One Simple Idea - Stephen Key

[Vigilante]

 

[StephenKey]

OldFool, This is not a tough question and it's a fair one to ask. My main source of income is from my Spin Label. Click here to see my website: Spinformation The Spin Label won two Edison Awards in 2011 with Accudial and SoYu Natural Teas. The Accudial product also won Product of the Year in Canada this year. It's also rolling out to the US and worldwide soon. I am on the board of directors of Accudial. This has been my main source of income and I am still filing patents on it after 15 years.

I am going to try to give you a complete list. It's been 30 years so I will try my best.

1 - Applause - A line of hand puppets called Up, Up and Away. They had smiley faces. A line of 6 puppets.
2 - Applause - Fast Food puppets. You can see that on my website. Hamburgers, Taco's, etc. 6 Puppets.
3 - Applause - Musical instruments. They made sound. 6 Instruments.
4 - Applause - Graduations owls - 3 different sizes.
5 - Applause - Graduation elephants. - 2 Sizes.
6 - Applause - Plastic Darts that said stuff like "Stuck on you". Called Sweet Darts. You can see these on my website. 8 Darts.
There are a few more that I don't remember. These were with the gift an novelty industry. I have talked about this before. Very short lived products. No protection. They are not inventions. This industry did not require patents.
This was way to much work and I probably only made about $80,000. This was about 25+ designs that were licensed.

Worlds of Wonder - Hatty Surprise. Big hats on little dolls that opened up. $15,000 advance. Product never went to market. No protection. No an invention.
Class Act - School supply company back in the 90's. Did Food Flight for them. Lunch bag that folded up and could be used as a frisbee. Never came to market. They paid me a $10,000 advance. Patent was applied for because it functioned but because they never brought it to market they abandon the patent.
Class Act - Cool Pals - Characters that went into your lunch pail to keep your food cool. $10,000 advance, never went to market.
Class Act - Rotating pen and pencil sharpener - Paid advance but never went to market.

Boy, I didn't have a lot of luck there did I. It brought me in about $35,000 +/-.

Pop Up 3D Hat. $15,000 advance, but never made it to market. This was in the early 90's. I can't remember the name of the company.

Ohio Art - Michael Jordan Wall Ball - Finally another one came to market. Sold for 10 years. Sold in Wal-Mart and other mass retailers. Even on a Wheaties Box.
First year $100,000 in royalties. TV Commercial. Finally making some real money. They also did other famous basketball players in multiple sizes. It was about $300,000 +/- in royalties total.

Trudeau - Disney Cups and Canteens - Sold for 5 Years in world wide Disney stores and theme parks. 10 Different designs and sizes. Ohh, Now I am making some money. This item was patented. $150,000 + in royalties for these.

Spinformation Rotating Labels - On such products as Rexall Sundown Herbals (over 70 SKU's), Jim Beam DeKuyper Pucker, Nescafe Coffee, Accudial, Kock Chicken, Big Sky Water and more. 400 Million units sold. 13 awards, 12 patents. Licensed with Coca Cola in Mexico. 15 Awards world wide, 13 patents and 5 patent pen dings. Numerous trademarks. The majority of the patent portfolio was paid for by the licensee.

HotPicksUSA - Unique Guitar Picks. Brought to market myself. Worlds largest selection of guitar picks. Best In Show award 2 years running at the NAMM International Music Show, largest Music show in the US. Sold over $1 Million the last year I had it. I sold this business 4 years ago.

Twist N Chill - Spinformation product launch with Disney, Cars and Hannah Montana. Spring 2009. 9 Cars, 9 Hannah Montana bottles. This was a small US launch.

I am sure I have forgotten a couple products along the way but it has been 30 years. There have been a lot of hits and misses. Some of these were great products some were crap.

So, yes, I have made millions of dollars collecting royalties.

