A Beginner’s Guide: How to Rent Your Ideas to Fortune 500 Companies (Plus: Video) 55 Comments

Written by Tim Ferriss Topics: Filling the Void, Gadgets, The Book - 4HWW

stephen-key-photo.jpg

I first met Stephen Key in 2001. Two months later, I used a few recommendations of his — shared over the customary gin tonic — to help a friend double overseas sales in less than two weeks in New Zealand and Australia.

How? Licensing. It can be a beautifully elegant model.

Stephen is somewhat famous in inventing circles for two reasons. First, he consistently earns millions of dollars licensing his ideas to companies like Disney, Nestle, and Coca-Cola. Second, he is fast. It seldom takes him more than three weeks to go from idea to a signed deal.

He is not high-tech. There are no multi-year product development cycles. He specializes is creating simple products or improving upon existing products, often using nothing more than a single-sided drawing or photograph. Coupled with refined cold-calling skills, Stephen meets with some of the most influential marketing executives in the world. In this interview, we’ll explore how this advisor to American Inventor rents his ideas to Fortune 500 companies.

1- What exactly is licensing, and why is it a good option for people with ideas but little time or patience?

I think licensing is a bit of mystery to many people. It really doesn’t have to be.

Licensing is renting your idea to a manufacturer. The manufacturer handles the marketing, manufacturing, distribution and basically everything else required to bring the product to market.

Usually quarterly (four times a year), the manufacturer pays you a royalty on every unit they sell. This royalty—generally a percentage of the total wholesale price—is your payment for bringing them a new product idea that they can sell to their customers.

It’s an attractive low-risk alternative to manufacturing products and taking them to market yourself.

Using licensing, I can spend my time coming up with new product ideas instead of worrying about balance sheets, cash flow, employees and all the other hassles of running a company. I might pitch three ideas one month and no ideas for the next two months. You can have total flexibility with your work schedule.

Here’s one tip on how to make sure you get paid a certain amount four times a year.

Minimum Guarantees - So here’s why I use the term “renting” when describing licensing your idea to a manufacturer. It’s very important to make sure the manufacturer performs. You need a performance clause in the licensing contract. Without a performance clause, the manufacturer could just sit on the idea and do nothing with it. I’ve seen it happen.

Ensure you have a “Minimum Guarantee” clause in the contract. A minimum guarantee clause basically says the manufacturer needs to perform and sell a specified number of units every quarter or every year. Otherwise, you get your idea back and you can license your idea to another manufacturer.

It isn’t usually necessary to call in [enforce] the minimum guarantee clause. Most of the time you want to give the manufacturer a chance to perform. After all, you are partnering with them and they’ve spent big money on setting up their facilities to manufacture your new product.

Here’s another tip: Don’t front load the deal. I see many people with ideas doing this. They ask for large up front fees and make it to hard for the manufacturer to say yes to the deal. Instead ask only a small amount of money up front and scale up the minimum guarantees each quarter.

An example of minimum guarantees:
100,000 units quarter one
200,000 units quarter two
300,000 units quarter three

Let’s say the manufacturer sells 110,000 units quarter one. You would get paid a royalty on each of the 110,000 units sold.

Then let’s say the manufacturer only sells 190,000 units quarter two. The manufacturer can choose to pay you the royalty for the minimum 200,000 units they guaranteed you they would sell and they would retain the rights to manufacture your idea.

You should be OK with these “Minimum Guarantee” numbers since you set them up when you negotiated the contract. Set up numbers you think the manufacture can meet and that you’ll be OK with if the manufacture just meets the agreed upon “Minimum Guarantee”.

Of course you would prefer to earn royalties on 600,000 units every quarter, but you know you are guaranteed at least a certain “Minimum Guarantee” every quarter. This makes it nice when budgeting to buy that new sports car you’ve had your eye on.

2- I’ve heard you say that the most important thing you can do when licensing an idea is to spend as little time and money on the project before you get feedback from a manufacturer. Why?

Yes, that’s true. Unfortunately, it’s the exact opposite of what most people do. Most people go out and spend $3k to $20k or more on a patent and a few grand or more on a prototype first.

Time is the enemy in this process.

I’ve talked to inventors who have been contemplating or working on ideas for years. That’s not me. When I have an idea, it only takes me three days to three weeks to find out if the idea has legs.

On average, I recommend that my students take no longer than three weeks to three months before they make the decision to keep working on the project or dump the idea and move onto the next one.

Spend very little time or money on a project before you get feedback from manufacturers. The reason for this is simple: You’re not going to hit every idea out of the ballpark. Sometimes the benefits of the idea just aren’t intriguing enough. Maybe the idea has some manufacturing problems. Maybe the idea has been tried before and you didn’t find it with your research. There can be many reasons why manufacturers decide not to move forward with an idea.

