1.05 – Zeroing In on a Brand New Product
Many entrepreneurs would like to deal in products, but they’re not quite sure how to get started. Of course, you could import products from other countries or buy your products from domestic manufacturers. However, if you like the idea of manufacturing and distributing a brand-new technology or other type of product, you have three choices: invent something, team up with an inventor, or licence an invention.
Becoming an Inventor
If you enjoy tinkering and experimenting with new ideas that might become inventions, your role might be to invent a new product. However, most entrepreneurs and start-up businesspeople are not inventors – not because they lack the ability to invent, but because their focus is elsewhere.
The mindsets of businesspeople and inventors tend to be quite different, and it’s unusual to find both in the same person. Not only are the mindsets different, but the skills required by each are very different. In general, pure inventor types aren’t interested in the commercial side of things. They invent for the love of invention. Unless an entrepreneur comes along and points out an opportunity, many inventors never see their inventions reach the marketplace.
Many types of inventors – engineers, scientists, and so forth – would rather spend their time in the laboratory than consider business issues like markets and customers. You have to ask yourself what role feels right to you and do that. You can always find other talents in someone else.
Teaming Up with an Inventor
Entrepreneurs often team up with inventors to commercialise a new product. Often the opportunity to pair up with an inventor comes from the industry in which you’re working. You hear about someone working on something; you investigate and discover an interesting invention.
Don’t hesitate to approach an inventor, but keep a couple of important things in mind:
- Inventors are often paranoid about their inventions, convinced that someone is out to steal their ideas.
- Inventors typically aren’t business-oriented and don’t want to become businesspeople. Their passion is inventing, so don’t expect them to be partners in a business sense.
Ensure your attorney structures a beneficial arrangement with your inventor that doesn’t hamstring your efforts to commercialise the invention. Both parties bring something very important to the mix, so ensure you can work together well.
Licensing an Invention
Companies, universities, the government, and independent inventors are all looking for entrepreneurs to commercialise their inventions. You can access these inventions through licensing. Licensing grants you the right to use the invention in an agreed-upon way for an agreed-upon period. In return, you agree to pay a royalty to the inventor, usually based on sales of the product that results from the invention.
The government owns many core technologies developed for the military and the aerospace program, among others. You can licence these core technologies and create a new application for use in a different industry. Alternatively, visit the technology licensing office of major research universities, and you’ll find more opportunities. For example, the Stanford University Office of Technology Licensing evaluates, markets, and licences technology owned by Stanford University. Universities are a gold mine of new technology you can tap into.
