In the mid-80s, I had the fortune of working at the red-hot toy startup Worlds of Wonder in its design department. Worlds of Wonder brought Teddy Ruxpin, the animatronic storytelling teddy bear that became a bestseller, to market, as well as similarly innovative products like Lazer Tag. But it was the knowledge that Worlds of Wonder hadn't invented Ruxpin, but rather, licensed the concept from Ken Forsse that changed everything for me. Because as I stood in a factory overseas and watched Teddy Ruxpin after Teddy Ruxpin roll off a production line, I came to what seemed like an obvious-enough conclusion: I didn't want to be standing there. I wanted to be like Forsse, who I knew was free to continue focusing on being creative—while also making money in his sleep.
The licensing model has always made sense to me for that reason. When I broke out on my own, I was perhaps a bit naïve. I thought, 'If I show one of my ideas to a company and they like it, they'll pay me.' That's what I'd seen work in practice, after all. And really it seemed quite simple! I could focus on being creative without taking any risks. My licensee could focus on what it did best, like manufacturing, distribution and marketing. Who wouldn't want to hear me out? If we decided to move forward together as partners and the product was successful, only then would they have to pay me. It seemed like the perfect partnership.
I've been licensing my ideas for products more or less since I left WOW. For the past 15 years, I've been helping other inventors license theirs. (The designer of Grid-It™, the first product Core77 contributor Bruce M. Tharp references in his excellent 2012 article on product licensing, was my student.)
Some of the ideas I've licensed have been downright silly, intended only to put a smile on someone's face. On the other end of the spectrum, I've protected an Edison award-winning packaging innovation that I licensed to national brands with a wall of intellectual property.
That design schools don't teach their students how to license their ideas stumps me: The way I see it, open innovation enables creative people to design their lives, not just products. Work where you want. Work when you want. No more 9 to 5. (You'll work longer, trust me, but at least the exact time is up to you.) Open innovation is thriving! And really, no one is better primed to succeed at it than those who have studied product design. Most of the successful inventors I know have no formal training. I don't. You have a huge advantage!
A few years ago, I was invited to speak to Stanford's graduate design students. At the time, the economy was suffering, design jobs were few and far between, and students weren't able to start their own companies as readily. I can clearly remember how dumbfounded everyone looked after I described how licensing worked. They weren't aware they didn't have to start a company, nor work for anyone else.
At the Art Center College of Design in Pasadena, I experienced the same reaction. When I walked in, I was blown away by the art projects lining the hallway. The quality of the work was astounding. I felt like an amateur in comparison. But when I asked what would become of the products, I was informed they were just for a class project and would most likely be thrown away. If I could license my ideas without having studied product design, what these students could do seemed limitless. Researching markets, making observations, thinking critically, building prototypes—everything I had taught myself to do they were already doing at a professional level.
All of which is to say: I'm privileged and thrilled to share my strategies for licensing product ideas with the Core77 community. In future articles, I'm going to describe how to target the right companies, exactly what is needed to pitch an idea for licensing consideration, how to get a win-win agreement signed, and what to watch out for along the way. I'll explain how to protect your creativity from not only a legal perspective, but more importantly from a business perspective. Strategy is too often lacking when it comes to IP. I know how to write intellectual property protection that actually has value after having the 'honor' of defending my patents against one of the world's largest toy companies, Legos.
If you've studied product design or development, you already possess the skills needed to succeed at licensing. My intention is to show you how to leverage those skills to become an entrepreneur. Fair warning: It might feel uncomfortable. I'll be asking you to perceive, act and think quite differently from what you've been taught.
Stephen Key is a lifelong product artist who has licensed dozens of his ideas. His bestselling book "One Simple Idea: Turn Your Dreams Into a Licensing Goldmine" has been translated into five other languages. He speaks, writes, and vlogs extensively about licensing, entrepreneurship, and intellectual property strategy.