You need to call a handful of potential manufacturers that might sell your idea. It takes very little time and next to no money to make the calls, and it’s the only way you’ll get the critical early-stage feedback.

File a provisional patent application ($100), create your sell sheet ($0-$80) and start making phone calls as soon as possible. That’s totally the opposite of what most people do. Most people dream or plan and research the idea to death.

The reality is that you will never be as knowledgeable about a particular industry as a manufacturer that been in the business for thirty years. They’ve seen everything imaginable in their product area. Their opinion is the only one that matters. Get your idea in front of them as soon as possible and get the feedback you need to pursue it or kill it.

Here’s a summary of my solution to the patent and prototype hang ups many people seem to have.

PATENTS:

PROBLEM (What most people do):

The majority of people I talk to think the first thing they need to do is go out and spend money to have an expensive patent filled by a patent attorney. Here’s why that’s wrong: Many times you’re going to get complaints from manufacturers that your idea needs to be fixed in one way or another. No problem. You’re creative and they aren’t. Go back to the drawing board and fix the problems the manufacturer presented.

The only problem is that if you’ve wasted $3k to $20k on a patent, now your going to need to file another patent covering the new features of your product. Another $3-20k? I don’t think so. There is a better way.

SOLUTION (My method for you):

Instead, spend $100 on a Provisional Patent Application (PPA). A PPA gives you one year to fish of the end of the pier to see if anyone is interested in your idea.

A PPA also allows you to say “patent pending.” It’s a huge benefit to the small guy! If you come up with a new version of your invention, just file another PPA with the additional features. With my approach, you should be able to get a “go” or “no go” in three weeks to three months.

Make sure to put another one to five months aside for negotiations and you’ll still have many months left on your twelve month PPA.

Then when you license your idea to a manufacturer, you’ll put in the contract that the manufacturer is responsible for paying your attorney to upgrade your PPA to a full patent and put it in your name! This is how I get multiple patents, in my name, paid for by manufacturers.

PROTOTYPES

PROBLEM (What most people do):

People think you need to have a polished and perfect prototype in order to sell an idea. I have sold many ideas with very simple prototypes and many without prototypes at all .

What people don’t understand is that you are not selling your prototype or your patent. I’ll say that again. You’re not selling your prototype or patent. You are selling the benefits of your idea.

SOLUTION (My method for you):

Create a sell sheet. What the heck is a “sell sheet”? It’s a regular 8 ½” x 11” piece of paper. It’s like an ad for your idea. It has the big benefit of your product in one sentence at the top, maybe a few sub benefits or features in bullets below and a picture or drawing of your idea. “Oh, but I have to build a prototype,” many will say. No, you don’t.

You don’t need a prototype until you get some interest. If you don’t get any interest, you haven’t wasted time on a prototype.

Your sell sheet should be like a billboard on the freeway. People should be able to glance at it for a few seconds and understand the benefit of buying your invention. They don’t need to understand every feature or hear you make clichéd statements like, “if we only sell this to 1% of all households in the country, this new idea will make millions”.

My one line benefit statement for one of my biggest ideas was, “I have a new label innovation that ads 75% more space to your container.” That’s it. I didn’t need to explain how when I called on the phone, they just wanted to know more.

Benefits, benefits. That’s what you are selling. Not your patent or prototype.


Stephen in motion: Repurposing existing products in 5 minutes for a call sheet model or prototype…

[To be continued in Part II: negotiated royalty rates, who to call within companies, product idea criteria, what product categories to avoid, and more]

Posted on November 26th, 2007

55 Responses to “A Beginner’s Guide: How to Rent Your Ideas to Fortune 500 Companies (Plus: Video)”

  • Taking Action November 26th, 2007
    6:41 am

    […] 26, 2007Taking Action Timothy Ferriss, author of 4 Hour Work Week, has an interview up with Stephen Kay, inventor. While they don't necessarily reflect the same market or […]

  • PJ November 26th, 2007
    7:00 am

    Awesome tips Tim. Reading this approach a big “bell” went off in my head - along with the sound of my inner voice saying “duh!” - this is so much smarter than trying to handle everything yourself. I see usefulness for this approach not just in patentable inventions but all other aspects of virtually any type of business. I am immediately changing the way I handle all of my entrepreneurial activities based on this advice.

  • jimdmcd November 26th, 2007
    7:54 am

    As always, another great thought producing article . Thanks

  • Ankesh Kothari November 26th, 2007
    9:21 am

    Thanks Tim - excellent interview.

