There are thousands and thousands of companies that want creative people to submit their ideas for new products to them. My students tell me about new companies they're working with all the time. By and large, these companies treat inventors well. They've licensed ideas before. They have a process in place for reviewing submissions. Their contracts are fairly balanced. They get back to inventors quickly. These companies will absolutely love you.
That having been said, you'll still need to manage the process. You'll need to supply them with the right information at the right time. You'll need to keep asking for next steps. You'll have to strategize about protecting your interests, because establishing perceived ownership is always important. When agreements work out, it's because a partnership was forged.
Then there are other companies. Some companies profess to embrace open innovation, but don't. They say they're looking for ideas, but they really aren't. These companies are extremely difficult to work with. They're constantly lagging. They will take forever to get back to you. In my experience, companies like this tend to be very large. They have their own R&D departments. Their attitude is, "If it wasn't invented here, it must not be very good." They put up with us. Our submissions are more of a distraction, a waste of time. That's an oversight.
What are some signs a company isn't taking open innovation seriously?
1. It asks you to forfeit your rights to your idea. To my disbelief, some companies do this, often very blatantly. Frequently their intentions are laid out right there on their submission forms. Please, always read the fine print. Understand what you're agreeing to. And assume that whatever you sign is binding.
2. It directs you to its legal department first. Lame. The legal department is going to bog things down with red tape. Companies that want to move fast won't transfer you to legal.
3. It requires ideas to be patented. To me this is a huge red flag. Speed to market is more important, full stop. Patents can take years to be issued. It simply does not make sense for an inventor to seek out a licensee after his idea has been patented. I want to know whether or not there's interest in my idea before I invest too much, let alone make that kind of financial commitment. And I want to license a lot of my ideas, which means I can't afford to patent all of them anyway.
4. It refuses to agree to minimum guarantees. What if, after signing a contract, the company decides not to manufacture your idea after all? Minimum guarantees ensure that you'll get your idea back if that ends up happening. They're essential. Do companies like them? No. But they're a reasonable request.
5. It insists on owning all improvements. Licensing is like renting. Your licensee is 'borrowing' your idea for a fixed amount of time. Companies that do open innovation right will agree your idea is yours. What they're interested in is profiting from it with you. If a company insists on owning any improvements made to the idea, that's a red flag. Improvements are always made. Make sure your agreement applies to them.
Who doesn't want the biggest company on his list to license his idea? It's fun to dream about. But these companies are not your best bet. They aren't open to taking risks, because they don't have to. These companies are market followers, not leaders. Midsize companies are much more likely to want to license your idea. Look for companies that are hungry, companies that are in search of that golden ticket. They will be much easier to work with. They'll make this process fun, not tedious.
Don't get me wrong: Not all large companies act like this. There are numerous Fortune 500 companies that have realized opening their doors is essential to staying on top.