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Lesson # 23 Are You Sabotaging Your Own Success?

rogerbrown's Avatargold

I am writing this in the hopes that it will make Inventors stop and examine what they are doing and if it is really helping or hurting them. Recently I was contacted by an Inventor and asked to review their product. I said I would after we signed a nondisclosure first.
They didn’t want to bother with a nondisclosure because that would delay them sending me their material for review by a couple of hours, since they were going to scan it in and email it back. I insisted on the nondisclosure or I would not proceed further. They agreed and the nondisclosure was signed and returned.
They sent me some material and a video of their product. The material was concise and gave you the information needed without a lot of fluff. The video was 1 minute 7 seconds long and gave a great demonstration of the product. After reviewing the written material and seeing the video I was very impressed with their product and already had several places in mind to contact. Everything about this product is a winner and had a high chance of success, (I am not trying to be mean here)… if you did not involve the Inventor.

When I contacted them via phone I was looking forward to working with this person and seeing them succeed. I told them I thought their product was sound and had a great chance of success. This is where things went downhill quickly. When I asked what they were expecting out of a licensing deal with a company red flags started shooting up immediately. They wanted an advance that was 10 times what is even realistic. They wanted full control over the product and a royalty percentage that even the most seasoned Inventor couldn’t get.

I tried explaining how the industry really works and what they could realistically expect and that was met with, “I understand, but this is what I want.” I again tried to explain that unless you were making and selling this product yourself no company licensing your product will meet these demands. They insisted it had to be those terms or it just wasn’t going to work for them.
I conceded and told them we were at a fork in the road and they needed to follow their own path and I wished them success with that path. I even gave them a couple of companies to try.

Five weeks later I get a phone call from this Inventor and they are angry at me. I ask why. They stated that the first company I gave them reviewed the idea loved it and wanted to move forward. This confused me since getting licensing deal should be a good thing…right?

They said they received a licensing agreement that stated the same percentages I had told themwere standard in the industry and offered no advance. They said they FIXED the interested companies licensing agreement to what they wanted and sent it back to them. Then was surprised when the company contacted them saying they were no longer interested in the product and wished them success elsewhere.
The Inventor wanted to know if I had called the company ahead of them and told the company to only offer them the deal they did? (regardless of what people think I do not have that kind of power).
This Inventor wanted to know if the other companies I gave them to try would make that same kind of offer? I told them if they liked the product it would probably be in that same area. The Inventor said “Then why did you give me these companies?” (which made me ask the same question. WHY DID I GIVE THEM ANY COMPANY TO TRY?)
This Inventor has the best and worst of two worlds. They have a product companies would be interested in and a unrealistic expection of their products value.
How do you get this person to change that perception and except reality or is this a lost cause?

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dreamgirl3's Avatar

It’s unrealistic expectations and a lack of business knowledge.

Bottom line: if someone believes their idea is gold AND they want to keep all of the revenue generated, then they need to develop, produce, and sell the product themselves.

Otherwise, if they get investors or use a licensing company, they will have to share the profits. Getting a hefty advance??? Why would someone expect a hefty advance when the product hasn’t made a dime yet? Sure, the product has potential, but until the money rolls in, that potential is just conjecture.

If this happens again, maybe suggest some business courses at their local community college.

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let-them-fly's Avatar

Wow, Roger; that sounds like one of them “Why me, Lord” encounters!!

Sounds to me like the only way they’d ever snap out of the illusion is by getting several good “beat-downs” in reality. Hopefully they don’t burn all their bridges before getting to that point.

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junqdiva's Avatar

Was this inventor somebody already on the forum? If so, then they need to do their homework a ‘LOT’ more and read up on what reality is. The only time I heard of an inventor getting a larger royalty percentage on this forum was because they had already done the advance and costly work of having the necessary tooling done to manufacture their product. I think Kim is absolutely right in her assessment.

I might add that this inventor needs to either leave his ego at home when conducting business or realize that their ‘baby’ isn’t anymore precious than the ‘babies’ of all the other inventors out there…why should they get special treatment over someone else? Unless you’ve found the cure for cancer and the woes of the world economy (and I didn’t get that feeling from Roger that this was the case)…

To put it even more bluntly…most of us invent ‘things’…and the world is full of things and stuff…in the grand scheme of things..what is one more or less?

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amelia's Avatar

Roger how do you sign a non-disclosure? Can you type your name on the Word document and email it back or do you have to print, sign and mail it? Thanks!

