With the energy crisis and the worldwide push to “go green”, innovation in the automotive sector is at an all time high. This puts automotive patent holders in a prime position to sell or license their patent. However, it would behoove you to do some research on how automotive patents are typically capitalized on, as well as who would be most likely to buy or license said patents.

Most of the action in the automotive industry takes place in Michigan, specifically Detroit, or “Motown.” A recent article called “Auto Industry Fueling Growth in Michigan’s Patent Applications” describes the recent surge in auto innovation there:

“The auto industry may be bleeding money throughout Michigan, but it is fueling a rise in innovation in the state, federal data on patent activity shows.

The state saw a 20 percent rise in the numbers of patents granted between 2000 and 2006, the years for which the most recent data is available, compared with the seven-year 1993-1999 period, according to the U.S. Patent and Trademark Office.”

SRC: http://www.mlive.com/business/index.ssf/2008/03/auto_industry_fueling_growth_i.html

 However, a number of auto leaders do business internationally as well. Wikipedia offers a handy chart that breaks down, by volume, the largest auto makers and their divisions and subsidiary companies. The table is based on the most recent OICA data.

SRC: http://en.wikipedia.org/wiki/Automotive_industry#World.27s_largest_vehicle_manufacturing_groups_.28by_volume.29

General Motors, Ford, and Chrysler are the largest players in the United States market, in that order. Under the GM flag are brands like Buick, Cadillac, Hummer, Pontiac, Saturn, and Saab. Ford encompasses Lincoln, Mercury, and Volvo, while Chrysler markets the Dodge and Jeep line of trucks and SUVs. The divisions of each auto maker should inform your decision on who to contact about selling your patent.

If your patent pertains to low-mid range sedans or gigantic SUVs, you might look to score a meeting with someone from GM. If your patent applies to luxury models like the Lincoln Towncar, a call to Ford might be best. And if your invention would be best utilized in a heavy-lifting work vehicle like a Dodge Ram or Jeep Cherokee, Chrysler is probably the ideal networking target. Of course, there are several other auto makers worth considering who operate outside of the U.S., but it often helps to start closer to home.

 It is also worth noting that many automakers own stock in and have business partnerships with other automakers. This means that even if you fail to sell or license your patent to one automaker, they might be able to put you in touch with one that would be more amenable to your proposal. Here is a quick reference of ownership overlap within the automotive industry.

• Porsche holds a 20% stake in the Volkswagen Group (30.97% voting rights), as of 2006-12-31.
• The Renault-Nissan alliance involves two global companies linked by cross-shareholding, with Renault holding 44.3% of Nissan shares, and Nissan holding 15% of Renault shares.
• Ford holds an 33.9% stake in Mazda. and an 8.3% share in Aston Martin.
• Hyundai Motor Co. holds a 38.67% stake in Kia Motors.
• Daimler AG holds an 19.9% stake in Chrysler Holding LLC.
• General Motors still holds a 3% stake in Suzuki. Suzuki is also partner with GM in GMDAT and CAMI.
• Toyota holds 51% stake Daihatsu hence having a controlling interest in the company.

However, not every automotive patent holder should necessarily target auto makers. Instead, some patents are probably more attractive to auto dealers, of which there are tens of thousands across the United States. If you are unsure of which auto dealer to contact or how to get in touch with them, the National Automobile Dealer Association is a good place to start. They are an automotive industry trade group that represents some 20,000 dealerships across the U.S. and boasts some 43,000 worldwide franchises. They also develop comprehensive research data on the auto industry, which might be of use to you in putting your pitch together.

You can contact the NADA by phone, e-mail, or snail mail.

National Automobile Dealers Association
8400 Westpark Drive
McLean, Virginia 22102
(703) 821-7000 or (800) 252-6232
nadainfo@nada.org

Of course, you will want to consult a patent attorney before diving headlong into negotiations. Furthermore, this attorney should be one with experience and success in the auto sector. One proven winner in this field is Quinn Law Group, PLLC. “Auto Industry Fueling Growth…” discusses the track record and auto industry connections Quinn has at its disposal:

Principal Christopher Quinn said patent applications in areas such as hybrid technology, vehicle safety and electronics are helping drive annual revenue increases of 20 percent or more. The 19-member firm works with customers including General Motors Corp. and suppliers, as well as with out-of-state companies, many with Michigan offices, whose patents wouldn’t necessarily show up in USPTO data, he said.

 Quinn can be contacted at the following web URL:

http://www.quinnlawgroup.com/contact.htm

All in all, your quest to sell or license an auto patent should begin with a careful matching of your patent to the right auto maker, and end with the assistance of a proven attorney in the field.

 Eric Corl is the President of Idea Buyer LLC, a new product development company that owns and operates IdeaBuyer.com- The Online Marketplace for Intellectual Property.  The site gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email him at EricCorl@IdeaBuyer.com.

While selling a patent is not necessarily easy, it is quite simple compared to licensing. Selling a patent is basically giving up all future rights to it for a set price. Licensing, on the other hand, can take on many other, different forms depending on what you and the licensee want to get out of the arrangement. Therefore, it pays to be “in the know” about what your options are before diving headlong into the process. In this article, we will offer 10 tips on how to license a patent in a way that meets your needs.