One Simple Idea is selling extremely well. It is being translated into three different languages right now. You are not going to get rich on selling a book. I found my voice over 10 years ago by speaking. I set up InventRight with Andrew Krauss, that runs the business. A lot of people wonder why I bother with the education. Watch the video here to learn why. InventRight is a very personal company. We work one on one with each student. It's not scalable.

To summarize, yes, I have had a lot of students make a lot of money. Some make a nice income. Licensing is more of a lifestyle. Like any business it takes a lot of hard work and a little bit of luck.

If you would like to take a closer look at my products, take a look here.

Any other questions please feel free to ask.

 

[StephenKey]

Hello everyone. I am glad everyone is finding my book helpful. If there are any questions I can answer please let me know. I am here to help.

Thanks,
Stephen Key

 

[StephenKey]

One Simple Idea has been nominated for a small business book award! It'd mean a lot to me if you voted for it: http://bit.ly/1XXhxFy. Thank you.

You're welcome! That's an interesting question. In the past, I've recommended joining a startup for those who want to learn about product development. That's how I learned a lot, fast, when I was just getting started. If sketching appeals to you, you'll certainly be able to make use of that. These days so much work can be outsourced affordably; really, go with what you want to learn. CAD is great, but you really need to have an understanding of manufacturing for it to be worthwhile. Being able to sketch your ideas would be powerful! Thanks for tuning in.

 

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[StephenKey]

Hello everyone.

We just did a free webinar that anyone can watch. I think you guys will really enjoy it. Lot's of good info.

It's up on our YouTube channel.

 

[StephenKey]

Hello rexxakai,

Licensing is a numbers game. The more products you can work on and the more companies you can call for every project you work on.......the more likely you are to successfully license one of your ideas.

The big mistake i see people making is they invest to much money in one particular idea before they verify there is any interest in the idea.

So instead of spending $110 on a Provisional Patent, they spend thousands with a patent attorney.

Then on the prototype side of things they spend thousands again, when they could simply use a sell sheet instead.

I've had students of mine license their first idea they work on, while others licensed the second, third, four or fifth product they worked.

Most people with ideas never move past their first idea because they invested to much time and money in the idea before verifying there is any interest. However, people using the approach I teach can move on if their isn't any interest because they aren't married to the idea time-wise and financially.

I hope this helps you with the "Playing The Numbers" mindset I teach.

 

[DeletedUser2]

I live in a area with lots of Laboratories, One of my friends makes it a habit of buying or licensing patents, and tech. He then takes them to manufactures and sales and distribution networks, and Licenses them the tech.
He does very well with that.

Since he is also a manufacture of a bio enzyme, he has alot of people in his network so can execute fast. He will also put up the money for prototypes, before taking them to the market.

I was impressed by the model, and would love to play there. but it definitely requires some skill to sort through all the tech that flows through those labs.

I have made some good money Licensing ideas from people, and executing on them. I usually pay very little upfront, and then sell to my lists.

I am also getting ready to license one of my info products to a CPA group, see if they can take it mass market.
should be fun to be on the other side of that one.

 

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[StephenKey]

And to add to his question, if I may, would you please elaborate on the process on how you go about finding the individual(s)/company who own the license rights such as the Michael Jordan name? I find this a vital step that could benefit many readers.

Thank you.



- Devin

Ubertreffen,

It's really quite simple. You go down to the stores or online and find companies selling products with that celebrity or brand. Like Michael Jordan or Nascar for example. You know they are already paying Nascar or Michael Jordan for the rights, so they are perfectly set up to do your new product with that brand.

-Stephen

 

[StephenKey]

Does anyone have a licensing question or two?

Does anyone have a licensing question or two?

It looks like it's been a couple months since there's been any activity in this thread and I though I'd check in to see if i can answer a question or two.