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rogerbrown's Avatargold

David, it does make you wonder some days, but I hate seeing Inventors that close to success go right over the cliff due to lack of knowledge.

Kim, I like your suggestion. I will email this person and give them that advice.

Frank, unfortunately I am not sure that will make any difference. They seem to have the attitude that the companies will see their product and bend every poilicy they have just for them.

Krissie, they are not on these forums. I mentioned that as a useful resource and their response was “Why do I want to waste my time with a bunch of people that need to talk about inventing when I am doing it?” I started to argue with her on that point since she contacted me for help in the first place and she hasn’t even seen what we do here at EN. I had already figured by then I was not getting past their problem.

Flora, I sign it, scan it in and attach it to an email.

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let-them-fly's Avatar

@FloraSeeAmelia – I scanned my signature and saved it as a “.tif” file (to maintain quality)… when doing an NDA, I cut the signature from the image using my PhotoSuit program (or any comparable photo manipulation program), then paste it in the appropriate section of the text document NDA.

@Roger – That kind of sounds like the same schooling as that fellow had who appeared in here that time proclaiming inventors “ideas” (IP’s), even simple ones, can be easily sold for MEGA BUCKS!! LOL!

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amelia's Avatar

Thanks for the information!
I guess royalties also depend on volume of sales and type of market. When negotiating what would you recommend doing to know the percentage margins so we do not go off like in this case.
Thanks again Roger and frank.

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rogerbrown's Avatargold

Understand that the industry percentage is 3% to 5% so anything above that is gravy. Anything below that and you need to question why they are making that offer. Contracts are negotiable. Make your pitch for what you want. I know one Inventor that got a very high precentage rate because they brought a nd large list of media contacts the company could use to not only promoyte his product but their entire line. Another Inventor was retired. was already traveling the country by mobile home and offered to hit the trade show circuit and help pitch and demonstrate his product. So, look at what you might be able to sweeten the pot with and add that to your pitch.

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imajane's Avatarname search

Roger… you mean “motor home”. Julie’ll getcha! lol

and as always, great information!

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rogerbrown's Avatargold

Had to post this as a lesson in being to stubborn. Had an Inventor contact me asking if it is typical of a company refusing to make a product you are licensing to them a certain color? He said he did not like the color they use and wanted it in a different two tone color to stand out from their line. He thought that would increase its sales. He also wanted "Invented  by__________ embossed on the body of the product. When the company refused, he would not sign the contract and the deal was dropped.

First, in most cases companies will not put your name on the product.

Second, companies use color to help with branding. So wanting your own specific color is not  making it part of the line. Look at these examples below and think if you said you wanted yours to be gray and red. Do you think they would be open to that?

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let-them-fly's Avatar

True that!

I've always said; it doesn't matter to me WHAT the licensing company chooses to name it or WHAT style they choose to present it!

They want the product to make them money so they are going to move with it in ways that already have proven successful with their line and to their demographics.

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williamj's Avatar

I see yellow and black, I think Dewalt. I see the light green it's Ryobi, or I'll see Milwaukee red. It's all about trademarks and branding. Companies pay big buck to get people to think 'their' brand name when they see a particular color, shape or logo... bigggggg bucks.

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rogerbrown's Avatargold

Frank, I am with you. I don't care what color they make it as long as the check clears the bank.The same goes for having my name on the product. I could care less. All I want is for them to do their best to get it into the market and promote it the same as they do their other products.

William, you are correct, companies spend a lot of cash to build a recognizable brand. They are not going to change it for one person.

If an Inventor has to have everything their way or no way they need to start their own company so they can do what they want. If you plan on licensing it out you have to be aware they will make changes to fit their target market and consumer base.

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rogerbrown's Avatargold

This should be a good learning Lesson:

Had an Inventor email me asking why a company she sent her idea to the beginning of March and they acknowledged receiving it has stopped communicating with her. I asked her the name of the company and when did this start? She said the name of a kitchen product company and it all stopped around March 4th. She said she left a voice mail Friday morning and heard nothing from them that day. So she sent an email that afternoon and left another voice mail that afternoon. She heard nothing over the weekend. 

She said she tried again Monday sending three emails and leaving voice mails in the morning and afternoon. The same pattern Tuesday and Wednesday. She skipped Thursday and did the same emailing and calling on Friday. She emailed me that Saturday asking her question about the non-communicating. And has just this week heard back from the company saying they are not interested in pursuing any products with her now or in the future.

Lets see if you can you tell me why she got this response and why they stopped communicating with her during that time frame?