    I’ve been on Stephen Key’s mailing list since sometime, but haven’t bought his product yet. Maybe I should invest in it…

  • Kelly Monaghan November 26th, 2007
    9:30 am

    Tim,

    Loved your book, which crystalized a number of things towards which I have been groping throughout my life as a micro-entrepreneur.

    As a writer/publisher, I thought the best way to say “Thank you!” would be with a suggestion for a minor copyediting correction in the next printing:

    The quote from Paul Theroux on page 248 should read, “It is fatal to know too much at the OUTSET …”

    Now try to get your pubisher to fix it! ROFL.

  • Another Tim November 26th, 2007
    9:45 am

    Tim, I am not sure how you can have your hand in so many different pies at the same time , and be an expert at all of them … but this is amazing.
    I have been stuck in this ‘patent-invention-marketing’ area for over 10 years. I have not found the financial resources needed to patent my ideas. Or I would find the cost of patents and patent searches too intimidating when I am not guaranteed anything for my time and expense….

    But … after reading this blog today … I think I can finally move forward!! Thanks a million!!

  • Michael Dingler November 26th, 2007
    9:54 am

    Sorry to say that, but this kinda awakens the skeptic in me. If it’s really that easy, why is there a $400 course needed for this? And the “This is how I earned a brazillian dollars!” success stories don’t help much.

    I’m not sayin that it’s snake oil, but as much business advice, it sounds a bit too repeatable, Charles Atlas-style.

  • Stacia November 26th, 2007
    11:28 am

    Thank you for sharing! It’s wonderful to have found other people out there who show such a zest for learning and for life, and willing to share that with others. I’ve been toying with a patentable idea for a month or so now, so this is timely.

    Now, it’s just a matter of making heads or tails of the provisional patent information on the UPTO site ;)

    Thank you!

  • Pete November 26th, 2007
    11:38 am

    What are some examples of actual things Stephen has done/does? Examples of what he’s taken to specific manufacturers and licensed to them that we’d know about?

    This sounds great and all, but I’m just not wrapping my head around coming up with a billion “ideas”, and turning around every few weeks and selling those “ideas” to somebody. Anyone can come up with hairbrained ideas….what makes this case so special?

    Pardon my skepticism :-)

  • Brandon November 26th, 2007
    11:57 am

    Tim,

    This is another great post. Super helpful.

    I have been playing with a couple ideas for licensing and patents for a few years, but have not had the money to file them and risk the time and money to build a prototype and this post was like a huge weight lifted off my shoulders.

    Awesome.

    I have the ability to move forward and see what happens now without much risk. Thanks! B

  • Fredrick November 26th, 2007
    1:01 pm

    Tim, I appreciate you presenting this topic…

    I am working in the field of character licensing with both new and niche market properties that definitely are not (yet) household names like Dora or SpongeBob.

    This may be out of Stephen’s expertise, but can he speak to how his strategies might be modified to benefit artistic Intellectual Property? It seems that the pitch to manufacturers in character licensing is much more about “riding an already established wave” than taking a risk on an “unproven” market presence.

    Does this mean that the Goliaths of the industry (Disney, Nickelodeon, etc.) will always have the advantage of sheer cash to throw around and impress potential partners? Or are there guerilla, “new rich” techniques that you and/or Stephen can suggest?

    Thanks again for the covering licensing. I like forward to the rest of the series.

  • David November 26th, 2007
    1:21 pm

    Tim, good suggestion about the provisional patent. From what my inventor friends tell me that’s the way to go. Not only protects your idea, but also makes companies more willing to deal with you because in a way it protects them too. You can of course only patent ideas for things that are functional, as opposed to aesthetic. For images and words you would get a copyright.

  • melin threadgill November 26th, 2007
    1:34 pm

    Hi Tim, I loved your book! Keep up the insightful work. I’ve never heard of this approach with patents and have been at a road block myself because of the filing costs.

    Thanks Much, Melin

  • Varangy November 26th, 2007
    2:03 pm

    Tim,

    Great post but two points:

    1) While intrigued, I, too, am a bit skeptic. This seems too easy.

    2) I think your readers (well, at least me) would love some information on selling one’s ideas to a company and how to avoid getting ripped-off.

    That is, XYZ company sees your nifty invention, likes it. Creates something similar that it can patent and then runs with it, leaving you in dust and uncompensated for your hard work and inspiration.

  • Stephen Key November 26th, 2007
    2:14 pm

    Pete wrote…
    “What are some examples of actual things Stephen has done/does? Examples of what he’s taken to specific manufacturers and licensed to them that we’d know about?

    This sounds great and all, but I’m just not wrapping my head around coming up with a billion “ideas”, and turning around every few weeks and selling those “ideas” to somebody. Anyone can come up with hairbrained ideas….what makes this case so special?