Stephen Key
Successful inventor Stephen Key helps you bring your invention or product idea to market through licensing. - inventRight.com

 

[StephenKey]

Mr. Key,

Thanks for being a part of this forum. I really appreciate your genuine participation. I'd like to get your advice as well as others to the following question. I am going to buy one of your two books for my nook tonight. Is one better then the other? I'd hate to buy the second book and miss some of the good stuff in the first book. Is everything in the first book carried over to the second book? 1st book being: One-Simple-Idea-Licensing-Goldmine. 2nd book being: One-Simple-Idea-Startups-Entrepreneurs. What are the key differences between the two books? Opinions please. I can't wait to start digging in!!! Thanks again.

I'd be happy to answer that question.

The first book "One Simple Idea" is for you if you want to license and sell your ideas for royalties without starting a company.

The second book "One Simple Ideas For Startups & Entrepreneurs" shows you how to start up your own company and sell your ideas yourself.

 

[StephenKey]

Thanks for reading! So glad to hear that it was useful to you. Stay tuned for a second revised and updated edition in the works...

@StephenKey, I just finished "One Simple Idea: for Start-ups and Entrepreneurs" Great book! Thank you for writing it. This is definitely one of those books that I will be be marking up and highlighting as I go along. ha

It was nice to see an entrepreneur lay out their progress and give so much helpful information. Sara Blakely is generous like that too. As is @MJ DeMarco .....and many others on this forum.

P.S. Gracias @Vigilante for recommending it to me

 

[MJ DeMarco]

I bought the book because it seems to fit the Fastlane model, but haven't read it yet!

 

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[StephenKey]

Thanks for the response Steven! I really appreciate you spending time here helping us. But to follow up on what you said about not needing a physical prototype, has there ever been a licensing deal that you/your students made where the licensee required a prototype? I ask this because if most companies accept sell sheets alone, why do many inventors spend so much time and money making a prototype?

Yes of course. Many companies will ask for a prototype. Others will just look at your sell sheet or video and say.... "sure, we can make that".

To answer your question, i think inventors don't understand that they are selling the benefits of their idea and not their prototype.

If you need to make a prototype, it's much better to get some confirmation that they are interested in the benefits of the ideas first. If they are sincerely interested, they will wait if you tell them it'll take you a couple weeks to get them a prototype.

That's not to say you never want to make a prototype before hand. Many of my students do. Sometimes you just need to prove to yourself that it can be done.

-Stephen

 

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[StephenKey]

You don't always need a patent

Hey Stephen, I find your experience with licensing fascinating and inspiring, I am sure I will try licensing products a lot in the future. So, I have a quick question from your speech if you ever get a minute to answer it.

In the deal with the basketball hoop, you said that you contacted the company who had rights to Michael Jordan name, that part all made sense. But I didn't understand what exactly you licensed to them; if it was just a backboard with a Michael Jordan picture, did you license them the hoop?, or was the picture once put on the backboard considered a "game" that was then licensable to the company?

Mike,

I licensed the idea of putting Michael Jordan on the backboard. They liked the idea and payed me royalties with no patents at all. They sold a ton more than they were selling before. All parties were happy.

You can't do this in all industries. For example. I'm doing packaging products now. You must have patents in the packaging business. However, in the toy biz they don't always require them.

Hope this helps.

-Stephen

 

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[StephenKey]

@StephenKey , I have an app idea that is specific to one company. It is not a product, but a service that could be considered as a marketing technique. As well as, providing better customer service and getting people involved in the companies community. I really do believe that this idea will help them rise above their competitors. Can I still protect this idea? Or should I have to make and sell the app?
I enjoyed your book by the way!

Your idea sounds like it could be protected via a software patent. Obtaining those is not the easiest thing to do right now, because the field is very crowded, but it can be done. I would investigate further, possibly by starting to search for prior art first. Thanks for reading!

 

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[CEBenz]

Stephen Key has been selling his info product for a while now. I understand he's done well financially with what he teaches, but make no mistake, his fastlane is his info product and book. I know MJ understands that, but wanted to make sure everyone else knew that to. Considering his being mentioned in The 4hour Workweek, I'm sure he has done very well.

