The Licensing Game

[Vigilante]

I have a great idea for a digital product and would need licensing from any big organizations, Nascar or MLB, NBA, NFL. I know some of those are very difficult to get and cost 100k but the biggest stumbling block is that they require clients to prove sales. I dont sell anything and i dont have a factory so im looking to partner up with anyone who has any type of such license to get started.

My idea is great because it doesnt require much inventory, or much investments (based the licensing) but i dont really know how wellit will do because it wasnt done before.

I'm not good at calling companies and convincing them to work with me so if anyone wants to help pm me.

Hi and welcome to the forum.

First, I would recommend that you stop by the Introductions & Networking part of the forum and make an introduction post. You're not likely to get many serious responses based on your post above. Take off your coat, stay a while and chime in when you can. From watching interactions around here, you will see that people that show up here with a business idea and need for help are usually not taken seriously until people think they are seriously worth spending time on. So... add some value around here and over time you may find some kindered spirits.

License agreements don't require you to prove sales as much as guarantee $$. And you are right... the ones you mentioned are some of the most expensive and huge pains in the a$$. However, also... they will all be product specific. You can't ride on the coat tails of someone's existing license agreement, as that is a specific % for a specific product and with a specific commitment. You don't get to just add additional shit to it. It's much more tightly regulated than that.

Your last sentence is complete bullshit. Fear is a barrier to entry for some. If you can't pick up the phone and offer someone to work for them making them money (which is what a license agreement is) you'll never make it happen. Practice with your wife, your dog, or anyone that will listen. Then pick up the phone and make the call. If you fall flat on your face, do it again. And again, and again. However, giving yourself the easy out that you're "just not good at it" is nonsense, and tends to be a hallmark of action fakers.

If you believe in your idea... if it is good enough... PICK UP THE PHONE. Your sentence is a sentence of fear, not ability. And you have nothing to be afraid of, because the worst thing that can happen is they say NO. You're no worse off in that scenario, other than the fact that you gave yourself an MBA in license agreements in the real world. If you are prepared... if you have a good idea... and if your idea makes sense, make the call.

And... welcome to the forum.

 

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[InMotion]

Your last sentence is complete bullshit. Fear is a barrier to entry for some. If you can't pick up the phone and offer someone to work for them making them money (which is what a license agreement is) you'll never make it happen.

So true...I would say its the entry barrier for most. I was thoroughly surprised how many people have major anxiety towards using the phone; it made me feel much better about doing it myself when I learned that.

 

[Programmer]

I did make few phone calls thats why i know its not easy getting licensing. I dont have any sale projections and no stable business to back me up so big players dont want to listen to me and i dont think it would work with smaller licensing agreements from places like NCAA.

I dont mind sharing my idea if anyone is interested. And if anyone wants to get to know me i'll open up privately.

pm or email me.

 

[Darius]

One Simple Idea: Turn Your Dreams into a Licensing Goldmine While Letting Others Do the Work: Stephen Key: 9780071756150: Amazon.com: Books

Re-read the thread and time I purchase this book.

 

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[Vigilante]

She called me this morning.

She got the first check. The first of many.

This first check was equal to 50% of her annual salary. This was just the down payment on her idea from the buyout buyers.

The next check, if everything falls into place, will be 3x her annual salary.

And from there, she gets royalties.



One simple idea.

So here's the (estimated) scorecard.

1 - Phone call that changed her life. One simple call.

50 - The quantity of people who told her that her idea was stupid

6 - Family members who verbalized she would never be successful

40 - People who judged her lack of education/intelligence and dismissed her chances

3 - people who passed on helping her that she called for help

2 - people who believed in her (including herself)

1 - banker that deposited her first check on Friday

100 - people that now want to talk with her. She doesn't realize that 99 of the 100 are action fakers with an idea.

If I could boil it down to one thing she did right? Tenacity. She took action. She stuck with it when everyone told her she was stupid. (Mind you, not ONE of the nay-sayers has EVER done anything even remotely similar to this). She fought through it. She believed in it.

She. Took. Action.

 

[TedM]

Tenacity

Illegitimi non carborundum

Thanks for today's dose of inspiration.

 

[Eskil]

Vigilante;
Wow.... thank you again for sharing this story - and keeping it updated.

A genuinely inspirational story for sure!!

 

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[Jazzcat]

Thank you for sharing Vigilante.

This is a seven figure thread with multiple money making takeaways. Besides the obvious thread topic of licensing the other major takeaway for me is just as valuable...DO SOMETHING...TAKE ACTION...NOT TOMORROW...TODAY...RIGHT NOW! Inaction is theft. It steals your self-respect and the value you can provide to others. There are things in life worse than rejection. Regret is much more painful than being rejected.

 

[JackTackett]

FYI, this link no longer works, but here is a new link that does. Have to say I'm surprised at some of the licensors, really, Hello Kitty? Number one does not surprise me at all....

