Idea > Profit

[Yoda]

I am the student.​

Goal: Profit $1 or more in two years or less

Process: Idea > Patent > Design/R&D > Market Interest > Sell Product/License

Product: Took an existing product, and simply made it better

Story: Had an idea about 3 or 4 weeks ago, and it was one of those, "Man, I need product. It'd be so nice." [Problem]

Naturally, I went online to investigate, and even purchase, said item to solve my minor concern. However, the existing product available was 1.) hideous, 2.) bulky, 3.) super inconvenient.

After getting frustrated and not getting finding I wanted (we're so spoiled these days), I moved from "Seriously? These suck." to "Wow, even I could make this better, and I have no idea how to build it. Heck, I'd do this, this, and this."

Then, bingo! [Idea]

Of course, ideas are shit without execution. But first, a little due diligence, since this did involve an existing item, of sorts.

I hit the USPTO because I thought, "Surely someone is already working on this. It's sooo basic."

Nope. Couldn't find anything in a preliminary search of my own.

Next, I told my wife about it and we started searching more in depth, and simply couldn't find what we were looking for.

I hit up a local patent attorney, told him I had an idea, and wanted to consult with him. He sent me a document to detail my idea and to date it, and send it back so we could discuss the feasibility of it. He had me answer a lot of questions to make sure it:

1. Was new (or assumed to be).
2. Had utility (most definitely).
3. Was clearly defined (it's so basic, I didn't even have to explain the function to him).

Check.

Next, we discussed whether the product actually made sense to create/modify (improvement), whether there was already interest or potential interest (market), and whether it was something which would add what he called 'reasonable value' to a person (value).

Check, check, and check.

Action Step: I sent payment yesterday for a patent search, and I'm expecting an answer within the next few weeks.

Guess we'll know then how quick this action thread lives or dies.

 

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[Yoda]

Day 7: Status Update

Had another long call with the patent attorney.

Looks like we're a go. In fact, we're going for a utility patent (we originally looked at just a design patent).

There were a couple options he laid out, so for those just reading for learning's sake (I'm learning as I go, so I want to describe what I learn, as well), here they are:

1. Product Creation - If I want, I can grab the utility patent and start creating the product itself, and build a company/brand around it.
2. Licensing - Or, I can apply for the utility patent and look for a licensing deal from a manufacturer/bigger brand already within the market.

Because the product development is pretty far beyond my personal or professional scope, it's looking like the second option is going to be the way to go. Now, the actual product creation should be a piece of cake for someone already in this niche, but, because I have absolutely no experience in it, there's no reason not to provide the means to someone who could build and scale 1,000x to what I could, in way less time.

That said, here's the process moving forward:

• File for provisional patent.
• Establish the product idea in a consumable format.
• Research the market leaders.
• Contact the market leaders.
• ???
• Profit.

Now, easier said than done.

Filing for the patent is left up to the patent attorney and his team (and my wallet, of course), and they're aiming to be as broad as they can in establishing the utility patent. In other words, there are probably 10 different ways for the product to be modified down the line, so we're looking to monopolize the utility (yes, it's legal in the patent world) as much as possible. Chances are, we'll be granted some but not all, and we can then file continuances on the others down the line and increase total intellectual property. Woot.

What I mean by establishing the product idea into a consumable format is to have something I can hand to the company I reach out to and say, "Here. This is the idea, the product, the use, the patent ability, and what it's all intended to do." Basically, I want to show each company there is a genuine product which fits a genuine market (theirs), with genuine profitability potential.

Researching the market leaders should be easy, yet a little time consuming. [If anybody knows how to be more efficient/effective here, I'm all ears!] This is a multi-billion dollar market, trending upwards. It's also international, and would eventually be applicable to most anybody on the planet. I kinda like that.

Contacting the market leaders is going to be the bulk of the work. No writing letters, emails, and hitting contact pages on websites. Nope. It's hitting the phones. I want to speak to the decision maker. This is also something I'm sweating a little at the moment, since I've never 'pitched' a company before. But we can't put the cart before the horse, right?

[I don't know what happens next. Can't wait to find out the process.]

