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0:00 hi everyone and welcome to inventors 0:04 Launchpad roadmap to success this is 0:07 common dennis go your host for today's 0:09 episode and today on the launchpad we 0:12 have a licensing expert he's an inventor 0:15 she's an inventor advocate she really 0:18 really loves educating inventors on the 0:21 way to move forward whether they're 0:23 going to go to retail going to go to TV 0:25 shopping but her main focus is licensing 0:27 products which is one of the things that 0:29 I get questions about all the time 0:32 everyone not everyone but most inventors 0:35 and most product developers want to 0:37 license their product because they don't 0:38 want to be in business they don't want 0:40 to be a business person they just want 0:41 to go about inventing and developing her 0:44 name is Rita Crompton and I think she's 0:46 on the one line now are you there either 0:47 I'm here well hello and thank you for 0:51 being on the show today how's it going 0:53 out there it's nice and sunny today yeah 0:55 that's good you're out in the colorado 0:57 area i am right just west of the Front 1:01 Range there so I give an ICU the 1:03 mountain oh yeah it's some nice area 1:05 we're out here in the Clearwater Florida 1:07 and we enjoy the sunshine as I know that 1:09 you do and again I'm glad you're on the 1:12 show um you're talking about license of 1:15 questions sent to us at the launchpad 1:18 about licensing and it's so important to 1:21 get the right information licensing is 1:23 such a great outlet for an inventor and 1:26 that's what so I was excited to have you 1:28 on the show first off let's see a step 1:30 back whether I could get into what 1:32 you're doing oh yeah okay that's kind of 1:36 funny because I always say that God was 1:38 actually talking to me one day and I 1:39 shut up and listen you know and when I 1:42 look back over my history I was kicked 1:45 out of the Girl Scouts in the fourth 1:46 grade for selling too many cookies I 1:48 invented going around and taking orders 1:49 I have been an entrepreneur all of my 1:52 life and so you know i look at the steps 1:55 and my skill set is helping people kind 2:00 of get out of their own way it's seeing 2:01 the bigger picture it's getting out of 2:03 the traditional sandbox and saying well 2:05 what if we used it this way well how 2:08 about going here and helping inventors 2:10 really see that bigger picture and 2:13 to keep them on track you know life gets 2:15 in the way for everyone it does me too 2:16 and then the goal is to get back on 2:19 track you know how do you get come a 2:21 time table set and then stay on track 2:23 and that's my skill set is to see the 2:25 bigger picture and keep them on track 2:26 yeah well looks fine you don't take 2:30 shortcuts I don't let people drink a 2:31 little umbrella drinks into ET you know 2:33 when we still got a lot of work to do 2:34 I'm glad you think that because doing 2:39 this in the right sequence is one of the 2:41 most important things at an inventor to 2:43 do but to try to leapfrog or jump there 2:47 are no shortcuts I do not have a crystal 2:49 ball I can't make promises on that 2:52 something is absolutely going to happen 2:53 so it's a very sequential you know one 2:56 step we mix it mix the next set of 2:58 decisions based on the information we 2:59 gathered at the previous step very 3:02 logical yeah so when you when you 3:05 started getting to this was there was 3:08 there something i don't know i don't 3:09 know how many years you been how long 3:11 have you been doing this i'm not going 3:12 to tell you all dates me know over 10 3:15 years over 10 years unselect that have 3:17 been an entrepreneur and have multiple 3:19 businesses in your industry over the 3:21 years rather than dip decades but I've 3:25 been around for a while well again I 3:28 read that you did have several 3:29 businesses and that's kind of even in 3:31 the same way I mean as you progress 3:32 through your business and gathered 3:35 knowledge it's so much fun to to help 3:38 other entrepreneurs are inventors with 3:40 your knowledge and education but 3:42 bringing them back down to earth and 3:43 getting them in that sequence as you 3:45 said is so important it really is 3:47 because they have and I don't want to 3:50 say anything bad i mean inventors were 3:51 all inventors we were getting excited i 3:53 get excited about my own product yeah i 3:56 need somebody to pull me down and say no 3:58 you know you can't do that you can't go 4:00 that fast so when you're looking at four 4:02 products are looking at a product what 4:04 do you what do you look forward you look 4:05 at the inventor first do you look at if 4:07 they have a team together or do you look 4:09 at just a product oh it really depends 4:13 the first thing I look at is the product 4:14 does it have some length you know we do 4:16 some due diligence is there anything 4:18 else out there you know they always say 4:20 oh there's nothing else out there like 4:21 it it's like you know what's give me 15 4:22 minutes and it's like you know you might 