When it comes to making money with intellectual property, I’m always surprised by IP owners who constantly try to “reinvent the wheel”.
Often times I meet inventors and they are trying to build a business around their intellectual property. One of their biggest challenges is finding the capital to launch the new business. If they do raise some money, it’s usually less than they need. In the end, they run out of money and their new invention or technology never reaches the market.
Licensing is a faster way to get your intellectual property to market. Licensing can be done in months vs. the average 2 years it takes to start and grow a new business.
That is one of the biggest advantages of licensing. It’s a low-risk strategy that focuses your time (and money) on finding a company with the ability and resources to bring your IP to market. In effect you are plugging into a company that is already in motion in the marketplace.
Unlike making and selling a single product or service, your goal is to find different ways to license out your IP rights. For example, entertainment content, such as an animated movie or a TV show, can be licensed into multiple product categories, such as apparel, toys and gifts. Other types of IP, such as a new consumer product or software, have fewer licensing options, and may be limited to one or two different companies. You can also license your IP in other ways, such as for specific territories (i.e. the US or Canada) or retail distribution channels (i.e. mass market vs. specialty).
When thinking about how to make money with your IP, consider licensing as a fast track to the marketplace. Licensing let’s you tap into companies who already have the wheel in motion. It’s a faster, cheaper and less risky way to make money with your IP. In today’s economy, you can make more money licensing your IP than making and selling it yourself as a single product or service.