Who hasn’t dreamed of hitting the big time? If you’re playing this game, I’m talking about licensing an idea to a big company-a billion-dollar company whose brands are ubiquitous, whose distribution is off the charts. I’m talking about companies like Coca-Cola, Johnson & Johnson, and General Motors. As a product developer, how can you not wonder? Your idea on store shelves absolutely everywhere. Think of the possibilities! They are tantalizing.
In truth, getting in to a big company can be a challenge. Most of the ideas I have licensed have not been to big companies. The same goes for the majority of my students. To get in to a big company, a similarly “big” idea is needed. As you go about crafting your list of potential licensees to reach out to, it’s fine to include big companies-just know that they require a different approach.
You should know that although I have licensed many ideas, I have never licensed an idea to the biggest of the big. I’ve gotten close. I licensed my rotating label innovation to Coca-Cola Mexico as well as Nescaf Japan. But that’s not truly the same, because it didn’t happen in the United States. To put it in perspective, at the time, Coca-Cola had dozens of manufacturing facilities in the United States. There was one Coca-Cola manufacturing facility in Mexico. Implementing a new label at one facility is a whole lot easier (and less risky) than implementing a change at dozens of facilities.
Some big companies profess to have open innovation programs, but they’re still slower to innovate than smaller companies that are hungry to grow. To put it simply, smaller companies have embraced open innovation because they need it more. They are actively looking for opportunities to set themselves apart. That’s why they are more likely to license ideas.
I’d be the last person to dissuade you from trying though, because I fantasize about the possibilities too. So, how do you play with the big boys?
First, you should know that working with a smaller company is going to be easier as well as less stressful. Scaling up is especially time-consuming and expensive for big companies. They’re more reluctant to do it. That’s why it’s easier to license an idea in a smaller market, like a foreign country. It’s a sort of test run. It’s dipping your toe in the water before diving in.
In my experience, big companies don’t license ideas that often. They don’t innovate so much as purchase innovations. They let smaller companies duke it out. They let them take the risk. It might seem perverse, but big companies are also extremely frugal with their money. They rely on the leverage that their size and power of distribution affords them.
You can go through the front door, and call the company directly, but prepare to be sent to the legal department. That’s OK; the process is just going to take longer. You will have to sign non-disclosure agreements. They’ll want to look at the intellectual property you have filed, so you’ll need to make sure yours is airtight.
These are the other strategies I’ve used to get in.
1. Personal connections. Knowing or forging a relationship with someone who works at the company is a great way of getting your foot in the door. Just realize that although you’ve gotten in through one door, there will be many more doors. There’s also a good chance you’ll still end up in the legal department. Remember to be respectful. This person is going out on a limb for you.
2. Other suppliers and contract manufacturers. They have a direct line to the big boys. Start local and move your way up the supply chain. For example, when I lived in Modesto, there was a local bottler of 7-Up in town. I knew someone who worked there because our kids went to the same school. He helped me get in touch with corporate people.
3. Advertising agencies. Employees at ad agencies pick up their phones, because they’re always looking for new business. If you can use the Internet, you can find out which advertising agency a big company uses, because they like to brag about their clients. Instead of asking after a specific client, I simply state that I have an innovation I think one of their clients might be interested in. They’re almost obligated to show it to their client.
4. Packaging design firms. If your product is going to require packaging, you can get in through a big company’s packaging design firm. They brag about their clients as well. This is how I got into Coca-Cola (bypassing legal entirely). I reached out to Primo Angeli in San Francisco, whom I knew was designing packaging for Coke because my wife was the vice president of marketing at E&J Gallo Winery. One of his account executives looked at what I had, brought Angeli in, and the next thing I knew, I was sitting in a meeting with multiple higher-ups at Coke.
5. New product development. Unlike the new product development departments of smaller companies, showing your idea to someone in this department is a smart move. Before your idea is ever going to be shown to marketing, it will have to be approved by new product development anyway. They need to vet your idea and will ask you a lot of questions about manufacturing costs.
6. Equipment manufacturers. It’s easy to get in to equipment manufacturers, but you’ll still be pretty far from where you want to be. That’s because manufacturing people do not communicate with marketing people. But at the end of the day, the manufacturing department has to approve everything. I showed my concept to an equipment manufacturer, who then showed it to their client, because understandably, they wanted the big company to order a new machine. New business is highly motivating.
7. Seminars. They can be expensive, but you do get access to the speakers. Making this move has paid off for me many times. In fact, it’s the reason my label ended up on Coke products in Mexico. I ran into Coke’s packaging guy (whom I knew because I had presented my innovation to him years earlier) at a packaging seminar in Miami. He asked me how I was doing, pointed out that his Mexican counterpart was sitting at the bar behind us, and told me that I would have a much easier time in Mexico than I had been having in the United States. I pulled my samples out of my pockets and showed them to the guy, who told me he was interested and to email him. I didn’t, because I wasn’t sure he was serious-but then he emailed me asking me where the samples were!
This is what else I can tell you: Working with a big company is an exercise in patience. It helps to have a background in the industry. You’ll need to be more aware of manufacturing processes than you would otherwise, especially when it comes to issues of scalability. You will need to have filed multiple patents and thought extensively about workarounds. But that doesn’t mean you shouldn’t try!
Originally published on Inc.com February 24th 2015.
