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General Question and Possibly Debate

Discussion in 'General Entrepreneurship and Startup' started by Guest304, Apr 6, 2017.

  1. Guest304
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    Guest304 Contributor

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    Hello Everyone,

    I would like to start by giving you some background on myself before I pose my question.
    Before I do; the reason I'm not sharing the exact idea at the moment, is because I need proof of concept before I pursue the patent.

    I'm a 26 year old in product development as a full time job. My industry is LED Lighting. That being said, I frequently have ideas that are worth pursuing in other industries. Sometimes they stem from my work and other times they stem from life. Recently I came up with something that has the potential to change an entire industry. I have spoken to my boss about this idea and he has agreed to fund me pursuing a utility patent and prototype aside from my work in the lighting industry (in exchange for a percentage of the net worth). To sweeten the deal his best friend owns a ton of market share in the industry in which my idea is, so I have a bit of an "in".

    Anyway, the proof of concept is all but complete. I'm about ready to start the patent process and get get all of the information formatted in a presentable manner. Luckily my background has taught me most of these steps already. My question is actually two parts.

    1. Does it make sense to try and create things in a large industry specifically for the purpose of licensing it out and getting the royalties, or would I be better served trying to produce the product myself and compete in the industry with the big players with my newly patented product? To give you background on the industry; between 70 million to 120 million units are sold each year, with pretty high margins on each. My plan with licensing is to simply ask for around 10-50 cents on each unit (obviously I will start high) sold to whomever licenses the product.

    2. Is it smart to license solely to one company with large market share, or would it perhaps be better to just sell my patent to the highest bidder? I realize that most people will probably shun the thought of giving up my business that could be worth billions in the future to make money instantly. Yes, I AM a millennial technically, but I have no shortage of work ethic or ideas. I figure if this idea is successful, I have a few more (this being the best and most feasible) that would be just as easy to get moving on. Especially with my own capital to invest at startup.

    To put my questions simply: Is it wise to simply create working prototypes and license the solutions to the big guys, or is it smarter to compete with them? If I consider myself an idea man (and implementer) should I focus on driving home this one idea on my own, or put multiple eggs in multiple baskets? (yes I read the threads that say focus on a single idea, but I'm in a slightly different situation I truly feel) Technically speaking, at the moment... If I have a solid idea, I have a super supportive boss and company behind me to pursue it. Although I would prefer using my own capital if I had/have the means.

    Thanks for any input.

    ~J
     
    JAJT and Kingmaker like this.
  2. OldFaithful
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    OldFaithful Silver Contributor Read The Millionaire Fastlane Speedway Pass

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    I'm surprised that no one has chimed in here. My opinion is that you should start your own company and sell your own product.

    If the opportunity is as large as you believe it is, you had better be extremely careful in your discussions of the product and sharing of IP. Figures that large tempt even the best of people to steal. I may be jaded, but I wouldn't trust licensing my idea to another company. I would simply expect them to change the product slightly to circumvent the patent and then leave you out of the loop.

    IMO, the only way to ensure that you get paid for your invention is to make it yourself. I hope you check back and fill us in. Good luck.
     
  3. MB2
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    MB2 Contributor Read The Millionaire Fastlane Speedway Pass

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    In my opinion, doing it by yourself is the best bet,because when you do it by yourself YOU are in the driving seat with 100% control whereas in Licensing ...not so much control.

    You said that you are more of an "idea guy".So take one idea and bring it to the market by yourself(requires lot of work) and check how market reacts, then use one of your other related ideas to respond to that market feedback accordingly.In that way you have more control and more potential than just being an idea guy who knocks big companies doors and waiting there HOPING that his idea will take off, which is a way that gurantees less reward because all of your fate lies on an another person hands.

    Starting a company by yourself and bringing your product under your company is the path that has more reward because of the risk involves.More risk more reward,but it shouldn't be a moron risk.Licensing can even be done long after your invention, like a situation where your invention is modified and brouught to the market.That way you can earn long after the intial date you invent the product.
     

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