You have a new idea, now what?
Sooner or later almost everyone thinks of a new idea! But what should you do?
The way life works, if it’s a good idea, you will eventually see it for sale somewhere.
Perhaps at a store. Perhaps on Amazon. Perhaps even on tv!
And that’s when you kick yourself and realize that you could have/should have done something.
“I had that idea.”
That’s perfectly OK. Most people don’t know what to do – I’m here to help.
I recommend that you start by answering one important question.
1. Are you an entrepreneur or inventor?
The two most common ways to bring a new idea to market is to either manufacture it yourself (called venturing) or “rent” it to a company which will bring it to market for you (called licensing).
If you’d like to handle all the details which will include raising money (or investing your own), finding a manufacturer and setting up a quality control system, hiring and managing people, marketing and selling your product, holding inventory and handling fulfillment – well then you just might be an entrepreneur. In my experience this involves a decent amount of financial risk and most people are not experienced in all these areas.
On the other hand, if you are a creative person that likes to come up with ideas, to create new things, to solve everyday problems by coming up with new products – well then licensing might be a better business model for you. Less risk – specifically money and time.
The licensing business model is perfect for many people. You don’t have to quit your day job. It’s a great side hustle. And it lets you be creative without doing the “heavy lifting” of running a business.
Companies are looking for ideas. This phenomena is called open innovation and it’s exploding. Companies have come to realize that they must introduce new products and/or services to stay competitive! And they cannot afford to hire enough employees to invent new things – they must work with outside creative resources. It’s a great time to be an inventor!
Let’s assume at this point you’ve decided that licensing sounds like a pretty good idea – what do you do now?
2. Protect your new idea
(Please note I’m not giving legal advice)
There are many tools to help protect your new idea. You can file for a provisional patent, utility patent, design patent, trademark, or copyright. There is even something called “trade secrets”. You can learn all about these tools at the uspto.gov
Provisional Patent Application
When you file a provisional patent application you are trying to protect the functionality or utility of your new idea. Meaning – how does it work? How is it unique from other products?
My advice when you’re first starting out is to learn how to file a well written provisional patent application (PPA). This relatively inexpensive tool provides you with one year of protection (after filing) to see if there’s any interest in your new idea. It’s very affordable and anyone can do it. But you need to learn how to do it correctly. It’s possible to hire a patent attorney or patent agent to help you – but in most cases, if you spend the time to learn how to do it yourself, that is an unnecessary expense.
Please note – the PPA only gives you one year of protection (unless you refile the application) – it is not the same as a traditional utility patent that gives you twenty years. I use PPA’s as a strategic tool to buy myself time to try to get a licensing deal.
Utility Patent
I do not recommend that you file a utility patent first.
A utility patent application will need to be written by a patent attorney or patent agent – there are very specific language and format requirements. In general, it’s expensive (over $10,000). It’s time consuming. And, there is no guarantee that it will be granted.
If your idea is in the very early stages, and you have no concept whether or how it can be manufactured – and you are not sure of the final design – then it’s likely you will file too early and need to file another application when you have more answers. That means you just wasted a lot of time and money!
Design Patent
While utility patents protect the utility/ functionality of your new idea, design patents protect the unique look of your invention. I actually like design patents because they’re quite affordable. The only downside is that if there’s many variations of what your new product look like it could become quite expensive protecting multiple versions.
Trademark
Many people want to know if should they file a trademark on the name of their idea. It’s fairly easy to do and inexpensive.
The thing is, realistically, if you license your idea to a company, they will probably change the name.
But if you feel that you have a clever, memorable and fantastic name and you are excited about it please consider filing a trademark. You can learn to do it yourself or hire a patent attorney to help.
Over the course of my career, I have filed personally over 13 trademarks. It’s fairly easy to do.
Here is a list of some:
• One Simple Idea
• Spin N Win
• Aquapromo
• Aquablue
• Basic
• Soyu
• Spinformation
• Twist ‘N Learn
• Jacked
• Gravepicker
• inventRight
3. Find out if there are products on the market already that are the same as yours
This is important! Just because you have never seen a product like yours doesn’t mean that it’s not already available for sale! Many companies that accept outside ideas tell me that inventors submit products that are already on the market all the time. It doesn’t take long to find out – put in the time!