 

[StephenKey]

Rock on Stephen, awesome having you on here! Was just at Barnes and Noble yesterday to pick up your book. Only a few chapters in so far but I really like it. I agree with what you say about first to market, but I'm trying to figure out how to deal with copycats.

Take Silly Bandz for example; they launched and within a year had dozens of copycats, some that even acquired licensing deals with companies like Disney before they did.

I have a product i created that would be in a similar category. Completely original (but not patentable, from what my IP attorney tells me), targets kids and has a low retail price point. My concern though is that, like Silly Bandz, the second I take it to market I'll be copied left and right.

What would you recommend in a situation like this?

If you are going to pursue this idea, first to market is your best bet. Which means licensing to a big company who's going to get it out their in a big way really fast. Yes, there may be knock offs, but since you are with a big company, hopefully you'll make more money than the knock offs.

 

[StephenKey]

Technically Complex Idea

Mr. Key,

Completed the book and enjoyed it immensely. I have been pumping my wife for ideas, and she as a couple, one that I think I can design (or at least propose a draft), the other one is to technically complex (would require a lot of knowlege of electrical engineering). My question is can we sell an idea, which is largely a "wouldn't this be neat" idea, with no detail on how to design it, all we would be offering is an idea with a large market? On the other product, I need to start researching it and see if anything like it exists, if not I'll start the process. Thanks, Bill

Great question. If you are not a technical person, it will be easier to work on non-technical ideas. However, quite often you can just look at existing ideas and make an educated guess that........."if they can make that, they could make my idea". Other times you can contact a contract manufacturer to see if they can make it.

 

[StephenKey]

One Simple Idea

Hello Stephen,

I just want to say I loved your book and did read it while reading Fast Lane. You have really inspired me to create. Dor a while I was searching for something that fits my personality. I work on projects quickly until its done and get bored easily so this was a nice fit.

I did have one questions. As far as a DBA, do I ask them to sign one along with the sell sheet or do I ask them to sign prior to sell sheet? This was something that confused me in your book.

What you are talking about is an NDA(Non-Disclosure Agrement), not a DBA(Doing Business As).

The answer is...... "It depends".

We give hours and hours of training on NDA's to our Students, so it would be hard to summarize in a few words.

Here are a few tips though. Many companies will not sign your NDA for various reason that would take too long to go into here. At the same time, their are definitely some situations that warrant you getting a company to sign your NDA at the very beginning and other situations, where you get a company to sign your NDA later after they want more info.

However, a lot of companies will be ok with sending you their NDA. Sometimes this will protect you, other times it's one sided and only protects them. You need to decide at that point if you want to sign it, red line(modify it) it or not move forward if you really don't like their NDA. Many companies NDA's look nasty on the surface, but once you understand the terms, you realize they are ok to sign. Please contact your attorney before signing anything.

Keep in mind that there are many reasons why companies don't want to rip you off. Here are just a few of the things that offer some measure of protection beyond an NDA.

You filled a PPA (Provisional Patent Application)
You filled a Patent
They don't want to get sued
They don't want bad publicity
You created a paper trail with emails

In 10 years of Andrew Krauss and myself coaching Inventors, we've never had a student have their idea stolen.

I have spoken to Inventors that have had their ideas stolen, but it's so rare!

What is 10,000 times more common is Inventors ripping themselves off out of their own fear. They are afraid and never call any companies to pitch it. When you don't take action on your idea, you are ripping yourself off.

At the same time, be smart. Understand how to protect yourself and take action.

 

[StephenKey]

I had a question for Stephen. In 30 years he's licensed roughly 20 products, and he says you have to have lots of ideas "in play" to get one accepted.

How many $110 provisional patents do you normally spend before you get one that sells? If it takes 100 ideas to get one licensed, that could be kind of a spendy hobby while you hope one succeeds.

Yes, you do need to work on a lot of ideas. Success in licensing is a numbers game.

However, if my goal was to just sell a lot of ideas, i would have just stuck to novelties. If i did that, I'm sure I could say I've licensed hundreds of ideas by now. The problem with that is that novelties don't make much money and quite often only sell for a season or a couple years.