Finally, I expect to make money. The minimum is getting my money back for the patent and time spent doing all this jazz, however I'm aiming for F*ck you money. This has an opportunity to go pretty big.

Action Step: Pay the attorney (and USPTO fees) to get the ball rolling. Expected time to patent pending is 30 days.

(I have no idea what I'm doing, but it's fun as hell!)

 

[Waspy]

(I have no idea what I'm doing, but it's fun as hell!)

Life of an entrepreneur summed up in a single sentence.

 

[G-Man]

In fact, we're going for a utility patent (we originally looked at just a design patent).

Had to google this, and still not sure I understand it entirely, but oh well

Researching the market leaders should be easy, yet a little time consuming. [If anybody knows how to be more efficient/effective here, I'm all ears!] This is a multi-billion dollar market, trending upwards. It's also international, and would eventually be applicable to most anybody on the planet. I kinda like that.

I'm used to consumer products, and I don't know what industry you're in, but have always found purchasing IRI data worthwhile.

 

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[Yoda]

Had to google this, and still not sure I understand it entirely, but oh well

There are essentially two different patent types: Design and Utility.

Think of a design patent as in the way something is, aesthetically. The way it looks. Take a salt grinder, for example. There are probably thousands of different looks and feels to the object. Made of wood, round. Made of stainless steel, rectangular. The way the product is modified to look or feel is patent-able, but only by design.

A utility patent protects the way the product works. The actual salt shaker. It takes salt, grinds it, and it falls onto your food from some type of manual exertion of energy.

IRI data

Checking it out now, thanks for the nod!

 

[MidwestLandlord]

There are essentially two different patent types: Design and Utility.

Think of a design patent as in the way something is, aesthetically. The way it looks. Take a salt grinder, for example. There are probably thousands of different looks and feels to the object. Made of wood, round. Made of stainless steel, rectangular. The way the product is modified to look or feel is patent-able, but only by design.

A utility patent protects the way the product works. The actual salt shaker. It takes salt, grinds it, and it falls onto your food from some type of manual exertion of energy.

If I understand correctly, you'll own the rights to the way the product physically functions?

So if someone wanted to make one that functions the same, but looks different, they'd have to pay you?

 

[G-Man]

A utility patent protects the way the product works. The actual salt shaker. It takes salt, grinds it, and it falls onto your food from some type of manual exertion of energy.

Yoda = better at explaining shit to dummies than Google.

One detail, if you do decide to buy an IRI data packet, negotiate. They'll act like everything is firm, but they will horse trade. They'll come back and tell you that have 2 or 3 reports they think can help you, and will probably want 1,500-2,500 for each. Get them down as low as you can on one report, then wait a day or two and call them back and try to get them to throw another one in for free or half price.

Really all the rep is doing is emailing you an excel file, so they'll usually do it.

 

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[Yoda]

you'll own the rights to the way the product physically functions?

And all future iterations, so long as I keep making improvements, yes. It's called a "continuation-in-part" (CIP) which basically allows you expand on your original use, so long as it's not too far a stretch. This was key to the "monopolizing" the idea, essentially (or so I understand).

So if someone wanted to make one that functions the same, but looks different, they'd have to pay you?

Correct. They could then create a design patent if it was distinguishable enough, too.

I'm hoping to fully own what the product actually does, so any modification (which I intended to also protect, where possible), is a use of the first existing patent (mine). The look is becoming less and less important, as anyone could penetrate this area.

In other words, I'm happy to own the "Ford Escape" and let the other guys choose their colors at will.

 

[Yoda]

Day 8: No Time To Lose!

Spent some time reading around yesterday so I could further my understanding of what to do next; I'm not about to waste 30 days while we wait for the USPTO. Since this is my first time in the patent/licensing game, knowledge overload was a must. Also purchased "One Simple Idea" by @StephenKey (book thread here). I'll get that Saturday and hopefully have read most of what's immediately useful by Sunday afternoon.

I also re-read "The Licensing Game" thread started by @Vigilante. Gold mine, still applicable almost 5 years later.

