Inventing is a numbers game. And so, by extension, is licensing. What does that mean? If you want to license your ideas for new products, you can't get too attached to any of your ideas. This is challenging for most people, to put it mildly. In my experience, inventors too often become emotional, especially when they've devoted a substantial amount of time and energy to one project.
A better strategy is to evaluate the appropriateness of your invention ideas for licensing, and then take action. By focusing your efforts on the right kinds of ideas, you are much more likely to become successful. Not every idea is a good fit for licensing. Big-picture wise, your focus should be on reducing risk. If an idea is perceived to be too risky, it's unlikely that a licensee will take it on. Risk is already inherent in bringing new products to market. Taking away perceived risk is crucial.
Remarkably, Paul Sorenson has licensed every idea he has ever pitched. He just signed his third licensing agreement in less than a year. (Full disclosure: I know Sorenson because he is a coach for inventRight, the company I co-founded in 1999.)
"I don't look at pitching my ideas as a one-trick pony thing. I know very well that if I reach out to 70 companies, I may receive 70 no's. That's okay. It doesn't shock me," Sorenson confessed. "I just add a few more companies to my list and keep moving forward. In some ways, I almost look at receiving a no as a win, because I get to cross that company off of my list."
Sorenson maintains a running list of product ideas. When it's time to select a new idea to work on next, he applies the following set of simple criteria to help him.
First, which ones appeal to the largest markets? Is this a product that could exist in every household? Or does it appeal to a niche audience? Sorenson concentrates his efforts on concepts that have the greatest potential market. This helps him dramatically narrow down his list.
Of the remaining ideas on your list, which are the smallest? Physically large products are more expensive to manufacture, ship, and store. All of which adds up to greater risk.
And finally, which is the most simple? For example, are there moving parts? What about electronic components? Complex products are more complicated to manufacture and perfect. There's a greater possibility of parts becoming defective, leading to returns. Products that have fewer components are less risky.
What Sorenson has done is take his ego out of the equation. He doesn't select a new project based on excitement or conjecture.
And, perhaps even more crucially, when he engages with potential licensees, he's unfailingly polite. He doesn't fight or argue with companies that pass on one of his submissions, choosing instead to focus on the long game. Sure, they said no this time. But next time, they might say yes.
Maintaining this kind of attitude is essential. It may even lead you to a deal. Being reasonable and acting like a professional is exactly how Sorenson landed his most recent deal.
When Sorenson shared his sell sheet for a novelty gift invention with a new company, his contact told him, "We like it. Give us some time to review it." About a week later, the contact called to say that although the company liked his invention, they didn't feel like there was enough behind it to get a retailer to take it on and that as a result, they had decided to pass.
On the phone, Sorenson said okay and thanked the individual for his time.
What he heard next might surprise you: "You know Paul, you are so different from any other entrepreneur I have worked with. You're easy to do business with. We have an e-commerce site that is pretty popular. Why don't we start selling your invention there and then move it into retail if it's successful?"
And just like that, a no became a yes.
How do you determine which of your invention ideas to focus on next?