So i got out of novelties.

I'm now in packaging. Most of my time is spent on my spin label invention that can be licensed and is being licensed into many different categories. I wanted to sell volume and see my products in as many stores as possible. With my spin label I can do that. It's on products and containers around the world.

I get that 30 years, 20 products question quite often. I hope my answer helps.

You can check out my spin label here
Spinformation - Add 75% More Space To Your Label. An Elegant Alternative To ECL's - Expanded Content Labels


With regards to your PPA question, I can't say. That all depends on how good your ideas are and if you make a sincere effort to take action and license them. $110 to say patent pending for an entire year is dirt cheap. How many businesses can you start for $110.

Many of my students have licensed their first idea, however don't count on this. I had one student who licensed his sixth product over an eight month period. If he had done what most people do and spend $8k on a patent and $5k on a prototype, he would have never gotten to his sixth idea to license it.

He was able to get to his sixth idea because he followed my methods regarding spending very little time and money before getting feedback from manufacturers. He's earned six figures on the deal he closed.

 

[StephenKey]

Hey Stephen,

Just got done reading your book. I love your approach, because it actually seems very straight forward (though nerve racking when you actually start cold calling). I have a question about your approach to selling your spin-formation design. I have a product I'm developing that is also in the packaging design business. I'm curious about what your clients cared about when you presented the idea (aka, why did they care about it) and how your royalty deal was different from your other products you sold (such as the Michael Jordan Basketball hoop).

I really appreciate the response.

SHHDlove,

That's a great question. Inventing new packaging is different than other industries. As you probably already know.....it's all about price. How much will the price of the package be increased (if any) and will that price increase justify the benefit? And will the benefit of the new package and increase purchases?

For example. My spin label was 10 cents a label in the beggining restricting it to only be on certain types of products. When i got the price down to pennies, the gates opened up and the spin label was able to be on many more products.

Also, you need to really understand manufacturing when you are doing packaging. It's one thing to come up with a great packaging idea.........but it's another thing to be able to produce it with existing machinery or with just slight modifications to existing machinery.

-Stephen

 

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[StephenKey]

You're OK - you don't need engineering skills to be an inventor!

Hey Stephen, I don't have any background in engineering or anything of that sort. I have an idea that I know can be made, but I just don't have the technical knowledge to do it. Do you or your students ever encounter this problem? If so, what do you do?

GGriffinGG,

Great question. If you know they can make it, why do you think you need to make a perfect working prototype? You don't! You're selling the benefit of your idea, not your prototype.

Many, many inventors have the same concern. Make your sell sheet and present the idea as best you can. Don't think you need a perfect working prototype.

Here are a few ideas. Modify an existing product you pick up at the store.... have it photoshop'ed or have someone illustrate the idea.

-Stephen

 

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[Twiki]

howdy, thought ppl in this thread would be interested in Mr. Key's Google talk that has just been released today: [video=youtube;6csI0dZzFRQ]http://www.youtube.com/watch?v=6csI0dZzFRQ[/video]

He seems like a genuinely helpful fellow and One Simple Idea is a very informative book!

 

[StephenKey]

Hey Stephen,
I got your book for Christmas and have been reading it lately. Very much enjoying it so far - especially since I have an idea that I have built a prototype for and strongly consider to get licensed these days. Your book is really great and I highly recommend it to anyone here on the forum - even if they think they are "not the creative kind". Like you say: anyone can come up with license-able ideas!



I will probably have some more questions for you soon, but one thing I dont quite understand is the scenario above. If you do not even have a provisional patent - and you call a company up like that - what stops them from saying "awesome, thanks for the idea!" and running with your idea without ever paying you? If you did not have even a provisional patent - did they decide to just pay you licensing fees (which according to you was in the hundreds of thousands for this over ten years) to "be nice", or did they just assume that your idea had been protected so they would have to pay you?