1) Realize what a license is and demands of you
There is no doubting the lucrative potential of patent licensing, but you should be aware that it is a different animal than selling your patent. Licensing is not always the “set it and forget it” deal that many licensors hoped it would be. Typically, you will need to exercise diligence in making sure that your licensee(s) are performing the way they agreed to. If they are not, you will need to take action and revoke the license. This should not scare you away. Rather, it is only being mentioned so that you approach the process with realistic expectations.

2) Avoid general “best efforts” clauses
One benefit of licensing a patent is being able to stipulate things a licensee must do to retain his license. However, there is one type of stipulation that you should avoid: a vague “best efforts” clause. As an article called “Patent Licensing” explains, courts tend to interpret these clauses in problematic ways:
“Both parties should avoid this clause in favor of more objective standards. The courts may interpret such a clause to require the dedication of all of the licensee’s resources towards exploitation of the licensed patents, when realistically most licensees will have a number of other significant business endeavors to support.”
The way around this dilemma leads us to tip 3.

3) Use specific milestones and obligations
What you want to do is set specific, numeric goals and milestones that the licensing agreement will be contingent upon. As the aforementioned article states, the key is to be objective in setting these requirements.
“The milestones can be anything definitive that the licensee feels it can realistically meet in the stated time frame. For example, the licensee may be required to obtain an approved New Drug Application with the Food and Drug Administration by a certain date. Licensees should be aware that there is an implied obligation to exploit the licensed patent on the part of an exclusive licensee.”

4) Set those milestones for a reason
While it is important to have specific milestones, they must also not be arbitrary. It may sound nice to tell a licensee “You can only keep your license if you do a million in sales the first year”, but this is probably not realistic. Instead, do some market research on what it would be reasonable to expect. You want to make sure both you and the licensee feel comfortable with the performance obligations being written into the agreement. After all, the goal is to capitalize on the patent, not one-up each other.

5) Set royalty requirements
One alternative to, or supplement of, performance obligations is to use royalty requirements. Simply put, these are stipulations that say “I can revoke this license unless you pay me X dollars in royalties.” The royalties can be paid monthly, annually, or semi-annually, but the idea is that unless you get the dollar amount stated, you can revoke the patent license. This can be useful if you want further assurance that your financial needs will be taken care of. It is a way of ensuring that no matter how the patent licensee performs, he is responsible for paying you a certain amount.

6) Clearly spell out how and when those royalties will be paid
Just as important as specific and non-arbitrary obligations is ensuring that you both know how and when they are to be fulfilled. Few patent licensing issues are thornier than when there are misunderstandings about payment schedules. Therefore, you should take special steps to avoid these hassles. The earlier quoted article continues:
“The agreement should clearly specify when reports are required to be made and when royalty payments are due. Payment needs to be made in conjunction with a quarterly or semi-annual accounting report on the royalties received by licensee. Licensors usually reserve the right to annually audit the records, at their expense, to be sure they are receiving the proper amount of royalties. Licensors are advised to also include a provision to audit for a period of time after termination of the license to be sure they have received all the royalties that are due and owing to them.”

7) Get legal advice for your agreement
As you can see, all of these performance obligations, milestones, and royalty requirements can seem a bit overwhelming if you are new to the field. A patent attorney is the best person to consult when this happens. They can ensure that your contract is on the up and up, that it can be enforced down the road if necessary. While you may balk at paying their high fees, consider it a worthwhile investment. You need to know that you can enforce your agreement if you have to and only a patent attorney can provide this assurance. They can warn you if the terms in your deal are heavily favorable to the licensee.

8) Don’t get greedy
This rule applies to both patent sales and licensing. If you are in a position to get some nice, life-supporting residual income from a licensing deal, don’t kill it by being excessively greedy. The idea is to score some nice income from your patent, not suck the other party dry. Remember: pigs get fat, but hogs get slaughtered.

9) Specify a length that you are comfortable with
Patent licensing agreements can be as long or as short as you and your licensee want them to be. Therefore, you should take the time to think of a length that suits you. If you want to someday take the reins and capitalize on your patent, an agreement length of 5 years or less might be what you want. On the other hand, if you want to just sit back and cash the royalty checks, you might want to go for as long a term as the other party will agree to. The key is to set this length consciously based on your true goals.

10) Decide on an exclusive or non-exclusive license
There are two different types of patent licenses: exclusive and non-exclusive. An exclusive license is what most licensees will prefer, since it grants them “exclusive” rights to capitalize on the patent. It ensures them some protection against competition and also allows them to enforce violations of the patent. Non-exclusive licenses, then, let you, the licensor, keep the right to license the patent to someone else. Decide which of these two licenses you are most comfortable with and try to get the licensee to go along with it.

Eric Corl is the President of Idea Buyer LLC, a new product development company that owns and operates IdeaBuyer.com- The Online Marketplace for Intellectual Property.  The site gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email him at EricCorl@IdeaBuyer.com.