    Pardon my skepticism :-)”

    Hello Pete,

    You can view many of the products I’ve licensed by visiting my website and viewing the projects on the right side of my home page.

    Your right about coming up with ideas. It’s much easier to come up with ideas than to sell them.

    I teach some techniques for coming up with ideas, but knowing how to sell those ideas is the part most people don’t understand and the part of the process that I really emphasize.

    Knowing how to sell a new product is absolutely critical.If you don’t pick up the phone and call some manufacturers, the idea will just be in your head and it won’t go anywhere.

    I’m doing a free tele-seminar (phone seminar) this Wednesday. It’s totally free and there will be no big sales pitch for my course.

    It’s my way of helping out people who are new to the game.

    You can sign up for the tele-seminar for free, just go to the news page on my website.

    I wish you much success in all your invention related endeavors.

    Stephen Key

  • Stephen Key November 26th, 2007
    2:25 pm

    Stacia wrote…

    “Thank you for sharing! It’s wonderful to have found other people out there who show such a zest for learning and for life, and willing to share that with others. I’ve been toying with a patentable idea for a month or so now, so this is timely.

    Now, it’s just a matter of making heads or tails of the provisional patent information on the UPTO site ;)

    Thank you!”

    Hello Stacia,

    I love your positive attitude! Here are a few words of advice.

    The patent office web site is great for doing patent searches, but won’t show you step by step how to file a provisional patent.

    The book “Patent Pending In 24 Hours” on my web sites resource page will show you step by step in common English how to file a provisional patent application. It’s a great book. I have no self interest in promoting the book. You can buy it at any book store.

    What the book won’t tell you is how to sell your ideas. 97% of all patents never make any more money for the inventor than the inventor spent on the patent.

    This is because most people thing the first ting to do is file a patent. It’s most definitley not!

    My advice is to do some solid research of the marketplace before you even spend the time to file a provisional patent. Patents don’t sell themselves.

    I wish you much success with your projects.

    Stephen Key

  • Victory Darwin bootstrapping, serial, entrepreneur-inventor November 26th, 2007
    2:50 pm

    This IS the SOLUTION for us “IDEA GUYS”!

    Awesome post Tim, thanks! I invented a residential illuminated address sign back in ‘91. It was by far the best design on the market and could be manufactured at a great price. Because I was a perfectionist, I did the manufacturing and marketing all myself. Although I had started selling and earning a living only 2 years after concept, I wasn’t satisfied and wanted to take the product and marketing from 80% quality to 99%. That took 5 more years.

    I ENDED UP BURNT-OUT AND BROKE so I sold the company. Some successful (Porsche & Ferrari driving) young entrepreneurs bought it for a royalty (with no minimums) then shelved the idea. Over the 2 following years they lead me on, I went bankrupt and split with my wife and two year old. Turns out the “young entrepreneurs” were actually lawyers! They finally sold the company for $100 and gave me my one-sixth share. That was 9 years of my life, over $100k in manufacturing equipment and patents for $16.66.

    I HATE LAWYERS. I rented some trucks and thugs and went to the new company who bought my biz and reclaimed all my equipment. Then I visited my contact from the young lawyers. Actually I followed him to work and when he was stopped at an intersection, I took my tire iron, went over to his car, and SMASHED IN HIS DRIVER’S SIDE WINDOW, then dragged him out through it and expressed my feelings. I was very lucky to find a judge who was quite empathetic.

    WHEN I GOT OUT OF JAIL, I was truly renewed. I started another business right away, this time bootstrapping it and test marketing it before investing any money. In just 6 months it was worth over $2 MILLION and I paid off my investors from the first biz.

    Since then I’ve created an entrepreneur education program that teaches how to start any business from nothing using an initial promotion which not only test markets the concept, but if it’s successful, it can entirely finance your venture.

    ~Victory Darwin

    p.s. I’m really looking forward to part 2 of the Steven Key story. Everything he says about the PPA and sell-sheet instead of prototype is right on and yet hardly anybody knows it. Dan Kennedy taught me the DIY method to starting a biz, which is to create a promo, send it out, and get orders. If you say “allow 4-6 weeks for delivery” you then have that window to get producing the product.

  • Victory Darwin November 26th, 2007
    2:53 pm

    video isn’t working. “we’re sorry this video is no longer available”.

    p.s. did you do the PR teleseminar yet? (the $125 one)

  • Victory Darwin November 26th, 2007
    3:39 pm

    Licensing sounds like the ultimate form of outsourcing for idea guys like me. I was about to part with $399 for his program and I noticed his checkout has a coupon code!

    so Mr. Ferriss can you give your bud Stephen Key a call and get us loyal 4hww readers a FERRISS50 ?

    thanks! V.

