When it comes to licensing, there’s no one better to ask than the Open Innovation Director and President of the United Inventors Association, Warren Tuttle. Dedicated to connecting independent inventors with large corporations, Warren has received thousands of submissions from inventors trying to license their product. It’s not a surprise, since he has helped orchestrate the successful launches of products such as the Smart Spin Storage System, which sold more than 10 million units. And MISTO, the gourmet olive oil sprayer, that has sold more than 5 million units worldwide.
Today, Warren works with Open Innovation programs for three (3) major companies; Lifetime Brands (the largest non-electronic hardware company), Techtronic Industries (largest power tool company in the country) and Merchant Media. “Years ago, companies developed their own proprietary information and their own patents,” he said, “but in the last 20 years, there are companies that have opened up a lot more and said, ‘hey we don’t have all the good ideas.’ And they were willing to set up a program to receive those ideas and products.”
Open Innovation is a term that is appropriate for companies rather than inventors. It describes a program of the company which allows them to open up and look at outside innovation and submissions. The program basically creates an environment where the cultural differences between the company and inventor can be merged, or limited, if there are differences. It creates a safe setting where people can present their products and companies can license them.
Warren’s role with Open Innovation is complex. As an outside contractor, he serves as a liaison between the inventor and companies. He’s an advocate for the inventors because he knows what they’re looking for, and in turn gains the trust of the inventor. But he can go back and tell them the real deal from the company, so neither parties waste time. At the end of the day, he tries to help both. He works with everybody throughout the companies including their division presidents and legal departments. “So much is involved in it, and there’s a whole culture that has to be done in order to effect the outcome.”
As someone who receives 4,000-5,000 product submissions a year, Warren has seen the biggest mistakes inventors can make. On his website, Tuttle Innovation, he conducts a submission process (questionnaire) where he can quickly get a feel on the products sent in. One of the biggest problems inventors make is not doing enough research. Three (3) primary mistakes include:
- Which company to approach for their product.
- Not enough research on their own product such as patent searches and/or Intellectual Property search.
- Submitting drawings or a sales sheet, but haven’t built a functioning prototype that actually works, ie: they haven’t proved their product.
Issues such as these show him that these inventors are probably not ready for primetime. So what do inventors and entrepreneurs need to do to increase their chances? “Have a functioning prototype and patent strategy,” Warren said, “and more effort into researching who the right companies are to approach and the right people within the industry.”
As an expert in his field, Warren needs inventors to come to him that are beyond the idea stage with more than just a drawing. Ask yourself these questions; What is the role of my product in the marketplace? Does it really solve a problem? Is there a consumer demand or interest for it? Can it be built? “You have to put your time and effort into prepping. There’s no shortcuts.”
As far as 3rd party license companies are concerned, be careful, especially with companies that take money in advance. Warren noted “be very, very carefully vetted. Anybody that isn’t involved with you in the deal and just wants payment upfront for goods & services or coaching, etc.” He also wants inventors to be very critical. “It’s your hard-earned money. Be very careful in the quality that they’re offering and that they’re really helping you in the end.”
Warren suggests asking yourself AND these companies questions before handing over money. Can you or the company define success? Will you make enough back and what your pursuit is to pay off those prices? “You can get a licensing deal but that doesn’t guarantee anything. A licensing deal doesn’t guarantee success until the product starts selling and reordered. There’s a whole lot more to that,” he told me. “Ask these companies ‘tell me something that actually made money.’ The successes are few and far between with these companies.”
Warren advises inventors that they should be more discerning. “The people who are helping them, they don’t make a judgment on the product. They’re charging you, no matter what.”
A recent inventors digesters poll said 78% of all first time inventors think they’re going to become millionaires from their idea. Less than 3% of products get licensed and under 1% make back more than what they put into it. The 75% are who these companies prey on and for Warren it’s a big concern.
“The idea of not taking inventor’s money and giving back charitably to the community means a great deal to me. I say no a lot of times, all day to people.” For one thing, Warren Tuttle doesn’t take one dime from inventors. “Email me and for free I’ll tell you no or help you.” Without risking your savings.