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Licensing: What exactly is it? Is it for me?

When developing a new product it is important to understand the dynamics of the inventing process. We see many inventors who may not understand the proper steps or path to follow to give their product the best chance for success. It is important to keep realistic goal! It is important to know exactly where you are at in development and what can be achieved in each step,  and know how much traction you can gain towards your end goal of production.

It is important not to get ahead of yourself or the stage of development you are in, this can lead to mistakes and wasted resources. One common error new inventors make often is the expectation of a license deal early in development; this is extremely rare! I know there are companies that will contact you after you file for a patent; they sell you on the idea that they will secure a deal for your concept, that there are tons of companies they can market your product to that will take your idea do all the work, pay for everything, and all you have to do is collect a check.

This simply is not true; it is one in a million. It has been our experience that a product has to be brought through many stages of development before a company will even take a look at giving a licensing deal. Usually proven product sales are needed in order for this to happen; meaning you have spent money on the proper steps to get there, by then it may or may not be beneficial for you to take a licensing deal. You only get a small percentage of the sales.

Definition of LICENSING: Licensing means renting or leasing of an intangible asset. It is a process of creating and managing contracts between the owner of a brand and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory.

Your best option may be manufacturing it yourself – do you really want someone else profiting on your idea?  Don’t be a victim of low-cost licensing deals. It may be the biggest mistake of your inventing career.

What Does your Product DO?

As an inventor, the very first thing you should do in the process is make sure your product purpose is concise. Especially when you are working with patents, your mind must be made up when it comes to the specific function of your idea.

Here are a couple of things to do:

  • Write down the function of the product. For example, “My product will pick up animal waste with built in plastic bags, so the owner doesn’t get any of it on their hands.” This is a clear and concise purpose, of which can be expanded upon in the product development phase.
  • Get a professional drawing of your product. Make sure the engineer working on the idea has clarification on the product’s purpose.
  • Don’t change your mind often! The more you change things, the more likely you are to completely distract from the original idea. Stay firm – unless your product needs engineering changes to improve functionality.

Sometimes, in the production development process, friends and family may get involved to suggest changes and fixes to make your idea “better”. Be very cautious. Unless your family member is an engineer, you should consult your production company before implementing changes!

Lesson to be Learned: Don’t Rush Into Marketing!

As an inventor, the desire to promote and market your product or idea is strong. You want the world to know about it, and support you. There are some huge drawbacks to that, and we’d like to explain them to you:

  1. If You Market Too Early, You Don’t Leave Room For Changes – If you market your product in it’s infancy, you’re promoting a look and feel that may not be as refined as your final version. Having potential customers on board and then changing everything will not look good on your brand.
  2. Consumers Won’t Rally Behind an Unfinished Idea – One of the biggest issues with crowdfunding is when inventors try to raise money before there is a prototype or plan in place. Using crowdfunding to get your initial capital for production is a bad idea – consumers won’t give money to a campaign that isn’t “for sure”. You need to invest in a working prototype, drawings, and a timeline so your investors feel comfortable about the final product.
  3. Marketing Won’t Solve Your Problems – Some invention companies will tell you that they’ll market your unfinished product for an insane amount of money, before it’s even developed! Don’t fall for this – it’s the biggest scam around. Would you buy a product based on just a paragraph of text and a computer generated image? Probably not. You cannot properly market a product until it’s completed!

In the invention process, rushing is never a good idea, no matter where you are in the process. Some of the most successful campaigns out there have a solid timeline, proper backing, a team of professionals, and goals set in place. There may be setbacks here and there, but with a concise vision, it’ll do wonders. If you take anything from this blog today, just remember this – don’t fall victim to a “marketing your dreams” scam. It won’t work. Do some research! 

The 6 Keys to Invention Success – The Short Story!

Source Direct Presents – 6 Keys to Invention Success

We’ve put together a list of the 6 Keys to Invention Success – use these when looking for a company to help you realize your inventing dreams and goals.

#1  – Do your research and look for obvious red flags! We often hear inventors complain about being taken advantage of by invention companies claiming to have all the answers.  A company that gives you a price for your project without seeing the product first-hand is probably not the direction you should go. Inventions are intricate, and no two are alike.   Don’t settle for a one size fits all program unless you are looking for cookie cutter results.  An honest company will want to evaluate your product to determine the right next steps for you.

#2 –Spend Wisely and Read the Contract. We all only have so many financial resources to achieve our product development and commercialization goals. If you partner with a company, make sure they are money well spent. If a company sends you a quote for services, make sure you get clarification on exactly what you’ll be receiving. The biggest mistake you can make is spending your allocated capital incorrectly on services that don’t get you where you want to be.

#3 – Be Open to Suggestion. Inventors often fall in love with their invention.  And it’s understandable. However, there may be suggestions given to you to help enhance/improve/modify your product so it will have a better chance  in the marketplace. Experts have years of experience in manufacturing, consumer buying habits, retail requirements, etc. that they may suggest you apply to your product to increase its commercial viability.  Keep an open mind.