  • Billionaire Strategies November 26th, 2007
    3:49 pm

    Implementing this strategy is going to be a lot tougher than he makes it sound. Inventors are likely to get taken to the cleaners by the big companies.

  • Raina Gustafson November 26th, 2007
    4:20 pm

    Tim and Stephen,

    Wonderful post.

    Can you also please include in Part II manufacturer criteria? For instance, I am wondering if a contract manufacturer would automatically be eliminated as a prospect. This might be an obvious question - I just don’t know much about the world of manufacturing yet.

    Thanks! Looking forward to the follow-up post and teleseminar Wednesday.

  • Jose Castro November 26th, 2007
    5:35 pm

    I will keep this short. This post is for everyone. There is not just one given way to make money and not all ways work for everyone. I think the level of excitement about a notion has a lot to do with the outcome. If you do something just to make money, the fire will burn out soon. These are principals that can be used to help increase your chances of something working out. There are NO guarantees, the only guarantee you have will be that if you don’t try something then it will Definitely not work. One should always consider the cost opportunity of doing one thing rather than another. All in all trying these methods seem harmless and who knows they may just make you a buck in the process.

    Nice Post & Enjoy your Journey

    Jose Castro Frenzel

  • Stephen Key November 26th, 2007
    5:57 pm

    # Varangy Wrote…
    November 26th, 2007 at 2:03 pm

    Tim,

    Great post but two points:

    1) While intrigued, I, too, am a bit skeptic. This seems too easy.

    2) I think your readers (well, at least me) would love some information on selling one’s ideas to a company and how to avoid getting ripped-off.

    That is, XYZ company sees your nifty invention, likes it. Creates something similar that it can patent and then runs with it, leaving you in dust and uncompensated for your hard work and inspiration.

    REPLY

    Hello Varangy,

    RE: Being Skeptical

    Great post! Being skeptical is good. Your right, it’s not a piece of cake and it DOES require work to close a deal.

    Going through the steps the way I do is not hard in my opinion and the opinion of many of my students. Does that mean that you will close a deal every time. Of course not.

    Licensing is a numbers game. I could wallpaper my house with rejection letters. You need to be willing to fail in order to succeed. Here’s one of the big differences with how I approach selling ideas …

    I teach people how to play the licensing game affordably. So when you fail, you can easily move onto the next product idea. Using the methods I’ve developed, my students can often invest less than $300 in a provisional patent, sell sheet and the cost of their phone calls to pitch each of the their products. This is a much better way in my opinion than what the average Joe on the street with an idea does, which is run out and spend 10K on patent and 5k on a prototype and then hopes someone will beat a path to their door to buy their widget.

    My inventRight approach is all about minimizing both you financial and time investment in each new product idea you come up with. It’s not right for everyone. I’m just sharing what I’ve learned over my 25 years of selling new product ideas.

    RE: Getting Ripped Off
    I’ve pitched hundreds of ideas over the years and only been ripped off a few times. Big companies don’t want the liability of ripping off the little guy. It does happen, but it’s rare. For $135 you can file a Provisional Patent Application and say patent pending for a year. How cool is that!

    Kindest Regards,
    Stephen Key inventRight

  • Stephen Key November 26th, 2007
    5:59 pm

    # Fredrick Wrote…
    November 26th, 2007 at 1:01 pm

    Tim, I appreciate you presenting this topic…

    I am working in the field of character licensing with both new and niche market properties that definitely are not (yet) household names like Dora or SpongeBob.

    This may be out of Stephen’s expertise, but can he speak to how his strategies might be modified to benefit artistic Intellectual Property? It seems that the pitch to manufacturers in character licensing is much more about “riding an already established wave” than taking a risk on an “unproven” market presence.

    Does this mean that the Goliaths of the industry (Disney, Nickelodeon, etc.) will always have the advantage of sheer cash to throw around and impress potential partners? Or are there guerilla, “new rich” techniques that you and/or Stephen can suggest?

    Thanks again for the covering licensing. I like forward to the rest of the series.

    REPLY

    Hello Fredrick,

    Great post!

    I love riding that wave and piggybacking on another products success. My Spin Label invention has sold 100’s of millions of units by being used on vitamin products, liquor products, spices, toys and various other round containers. Use the big guys and ride their wave. It’s a positive, not a negative.

    Kindest Regards,
    Stephen Key inventRight

  • Stephen Key November 26th, 2007
    6:28 pm

    # Billionaire Strategies Wrote…
    November 26th, 2007 at 3:49 pm

    Implementing this strategy is going to be a lot tougher than he makes it sound. Inventors are likely to get taken to the cleaners by the big companies.