I would think that if I called up companies who were already licensing ideas like that - that they would just take the idea without ever bothering to pay me. Unless of course - I had a provisional patent to show for. Correct me if I am wrong, and thanks for your time!

Eskil,

Some industries like toys don't always care so much about patents. They just want good ideas. It's more about being first to market.

If they rip you off and word get's out, inventors would stop sending them ideas and their free R&D department would be gone.

They love the fact that they get all these ideas flowing in and they only have to pay for the ones they like.

-Stephen

 

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[Eskil]

Some industries like toys don't always care so much about patents. They just want good ideas. It's more about being first to market.

If they rip you off and word get's out, inventors would stop sending them ideas and their free R&D department would be gone.

They love the fact that they get all these ideas flowing in and they only have to pay for the ones they like.

Thanks for the response, Stephen.
To follow up your answer - this brings me to something else I have had buzzing in my head since I started reading your book. That is, the big change from "first to invent" to "first to file". Obviously, your book was written before this, but as you know, the U.S. is now adapting "first to file", so I am curious what your own thoughts are about this change in regulation, and its possible ramifications for inventors and product developers like yourself.

 

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[StephenKey]

Hey Stephen I have an idea I have been toying with for awhile made a mock up out of clay did alot of research after reading and re reading your book. I'm from Jamaica and I was wondering If I could just outright follow the advice you give and get a PPA through inventright to get protected in the US without protecting it in Jamaica. The main/minor companies I have in mind that would license this idea is in the US not Jamaica, I have no intentions of getting a patent here but since I'm not a US citizen I was wondering if I could do this?

That's exactly what you should do.

Get a US PPA. You don't need to be a US citizen and have all the same rights as a US citizen when getting a patent in the US.

 

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[StephenKey]

Stephen! This is so awesome because I just finished your book, looked this thread up and found it was outdated so never bothered posting. So I am ecstatic right now to see you are back. So I have an idea for licensing and I looked into the PPA but the problem is from my understanding what I would need is a design patent and not a utility patent which you cannot provisionally apply for. My idea is for a toy and very similar to your wall ball in that you just added graphics and did not change the function. Should I forgo the PPA and still follow your process as explained in the book? Thanks, I can't wait to hear from you!

Design patents are very affordable. I'd file nothing or a design patent then. Make sure to talk to a patent attorney to see if you are right about not being able to file a PPA though.

 

[StephenKey]

Cost of design patent

Stephen; What ballpark are we talking here - as compared to the more expensive utility patents?

The filing fee due to the USPTO for a small entity is $265 plus a 15% surcharge, which makes the cost about $305.

 

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[StephenKey]

Stephen,
Another question - crass and impolitic as it may be: What percentage of your students, who apply themselves and your teachings, make over $100K/year from their licensing work?

All our students who apply themselves learn how to work on licensing their ideas. This is a skill they can use throughout their life. After, they leave us, they don't need us anymore. This is the goal of any good coach/mentor/teacher and it's the biggest goal Andrew Krauss and I have for our students. Students are only with us for a year of coaching in most cases, so i don't know how much each of my students are making after they leave us. I've had many students come back to us after many years telling us about all the deals they've done on their own. There is nothing that makes me more proud than that. Others we never hear form again. Some have quit their day jobs and gone full time while others continue with their business or job and continue to always work on one project on the side. I don't sell the get rich quick thing. Yes, we have students making over 100k a year. To be honest, i don't ask them exactly what they are making. We don't use that kind of sales pitch in our marketing. You can make a lot of money licensing new product ideas, however it's rare to see someone make a million dollars in one year of one product. However, it's not rare to see royalties stream in over time and from several products you've licensed. That may be 50k a year, 100k or much more. Also, all products don't sell forever, so don't expect to earn money off something you've licensed for your lifetime. You need to license more products to keep the money coming in.

 

[Vigilante]

@StephenKey nice to have you back in the house for a bit! Your book continues to change lives, and we continue to recommend it. Hope you are well.