only to find no one is interested.
But, there is hope out there for the inventor, entrepreneur, and new venture. A company in New Hampshire has been helping people license their inventions to large, established firms. That company is the Big Idea Group, or BIG. BIG started in 2000 to bridge the innovation process between the inventor and the big firm looking to commercialize new innovations. For inventors, BIG offers Roadshows, Idea Hunts, and even accepts general submissions. Their intent is to help find that one in a thousand invention that is perfect for Black and Decker for example. For large, established firms, BIG offers Innovation Challenges where their network of over 13,000 inventors submit ideas on open idea challenges. A recent challenge was held for Staples. BIG helped Staples design a public invention contest for office supplies to help differentiate Staples products from commodity goods, drive traffic into stores, and generate positive PR. In the first year, the contest generated 8500 entries, received national U.S. media coverage, and led to the launch of four innovative products.
FlashPoint has had a relationship with BIG since 2004. In April 2004 an inventor approached FlashPoint to help try and commercialize his product, a new type of personal flotation device. It was designed to replace the life jacket through a very comfortable and easy to wear automatically inflating belt. It was tested and certified by the Coast Guard – it really worked as promised. Actually a sad story – the inventor had spent his life savings on the project – gone through a divorce, and was living in near poverty, exhausted and desperate. I was sold on the product, and committed to the inventor to work for a percentage on sales if we could get it to market. We developed marketing materials, detailed commercialization plans, and hit the road to try to sell it. We presented the product to BIG and they were excited too. In fact, they agreed to sponsor an airing of 5,000 units on QVC. We were on our way. Unfortunately, when we tried to line up the manufacturing, the inventor’s contract manufacturer did not have the capacity to fabricate the units. We found another supplier but the inventor could not raise the funds for the QVC inventory. We tried to secure angel investment, but we could not get a deal closed. All investors were not happy 7 years had elapsed on the patent, and had concerns with the inventor. So we had to fill BIG in on the bad news. As with many failed inventors and inventions – there are often sad stories behind them – and many what ifs. A lesson to be learned – do not spend all of your life’s savings and run out of funds and energy before you get to market. Have a clear commercialization strategy and do not hope for the best once you have a patent and a prototype. As with manufacturing, once you have a functioning product does not mean it will be successful.
So, check out BIG – if you have the right idea in the right space – your potential for successful licensing may be improved. BIG is currently on the lookout for high-potential micro-businesses.