Since one of the next thing's I'm going to need is a "Sell Sheet" (a term I just learned which basically covers the "establish product idea in a consumable format" from above), I needed to familiarize myself with exactly what it is, what it aims to accomplish, and find examples from within my target market.

Check. [Google Images made it way too easy, once I knew the term to search for.]

To build my own, I first need to highlight the benefits and get them in writing before I even think about design. Simplicity is key, so I'm going to aim to keep to the three best benefits, and write them in the most clear and succinct way I can, with small descriptors. While there are more, I don't want to give away the entire enchilada on the first meeting. I want to spark interest.

A fascinating thing I read yesterday was to always have another arrow in your back pocket to keep the conversation going with the interested parties. When you have nothing left to give, they lose interest.​

Next, I am going to come up with as many objections I can think of (and their resolutions). This is going to really help later when I start to engage the marketing directors of the companies I contact, because I'll be able to quickly overcome them and get to what the product can do. It's also going to help me immediately by identifying key gaps in the marketplace, and key competitors, too.

These two items are today's objectives.

Funnily enough, the more I poked around the market I'm aiming to penetrate, the more I saw. It's massive. It's absolutely bubbling, and I had no idea.

It's also not going anywhere but up. This is not a fad, this is not a 2-3 year roller coaster.

But something else I noticed.. this market moves fast. Real fast.

In my original post, I mentioned wanting to reach profit within 2 years... No chance. It's now or never. It's not that I would not be able to enter, but the opportunity loss would be extraordinary.

Action Step: Compile document with list of benefits, prioritize them, and draft them. Compile document of with list of objections, and their resolutions.

 

[G-Man]

Since one of the next thing's I'm going to need is a "Sell Sheet"

Once you have a boilerplate sell sheet, take the time to customize the sell sheet for the potential customer, including putting their logo on it somewhere.

I never used to understand why our rainmaker would be at the office till 1am tending to little details like that, but I've watched that shit play in meetings with buyers. It's the details that make you look like a pro, even if you're really just a guy that can argue with the kid at Kinko's in the middle of the night.

 

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[Yoda]

Day 13: Finished the book, started my benefit sheet, and have a first draft of the sell sheet in hand.

The book was a quick read (for me, at least). For the most part, I think I had a good handle on many of the big ideas, but it was nice to get both confirmation of process and some more fine print details. For anyone interested in licensing, I'd say it's a strong read, and pretty well comprehensive. As to where I am in the process now, I've already filed for the PPA, and know there's a market, so those steps are handled. However, prototyping, pricing and marketability are my tests. While I won't be 'building' a prototype, I do need to have, at minimum, some graphics showcasing what it will do when developed.

On my benefit sheet, I listed what came to mind, and then took all those benefits and tried to compile them into one, concise sentence (benefit statement according to the book), and craft my sell sheet around the benefit statement. I quickly made the one page sell sheet with designs influenced from existing products in the marketplace, with my own spin. After doing so, I let my wife have a look.

I got both positive and negative feedback from her, both of which I took as constructively as possible. Then I took a step back and didn't touch it for a day or so.

I've spent some time simply thinking on the idea and marinating on what kinds of objections I might get, as well as playing through how a discussion with an interested party might go in my head. Both have already aided me in both adding and eliminating benefits of the product.

One thing to note: don't pigeon-hole yourself. In the beginning, I basically looked at my product as having a singular use, and lots of "spin-offs" for lack of a better word. Now, after looking at it with the broadest lens I can, it may be better to aim a little higher, and showcase a higher utility to a larger set of end users.

I've also done a little more poking around in the existing marketplace, and there are products which are in-and-around the same idea, and even comparable to certain aspects, so identifying the most differentiating factor is key, so long as it's not too distant from what is already being created. In other words, it needs to be different enough to make someone say "Wow!", but not so different they can't conceptualize how to manufacture and build it at scale.

 

[G-Man]

Hope all is well, @Yoda. You still working on this?

 

[Yoda]

You still working on this?

Yep, just not enough to report on to have made another post.

Still waiting on some PPA news (but did get to see the first technical drawings of the patent) but that's about it.