Web Reader License! Global Supplement May 2013 Issue

Jack

Here's a listing of the TOP 100 licenses. And, I can guarantee you, if you had the right idea... you could get a license deal with ANY of these companies if they did not already have a license in place with someone in your space. Now, these top 100 are going to cost more than normal (because they're the top 100...) but this should be interesting reading for anyone interested in this field. These should get your ideas cranking anyway...

TOP 100 Licensors - License

For extra credit, can you guess whom the top licensor is on this list? Hint... it was mentioned a few posts back, and not by me!

 

[scottaj74]

Sweet thread! Thanks Vigilante for sharing all of your stories, knowledge and wisdom with us wantrapranuers (speaking for myself anyway).

The timing on this thread is golden. I'm actually looking at this whole deal the other way.

I live in Canada and do a lot of backcountry snowmobiling in avalanche terrain. I have an idea (my bad) for an new product that combines a snowmobile helmet with a device that already currently exists allowing you to breath under the snow. The two are separate items at the moment and can't be used together because of the current configuration. While riding one day, I thought - Hey, why can't someone build this "snorkel" into the helmet? So that what I did, combined the two, tweaked the design a fair bit and build a crude prototype that works they way I wanted it to (total cost was $20 and time was an hour).

I just filed for a provisional patent. I had trouble with the claims, so I hired Legal Zoom to give me a hand for a minor cost. I figured I would stumble around with it for a day or so, or I could take action, pay a few $$ and get it done.

When the provisional is filed, I'm going to get on the phone with the helmet and sled manufacturers to see if anyone is interested in the licensing this product. There are already significant #'s of of the helmet and the "snow snorkel" already out there, so putting the two together only makes sense. I've talked to industry experts and they think it's a smart, timely product for the crowds. The production cost is low, but I'm choosing to go the licensing path on this one.

These companies have their loyal customers, the money to build this product in mass and the resources to market it and get it onto their showroom floors. Being a small time guy trying to get a slice of their pie would be difficult (not impossible, but not easy).

That's my plan anyway. Just waiting for the green light on the provisional then it's calling and sales benefit sheet time.

Thank again for this thread and the motivation it provides!

 

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[Silverhawk851]

Vigilante; tried to PM you but can't seem to find a route. I'll say it here.

Sincere thanks for the value your providing. you're changing lives, whether you know it or not.

If you ever need any type of marketing/PR/errand work done in Toronto, Canada, shoot me a PM I will help as to my best ability.

Much respect!

On another note, how are the royalties coming along for your client? Is the new buyer able to produce sales for the product?


Also, how important would you rate having the security of a patent within a licensing deal?

For clarification, I'm venturing into a similar type of deal where my products are manufactured overseas, branded here, licensed here, and sold here (here being North America).

 

[Vigilante]

Vigilante; tried to PM you but can't seem to find a route. I'll say it here.

Sincere thanks for the value your providing. you're changing lives, whether you know it or not.

If you ever need any type of marketing/PR/errand work done in Toronto, Canada, shoot me a PM I will help as to my best ability.

Much respect!

On another note, how are the royalties coming along for your client? Is the new buyer able to produce sales for the product?


Also, how important would you rate having the security of a patent within a licensing deal?

For clarification, I'm venturing into a similar type of deal where my products are manufactured overseas, branded here, licensed here, and sold here (here being North America).

Thanks. Good to hear, and super cool that you are taking action.

I have not kept up with her. She wasn't a client as much as a wantrapreneur that turned into an entrepreneur. So, beyond the call where she told me she got the first big check, I haven't heard from her. During that call, I told her to not get lazy (as she didn't make retirement type money... yet...) and I wanted her to go do her next deal. On her own.

Nearly none of the deals I have done were patent secured. We did TV's that we bought directly from Samsung, and rebadged them as Akai under license. We did GPS deals with Dale Jr. and Nascar, and didn't own the software or the hardware. Even the gal in the subject of this thread took a readily available technology and applied her own spin on it. She didn't own shit. No patent, no tooling, nothing.

To me, it's more about generating revenue where none exists. NASCAR didn't want to be in the GPS business without us. That's not what they do. They just wanted to sit back and collect royalty checks. So, we aren't really worried that someone is going to say "that's a great idea... man... maybe we should just manufacture these ourselves." Why? That's not what they do. Zero expertise. Could they go build the expertise? Sure, but why would they?

Every month (or quarter, or year) we just send them a check. They do virtually nothing. In the case of Dale Jr., he was in the recording studio with us for an hour. That's it. Actually, a recording studio arranged near him, on his schedule. Ultimate in passive income for them. Sit back and collect the check.

So no, I am not concerned about the end around. The licensor doesn't have expertise in your arena. And, the factory knows THEY are the dispensable, replaceable piece of the puzzle. YOU are the secret sauce.