    REPLY

    Hello,

    I’ve only been ripped off a few times and I’ve submitted hundreds of new product ideas to some of the largest corporations in the world. Big companies don’t want the liability of ripping off the little guy.

    Here’s a tip…
    If you create a paper trail, you will reduce your risk in those rare case that a big corporation does decide to rip you off.

    Big companies are very slow to move. Little guys like myself are much more agile and creative.

    I believe the little guy with an idea has the upper hand in many respects. If you use the right approach and correct techniques, little guys like myself and you can license products to some of the largest corporations in the world.

    I’ve done deals with Disney, Ohio Art, Nestle, and many others. I have licensed over 20 products in many diverse industries and I believe anyone can do the same.

    It’s work. You have to want it and go after it.

    I wish you much success in all your new product related endeavors.

    Kindest Regards,
    Stephen Key inventRight.com

  • Stephen November 26th, 2007
    7:20 pm

    Wonder how well protected my idea is if I go this way? I have a recipe that sells, and I am worried about a manufacturer knocking me off if I approach them. They could vary the recipe slightly etc.

  • The Invent Blog® » Licensing, Quick Prototypes :: The Patent Blog of Stephen M. Nipper November 26th, 2007
    7:47 pm

    […] Hour Workweek Blog on “A Beginner’s Guide: How to Rent Your Ideas to Fortune 500 Companies.”  Print This Post |  Email This Post | | Subscribe via […]

  • zach even - esh November 26th, 2007
    11:21 pm

    Tim, right on, been wondering about licensing for a while. Especially w/my gym and the methods we use.

    Were you planning on licensing that gym you opened in Taiwan?

    Is my “idea” even licensable? Or must it be a physical product?

    Thanks bruddah, hope all is well,

    —Zach—

    ###

    Hi Zach,

    The gym chain in Taiwan, which was over before it started, was not a licensing deal. I was looking at either purchasing facilities or constructing them. Ill-fated on many levels!

    Whether your idea is licensable or not is a better question for an intellectual property attorney or the US Patent and Trademark Office. If it can be patented, trademarked, or copyrighted, it can be licensed.

    Good luck, Tim

  • Mark November 26th, 2007
    11:24 pm

    How do international patents work? It appears you don’t have to be a US citizen to get a “patent pending” in the US… but can’t someone in another country still rip off the idea?

  • Jose Castro November 27th, 2007
    4:30 am

    Question for both TIm and Stephen, what do you both collectively suggest as a good starting point in doing these ideas/strategies.? Furthermore, Tim have you done this before and if so what products specifically have you had patented?

    Stephen, what is the best way for one to do this if they currently are running their own company and wish not to risk it all. I am looking to see if there is something feasible that one can do while still traveling and enjoying mini retirements.

    Look forward to hearing from you both…

    Best

    Jose Castro Frenzel

  • Patrick Deal November 27th, 2007
    8:00 am

    Interesting. I’m looking forward to part 2.

  • Stephen Key November 27th, 2007
    3:07 pm

    Jose Castro Wrote. .

    Question for both TIm and Stephen, what do you both collectively suggest as a good starting point in doing these ideas/strategies.? Furthermore, Tim have you done this before and if so what products specifically have you had patented?

    Stephen, what is the best way for one to do this if they currently are running their own company and wish not to risk it all. I am looking to see if there is something feasible that one can do while still traveling and enjoying mini retirements.

    Look forward to hearing from you both…

    Best

    Jose Castro Frenzel

    REPLY FROM STEPHEN KEY

    Hello Jose,

    RE: Starting Point
    I suggest you go down to the marketplace and study the category your idea is in. If you have a new hammer that hits nails straight every time, then you need to go down to the hardware store and look at all the hammers and all the products around the hammers. Look at the prices, the benefits of each hammer, what they are made out of and who makes each one. That’s the best place to start.

    RE:Licensing while running your business
    You can without a doubt license a product in your spare time. I suggest you allot a few hours every week to working on your new product ideas. You can quite often work on each project for under $200, so money shouldn’t be a factor. You just need to set aside a litte time each week.

    Hope this helps.

    Kindest Regards,
    Stephen Key inventRight.com

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    2:33 am

    […] And more about making money - A Beginner’s Guide: How To Rent Your Ideas to Fortune 500 Companies […]

  • Luci November 29th, 2007
    10:22 pm

    I so enjoy watching geniuses at work…you, Tim, for always giving us ideas to “chew” on and you Stephen, for showing us some easy ways to get things done!

    I’m not an inventor, and may never be one…but learning how to KISS is always a valuable way to approach any project/product. Kudos!!!!

