You may be a brilliant scientist with a great new invention or a couch potato with a unique idea. Just because you’re clever doesn’t mean you have any business being in business.
Ideas are a dime a dozen, I often say. It’s how those ideas get executed and commercialized that matters. Troll through the U.S. Patent Office’s Searchable Database in any field that you have experience in, and you’ll see that the vast majority of ideas, legally awarded as truly unique, have never seen the light of day.
If some inventor thinks their idea is novel enough to invest in the costly process of applying for and achieving a patent, you know they feel that their idea is valid. They obviously believe their product or process is commercially valuable and would be a great asset in the hands of someone else. If they didn’t believe this, they wouldn’t have bothered.
Many inventors or creators of unique ideas and products feel the same way. For many, starting a business is way easier than the patenting process. So, whether they’ve patented or not, these creators jump headfirst into starting a business to realize their dreams. What they don’t realize, however, is that starting a small business requires a massive amount of diversified skills and an appetite to do more than just create. It’s about managing people and cash flow, dealing with banks, suppliers and customers and so much more.
My advice to someone in a similar, pre-startup phase is: Maybe you should quit while you are ahead.
That’s harsh, I know. But I don’t mean that they should give up on their proprietary idea altogether. They should instead stop obsessing about whether they should build a business around that idea. If your concept has merit, surely there’s already an established business with the resources, experience and track record to do the commercializing for you.
The most obvious opportunity is a partnership or licensing opportunity. Let me give you an example.
Several years ago, I was running the manufacturing operation that I set up to commercialize a product I had patented. A young man walked in to ask for my advice. He had prototyped and patented an interesting product in a completely different field and wanted my advice on how to finance and setup a factory from scratch, build a brand and a distribution network and source components competitively.
My advice? Don’t.
His product was a perfect fit with dozens of existing distribution partners and big box retailers, and could be made by any one of hundreds upon hundreds of factories around the world who were already up and running making similar products and hungry for new business.
This young man took my advice, signed a licensing deal with one of the biggest brands in his industry for a royalty against every sale they earned. They used one of their existing suppliers to build the product and instantly started selling it to the thousands of customers they already had, around the globe.
Instead of raising money, building all the infrastructure from scratch, only to lose sleep over meeting payroll, component shortages and collecting receivables, this inventor got a little piece of the action every month in the form of a royalty cheque; what I like to call ‘mailbox money.’
He then went on to use his freedom to invent and license complementary products and is now working on a monumental project of global proportions. All the while, he’s focusing on the type of work he loves best and enjoys a small piece of a very big pie: his licensee’s commercial success.
The truth is, creative minds and commercialization models like his are indeed their own small businesses. These businesses don’t necessarily have a sign over the door or an ad in the local paper, but they provide amazing quality of life by allowing the entrepreneur’s focus to stay where it was born – with a great idea.
Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.