The #1 Reason Why Inventors Don’t Get Licensing Deals
So you’ve done the hard work of preparing your invention for licensing. You’ve done your market research, created a prototype, a sell sheet, filed your provisional patent application (PPA), written your scripts, and made a list of potential licensees to contact. You’ve even started reaching out to companies and are officially in the game! Throughout each step, you celebrated the small successes, persisted with your designer to create an excellent sell sheet, and worked diligently to get to where you are now. Many inventors don’t get this far. It’s a job well done!
But now a couple of months have passed, and you are forgetting to follow up with your contacts, you stopped adding new companies to your list of potential licensees, and yet you’re frustrated wondering why you haven’t had a licensing contract drop into your lap.
When asked, you use an excuse like work has picked up or family got busy, yet these things were worse when you were in the heart of the process, and you persisted back then.
There are many reasons why a product doesn’t get onto store shelves. It could be that there are too many similar products already out in the market; it could be too difficult to manufacture; perhaps, there is not enough demand; or maybe you received a “false no” because you didn’t contact the right department, and so on…
But the biggest reason?
It’s because you lack persistence.
Building a relationship takes time, trust, and a lot of persistence. Just like a personal relationship, you don’t meet someone for coffee and get married the next day. You might not even like them! Or they may already be in a committed relationship. A licensing contract is like a marriage. It doesn’t start with the legal document.
Though inventors understand it’s about building a relationship, they don’t foster and build one with each company. You may have worked relentlessly each step of the way, and then, when there is finally a dull moment, you dissipate into the vast continual frustration of not moving forward.
Inventors, it’s very simple. Following up isn’t just good to do, it is critical to getting a licensing deal.
If you were to venture (start a business) a product, you would probably have to quit your day job, spend 24/7 on your business, invest thousands (if not hundreds of thousands) of dollars, maybe even hire partners, and yet you still face the fact that 50% of small businesses will close their doors after the first 5 years, and that number goes up by 20% after 10 years.
Let’s face it, licensing takes far less time, money, and energy compared to venturing. Yet, in my experience as an inventRight Coach, persistence, and follow-through, despite rejection and uncertainty, have proven to be vital but rare traits for inventors.
Of course, we all know that the fun part of being an inventor is… well, inventing. However, if you want to be an inventor who reaps some financial benefit from your product ideas, you need to bear the following in mind: A house doesn’t get built in a day, and neither does it get sold in a day – usually. You need to develop some kind of follow-up and follow-through system to further your relationships with your potential licensees. And fortunately, there are many tools for this. From a document to a templated spreadsheet, to an all-encompassing CRM software, use the program that fits you.
When I was learning how to license my first product idea with the help of a coach through the licensing program that Stephen Key and Andrew Krauss cofounded, I received a lot of ‘nos’. Left and right, I was collecting them. But I didn’t give up. If I couldn’t get through to a company, I tried another tactic. When no one was interested in my product in a certain industry, I tried another. I didn’t stop — I persisted. It took me approximately two years and 81 rejections until I obtained my first deal. One contract fell through at the 50th company I pitched to, and even the company I now have a licensing deal with rejected me at first! But 6 months later, they said yes, and asked if I had more ideas. Of course I did. I then pitched 30 others. They liked three of those, scoring a deal of 4 products. And now that I have developed a relationship with them, 2 years later, I have gained another deal with 2 new products.
So no, I didn’t get my licensing deal in the time I was hoping for, but two years later, with 4 products now in the market, it was my resilience and persistence that ultimately built the relationship I now have with my licensee.
After two years of pushing her product ideas in the toy and game industry, Inventor April Mitchell pierced the industry and harnessed 4 licensing deals within a 6 month period. It took a lot of learning about the vastness of the industry, forming powerful relationships, and taking her products to the next level based on critical constructive feedback. It can take time, but that doesn’t mean you shouldn’t do it; it means you need to be prepared to do the necessary work to be successful, and that should be for everything that you do.
When Otto D’Agnolo started inventing, he had three years of working hard with no deal going through. Three years can seem like an eternity. But what you don’t see is all of the relationships he was building. And that 4th year? He got a licensing deal. Six months after that secured licensing deal, it fell through. Towards the end of that year, he finally got one that ended up being his very first successful deal!
He now has seven licensing deals.
It wasn’t easy. But he persevered and made it into the industry with quite a lot of deals soon after. He definitely made up for ‘lost time’.
“You never know until you see a finished product selling. All you can do is to keep working at it and learning all you can to help improve your odds along the way.” – Otto D’Agnolo
It’s insane to expect instant success when starting out in an industry. Licensing isn’t a “get rich quick” scheme. Success is hard-earned. You must listen and pay attention to what the industry is looking for, and make those connections at the right time to the right people. We are making products for people to use and enjoy after all! Real. Life. Products. And these products pave our future generations.