License a Patent

 Licensing a patent is considered one of the most viable means of commercializing it. In short, a patent holder seeking to license his patent will not exploit it himself. That is, he will not try to create, market, and sell anything based on the patent. Instead, he will market the patent itself to those who do wish to take those steps. Any variation of this is known as “licensing a patent.” However, it is best to know some facts about licensing patents before one rushes to do so, or assumes that licensing is a “set it and forget it” means of cashing in on their intellectual property.

 Legally speaking, you have licensed your patent when you (the licensor) grant exploitation rights over your patent to a licensee (the person you are licensing it to.) “Exploitation rights” simply means the right to create, market, and/or sell something based on what that patent protects. A license of this nature is also a legal contract, and that contract is what will spell out in concrete terms precisely which exploitation rights are being granted. These include any performance obligations the licensor might demand of the licensee. This means that if any performance obligations are included in the contract (ie, “You must produce X number of sales by the year X.”), and they are not met, this could lead to the license being terminated in its entirety.

 In this context, a license is also revocable – ie, cancellable – if certain terms and conditions are not met. This is a common characteristic of legal contracts in general, with special ramifications for patent licenses.

 The only way to grant someone irrevocable exploitation rights, it should be added, is to assign them the patent. Assignments, however, are permanent. They entail the sale or outright transfer of the patent by the assignor to the assignee. An in-depth exploration of patent assignments is beyond the scope of this article, but just know that they are an option if irrevocable exploitation rights are something you seek.)

 Now that you know what a patent license is and what they involve, we can move on to a discussion of how to capitalize on them financially. The primary means of doing this is to seek royalties from the licensee in exchange for using your patent. Royalties, typically, are paid over the life of the patent. The amount and frequency with which royalties are paid from licensee to licensor must also be spelled out in the license agreement. In this way, the licensor is protected. If the licensee fails to pay the royalties that were agreed to, the licensor can revoke the patent license and retain sole exploitation rights over it.

 Here is an example of how this might work in practice. Let us say you licensed your patent to someone in exchange for royalties amounting to 20% of all sales resulting from your patent on a yearly basis. If your licensee creates something from the patent that results in a profit of $100,000, you would be entitled, by the terms of your license agreement, to $20,000 of that profit. If the licensee failed to disburse those funds to you, he/she would be in violation of the agreement and you could then proceed to revoke the license.

 (Again, the danger with using patent assignments over patent licenses is that failure to pay royalties will not revoke the rights you have already assigned. You will be free to litigate for the lost royalties, but this is often an expensive and lengthy process. With a patent license, the matter is more or less open and shut. Failure to pay royalties means revocation of the license.)

Now, some more elaboration on performance options is in order as well. Performance options are a form of protection for the licensor. They are a way to ensure that the licensee does not “sit on” the patent, ie, do nothing with it and thereby starve the licensor of the ability to capitalize on it elsewhere. There are two basic types of performance options that can be written into a patent license agreement.

 The first kind is pre-market entry milestones. In short, these are obligations that the licensee is expected to achieve or meet. They could include things like bringing the invention under a trial or validation process, creating a working prototype, satisfying pertinent regulations, progressing through any clinical trials that exist, and so forth. These performance obligations ensure that things move along at a steady pace without any income-killing lag in activity. It prevents the licensee from become inactive as a rights holder.

 The second kind of performance obligations are post-market entry sales targets. These take effect once the invention is out of the development stage and available for sale on the market. Very simply, such obligations include sales targets, profit margins, or any other measurable goal tied to the performance of the idea in the free marketplace. These obligations give the licensee concrete goals that he must attain and give the licensor a bare minimum of royalties that he can expect to reap.

 In closing, licensing a patent is one of the most reliable ways to capitalize off of one’s intellectual property. By working with a patent lawyer to draft a rock-solid license agreement and choosing your licensee(s) carefully, you will greatly increase your chances of success.

Some mistakes are just too fatal to overcome. If you make them, your invention is pretty much dead on the water with no hope for success. Fortunately, your invention need not be doomed to the scrap heap of useless or uninteresting contraptions. A wise man once said that smart people learn from their mistakes, while geniuses learn from the mistakes of others. This article is an attempt to capitalize on the latter method. That being said, here are four surefire signs that your invention totally, unequivocally, and without argument, sucks.

1) You have no target market

Entrepreneur.com sums up this mistake:

“You have a big idea. You’re sure the masses will clamor for it. So you begin sinking lots of money into building your prototype, developing a business plan, hiring a patent attorney, and more. Little do you know there’s an identical product that’s already out there on the market. Yes, it can be heartbreaking to learn that someone else came up with your big idea first. But it’s even more heartbreaking when you’ve lost a significant amount of money because of it. Advice: be sure to research stores, the internet, catalogs, etc., before moving along in the invention process. I’ve seen people who’ve invested their life savings only to discover–too late–that their idea isn’t original. And it often takes a 10-minute search to find what you are looking for. How can you be sure your product doesn’t already exist? Spend enough time to ensure you’ve exhausted every angle. Search relevant stores wherever you go. Search the internet with multiple key words. In other words, don’t develop your product in a vacuum.”

This is by far the leading cause of inventions that suck. You cannot – repeat, NOT – create something no one wants and hope for a smash hit. If your invention is to succeed, it has to fill a real need for real people. Find out who they are before pouring your time and money into an invention.