So... very little attention is ever paid to who owns what patent. We did a patent search on the last deal just to make sure we weren't violating anyone else's patent. Short of that, not concerned that without a patent someone's gonna try and screw us. It's not going to be the licensor, and the factory can't do anything without us or we cut their legs out from under them (as we hold the license.)

 

[Silverhawk851]

Thanks, got ways to go, but will definately keep you and everyone posted on FL on the endeavor.

Oh I see. Well she had some valuable advice that she should've taken (hopefully has, lol).

Could they go build the expertise? Sure, but why would they?

This question alone opened my mind up, let alone all that gold.

Wow, so no patents required even, just get it done. This is a whole nother level of thinking. Just goes to show all the 'mental blocks' are just that, mental.


Forgive my insolence in the area, but if you did have the opportunity to choose in the setting up of the licensing deal, would you preferably secure the deal with the factory first, the distribution or the licensing deal?

I read your previous comments on this but to elaborate a little:

Say for example it's a BBQ that your planning to sell, license from a brand/celebrity. What would be your prefered method of action?

I see the pros in both, if I secure the factory that makes the BBQs preceeding the licensing, the licensor would see a product ready to go, possibly market-tested and head from there.
Contrarily, if I get the licensing first the factory would be much more willing to provide the best possible pricing for BBQ, allowing me to make further room for the royalties.
As you said, I'd agree that getting the distribution with retailers is the harder part, but once I provide proven market results for the BBQ, they'll tend to pick it up. Now comes the delimma of do I put the BBQs on consignment with them? or straight wholesale sell to them?

Hmm, decisions, decisions.

 

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[johnny604]

Vigilante, great thread...i love seeing interesting deals discussed.

but in the deals you (and your friend) had done how was a 'guarantee of sales' made. that is, who distributed/sold the GPS units or the products your friend made; and how was that part of the licence handled.
Its great if you have a potential product and a celebrity endorsement set up...but what then.

Always liked this article...check out the 5th paragraph:
http://www.entrepreneur.com/article/25052

 

[Guest3722A]

By the way, nobody has asked yet but the Dale Jr./NASCAR one wasn't that successful. NASCAR fans like beer more than GPS units, apparently

I was wondering about this and I see this thread is a year old but have you ever considered someone like a Snoop Dog type character with a voice-over:

"Left up here on Michnichols, bitches" and then you hear a bic flick or something that keeps the "presence" in the vehicle. I guess I just see some entertainment value with this.

 

[ddzc]

What an absolutely amazing and helpful thread.

Vigilante,
I have a simple question, lets say related to the "get er done" button. How does this idea and product stop China from producing millions of these and retailers and wholesalers from selling them worldwide?

 

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[Vigilante]

It doesn't.

Countries like the United States will shut down the import and resale of counterfeit merchandise during the customs process.

You can walk down streets in Hong Kong and buy a Rolex for $20.

We, as licensors can't really solve that problem on an international scale. Keep in mind also the most important point I have to give you about your question :

IT IS NOT OUR INTELLECTUAL PROPERTY.

Our agreements will be geographically limited anyway. That problem… is the problem of the intellectual property owner. That is not us. In short, it's someone else's problem (your licensors.)

99% of the market for the Larry button for example would be in the United States. And that… we can control.

I found it amusing that when we went to manufacture a test lot of the license that you mentioned, the manufacturer already had some audio files. Where did they get them? No idea. We supplied them with some legitimate ones. They would have been happy to use either.

I suspect that Canada is equally strong in enforcement action on inbound merchandise. Try and bring in some Apple products purchased from Asia. They'll end up being liquidated at customs, and you will end up with a knock on the door from someone you probably never wanted to see.

Nike. Rolex. UnderArmor. Even automobiles. Samsung. Sony. Apple.

They all deal with it. They all fight it overseas. They haven't stopped it yet.

However, it affects limited to nothing in North America. You will see regular enforcement action with catastrophic results (both personally and financially) for counterfeiters in the United States.

Here's an interesting article I read recently on the topic :

http://www.chinalawblog.com/2013/04/stopping_china_counterfeiting.html

 

[Vigilante]

Vigilante, great thread...i love seeing interesting deals discussed.

but in the deals you (and your friend) had done how was a 'guarantee of sales' made. that is, who distributed/sold the GPS units or the products your friend made; and how was that part of the licence handled.
Its great if you have a potential product and a celebrity endorsement set up...but what then.

Always liked this article...check out the 5th paragraph:
http://www.entrepreneur.com/article/25052

That varies.

In some license deals, you have a low to zero guarantee and a higher license percentage. In other deals, there is a high guarantee in effort to get a lower license percentage.

