I would like to consider generating cash flow via licensing IP as a part of my business plan. I am entirely unfamiliar with licensing contracts, and current methods of connecting with potential licensees. Please, before giving any replies that center around how difficult it is, I ask you to make some assumptions: I am an infinite learner (See Reid Hoffman's "master's of scale" for a background.) Assume that I have very strong IP, and that I am more than tenacious. I am relentless. I am not in any way saying that I am infallible, just unstoppable. I specialize in ergonomics, human factors, product development, complex mechanisms and volume manufacturing. All this reads super nerd engineer with zero social skills. However, in my youth, I realized this, and pushed myself to work as a waiter and as a bartender for many years. This allowed me a perspective that not many technical people create for themselves. This allowed me to observe and take part in the workings of small businesses, but as importantly, it allowed me to learn important social and empathetic skills that are largely lacking within my community of engineers. I know good customer service, I know how to please people, and how to guide their perceptions. I am fascinated with behavioral economics.
With that out of the way, please let me give a background of my current situation. I've got a primary project that I have been working on casually for many years (initially, I thought it was very interesting, with little commercial potential), and working with obsession the last 3 years. It is on the side of a paying day job and I have kids, so progress is like a turtle. Slow and steady. Three years ago, I realized that I have some valuable IP, we filed patent applications, and began a slow push in earnest. We did a market analysis and pivots happened, and two products emerged from project 1… About six months ago, I realized that to achieve a refined design, I would need more cash that I have. Enter new IP for an innovative fidget device.
I realize that jumping into a waning fad (fidget toys) is generally not the best business risk. Now I am going to tell you my justification so that you don’t need to waste your limited time arguing a point where I have decided the risk is acceptable. I am an expert in human factors and ergonomics. I have had very busy hands my entire life. That’s why I used to smoke cigarettes, I still spin pens and coins, etc etc etc. But now, I fiddle with my fidget. Wow, did I just say that in public? I need to say, I love this thing. And I am getting very favorable feedback and requests for them from both friends and strangers (though marketing has not happened yet.) We as Americans experience more pressure and stimulus than ever before, and are simultaneously encouraged to not smoke cigarettes (which in that past was a socially acceptable method of stress/ anxiety mitigation). Nor get hooked on opioids . So we fiddle with our phones. But we are beginning to realize that we do not want to be addicted to phones either. Enter this desk fidget, this concentration device. Now, I am not planning on getting rich with this thing, I just hope to generate some passive income so that I can devote more resources and time to the primary project.
I am concurrently investigating other options of monetizing this IP such as contract manufacturers, and real bootstrapping with 3d printed manufacturing. But, I would prefer to minimize my time investment, and (being ignorant at this point) it seems to me that with the right licensing partner, this could provide me with the right balance of income and time to develop project #1.
Ultimately, my long term goal is to generate income via IP, which will fund my R&D lab. I have 2 additional "non fad" prototypes for IP development on the back burner that I hope to develop and license also. Let's call them product #'s 3 and 4. At this point, my long term vision is using these small IPs to fund the creation of a manufacturing company around product #1, then developing other applications for this technology in the field of robotics (#s 5, 6 etc). And finally, live like Alexander Calder, and make big art with my R&D lab.
So, here is the ask: Specifically, my initial target audience for the fidget is local tech workers (San Francisco Bay area); I think of it as a precision engineered focus tool. I've iterated and refined this thing for 3D printing over the past six months, and I have very viable prototypes. I even suspect that customizable 3d printed units could be a viable business plan, but I would prefer to license this as this is not my main project. I have also precision machined a few prototypes, and these are amazing. And *wicked* expensive.
So, my idea is to send a 3d printed prototype to as many possible potential licensees as I can think of, and offer licensing. Other than that, this plan is not very fleshed out. What type of licensing-marketing have you been successful with? What kind of licensing pitfalls have you experienced? Being inexperienced on this front, I'm sure I am underestimating the effort involved in making this happen. Please elaborate on that if applicable!
Thanks for your thoughts!