2) Your invention is a vitamin instead of an Advil

The website AntiVentureCapital.com once had an article dividing ideas into two categories: vitamin and Advil. A vitamin is a nice product, but nothing that anyone would feel lost without. An Advil, on the other hand, fills a need so well that once it catches on, one can hardly imagine life without it. This is an instructive distinction for inventions, too. Who would be upset if your invention came off store shelves? Would anyone care? Would they even notice? Is your invention a vitamin, or an Advil?

It isn’t that all non-essential inventions suck; clearly, there is a large market for iPod accessories. It’s just that the ratio of bad vitamin inventions to bad Advil inventions is very lopsided in favor of the former. You are far less likely to screw up if your invention solves a major, pressing need than you are if you focus on some fringe desire that may or may not even exist.

3) It’s a “Me Too” invention

They say imitation is the finest form of flattery, but this is deadly advice in the invention world. It is statistically proven that the first and second to market take home the lion’s share of sales. It is also common sense that the hoards of knockoffs that inevitably follow are seen for what they are: knockoffs. The problem is that when something is first created, the first few producers make sure everyone knows about it. So by the time the knockoff artists come around, the buying public is fully aware that you are just the latest copycat. This being the case, you have no one but yourself to blame when sales plummet faster than The Core emptied theaters a few years back. Create something original, or at least add a new variation on an existing invention.

4) Your costs are out of control

Keeping costs low is not one of the sexier aspects of inventing, and therefore it is often avoided. Inventors without business acumen often assume that sales are all that matter. They figure with enough sales, they’ll have to turn a profit eventually regardless of how expensive it is to make their product. This is a deadly error that fells inexperienced inventors time and time again. It’s fine to use whatever is most convenient when you are making a prototype. At that stage, you are just trying to prove that your invention is workable. But once this is established and you set your sights to selling it, you need to find ways to get cheaper materials and supplies. This is crucial to turning a profit on each unit you sell and recouping the sizeable investment of time and money you are making in your invention.

If you steer clear of these four fatal errors, your invention probably won’t suck.

Eric Corl is the Founder and CEO of IdeaBuyer.com, the online marketplace for intellectual property that gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email him at EricCorl@IdeaBuyer.com.

With all the false starts that come with inventing something, it is easy to feel like the Rodney Dangerfield of inventing: like you get “no respect” from credible figures in your field. If investors are turning you down, business partners are flaking out, and you can’t even seem to get your calls returned, it may be time for a change of priorities. Believe it or not, there is actually a tried-and-true formula for establishing yourself as a respected inventor. It begins be creating credibility for your invention.

 Priority # 1 – Creating a Prototype

 If anything separates players from spectators, it is this. Having a prototype – a real, working version of your invention – says unequivocally that you are for real and have serious intentions of entering your field. It takes your idea from, as Entreprenuer.com says, “your mind’s eye to the palm of your hand.”

Their article on prototyping offers some helpful guidance on how to approach the process:

“So what exactly should a prototype look like? First, it depends on your idea. Second, it depends on your budget and your goals. If possible, it’s great to start with a handmade prototype, no matter how rudimentary. For example, I’ve seen prototypes made from the simplest of household items: socks, diaper tabs, household glue, empty milk containers–you name it. If it works for your initial demonstration purposes, it’s as good as the most expensive materials.”

SRC: http://www.entrepreneur.com/startingabusiness/inventing/inventionscolumnisttamaramonosoff/article80678.html

The number one thing to keep in mind is getting your prototype to solve the problem it aims to. Early on, it is not important whether it looks glamorous. It does not need to exactly mirror the ultimate vision you have for it. Get something up and running – something that works – and you will have taken a bold and important step toward gaining credibility for your invention.

 Priority # 2 – Secure a patent for your invention.

 Once you have a working prototype, you should file a provisional patent application for your invention. This will protect any new formulas, equations, processes, technologies, or methods you employed in creating your invention. Having patent protection is an invaluable asset in establishing your credibility.

 For one, it enables you to approach retailers or business partners with a tangible asset. Not only do you have a working invention, but you also have the exclusive, legal right to commercialize it. This portrays you as a legitimate player with something to bring to the bargaining table.

In addition, a patent gives you some peace of mind that a sleazy ripoff artist can’t clone your operation overnight. It won’t stop all of them from trying, but it will give you the right to sue them for damages and legally compel them to stop.

Above all, being a patent holder puts you in a position to capitalize on your invention by conferring on you the status and rights you have earned.

Priority # 3 – Set some initial sales targets – and meet them!

 This step is where the rubber meets the road: that fateful day when the market decides whether your invention will fly. It is a day inventors anticipate with both excitement and fear; excitement driven by hope of success, and fear driven by worries about what could go wrong. However, you can increase your odds of hitting your sales goals with some rational planning and foresight.

 The first thing to do is some market research. You cannot just concoct sales goals on a whim, based on fantasies of what you would like to earn. Instead, you must research the market and determine what similar companies have sold. While this in and of itself does not determine your fate, it will give you a realistic idea of what to expect. Reliable sources of market research include industry trade journals, periodicals, and library/academic databases that include access to market data.