In the meantime, lots of research, reading up on the market. Definitely don't want to underestimate.

My silence in not in-action, friend! But, I love the accountability!

 

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[G-Man]

My silence in not in-action, friend! But, I love the accountability!

Wasn't accountability, so much as yuge curiosity. Really looking forward to seeing how it goes!

 

[Yoda]

Really looking forward to seeing how it goes!

That makes two of us! Your curiosity is but a snowflake on an iceberg compared to my anxiety to make progress on this!

 

[Yoda]

Update time! (as if @G-Man could tell the future)

We are patent pending!


I will have the NDA contract in a day or so, and we'll be ready to hit the market hard on Monday!

 

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[ragnar]

Wow man. Congrats on your Patent Pending status. Hoping you have a home run!

Can you share who you used to file your patents and what it cost you? I have an idea I would like to get rolling i've been sleeping on! Your fast pace has got me pumped and ready to get into gear.

 

[iizu]

Update time! (as if @G-Man could tell the future)

We are patent pending!


I will have the NDA contract in a day or so, and we'll be ready to hit the market hard on Monday!

Nice! So do you already know that there is a demand and also the price point? And now it's time to call the market leaders?

Have you thought about manufacturing? This maybe a huge factor if the product is made from something else than plastic. While plastic injection molds might be expensive as a one-time-cost, you can still pretty much do any shape you want in one process. Other materials, like steel, can end up needing multiple processes and that makes the manufacturing costs go higher.

Anyway, don't let that hold you back, and judging from your execution pace so far.. You can't be held back

I've also been officially patent pending for two weeks and really trying hard to decide which route to go(manufacture or license)
And I don't even have that much of proof from demand.

Really keeping an eye on this thread.

 

[Yoda]

Day 40: Getting my feet wet.

Started making calls today (I know, it's Tuesday, feel free to slap my wrists). It's been interesting so far.

I'm starting at the 'bottom' of the list I compiled, since I know I'll be terrible in my pitch the first few times. I've already blundered one pretty good, but hey, this is a new type of call for me. Definitely getting out of my comfort zone a little. Still, the prospect of making it happen is enough to push call reluctance aside. I find something you're invested in or passionate about makes call reluctance less, but it never goes away entirely.

The most positive call I've had so far was talking with a tech support/sales associate who, up front, told me he was essentially the only person I could speak with. I beg to differ. Less than two minutes later, he was very hasty in passing me along to "the top" with a direct email to one of the main product developers for the company. Not a small company, by any stretch, either. Good deal. No phone number, which I understand, though I'd much prefer a human to a wall of words any day.

Just like @Vigilante said it would happen in his other licensing thread. You call someone to offer them a possible way to make money and the tides change pretty quick. Definitely a different kind of call, that's for sure.

I'm not hammering the phones and hitting the entire list just yet, as I'm trying to develop my pitch and learn from these first few calls (and the mistakes therein). So, here are some learned things:

1. Keep asking for the right person, but don't get pushy. I'll admit, on one call I simply told the guy I wasn't about to waste my time or his by emailing a non-detailed 'pitch' for him to 'pass along', yet, in the end, it ended up being my best option to get int the door (for now). My guess is, he's not going to look favorably on receiving it, and he may just push it to the curb. It's fine though. I'll hit every company 100x if I need to. He may not even work there by the time I'm through.
2. Use buzz words. Innovative. Refreshing. Emerging. Get the person to realize it's something worth their time, and not just 'any old' product. I initially started with a basic script from the book "One Simple Idea" and Stephen Key is right. Using some of his terminology and you could hear the person's voice inflection change from when they first answered. I've modified my script twice, and it seems to be pretty effective to at least getting the person's attention. And anyone who has cold called knows: that first minute counts.

Ideally, I'd like to get my first few rejections out of the way, too, so I can ask for feedback as to why. I think this could play an important role in pre-meeting objections for some of the A-list companies.

I don't know man, this is kinda fun.