  • Jayson Z December 1st, 2007
    2:26 am

    I like what you are doing. I invent for a hobby, but no success yet. Sometimes it’s hard to know where to begin when an idea comes to you. I have been doing research about inventing for about two years now, and I’m getting some what close to my goal. Just two days ago I met with a mechanical engineer professor and showed him a theory I had from three years back to clarify some things, and he told me my idea was good, but my theory was already in use in some of today’s hybrid cars (I was a few years behind). Pretty good for a novice without an engineering background, but I should think fifteen years ahead of time, and maybe even further.

    I like what you’re doing. You covered the major things involved in licensing your ideas.
    Later!!!
    Jayson Zamora

  • » Linky Goodness - 12/1/07 December 1st, 2007
    8:30 am

    […] Renting ideas to Fortune 500 companies Really interesting post from Tim Ferriss about how you can license your ideas to large companies and collect royalties. Beats working, but you have to actually go out and think of useful stuff. […]

  • chrissie December 1st, 2007
    11:18 am

    thanks for the stephen key articles. my boyfriend has had an idea for a product for a long time and had not pursued it, (for various reasons) but after reading all the information, we are ready to file the patent pending and get this show on the road. If we hadnt received this, I am sure he would not have been as inspired to run with it.

    Will keep you posted how it turns out.

    Thanks again.

  • Matt December 3rd, 2007
    5:43 pm

    Hi,

    Wondering if a provisional patent can be filed in Canada?

  • » Planning Your Life to Death December 4th, 2007
    12:09 pm

    […] for those of you that don’t want to wait to start researching, read this fascinating interview that Tim Ferris (author of the Four Hour Work Week) did with invention guru Stephen Key and pay […]

  • Ben December 8th, 2007
    2:09 pm

    In response to Matt. Why would you want to file a provisional in Canada?

    - Ben

  • Matt December 13th, 2007
    2:45 pm

    In response to Ben

    Do we not need one in Canada? I don’t know the rules with this kind of stuff.

  • Friday Smackdown with photo tips, future news amd the 10 worst gadgets December 14th, 2007
    11:54 am

    […] compilation of news of the future. Kind of like Ziitrend, but more news than prediction. How to Rent your Ideas - Designers or Inventors read this before you get a prototype made. This could get you going. 10 […]

  • Simon de Haast December 25th, 2007
    8:07 pm

    Some really great stuff here, so useful, thanks.

    I firmly believe in “idea abundance” with regard to sharing one’s ideas with the big guys.

    My reasoning is that the one idea you have isn’t going to be the only idea you have - there’re plenty more waiting in the pipeline in your head, and if you resist letting that idea into the ‘wild’, you’re clogging up the flow of other, possibly more compelling concepts.

    The more free-flowing the idea stream is, the more opportunities there are for those new ideas to build on and connect with previous ideas.

    Of course, one still needs to be sensible about looking after your IP rights, but not to be paralysed into inaction through fear of theft. If your idea does get stolen, well, get the next one out. You’ve lost nothing except potential opportunity, but gained experience for the NEXT idea.

  • Billionaire Strategies January 12th, 2008
    3:33 pm

    Stephen,

    Thank you for your reply. That’s excellent advice on protecting yourself.

  • Matt January 13th, 2008
    1:41 am

    Do we need to file a provisional in Canada? or is there something else we can do to protect the idea while we pitch to the manufacturer?

  • Tim January 23rd, 2008
    10:31 am

    Wow, I could have used this stuff about 30 or more years ago!! I have been an aspiring inventor all my life and yet have nothing to show for it:-? The good news is this stuff is very valuable to me and I will study and want to know more about it. I have seen multiple incidents of MY ideas show up on the market YEARS after my conception of them. I have the ideas, but the biggest problem is taking the idea to market before the next one overtakes me with excitement, pushing the current one out of my central focus.

    I am currently in Japan and plan to stay here, do you know of any relevant or different legal issues here, the Japanese equivalent to “patent pending”? I don’t have the time to read this right now but I had to comment. This information is or could be my holy grail, I have been inventing since EARLY childhood, but the legal stuff, money, inability to build a prototype and the next idea crowding out the current one have stopped me commercializing a single one. I dare not read it all now or I will be up all night excited and be exhausted and under slept for work tomorrow.

    bfn Tim

  • Stephen Key January 23rd, 2008
    2:36 pm

    Hello PJ,
    Glad to hear bells are going off in your head. There is no greater compliment as far as I’m concerned.

    If you want more info on licensing and thinking different. Check out our free tele-seminars we offer. It’s great info and we only spend about one minute out of 60 pitching our course. The rest is just straight forward advice on licensing and thinking different.