Another good step is to avoid overextending yourself. There is a temptation among many inventors to hit the market in a huge way. They want to get their product in as many stores as possible right up front. While the excitement is understandable, this is not always the smartest choice. A better idea is to start off by selling in one or two stores and use that to test the response. How did people respond to your invention? Were sales high? Are you maybe pricing your invention too high, or low? These questions are easier to answer on a small scale. There is an old piece of marketing advice that applies here: fail early, and fail cheap. If you can learn from mistakes at smaller stores, you can apply that wisdom and approach the bigger retailers with the most important thing of all – a track record.

 It would be dishonest to say that gaining credibility is easy. However, if you are diligent and smart in your approach, it is eminently possible. Don’t give up.

Every inventor knows the dreaded feelings of a creative dry spell. It is the pit of dread that comes with feeling like you are totally out of new ideas, that you could not innovate your way out of a paper bag, that you are creatively burned out. Ayn Rand called this anxiety “the squirms”, and it is well-known to any creative person.

So how do you wriggle out of the squirms and back into creativity? Brian Clark, creator of the popular website CopyBlogger.com, offers some helpful clues in his article “Do You Recognize These 10 Mental Roadblocks to Creative Thinking?”

The first roadblock Clark discusses is following the rules. He explains:

“One way to view creative thinking is to look at it as a destructive force. You’re tearing away the often arbitrary rules that others have set for you, and asking either “why” or “why not” whenever confronted with the way “everyone” does things.

This is easier said than done, since people will often defend the rules they follow even in the face of evidence that the rule doesn’t work. People love to celebrate rebels like Richard Branson, but few seem brave enough to emulate him. Quit worshipping rule breakers and start breaking some rules.”

SRC: http://www.copyblogger.com/mental-blocks-creative-thinking/

Two real-life examples of this spring to mind immediately. Ten years ago, people probably would have scoffed at the idea of Wikipedia.com. “A collaborative encyclopedia?”, they would exclaim. “Impossible! It’s never been done. It will be rife with errors – if people bother to edit it at all!” Well, today Wikipedia not only exists, but is one of the most trusted sources of information in the world. In addition, its accuracy rate is almost as high as Encyclopedia-Britannica.

Another example of an invention that whose creator “didn’t follow the rules” is Digg. Prior to Digg, news websites virtually all had moderators and anchors who decided what news got seen. Digg changed all that by creating a socially-driven system where users voted on news and thus determined what was popular enough to be on the front page Today, people pay hundreds and even thousands of dollars to consultants who promise them that they, too, can be seen on Digg’s homepage. All because the creators of the site went against the conventional rules.

Another roadblock Clark identifies is being practical. He argues that while practicality is important when it comes time to deliver the goods, it can lead us to idea killing self-censorship when we are just brainstorming.

“Like logic, practicality is hugely important when it comes to execution, but often stifles innovative ideas before they can properly blossom. Don’t allow the editor into the same room with your inner artist.

Try not to evaluate the actual feasibility of an approach until you’ve allowed it to exist on it’s own for a bit. Spend time asking “what if” as often as possible, and simply allow your imagination to go where it wants. You might just find yourself discovering a crazy idea that’s so insanely practical that no one’s thought of it before.”

The problem with practicality is that too often, we let established conventions define what is “practical” to us. In this way, any new and original thought is instinctively labeled “impractical” because it has not yet been done. Instead, do your best to banish “practical” from your vocabulary during creative brainstorming. You can apply the demands of practicality later, after you decide if you like an idea or not.

A third roadblock Clark talks about is the fear of being wrong. This is ingrained in all of us. As humans, we never like to be wrong on some issue because it makes us feel like failures. However, this is not necessarily true. Even the greatest minds in history have used failure and mistakes as stepping stones to technological discovery:

“We hate being wrong, and yet mistakes often teach us the most. Thomas Edison was wrong 1,800 times before getting the light bulb right. Edison’s greatest strength was that he was not afraid to be wrong.

The best thing we do is learn from our mistakes, but we have to free ourselves to make mistakes in the first place. Just try out your ideas and see what happens, take what you learn, and try something else. Ask yourself, what’s the worst that can happen if I’m wrong? You’ll often find the benefits of being wrong greatly outweigh the ramifications.”

The common theme in all of Clark’s roadblocks is that if you want to be creative, you shouldn’t self-censor. Instead, let creative brainstorming be a time of open, free flowing ideas. Ask yourself bold new questions and don’t feel like you need to come up with exact answers right away. It may turn out that you are onto something huge - something you may have cast aside by being unnecessarily stringent.

If your invention is done, functional, and ready for sale, congratulations! You have reached a plateau that few inventors ever see with their own eyes – a finished product that is destined for store shelves. But now, it’s crunch time. You want to be in stores 30 days from now. What do you do to prepare? That is the focus of today’s article.

If you want to sell in stores, there is a rule you need to know front to back, inside and out: “Show me the inventory.” That is the mindset of buyers and managers at nearly any store worth selling in. A BeadingTimes.com article called “Selling to Stores” explores the issue further:

“Forget catalogs - store owners want to see the merchandise. Your sales will increase if you approach them with samples in your hands. Sales will increase even more if you have inventory to leave with them at that moment. While some stores will pay cash for their merchandise, most prefer terms of thirty days net.”