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williamj's Avatar

Roger, how many times did she contact you before you had a chance to respond?

To put into words... She made a nuisance of herself. Who wants to deal with... Am I there yet !?!?!?

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rogerbrown's Avatargold

William, I got two emails about four hours apart before I responded. You got part of the question correct. Think about the market is contacting and her timing.

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williamj's Avatar

You pointed out the answer to your own question. She wasn't giving anyone any time to consider whether or not they could do anything with her concept let alone enough time to make any kind of informed decision as to whether or not anyone could profit from it or even if it would "fit" into their wheelhouse.

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rogerbrown's Avatargold

William you are missing an important piece to this puzzle. I said look at the market (kitchen) she is contacting and her timing. What is happening during this time frame?

This is an issue for many Inventors that don't research their target market.

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williamj's Avatar

Roger,

I'm not a market orientated individual, no even as a consumer. So I'm going to assume that March is not a good time to start considering new products in the kitchen utensil industry, possibly because it just might be trade show season for kitchen utensils and  a large number of industries.

If I am correct in my thinking, things like this (seasonal timing) don't normally enter my mind. I'm not a business minded person so thinking along these line is new and quite often difficult. I guess that's why I like EN so much. I come up with the concept and they take care of all the things I can't.

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tawright2800's Avatar

Does it have to do with march madness and NCAA play offs?

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rogerbrown's Avatargold

William, you are correct. Look at the schedule below for the International Home and Housewares show in Chicago below and look when she started her chain of emails and phone calls. This show is one of the largest in the country. I have had the opportunity to be at the show several times and loved it, but you better bring your best walking shoes, the place is enormous. 

So, most companies come to Chicago a couple of days in advance of the show to set up booths, set up meetings, then you have the show and then you have everyone heading back and doing all their follow up from the contacts and sales they made at the show. So it normally takes a couple days before the event and a week after the event for their routine to get back to a normal rate. During this time they are trying to do their normal work and the added load from the show. Which means the Inventor they don't know whose email is in the inbox is going to take a back seat until they can get caught up.

Which means all those emails and phone calls you made during this time makes you look like a what? And due to all those emails and phone calls what is the perception of the person you flooded with these messages? Does this add to the stereotype that Inventors are crazy and difficult to work with?

William you stated you are not a business minded person and thinking along these lines is new and difficult for you. It is something you might want to keep in mind because these same factors affect the timeline EN has for searches and getting responses back. Which in turn affects all those people you see complaining about why is it taking so long to hear something back on a search. If you know more about the industry you are going after either through EN or by yourself you understand how and why things work the way they do. And how to make them work to your advantage for success.

There are companies that have very stringent rules on how and when they do things and they will not deviate from that path for no one no matter how good your idea may be. And when you tell Inventors this fact they still think that rule does not apply to them because they are special. And when things blow up in their face because they did not follow that rule they are stunned it happened to them. 

There are companies that only review products the first week of the month. Others do it quarterly, some do it quickly as they come in. Some only look at patent issued products, some want a working prototype and CADs before they will review a product. All these factors mean every company does things that works best for THEM, not for YOU. After all it is THEIR company and they don't work for YOU.

Learning the industry you are targeting helps you make informed decisions and aids you in your success.

https://www.housewares.org/show/future

Saturday, March 5, 2016
10:00am - 5:30 pm*

Sunday, March 6, 2016
8:30am - 5:30 pm*

Monday, March 7, 2016
8:30am - 5:30 pm*

Tuesday, March 8, 2016

8:30am - 3:00 pm

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williamj's Avatar

Roger,

In this area, and probably others, you are a knowledgeable and wise individual. Over time you have gained the knowledge needed to survive here. And, what’s even more important is that you have also gained the understanding as to where and how that knowledge and understanding is to be applied and best used. And that my friend is wisdom.

Even when someone spoon feeds the desired knowledge to another, it will often take time for that spoon fed knowledge to be digested and understood. That ‘understanding’ only comes at a price. The cost of which is paid for in effort and in time. The time it takes to gain that understanding is often a most difficult time indeed.

The kind of things that we have just been talking about, for me, is what these forums are all about. Here in the forums there is an abundance of knowledge that’s basically ready to be assimilated. If you can’t find what you are in need of or are looking for here, there will almost always be someone willing and able to direct you to wherever it is that you can find what you need or are looking for.

Even after being here and submitting here, for several years I still become impatient and literally have to bite my tongue to keep from making a nuisance of myself. And for me that is where a great deal of ‘my’ efforts is spent. I do understand the need for patience. But the desire to ‘hound’ information from someone in EN, or elsewhere, is at best difficult to resist. Sometimes the stress is almost unbearable.