4:25 want to buy that one on amazon for 4:26 2495 because it's going to be a lot 4:28 cheaper than filing a patent like oh no 4:30 there's nothing else out there well you 4:32 know a lot of concern is now having a 4:34 better widget is a good thing having 4:38 something that is totally new and novel 4:40 is not always a good thing because now 4:42 you have to pay a lot of money to 4:44 educate the consumer that you solve a 4:46 problem they didn't know they had and 4:49 that can be really expensive so you know 4:51 a better flashlight everybody knows what 4:53 a flashlight is for but now you've got 4:55 one that wraps around a pole instead of 4:56 having to hold it so sometimes that's a 4:59 good thing it's faster into the 5:00 marketplace so we look at those types of 5:02 things is a disposable non-disposable 5:04 you know what is the potential market 5:06 place the guy gets dumb in southern 5:08 Colorado get an amazing full-size 5:10 functioning tractor limited market as 5:13 opposed to the person who did the really 5:15 cool baby teeter we look at those kinds 5:18 of things on you know what is it what is 5:21 the potential point to be and for a lot 5:24 of folks that's the big thing is you 5:26 know it's easy to go to a trade show and 5:28 launch a product when it's a baby 5:30 teether or i can carry it in tractor not 5:32 so much and again like you said it's it 5:36 could be a limited market I mean you 5:38 don't want to go after a market that's 5:40 very small even though most inventors 5:43 you probably hear you ask them who their 5:45 who their client database is who the 5:47 target market is and they say everyone 5:49 right and you know then I want to know 5:51 what have they done so far and we always 5:53 say you know do as much digging around 5:55 as you can try to find you know websites 5:57 then when they get to the point where 5:59 they've done their own version of a 6:02 prototype duct tape cardboard Legos pipe 6:04 cleaners I don't care what they've got 6:06 laying around the house they can get 6:07 something out of their head and in 6:10 three-dimensional and so for some people 6:12 are better at drawing than they are 6:13 actually doing something out of play-doh 6:15 that first one is just really really 6:18 rough and then we look at doing a 6:19 professional search and this is 6:22 professional search in patent and 6:26 product because there's a lot of things 6:27 as you know that are out there that are 6:28 not patented but they become part of the 6:30 public domain so that would influence 6:32 somebody's ability then to go ahead and 6:34 successfully file a patent so that's the 6:37 next step we look at is that 6:38 professional search 6:39 not something that is necessarily done 6:41 by an attorney just because they tend to 6:43 charge a lot more um but you know giving 6:47 them the inventor another set of eyes 6:49 it's going to be looking through the 6:50 USPTO the international filings and then 6:54 product filings it is amazing how many 6:56 science students made a public 6:58 disclosure and now they're in you know 7:01 there in the marketplace even though it 7:03 was just a science project and I saw oh 7:05 because they're in the public eye as 7:08 soon as they presented that's right yeah 7:11 i just got done judges judging the state 7:13 science fair last Thursday and for any 7:15 of those kids that had a potential 7:17 product they made a public disclosure at 7:18 that science fair oh yeah and they're 7:21 not getting everybody there to sign an 7:23 NDA so it's kinda psychic preferred yep 7:26 and so you know those some of the things 7:28 that we look at is you know the due 7:31 diligence you know that bet search what 7:33 comes back in the search you've been 7:35 done in other countries it doesn't 7:37 matter where it was done if it's been 7:39 done at any time in history any place in 7:42 the world it affects your ability to 7:44 file successfully in the US yeah and 7:47 it's super important that you're going 7:49 to try to license I mean a company that 7:52 you're going that's going to want to 7:53 take over your product is really how 7:55 deep into it how much due diligence do 7:58 they complete you know once you know if 8:01 when they have the professional search 8:04 done alright that's kind of one step 8:06 removed so I tell people you know look 8:08 dig around on the USPTO website they've 8:10 got a very good tutorial you know when 8:12 your eyes kind of roll back in your head 8:14 then it's time to move on and get that 8:17 third party search done we've got a 8:19 pretty good company that nobody it 8:21 worked with that's what you take in to 8:23 your attorney you know whichever one 8:25 you're but there's again no shortcuts 8:27 they're going to file a provisional it 8:30 needs to be a good one you don't get to 8:31 hire somebody that filled in the blanks 8:33 I can circle the words they filled in 8:36 and if I can do it somebody else can and 8:37 I had a guy do that he says let me send 8:40 you what I filed like okay and I said I 8:43 can circle the words this isn't going to 8:46 stand up in court and it's someone