SRC: beadingtimes.com/marketing1203.htm

What this means in practical terms is that you had better have the capacity to create and store inventory. This is no small issue, and it should command your full attention if you are even thinking about getting into stores. Do you need to hire people to help you? Do you need to rent storage space to keep a certain number of units on hand? Do you have enough room in your house? (Make sure your wife and kids are on board before saying yes, it only creates problems later if you don’t!) The point is that keeping inventory will be a necessity for getting into (and staying in) stores. Do not approach the matter lightly.

Another consideration is that you probably cannot get your invention into huge, big-name department stores right away. An Entreprenuer.com article called “Selling Your Invention” explains the more likely reality:

“Unless you’re very lucky or very connected, you probably won’t launch your product directly into mass-market retail stores like Target or Wal-Mart. Instead, there’s a product sales lifecycle you should follow that basically takes you from the ground up, allowing you to build sales in a smart, methodical fashion, starting with small independent retailers and moving up to the big guns.”

Instead of staking everything on the ill-premised hope of “Wal-Mart or bust”, the article outlines a more reliable and time-tested approach to getting – and staying – into stores.

o Start by selling directly to end-users. This’ll give you confidence in selling and create “referenceable” customers. You can also get their feedback on the product and packaging to make improvements before expanding your sales efforts.

o Once you’ve ironed out your product and packaging wrinkles, begin selling to local independent specialty stores and online stores. For instance, if you’ve designed a line of greeting cards, approach your local gift shops. Become successful with these retailers, and you’ll have the leverage and negotiating chops to go on to the next level.

If you take this kind of approach, getting into stores within 30 days becomes a realistic goal. However, you must still make sure that the invention itself is prepared for the store environment. Primarily, this is a matter of packaging. This should not be overlooked either, because packaging can add both weight and cost to your product. If it weighs more, it is more expensive to ship. And if the packaging itself costs a lot of money, that gets added to your costs as well, making your break-even point higher.

For this reason, it makes sense to use as little packaging and excess as you can get away with. Early on, cash is king, and you cannot afford to squander it on grandiose packaging that does nothing but make your invention seem big and flashy.

If you have figured out the answers to your inventory questions, set realistic goals for your in-store launch, and square away the matter of your packaging; you are just about ready to get your invention into stores.

What remains is a solid and easy-to-use system of keeping records. Once you start selling in stores, you will encounter a whole new series of record keeping issues relating to taxes, receipts, inventory statements, sales records, and all kinds of other paperwork. Without a reliable way to keep track of all this, your life will be considerably more difficult.

Therefore, you should invest the time to create one before your invention hits the shelves. That way you establish habits of organization before things spiral out of control and leave you in a mess of random papers.

If you do not have the capacity to get your product store ready yourself, you may want to consider licensing or selling your patent to an entrepreneur, retailer, or manufacturer who does.

With all of these matters taken care of, you will be better positioned to push for store shelves. Remember the strategy: avoid big stores at first, and build your track record at smaller outlets. It is a recipe for success that has been tried and battle-tested.

Eric Corl is the Founder and CEO of IdeaBuyer.com, the online marketplace for intellectual property that gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email him at EricCorl@IdeaBuyer.com.

All inventors have, at one time or another, pined for “the right people.” Be they investors, programmers, distributors, writers, architects, butchers, bakers, or candlestick makers, personnel is a crucial ingredient to the success of any invention. But getting the right people behind your invention is a road more easily mapped than traveled. In this article, we’ll walk you through finding and keeping the personnel you need to make your invention a hit. The task can essentially be divided into two categories: investors, and everybody else.

Investors (and how big a slice of future profits to give up for any personnel)

Some inventors are so desperate for investment capital or key personnel that they offer irrationally high percentages of future profits for those people to come aboard. In addition to advertising your desperation, this is a mistake for standard business reasons. John T. Reed, Harvard Business School graduate and real estate guru, explains why:

“At Harvard Business School, one of the lessons we learned was that one’s cost of capital was an indication of one’s competence as a businessperson. To put it briefly, if you are paying 50% interest or 50% of your profits to your silent partners, you are an incompetent businessman. Some successful investors would protest that was how they got their start. I don’t doubt it. I know some of them. But it was still a dumb move and the investors in question are lucky such terms did not blow up in their face and ruin their reputations before they got started.”

If you are a competent, accomplished person in your area of expertise, you should not be giving up half of your future profits for an investor to fund you. The same goes for other personnel you need. Unfortunately, many naïve or beginning inventors fall into this trap because they lack startup capital or believe they must do whatever it takes to attract X person to their operation.

Instead, use a different approach. The best route is normally to forgo outside investors altogether and bootstrap your invention with savings or small loans from friends or relatives. However, if this cannot be done, you should approach investors after you have a proof-of-concept of your invention. If at all possible, you should try to get some cash flow going before seeking outside capital. Try to drum up some kind of sales or progress with whatever you have accomplished so far. The website AntiVentureCapital.com explains why this helps you to attract investors later:

Pretend for a moment that you are a venture capitalist or angel investor. Two founders visit you about separate deals. You ask them each what progress they have made in the 3 or 6 months that they have been working on their respective projects.