#4 – Try to Get It All Done Together. Spreading your project across to many different companies can be hazardous to coordinate. Letting ONE COMPANY handle the project eliminates finger pointing. We are responsible from start to finish.

#5 – Keep Marketing In Mind. When your product has completed manufacturing and is “on the ground” ready to go to the consumer, do you have the proper sell sheets, proper pricing, shipping logistics, social media campaigns, or website design? Remember, you only have a few seconds to make a first impression; you’ll want your marketing materials to be persuasive and engaging, while highlighting the benefits of your amazing product. Utilizing every open source of digital and direct-to-consumer marketing will help promote your product to the appropriate audience.

#6 – Has The Manufacturer Been There Before? Make sure the company you choose walks the walk and talks the talk. Find out how many products of their own they have taken from a design to a finished product and actually sold them through. Ask them the last time they were on a factory floor. You need a manufacturer working for you who knows how to handle every step of the process – make sure you’re paying an expert, not someone who will be soliciting help from someone else. 

 

Crowdfunding your Invention: Best Practices

Chances are, if you are an internet browsing human being, you’ve stumbled upon a crowdfunding website, or have seen people trying to raise money on a digital platform. It’s very common to see folks raising money for a trip, buying a new iPhone, medical expenses, vacations, charity, and even invention launches.

There are a few things to know before jumping into Crowdfunding. If you are an inventor looking to raise all of your funds on a Crowdfunding platform, make sure you know exactly what you’re getting into. There are different rules and constraints for each popular Crowdfunding site…I’ve done the research for you so you know which one works best for you!

Don’t get involved with crown funding until you have a quality video demonstrating your product as well as a functioning prototype to show what your product does!

Kickstarter – This is the most popular, I have seen, for Invention funding. A few things to know: Firstly, it’s an all-or-nothing method of fundraising. If you do not reach your funding goal, you wont get any of the funds pledged. Secondly, there are also fees associated with it – Kickstarter takes 5% of the funds off the top, and then there is also a 3% and $.20 per pledge fee for payment processing (fee breakdown – citation here). Though Kickstarter is the most popular, you may want to avoid it if you don’t necessarily have the largest following and support backing.

Kickstarter Fee Structure
Kickstarter Fee Structure

Indiegogo – Indiegogo is a pretty substantial platform for Crowdfunding, alongside Kickstarter. From the Indiegogo website, “It is free to sign up, to create a campaign, and to contribute to a campaign.* When your campaign raises funds, Indiegogo charges a 9.0% fee on the funds you raise. If you reach your goal, you get 5.0% back, for an overall fee of 4.0%.” There are a few more fees to pay, and different tiers of funding:

 

indiegogo
Indiegogo Fee Structure

GoFundMe – Finally, the 3rd Crowdfunding source I’d like to go over is GoFundMe. Probably the easiest of all, this platform just deducts 5% and $.30 per donation, and a 3% processing fee for payments (fee structure here). The fee structure is very similar to Kickstarter, however, you get to keep any and all of the funds that you raise, even if you don’t reach your goal. GoFundMe is growing in popularity, and has claimed to have raised $1.2 billion in donations since it’s inception.

gofundme
GoFundMe Fee Structure

Final Thoughts from Source Direct

It’s up to you, the inventor, to make the decision that is most appropriate for your product. From a professional marketing standpoint, keep these thoughts in mind:

  • Use Kickstarter If…: You have a large following of people, ready to give. Also, be prepared to have incentives to give to the donors.
  • Use IndieGogo If…: You have a medium sized following and a reachable goal in sight. Make sure you use a lot of social interaction to gain a following.
  • Use GoFundMe If…: Your following isn’t huge, but your product/idea is something that any browsing donor may be interested in. Promote your GoFundMe as much as possible, because you’ll get all of the funds regardless of your goal…but still set a reasonable one!

We would like to suggest using GoFundMe, because as an inventor, you are relying on any/all funding and assistance to get your product moving. This is a good way to get a head start on your funding. Try out a goal of $1000, see what happens, and then go for more!

PRESS RELEASE – Gotta Potty!

Local Dog Trainer Seeks To Simplify Dog & Puppy Housetraining With New Product

St Peters, MO June 15, 2015 – Local dog trainer Shane Wisdom is bringing a new product to market that will make potty training puppies and dogs easier and more effective.  The Gotta PottyTM system is a wireless, recordable, dog potty training alarm system that consists of a pressure activated mat equipped with a digital transmitter and a wireless handheld receiver.

The premise is simple. The Gotta Potty mat is a pressure-activated mat that you place in front of the door discretely under your existing rug in other areas that the dog might be having “accidents”. The mat features a wireless transmitter that is voice-recordable and reinforces the proper command to the dog when it cues;  for instance, when the dog walks over and stands in front of the door to be let out but the owner is nowhere in sight. With the Gotta Potty mat, when the dog cues like this, the mat delivers an audible recorded message to the dog in your own voice that it will begin to equate with going outside (consistency is a key to success)

The mat transmits a separate, recordable message to the hand-held receiver to alert you that your dog is signaling to be let out. The dog hears “Gotta go outside?” (or what ever your want your command to be) in the owners voice and the owner hears “Rex is at the front door, hurry and let him out!”.