Do a Google image search or a Google shopping search. Please do a very thorough job. You’re looking for similar ideas and making sure that yours is unique or different in a meaningful way. You’re also determining if you have a “wow” factor compared to similar ideas.
Sometimes if you find ideas/products that are similar to yours you might have to re-design, or re-tweak your new idea. You also might determine that the category is just too crowded and your product doesn’t have the point a difference compared to similar ideas ad realize that it’s time to start over.
4. Look for “prior art”
This is a very important step once you have determined you have a new idea you have not found in the marketplace.
“Prior Art” is a technical term used to describe previously issued patents. The reason that you need to do this step is to make sure that your invention is not infringing on someone else’s idea! You want to make sure your product is new and novel.
The first time you look at prior utility patents you will likely be very confused. It takes a while to get comfortable looking at patents – they are written in what seems like a foreign language! I always look at the drawings first to see if they are close to my idea.
You can learn to do this yourself but it will take a lot of practice to do it well. If you are serious about moving forward, I would highly recommend hiring someone that does patent searching full-time.
Making sure your new idea is new and novel it’s very important. I cannot emphasize this enough.
There are so many products these days that the chances of finding something similar to your idea are pretty good. If you don’t understand the difference between yours or another patented idea get legal advice.
Search for Prior Art at Google Patents or the USPTO.gov website
5. Budget money wisely
I really don’t like to spend very much of my own money on my product ideas – certainly no more than is necessary to license it.
Regardless if you’re going to venture or license your new idea yourself you must realize it’s going to take time and money.
Licensing is less expensive overall.
However, you will still spend time and money to research other products, protect your idea, create great marketing material, and perhaps, build a prototype. Do your homework and make sure that you understand how much these activities will cost.
Be realistic.
6. Build the right team
In many situations you can license an idea yourself but sometimes you need to build the right team of mentors, consultants or advisors. Really, if you think about it, professional athletes all have coaches and/or personal trainers. Some things are easier to do when you have the guidance and support of someone who specializes in the field.
Before you start working with someone, always do a very thorough background check. Get referrals. There is a lot of information on the Internet and people who have a bad track record really can’t hide.
Sadly, there are many opportunities for people to take advantage of inventors when they are just starting out.
7. Learn a little bit (or a lot) about manufacturing
Developing an understanding of how much your product might cost to manufacture is a really good investment of time and energy. Having this type of information can be very important. If you have invented a product that is way too expensive to manufacture relative to how much a consumer is willing to pay for it, well the chances are very slim that you will be able to license your idea. Wouldn’t knowing that upfront be better? Perhaps you could modify your idea to make it less costly to produce!
One approach is to compare your product to ones that are similar. You can estimate the retail cost if your product is a simple modification to an existing one. You can also work with someone to help you get a manufacturing cost.
It does not matter how great your new idea is – if it cannot be manufactured at a cost which works for both the retailer and the consumer then it isn’t going to happen.
8. Educate yourself
There is so much information available today for inventors – please take advantage of it and educate yourself. There are articles and books on just about every aspect of licensing.
A lot of inventors think “If I just had more money, I could be successful” or “If I can just get a patent, I will be rich”.
I’m here to tell you the thing holding most people back is knowledge – but the good news is that it’s relatively easy and inexpensive to get! Become a student of licensing!
9. Remember, it’s a “numbers game”
Do not think that the first idea you come up with is going to land a lucrative licensing deal. You might need to come up with 10 ideas or maybe 20 before you land a contract with a company. That’s ok, it’s a numbers game.
It’s might take a lot of ideas. You might hear “no” more than a few times. You want to be smart and frugal with each new idea you have. If you end up spending a lot of time and money on one particular new idea and it doesn’t work you probably won’t be doing this for long.
Thanks for reading this blog! We will keep you updated on the latest strategies to commercialize your new ideas.
Watch my YouTube video for more information and perspective!