* One entrepreneur answers that he has been able to finish his business plan as well as find a means to generate cashflow which is being used to move the main project further along. Now he needs more money to fully capitalize on this developing opportunity.

* The other entrepreneur can only point to the “great” business plan he’s polished to perfection over the past 6 months and the “great” opportunity lying before him.

Which entrepreneur would you be more impressed by if you were the investor?

This demonstrates that you have something tangible. It also lets you keep your dignity when negotiating terms rather than begging them to accept half of your future profits.

Professionals with special skill sets

Of course, inventors don’t just need money to get their invention off the ground. They also need people with certain special skills to create the invention in the first place. So how do you bring such people into the fold?

The most common response is to promise the personnel in question a share of future profits. While this is acceptable practice (as long as it is not an egregiously high amount as discussed earlier), it is not the most effective way, either. The most effective way to get the right people behind your invention is to pay them to help you.

Not the answer you were looking for? Well, look at it from a realistic standpoint. Pretend that you are an experienced professional with a valuable skill. (If you are inventing things, you probably are such a person.) Now pretend that someone you don’t know is asking you to work on a project you’ve never heard of. That by itself is probably enough to make you a little uncertain. But then, to top it all off, they ask you to work for free, with no base pay, on the hopes that it someday pays off and you can collect when it does. At this point, your well-honed skepticism should kick in and dissuade you from doing the deal. Your time is simply too valuable.

However, imagine a different scenario. The inventor explains his idea to you in a way that sounds persuasive and enticing, and also offers to pay you! It might not be a huge amount, or even what you could get at a salaried job someplace else. But the sheer fact that you will be compensated for your labor will, naturally, make you more confident about the project and being a part of it. When a person sees someone put his own sweat, blood, and tears into something, it just feels easier to trust them.

Therefore, you should either save some money or use a small loan from friends or family to pay the personnel you want. Of course, you can still sweeten the deal by promising them future equity in addition to their base.

When you have some money saved up, it is time to place ads for the personnel you need. The industry you are in will dictate exactly how to go about doing this. If you are creating a new kind of garden hose, for example, you might want to advertise for engineers in a lawn and garden trade journal or magazine. You might try help-wanted ads in the paper, or even Internet resources like Craigslist.com

The idea is to offer something of tangible value to the people you want. This will go a long way toward getting the right people behind your invention.

Eric Corl is the Founder and CEO of IdeaBuyer.com, the online marketplace for intellectual property that gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email him at EricCorl@IdeaBuyer.com.

Every inventor knows that it’s a mistake to go around bragging about your idea to everyone who will listen. Careless mistakes should obviously be avoided. However, there is another kind of inventor who commits just the opposite mistake, and suffers the same failure. That mistake is paranoia. It is an irrational, unfounded fear of everyone in his field that causes the inventor to clam up and wall everyone off. An excellent article called “Inventor Paranoia” profiles the problem as such:Many beginning inventors are obsessed with secrecy. They’re convinced their latest invention is their “best” — and that anyone who hears of it will certainly “steal” it. They then become so obsessed with “protecting” their invention as to virtually guarantee that they’ll never see a dime from it.

Hey, guys, you can’t “protect” an invention. You can seek to acquire certain intellectual property rights in the invention. e.g., with a patent. And if your solution to the problem is truly superior, and if it’s commercially viable, and if the rights you acquire are sufficiently “strong”, i.e., your intellectual property covers ALL economical ways of providing the intended user benefit — you MAY be able to sell or license those rights.

However, even if you do everything ‘right’ — by the book — there’s no guarantee you won’t get ripped off. If someone chooses to copy your invention — without acknowledging your rights — all you can do is sue them. And a typical infringement suit starts in the range of a quarter million dollars.

SRC: http://www.tenonline.org/art/9405.html

If this is the case, why are there any paranoid inventors? And what is so disastrous about being a paranoid inventor? To answer those questions, we must first understand what drives this paranoia in the first place.

Nine times out of ten, an overly paranoid inventor places an enormous value on “ideas.” Not even just on his particular idea, but on ideas as such. In his or her mind, the quality of an idea is the sole determinant of whether an invention succeeds or fails. Consequently, inventors who believe this are extremely overprotective of any ideas they might have. They view the entire professional community as potential adversaries who, if they happened to discover the idea, would immediately drop what they were doing to pursue it. While this can indeed happen, it is far from likely. The truth is that ideas in and of themselves are not nearly as important as execution and the personnel behind them. However, many naïve inventors continue to think that ideas are sacred assets to be jealously guarded against intruders.

Silicon Valley venture capitalist Paul Graham clears up this misbegotten notion in his article “Ideas for Startups”

“They overvalue ideas. They think creating a startup is just a matter of implementing some fabulous initial idea. And since a successful startup is worth millions of dollars, a good idea is therefore a million dollar idea.

If coming up with an idea for a startup equals coming up with a million dollar idea, then of course it’s going to seem hard. Too hard to bother trying. Our instincts tell us something so valuable would not be just lying around for anyone to discover.