    Kindest Regards, - Stephen Key http://www.inventright.com/news.html

  • Tim January 25th, 2008
    1:41 am

    Hi Tim,

    The following is based on your advice, which strangely and happily is something i have been doing, yet not widely enough for a long time. As the saying goes there is more than one way to skin a cat, here’s my way, and why.

    A) Since I am making the rules for this little piece of reality, here they are, Tim ( or the person you outsource this to…) I have ideas and time but a lack of money.

    B) I KNOW I have knowledge and ideas that would be of sufficient value to you to make this a worth while investment of your time, and a meager amount of your money.

    C) I have been an inventor for about 35 years plus despite being 40 now, so I have a lifetime of ideas MANY with commercial value and some that where commercialized years after my first conception of them.

    D) I want you to buy and send me the inventright product in exchange for one of two things

    one… a percentage of the first product license I land

    or two…access to me and my ideas thoughts and reflections.

    Sound arrogant? perhaps, but only you or your agent can decide whether this is rambling or a valuable offer, so it’s worth you saying YES (about 1/2 second of your time to have someone else find out that it IS a worth while half second or your time. Your ROI on this will ultimately be ridiculous.

    In simple terms I make JUST enough money to meet living expenses, plus a small bit left over. At my current savings capacity it will take me at least two or three months to save the money necessary to get this course, unless someone with insight and a mind for profitable investments is willing to expedite this process for me.

    I opted for this so that I could pursue my entrepreneurial endeavors which include jewelry design, environmental energy products.

    This is the tip of my iceberg, that I have not been able to realized based on my limiting beliefs said I had to have serious cash to license a product without the manufacturer stealing it.

    The truth is this offer is open to anyone who is willing to act on it immediately!

    I am currently in Japan so unless you are resident here meeting face to face is a challenge, but this is an age of technology and I have internet. Contracts can be made over distance. I have a wealth of ideas, not one or two but many. If anyone wants to help you and I turn some of them into serious cash.

    I need only someone with the confidence and cash to act and enough knowledge to recognize that my ideas are of value.

    Someone’s future successful business partner Tim B. Green

  • Marcia Maloney January 29th, 2008
    9:30 am

    I have a noteable name in the uk tv market. Thinking of launching my own jewellery range under my own name (my public name). Instead of taking up the manufacturing costs myself, I could license my name right or license the the name of my designs? Come up with the designs and offer it out as a licence? How do I find out what I should be charging per unit etc.. without asking around too close to home and the powers that be work out that i’m new to this licensing idea? Also can I offer the license of my own name/designs to more than one company?
    Great website by the way.

  • The Weekend Retirement Test Drive: Groundhog Day and the Rest of Your Life | The Blog of Author Tim Ferriss February 1st, 2008
    7:15 pm

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  • Danny February 1st, 2008
    11:59 pm

    Thanks, Tim! This is just what I needed to hear….it ‘clicked’. ‘Preciate all the advice, and the links to InventRight. Peace.

  • Stephen Key February 4th, 2008
    11:52 am

    Hello Danny,

    I’m glad you liked the inventRight info I shared with you in this blog post. I wish you much success in all your invention related endeavors. Kindest Regards, Stephen Key inventRight

  • Cainen February 28th, 2008
    12:38 pm

    Hello. I love this website and the four hour work week book. I have a question for anyone who knows about property law. My Q is I am in the process of getting a PPA for my product, but an attorney that I talked to said it is most likely trademark-able not patent-able cause it is to obvious. I am taking Stephen Keys advice and getting a PPA and licensing my product, but can I get a PPA for my product if it is not patent-able but trademark-able? And if I make a deal with a licensee could they upgrade the PPA to a trademark? Thanks Cainen.

  • cainen February 28th, 2008
    1:18 pm

    Hello,
    I have a question for anyone who knows about property law. My Q is I was in the process of seeing if my product was patent-able or trademark-able, but an attorney that I talked to said my product is most likely trademark-able not patent-able cause it is to obvious. He advised me to get a Provisional patent and to see if it has a market. I have decided to license my product to a licensee but can I get a PPA for my product if it is only trademark-able? Can i just have (Patent pending) if i am not sure how it can be protected? Again i don’t know if it can be patented but it can be trademarked. And if I make a licensing deal with a licensee could they upgrade the PPA to a trademark after the PPA expires? Please let me know ASAP Thanks Cainen

  • Stephen Key April 15th, 2008
    11:37 am

    Cainen,

    A PPA and a trademark are two totally different things.

    Provisional Patent Application
    http://en.wikipedia.org/wiki/Provisional_patent_application

    Trademark
    http://en.wikipedia.org/wiki/Trademark

    I wish you much success in all your invention related endeavors.

    Kindest Regards,
    Stephen Key inventRight

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