 

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[Yoda]

Day 41: Objection # 1 - Not signing the NDA

As I mentioned yesterday, I wanted to log a few rejections up front so I could begin preemptively attacking objections. Well, the first one is in, and they basically said they "have many projects in process" and "if they needed to discuss them" they "couldn't be under any NDA."

I've read briefly around the net and I see both sides of the coin:

Option A - simply move on. There are more fish in the sea, so avoid a company who refuses to sign any type of non-disclosure.
Option B - proceed (with caution). This early in the game, with no prototype (and no intent to manufacture on my own), the risk to reward is worth driving the conversation forward, as long as the company is a strong fit. If they did move on the product, your PPA should protect you enough to make them stop, though you'd have to follow through with the full patent and product and get sucked into a legal battle.
​

I'm leaning towards Option A right now, simply because it's literally been 1 day since I've begun the process. No reason to show my cards to anyone when the doors have barely been knocked on. In addition, while this company does have a product in my arena, they have a pretty singular focus, and not much of a product line in total.

Note: my product is going to start a third product category, more or less. No company will be able to fit it in perfectly seamlessly, so some amount of R&D and manufacturing will be required.
​

Objection #2 - No Website

Easy objection to overcome here, as I can simply state I don't have one, but do have information to pass along to express the product idea.

However, if this becomes a repetitive objection, it would be super easy to throw a site up and password protect it.

 

[G-Man]

Option A - simply move on. There are more fish in the sea, so avoid a company who refuses to sign any type of non-disclosure.

This until you've been through the whole prospect list at least once.

If anyone makes you feel like you're being unreasonable to want an NDA, then you definitely don't want to do business with them. Just my totally unqualified stranger on the internet opinion.

Good luck.

 

[iizu]

Objection #2 - No Website.

Why would they need to see a website? To prove that you are a legit business?
Only reason that comes to my mind is ease of use with mobile devices. Using PDF-files(Sell sheet) on a small screen is not so handy, but still doable.

Options for website:
•Private Youtube-video
•Slideshare

These options would certainly be easily accessible. The video will require way more time, but it is the ultimate weapon of choice when delivering information for todays people with 8-second attention span

 

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[Yoda]

The video will require way more time, but it is the ultimate weapon of choice when delivering information for todays people with 8-second attention span

This is something I'm considering, but I'm just not sure I need it. The product is so dead simple, I could explain it to anyone in two sentences.

Of course, on the other hand, it would show more professionalism.

Mixed emotions on this so far. I think it's too early to think about spending time (and money) making a video for something such as this. However, much like the website, if it becomes a regular request, I wouldn't be against it.

 

[Yoda]

Just wanted to silence the crickets and let you know progress is being made, though not on the sales side, at the moment.

Spent $50 and threw a site up, and I'm waiting on my lawyer to approve the content before proceeding. Took me about 6 hours from buying the domain to sending it off for approval. Needs a few minor edits, but it's basically a 3-page site.

It acts like a simple funnel, with the home page talking about the capabilities, a specs page (this is what my lawyer is reviewing), and a contact page.

Why did I build a site??

While I mentioned early on this month it likely wouldn't be needed, there is a realistic amount of understanding gained from visual aid; I think because I understood it so clearly, I assumed others would, too.

I'm looking at it as an expansion to my Sell Sheet, with an added layer of convenience to the potential licencees. I want to make it as easy as possible for them to go from "Who are you and what do you want?" to "How do we get moving?" by giving them as much value as I can up front. The seed needs to be firmly planted.

In addition, as I get objections, I could even go so far as to put up an FAQ and pre-emptively knock them all out.

 

[Yoda]

Day 105: We May Be Done Here

Got in contact with a CEO who is making the absolute closest product imaginable to what I came up with. Setup a phone call, and he was eager to hear me out.

After a bit of small talk, introductions and pleasantry, we got down to it. Gave him my pitch.

Two things stuck out in the conversation to follow:

"You're the third person to call me about this in the last week."
"Well, if I'm perfectly honest with you, we are already under development with this with our manufacturers in China."
​

I honestly didn't have a rebuttal, but politely asked if I could call him back (on his personal phone) with any further ideas or advancements, and he said absolutely.