It may take a while. And that’s okay. Business is a gamble.
But if you give up too soon, you will never get that chance. Once you’re in, opportunities open up faster. But until then…
You. Must. Persist.
As I coach new product developers through the same process I went through, it’s aggravating to see inventors get frustrated and give up so early, after only one or two months of pitching their product idea. Time and time again I hear, “No one has liked it so far,” “I’m not getting responses back,” or even, “I have pitched to my whole list of 30 companies and want to move on to my next idea.” Well, have you gotten 30 ‘nos’? Have you added another 30 potential licensees to your list? Have you tried asking for feedback from those companies?”
Let me put it another way. If you are trying to sell a painting you made by leaving it on your doorstep and yelling, “painting for sale!” in hopes for people to walk by, hear you, walk up to it, and want to buy your painting, do you think it will sell? How long will it take? Did you look to see if anyone was even outside when you yelled?
That’s like cold emailing someone your sell sheet. You probably seem quite crazy to the receiving end!
Now if you place your painting in an art gallery where you expect people to be there to at least look at it (or hope to in the sea of paintings, or, sell sheets), that paints a different picture, now doesn’t it?
You’ve gotten this far and spent your time and energy on your product, all to cop-out too early? What are you waiting for?
Sending follow-up emails once a week to a company is easier than you think. Here is a script you can use if you got them to respond the first time, and then you sent your sell sheet over, but then nothing after:
I just wanted to follow up. I have reattached my sell sheet in this email. Let me know if you have any questions.
Thanks, and I look forward to hearing from you soon!
If you don’t receive a response after two follow ups, go ahead and try a different script like this:
Have you had a chance to look at my sell sheet? If you think it’s not a right fit, please say, “not a right fit”. Thanks again!
Giving them a chance to easily say no, can help drive someone to respond back.
Even asking something more bluntly such as, “Does this email get checked?” can help stir a response as it gently questions their professional prowess. I get quite a lot of responses back with this script!
But what if they never respond to you? Try a different method! Try calling. Try contacting employees on LinkedIn. Try their live chat on their website, a different email address, ask around for personal connections, or even try other types of social media the company may have such as Facebook or Instagram.
A licensing deal doesn’t get handed to you on a silver platter because you have completed all of the proper steps to get to where you are now. Licensing isn’t a science; it’s an art. You receive a contract when you have developed a good product that the market wants, and you find a company that is willing to gamble with that market and product. But when you ask if a company is looking for outside product ideas and they never get back to you and you never follow up, they don’t even get the chance to see it! You are knocking on the door of opportunity, and leaving before someone answers it.
We are the ones who are usually holding ourselves back from getting a deal, not the company. Ourselves.
It’s always good to take a step back and remind yourself why you chose to go on this journey. Receiving no after no can be discouraging – especially when you are just starting out! What would it feel like to walk into a store and see your product on store shelves? Would you feel accomplished? Proud? Revered? Harness and bottle up that effervescent feeling, and save it for a rainy day. Never lose sight of it, as it will propel you forward when the going gets tough. Sometimes just a simple reminder can get you back on track and keep your eyes on the prize. Let that excitement push you through the heartbreak so you can get to the gold. Fail forward. Follow up. And persist. Remember that N.O. means Next Opportunity!
So, what’s the moral of the story? Earn some grit by collecting those ‘nos’. Don’t give up. Find a couch, grab a drink, and stay awhile. Because you are always one phone call, one email, or one LinkedIn message away from a company’s interest.
Everyone has the same 24 hours. What are you going to do with yours?
Bio: Courtney is an award-winning entrepreneur and successful inventor who has licensed four product ideas to a company at the age of 22. She started her first business as a teenager while attending college, and she is also an experienced educator who has taught for nearly a decade on topics including robotics, animation, and design to youth. She believes that teaching students how to be life-long learners and creative thinkers at a young age is pivotal. She has been recognized for her achievements, including being the inaugural youth division winner of the NEXTies Awards for Entrepreneurship, as well as the Bay Area winner for the National Center for Women & Information Technology.
Before she knew its official name, Courtney was sold on the concept of licensing. She says that it’s an honor to be able to focus her energy on creativity and innovation every single day. Courtney is also the longtime Managing Director of Inventors Groups of America; she runs online meetings for inventors that reaches an average of 250 attendees as well as produces a monthly newsletter and an educational webinar series with guest experts on various licensing and venturing topics. “Inventors are dedicated movers and shakers who are constantly pushing their ideas forward. It is such an inspiration to be a part of the inventing community.” In addition to being a zealous advocate for inventors and the inventing community, and developing product ideas for her own company, Courtney is a martial artist, ukulelist, and latin dancer.
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