The last two deals I personally did were exact opposites:

One was
1. Zero annual guarantee, high royalty %
and the other one was
2. Fixed annual guarantee, royalty % only over a certain success threshold (i.e. royalty kicks in over 50,000 units and higher at x%.)


Every deal is different.

 

[Vigilante]

I was wondering about this and I see this thread is a year old but have you ever considered someone like a Snoop Dog type character with a voice-over:

"Left up here on Michnichols, bitches" and then you hear a bic flick or something that keeps the "presence" in the vehicle. I guess I just see some entertainment value with this.

That ship has already sailed. However, your idea of what might have worked is solid. That's how you concept these license deals.

 

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[Vigilante]

Forgive my insolence in the area, but if you did have the opportunity to choose in the setting up of the licensing deal, would you preferably secure the deal with the factory first, the distribution or the licensing deal?

Simultaneously. Usually, the licensor wants to know you are not just full of shit and have access to really manufacture the product, so I guess from that standpoint it does you no good to pitch the licensor and not have a product to show them.

Product sourcing first.

 

[Vigilante]

Let me know if I have missed any questions. I am NOT the most experienced licensor on this forum, so if you need to you can hunt down Steven Key or others.

 

[Guest3722A]

The whole Personal Navigation Device (PND) GPS business is on a sharp decline.

Just some info on some things that this statement made me think about, and I don't know if this was a consideration when you licensed the Jr. voice but I'm sure as you know, GPS is used heavily in the trucking industry but the money I would think would be with the owner operators because for the most part they're not tied to a qualcomm navigation system. Most people don't frequent places like truck stops and fueling stations and aren't aware but I can tell you the top places are always slammed with trucks backed up just waiting to fuel, and it doesn't matter what time of day or night either. It's companies like Pilot, Loves and Flying J that offer fueling discounts too to large carriers through a fuel card system and the drivers like these places because they get a card to swipe at the fuel pump which gives them points towards food and things in the store like GPS systems and head sets for hands free talking. $6-800 in fuel on the companies dime per visit and the driver gets all of the award points towards goodies. Most of these have hundreds or more parking spots too that always fill or come close because the laws force ten hour rest periods. So, people are always at these places. The industry as a whole is huge and growing too. Schneider National alone easily does a million a month in tires. On a side note, they also give a brand new mattresses in the plastic to each new driver assigned to a tractor and they go through drivers like water. So I guess I'm wondering what your view is on this market? Do you see opportunities here with licensed voices and other things? Has this been something you've looked into before?

 

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[Vigilante]

My client that I licensed the Dale Jr. GPS for has #1 marketshare in truck navigation. They (the truckers) are less into novelty, and more into functionality. Their GPS units need a specific set of things that are not in regular navigation devices (low bridge routing, hazmat routing, etc…)

I am no longer in the GPS business (at all) but that market, for us, was to specialized for any novelty value. It was (GPS for truckers) huge business at the time and probably still is now.

Similar to MJ's book (not being a catalyst for more limos.com competitors) this thread is best used figuring out how to add license revenue to NEW areas. GPS is dead. Celebrity buttons (like Larry the Cable Guy) is now old news.

Take the thought process and apply it to NEW areas.

 

[rogen]

I have a feeling that this thread will soon go to INSIDERS section..

 

[TedM]

you can hunt down Steven Key or others

Not to fawn, but your observations carry a lot of weight, as well.

Steven hasn't been in the forum for a long time - unfortunately. I guess I missed him by a couple of months.

Who else here?

 

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[Vigilante]

If you post in this thread, Steven will see it. He checks in here relatively regularly (as we have driven a lot of book sales his way):

https://www.thefastlaneforum.com/showthread.php/30946-One-Simple-Idea-Stephen-Key

 

[TedM]

If you post in this thread, Steven will see it. He checks in here relatively regularly (as we have driven a lot of book sales his way):

Right - that's how i know he hasn't been here for a while. i posted back in june - and there are a few others after me - and he hasn't shown up.

No worries.

 

[TedM]

Hey V. - what do you think of this: http://www.quirky.com/how-it-works

http://finance.yahoo.com/blogs/breakout/quirky-allows-anyone-become-inventor-160333336.html

 

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[ddzc]

Hi Vigilante,

I have a heap of questions to ask you surrounding the licensing subject, what's legal and not, etc. Not sure if I want to bombard the thread with them. Is there any way I can get those to you...looks like the PM option is disabled on your end.

Thanks!

 

[Runum]

Hi Vigilante,

I have a heap of questions to ask you surrounding the licensing subject, what's legal and not, etc. Not sure if I want to bombard the thread with them. Is there any way I can get those to you...looks like the PM option is disabled on your end.

Thanks!

It's cool that you have a heap of questions about this. It would be much better for the benefit of the forum if you would post them here and Vig could answer them publicly if he chooses to. This helps us all learn from each other.