As I often say, licensing is a numbers game. To become successful, you’ll need to invent idea after idea. Beyond that, you’ll need to get good at determining which of your ideas to move forward with. You probably love all of your ideas. I love mine, too. But my thinking is, why commit to a complicated project when you could focus on a simple one?
The way inventors feel about an idea has a habit of overriding critical analysis. We all like to wonder, “How big could this thing get?” But it’s not really about that. Becoming a professional means valuing your analysis about whether an idea is going to be easier or harder to bring to market more than your enjoyment of it. And the reality is: The longer you spend thinking about an idea, the more you’ll become emotionally invested. So it’s a good idea to get in the habit of evaluating your ideas early on.
If you’re new to licensing, I strongly recommend focusing on trying to license simple ideas. Doing so will serve you well. Many inventors charge ahead blindly, not really understanding what makes some ideas more challenging to license than others. Simple ideas take less time, money, and work to bring to market. So it’s no surprise more often than not, simple ideas are the most successful ideas.
Is your new product idea worth investing in? Take the following into consideration to help you make an evaluation. If it passes, move forward with it. But if it doesn’t, you might be better off abandoning or seriously altering it now. It’s a balancing act. I don’t want you to give up too easily, because you’ll have to be persistent. Think critically. Is this idea a good bet? Have the courage to admit when a concept is not likely to be very profitable. This will not be your only idea! You are going to have many more.
So, ask yourself the following.
1. Does your idea solve a problem? Can you identify the problem your idea solves in a sentence? Can you describe how your idea will solve that problem? Who will your solution help? How many people could it help? Will these people pay to have the problem solved? Not all product innovations solve problems, but many of them do. Maybe you’ve thought up a unique, interesting idea. But is it really relevant? If you cannot concisely identify how your idea is useful or beneficial, there’s a good chance it might not be very compelling. Consumers have an abundance of choices. Why would someone choose your product idea over another?
2. Is manufacturing your idea going to be complicated or straightforward? Remember, the first two questions a potential licensee is going to ask you are, “How can we make it?” and “For how much?” First and foremost, does the technology needed to manufacture your idea exist today? If new technology is needed to manufacture your idea, potential licensees are going to be turned off by that. They want to do the least amount of work possible. So, take a look around. Do products similar to your idea exist? If so, that’s a good sign. If your idea is more technical, you’ll need to do more research. And therefore, it’s not as simple of an idea.
3. Will you be able to prototype your idea more or less yourself? The good news is: You do not need a works-like looks-like prototype to license an idea. Not even close. It goes without saying that every idea is different, but these are some good rules of thumb. Will you able to cannibalize existing products to create a looks-like prototype? Will you be able to cannibalize existing products to create a works-like prototype? A simple idea won’t require you to spend a lot of time or money on prototyping.
Most inventors love prototyping. I often have to tell my students to rein it in. Your goal isn’t to create the best prototype ever — it’s to do just enough to get a licensee to ask, “Can I see more?” It’s about creating an impression, not an actual thing.
4. Does your idea have a wow factor? How is your concept going to stick out? Think about the type of person who would buy it in a store. What are they going to be intrigued by? What about it sizzles?
5. Is your idea easily understood? When you try explaining your idea to other people, do they get it? Ideas that are so new, different, or complicated that they require educating consumers about how they work and/or why they’re beneficial are much harder to license. Because education campaigns are so expensive, ideas like these are risky. Infomercial products are a sometimes exception to this rule.
6. Does it have mass appeal? Volume is important. How large do you want your royalty checks to be? If you come up with a niche idea, an idea that appeals only to a very small and specific group of people — well, that’s okay, but is it really an idea you want to commit to seeing through? In general, I recommend working on ideas that have the potential to sell larger volumes.
7. Is it patentable? Some industries care about patents. Others don’t. Benefits sell ideas, not patents. In most cases, just the perception that an idea is patentable is enough to get you where you need to be. Licensing ideas without any intellectual property is doable. But you should still be aware of the landscape.
Your job is to make it easy for a potential licensee to say yes. A simple idea does not require a potential licensee to start over in a new product category. Keeping their perspective in mind will help you make better decisions.
In time, evaluating your ideas will become easier. And the more you stick to one or two industries, the more knowledgeable about them you’ll become. If you have a big idea, I’m not asking you to give up on it. Put it on the backburner momentarily while you develop your skills. And to be clear, when I say simple, I don’t mean “less money”. Simple ideas are just those ideas that are a little easier to bring to market. Their simplicity doesn’t have anything to do with their earning potential. In fact, I think simple ideas are the most likely to be revenue-generating.
Originally published on Inc.com November 20th 2015.