This is where I'm puzzled, because, I was under the impression my PPA would protect others from building on the idea? First to file?

I reached out to the lawyer who drafted this and I'm eagerly awaiting his reply. However, please chime in if any of you have knowledge about how much protection a PPA truly offers, when I really had no intention of building the product itself.

Not the update I was hoping to write.

 

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[iizu]

Great to hear some progress!
PPA doesn't protect you. It merely gives you a time stamped ticket on full patent waiting line.

So if the company you called has just filed a patent recently, you would get the benefit of being first to file when applying for a non-provisional patent.

Also, they might be lying. Just trying to scare you off.

 

[AgainstAllOdds]

Day 105: We May Be Done Here

Got in contact with a CEO who is making the absolute closest product imaginable to what I came up with. Setup a phone call, and he was eager to hear me out.

After a bit of small talk, introductions and pleasantry, we got down to it. Gave him my pitch.

Two things stuck out in the conversation to follow:

"You're the third person to call me about this in the last week."
"Well, if I'm perfectly honest with you, we are already under development with this with our manufacturers in China."
​

I honestly didn't have a rebuttal, but politely asked if I could call him back (on his personal phone) with any further ideas or advancements, and he said absolutely.

This is where I'm puzzled, because, I was under the impression my PPA would protect others from building on the idea? First to file?

I reached out to the lawyer who drafted this and I'm eagerly awaiting his reply. However, please chime in if any of you have knowledge about how much protection a PPA truly offers, when I really had no intention of building the product itself.

Not the update I was hoping to write.

You're not done.

What you have here is a CEO that is knowingly infringing on your patent as well as several other people [that are calling him].

Judgments for conscious infringements are a lot higher than unconscious infringements.

Find a lawyer that has a history of patent trolling. Offer him half in exchange for suing the entire market. Scummy, but so is stealing your idea.

Or offer to sell the patent to the CEO in exchange for him having full control of the market over the next 20 years.

 

[Yoda]

It merely gives you a time stamped ticket on full patent waiting line.

So, if this were the case, how would I know what place in line I am? I'm not sure I completely understand the idea of a queue in this instance.

What you have here is a CEO that is knowingly infringing on your patent as well as several other people [that are calling him].

How do I prove such a thing? How do I know he's not already been in development under a similar type of PPA (though drawn up slightly different than my own)?

This is all very confusing.

EDIT: Also, if I still have no plan to create the product itself, am I treading water either way?

 

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[ZeroToOne]

What you have here is a CEO that is knowingly infringing on your patent as well as several other people [that are calling him].

This is true for an awarded patent, but you can't sue for infringement with just a PPA in place.

Also, if I still have no plan to create the product itself, am I treading water either way?

Is a patent necessary? You mentioned that this was an improvement on an existing product... Are there other patents surrounding the original product?

I believe you have 12 months from the date of the PPA to file your nonprovisional (I'm not a patent expert). Personally, I'd ignore this patent issue and focus on flushing out the product instead. Are you going to sell it yourself or license it? In my opinion, this patent issue is just distracting and it's possible the product will evolve anyway by the time you either complete the patent process or have a marketable product to sell. If you really feel you have a home run within the 12 months, then shell out some money and complete the patent process. In the meantime, sell it!

 

[Yoda]

Personally, I'd ignore this patent issue and focus on flushing out the product instead. Are you going to sell it yourself or license it?

Thanks for your input.

The idea was to license. It's a product I have little expertise in, and, quite likely, could never build myself. The field is technical, though the product idea is rather simplisitic in nature.

In the meantime, sell it!

The product has yet to exist, so there is nothing to sell but the idea at this time. The PPA is for a utility patent, not design. The idea for the utility is there (and, apparently, is being worked on), but does not yet exist in operational form. Not by me, not by anyone. We're in the pre-market phase.

For the last few hours, while waiting for my attorney's reply, I've been digging into the USPTO and looking through the patents filed by the company I've recently spoken with. They do have several utility patents.

One issue I know of, relates to patent continuation, where you can start with one utility, and create additional which basically stem from it. It may appear they do have such a possibility here.