So, I think that patience is not only required when submitting, but when dealing with new members and those of us who are still finding their ‘sea legs’ as well. It’s not just a tough concept to product to commercial success road but a very tough personal road trip as well.

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rogerbrown's Avatargold

William, thank you for the kind words. I realize I am in a unique position that few others here have since being a successful serial Inventor, having worked at EN as a Licensing Manager, working directly with EN members, reviewing product submissions, working freelance for companies to get their products licensed and working with Inventors for over 15 years that are not members of any Inventor community. So I see the working aspects of both sides and what each side needs or wants. Is there room for improvement on both sides of the fence....Yes.

The problem I see we as Inventors can try and fix is we have an image problem. This image is brought about by Inventors not taking the time to learn anything about the industry and having unrealistic expectations. Which leads to the "Crazy Inventor" stamp a lot of companies adopt which causes them to not want to work with us as a group. In this industry a few rotten apples are spoiling it for the rest of us.  

And having dealt with a lot of Crazy Inventors myself I can fully understand the company's fear. I know companies that shutdown their outside innovation process completely due to a single Crazy Inventor. That is why I am always harping on every Inventor making sure they make informed decisions and approach companies in a professional manner. 

Most people don't appreciate the amount of work the people at EN do. Having worked with them for over 3 years I saw first hand how Crazy some Inventors can be and how it affects the community, how it is tried to be handled diplomatically and the ones that no matter how you bend over backwards still won't accept reality. 

A good example that people don't see as a hinderance to the system is the opting in feature for searches. While I think it is a great feature a number of people abuse it. You have people that have 20 or more prior submissions and within 30 minutes of a new search opening they opt in all 20 submissions. They know the majority of these don't meet the criteria of the search but they opt them in anyway. Since they are in the search they each have to be reviewed, which adds time to the length the reviews take, which adds to the length of time before the submissions can be selected for review by the sponsor. It slows down the whole process, which causes members to complain about the length of time it is taking. Some of these complaining are the very people who caused the issue. 

That is why I am always pushing people to be as informed as possible to make good decisions. Because their decisions affect all of us. 

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rogerbrown's Avatargold

Here is an example of an Inventor that had a great thing going and killed it by their actions. I am posting this in hopes others will see the pitfall and avoid it.

The Inventor had contacted me asking for my opinion/advice on a concern they had with a company they were dealing with. He sent me the emails between the two of them and right away I saw the issue. He had originally contacted them about an idea he had that he thought was a good fit for the company. They reviewed the product and decided to pass on it. But they liked his idea and gave him a short list of areas they had interest in case he came up with something in those areas.

He thanked them and a few weeks later sent them two more items for review. Neither item was in the areas they sent him to focus on. Within two days they wrote him back stating neither idea was of interest and included the same list of areas they sent him the first time. 

A month later the Inventor sent the company two more ideas for review. Neither was in the areas they listed. The company responded back the same day passing on the two items and stated they appreciated his submissions, but they were no longer open to him sending in items for review.

The Inventor wrote me that his concerns were that the company just stopped wanting to review his ideas and he thought this was because they had plans to work around his ideas and steal them.

When I told him they stopped wanting to see his ideas because he was sending them things in areas they had told him twice were not areas of interest and he was wasting there time. He still insists they are going to steal the ideas he sent them.

This is why a number of companies are reluctant to work with Inventors. He had a golden opportunity. He was given a list of areas from the company to focus on which increased his chance of success dramatically and instead he kept pushing the ideas HE thought they should be interested in instead of giving them what they wanted.

I have been doing this for a very long time and when a company takes the time to give you a wish list that should be your primary focus. Show them you can meet that challenge and they will look to you for more items. 

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rogerbrown's Avatargold

Have an Inventor that is his own worst enemy. He is working on a technical product that needs a lot of engineering work. He has hired and fired three design companies so far because they are not giving him what he wants. The problem is they have all told him what he wants and how he thinks circuits should work are not the same. They have explained the issue, the solution and he won't accept the solution. But he does not have a solution to fix the issue. So, right now he is thousands of dollars in debt, no results that work and has exhausted the design companies in his area. 

His only option is to go out of town or state to find another design company. But if he is unwilling to listen to their suggestions will he ever get the end result he wants?

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sunto's Avatar

One for you Rodger 

Watch "The Founder " film about McDonalds .

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