Wisdom says he created the system to reduce the time it takes to properly potty train their dogs by training owners to listen to their pet’s body language.  By alerting owners to cues that are sometimes overlooked or not observed, the Gotta Potty mat gives owners a helping hand in the necessity of potty-training their dog. “Owners are constantly telling me that their dog has ruined the paint on their door from scratching to go outside,” said Wisdom. “They also said they didn’t realize their dog was at the door in time to prevent an accident, resulting in the need for more effective potty-training tactics.”

“ As I started researching, I also found out that one of the most common reasons a dog ends up in a  shelter is potty-training related.” said Wisdom.  “New owners quickly get frustrated with cleaning up messes and the property damage that comes with a dog that isn’t properly potty-trained. Typically, a dog that is not potty-trained has had an owner that does not understand what is required to change the behavior.  The Gotta Potty system simplifies this process and delivers real benefits through today’s technology,” he continued.

 

System Benefits include:

Consistency
The Gotta Potty system reinforces consistency, which is critical to effective dog training – Your dog hears your same recorded command every time the alarm is activated.

 

Portable
The wireless transmitter allows you to be anywhere in your house and still get the notification alert! The Gotta Potty system is self contained and can easily be moved to areas of concern or travel with you.

 

Invisible
The Gotta Potty pressure activated mat conceals under any door mat or rug so it becomes virtually invisible and matches any decor!

 

Customizable
Both the command the dog hears and the alert you hear are voice recordable. Plus, the system can be paired with an additional mat (sold separately) in order to cover two locations at once!

The company recently launched a Kickstarter campaign for the Gotta Potty system to finalize the initial production.  Now, backers can reserve a Gotta Potty system at a deep discount through Kickstarter.  Wisdom plans to have the product available for purchase in late summer 2015. (https://www.kickstarter.com/projects/1550714304/gotta-potty-wireless-recordable-dog-potty-training)

Shane Wisdom is a Certified Dog trainer and owner of DogWisdom dog training with more than 17 years of experience in the pet and training industry.  For more information on the Gotta Potty system, please visit www.gotta-potty.com.

Meet Our Staff – Nathan

Every month, we will interview a different member of the Source Direct team! This week, lets chat with Nathan, our Client Networking Director and Sales Manager.

Q: Tell us a little about your position with Source Direct.

A: I was hired at Source Direct to handle Client Networking, Acquisition of New Inventors, and Retail/Online Sales of new products. Pretty much, to sum it all up, I make sure that you feel comfortable with Source Direct when you start working with us, and then I sell your products when the manufacturing has completed. I will be the first person you deal with, and the last!

Q: What inspired you to take on a career helping inventors?

A: I’m a creative guy. I love technology, design, art, innovation, and new products. Coming from a marketing background, I understand the potential with brand new products, so I decided to bring my knowledge to Source Direct!

Q: Give us a rundown of your day at the office!

A: This is a rather interesting question, mostly because every day is very different for me (I actually like that a lot!). One day, I could be utilizing social media to promote a product, and on another day I could be on the phone with big-box retailers, getting product into the stores and online. I try to keep a schedule, but due to how many inventors we work with, that gets a bit hard!

Q: If someone was thinking about working with Source Direct, how would you convince them to do so?

A: I feel as though our product line speaks for itself. We just unveiled our new Inventor Showcase, which is an online resource and e-commerce store to showcase our brand new products, direct from the manufacturer. Does any other invention company do that? The answer is usually no. Most companies “talk the talk” but can’t “walk the walk”. Ask us about our years of retail success in a niche market – I promise you, it wasn’t easy, but it happened, and is still happening! 

Q: If an aspiring inventor reads this blog, what are some words of wisdom that you may have? 

A: Here are a few things to keep in mind:

  • We don’t take every single item. Yes, we are an a la carte, fee-based company – but that doesn’t mean we will do every product! We have to believe in it as much as you do. If you are struggling with yourself about your product, we can help you.
  • DO NOT SPEND YOUR MONEY WITHOUT DOING RESEARCH! Most invention companies will charge you a flat rate “to make your dreams come true”. Don’t fall into that trap. I hear from people every week who lost a good portion of their available funds to a scam company.
  • Your product/idea is something you value. Do it right the first time. Even if you’ve encountered speedbumps, that’s okay – we have too. The best way to become a great inventor is to learn from mistakes. Our founder, Ed Mauro, has been through everything in the inventing world (he invented many products, including the Club Clean!) – so he has made the mistakes already that will help you in the long run. That’s why we’re here!

Notes from Nathan: I look forward to the opportunity to speak with you! We are real people, with real goals, and a real great attitude! We will do our best to help you in any way we can. Give me a call, and you’ll know we mean business. We offer free consultations and product evaluations.

Thank you for the interview, Nathan! If you want to get in touch with Nathan directly, email Marketing@TheSourceDirect.net or call 888-373-3876, extension 212. Tell him you read his Q&A on the Source Direct Blog!