Actually, startup ideas are not million dollar ideas, and here’s an experiment you can try to prove it: just try to sell one. Nothing evolves faster than markets. The fact that there’s no market for startup ideas suggests there’s no demand. Which means, in the narrow sense of the word, that startup ideas are worthless.”

SRC: http://paulgraham.com/ideas.html

Invention ideas are somewhat different than ideas for startups, but the basic truth holds. If you never network with anyone or get your plans off the ground for fear of “your idea” being stolen, you are damning yourself to failure. You will turn away valuable networking opportunities. You will make it impossible to find the technical talent you need to create the invention. You might even turn down funding or buyout offers that would get your product to market faster or let you capitalize on all of your hard efforts. Clearly, this is not a smart or rational approach to inventing. So what is the solution?

The key is to abandon the fetish with protecting your idea. Instead, take reasonable steps to protect yourself and trust that you are smart and competent enough to get it to market. You cannot hire a database programmer, for example, if your refuse to tell him what his job is or what he’s doing. Therefore, you should have him sign a Non-Disclosure Agreement stating that anything you tell him is legally confidential. This gives you recourse against him if he spills your secrets, and more importantly, it gets you started in the invention process rather than stuck in analysis paralysis about what happens if someone steals your idea.

Risk is a part of invention because it is a part of life. The best you can do is take responsible actions to guard against worst-case scenarios and focus on getting to market as quickly as possible. Do not let paranoia prevent you from taking bold steps to succeed.

Eric Corl is the Founder and CEO of IdeaBuyer.com, the online marketplace for intellectual property that gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email him at EricCorl@IdeaBuyer.com.

When it comes to establishing your credibility and value, few things are more effective than endorsements. An endorsement puts a trusted and well-known figure behind your invention. It says to potential customers, in effect, “I wouldn’t stake my reputation on this invention unless it performed like its creator says it does.” This is an enormous help in the task of establishing your invention as something worth buying. But how do you go about getting endorsements for your invention?

Well, there are basically two types of endorsements you can get for your invention: endorsements from respected people in your field, or endorsements from celebrities. We will examine each type separately.

Endorsements from those in your field

Getting a respected authority in your field to endorse your invention is an excellent way to build credibility. Fortunately, getting one is a bit easier than getting celebrity endorsements. There are a few ways to go about it. One way is to contact the person you are seeking an endorsement from and simply ask for one. Tell him or her that you are willing to send them one of your widgets and that you would appreciate a few positive sentences to use in your promotional materials. Nine times out of ten, the person you ask this of will be happy to help. Just be respectful of their time and be sure to thank them if they do help you.

If you are not sure how to strike up a conversation with this person, try flattery! After all, if you are in the same field as this person, you should have some common ground right there. If they have a great product on the market, tell them how big a fan you are, how you use it yourself, how you have recommended it to others. This builds some good will between you and establishes a basis for continued conversation. Once this has been done, feel free to come right out with something like “Hey, so speaking of kitchen widgets, I just invented a really neat new so-and-so and I was wondering if I could send you one to check out and possibly review for me. A testimonial from someone as accomplished as you could really help.”

Where do you find professionals in your field? Typically, trade journals, conferences, or periodicals are the best source for this information. Anyone who publishes papers or is generally considered an authority in a field will probably be in these publications. You can also ask your colleagues if they know anyone of importance.

Endorsements from celebrities

Now, a word of caution: A-List celebrities like Angelina Jolie probably won’t be singing your invention’s praises anytime soon. However, that does not rule out local celebrities! An excellent article on Helium.com gives some practical tips on how to find them:

“Try local celebrities. Many local radio personalities are not only expected, but contractually required to advertise for a certain number of sponsors. Contact your local radio stations, and you’ve got your celebrities. Local acting schools and modeling agencies are filed with eager students, always needing a few shots and spots to boost their portfolio.

If you do want to spend the bigger bucks, subscribe to the professional version of the Internet Movie Database and gain access to actor’s agencies. While you may not net or afford any A-Listers, there are plenty of more obscure actors who would consider giving an endorsement.”

Of course, it helps if your invention is in some way related to what the celebrity is known for. For example, it would not make very much sense to ask a radio DJ to pipe up your latest suite of computer programming tools. But if you just invented a new kind of stereo speaker or sports widget, a radio DJ would be a perfect fit. Seek out celebrities that have something in common with your field, and you will drastically increase your odds of scoring that killer endorsement.

We live in a celebrity obsessed world, so it certainly makes sense to try and get one to endorse your invention. However, it may be far more effective to go the first route: getting one from a credible authority in your field. These are people who your customers already know and trust. You can only benefit from capitalizing on their good will. Additionally, some celebrities are very polarizing. Half of your customers might love someone while the other half despises them. It would be a shame to alienate potential customers over something trivial like that. Therefore, you should take care to only seek out neutral celebrities that don’t engender a whole lot of controversy.

If you are diligent and selective in the process of seeking endorsements, you will almost certainly secure one. It is simply a matter of getting out there and making the necessary phone calls.

Eric Corl is the Founder and CEO of IdeaBuyer.com, the online marketplace for intellectual property that gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email him at EricCorl@IdeaBuyer.com.