then 8:47 we get to the point of Licensing they 8:50 need to know that they can defend it 8:51 because they're going to take on that 8:52 respond 8:52 Tony yeah that thing each step is so 8:55 important and someone else is going to 8:58 be giving you money for your product 9:00 it's so important it really isn't so I 9:02 mean it so you go through and you find a 9:05 product and then you're going to go dot 9:06 your i's and cross your T's what about 9:09 their product itself I mean have you 9:11 gone through ones that we're just 9:12 drawing ones that we're functional or 9:15 just prototyped those do companies you 9:19 know it's funny because you know ask 9:20 somebody will how many prototypes you 9:22 having I've got a museum full of 9:23 prototypes because you know you build on 9:27 it they'll have their first one that's 9:28 you know out of Legos or play dough or 9:30 pipe cleaners or whatever and then they 9:31 not go and get a 3d printed one then 9:34 they test it then they know they've got 9:35 to make some changes in the size or this 9:37 part doesn't work just right 3d printing 9:39 is wonderful because you can make 9:40 corrections for a few hundred dollars 9:42 now instead of thousands of dollars and 9:45 so we look at you know getting that sexy 9:47 prototype finished up and to go to you 9:51 know that first kick of marketing and 9:52 launching a product we need patent 9:54 pending and a sexy prototype do not need 9:57 inventory yeah unlike something not the 10:00 licensing them nope now it's great if we 10:03 do if we get to the point now where 10:04 we've gone to a trade show we know 10:06 there's some due diligence there there's 10:07 an interest in the product um you know 10:10 packaging isn't going to be too terrible 10:11 we can sell on amazon you cancel orders 10:14 maybe do a Kickstarter campaign for some 10:16 folks we go to a trade show we launch 10:17 the product we come back we launched a 10:19 Kickstarter campaign so we've got more 10:21 options now as far as building towards 10:24 that licensing goal that's that's a 10:27 that's a good point so what about when 10:29 you're going after these licensees if 10:31 you're going after multiple you'll want 10:33 to have either more than one prototype 10:35 or if like you said you did a small run 10:37 and you have some manufactured it's 10:38 easier to send it out do do companies 10:41 ask about sales because it or you do you 10:44 tell them this is a brand new product we 10:45 haven't made sales we're looking the 10:47 license that you are you tell them right 10:48 off the bat yes we tell them right off 10:51 the bat exactly where we are that we you 10:53 know we've got sexy prototypes and Alexa 10:55 property filed we haven't sold any 10:58 because we have a manufactured any yeah 11:00 if we need to do then a Kickstarter 11:02 afterwards just approved sales 11:04 Kickstarter is great on you know 11:06 to go though because now they they pay 11:08 for it upfront so the inventor is not 11:10 out you know the tens of thousands of 11:12 dollars from manufacturing you know we 11:14 can usually get moles covers and a lot 11:16 of times the licensee will buy the molds 11:18 or the tooling and any inventory that 11:20 you may have for some of that is that's 11:22 great but I've got any letters going to 11:24 the national hardware show where their 11:25 money was put into a single prototype 11:28 and that is all we've got to work with 11:29 and I've license with that mmm sexy 11:33 prototypes in and for a lot of them 11:35 that's what they're needing a good 11:37 licensee they don't necessarily need to 11:40 they know what they're marketed they can 11:43 get a good licensing they can look at it 11:45 and know basically a ballpark of what 11:46 it's going to cost them to manufacturing 11:48 know their their book of business and 11:51 who's going to buy it when they get down 11:53 to that minutiae of it's like well you 11:56 know it's going to how much does it cost 11:58 you to manufacture it I say run because 12:00 they should know how much it's going to 12:02 cost them to manufacture and it's always 12:04 going to be cheaper than it cost you yes 12:06 know that there's no doubt about that 12:08 you're you're exactly right boy there's 12:11 so many questions when you're getting is 12:12 because and we get only cry yeah you 12:15 know we get so many times that want to 12:17 know about licensing and and you're just 12:19 hitting this stuff so fix it so fast 12:21 that's great um so so when you're 12:24 approaching a licensee and and do they 12:29 sometimes are going so so I'm just 12:32 trying to think of us we put so there 12:34 are they going to make changes to it oh 12:35 so it so you don't worry want to order 12:37 10,000 units because they may make 12:39 changes they may just want be though 12:41 they might just want the intellectual 12:43 property right and we look at you know I 12:46 worked with attorneys in the password 12:49 you know they understand that skill set 12:51 that it's got to bump up against and 12:53 that's why the search is so important 12:54 because they want to know that ballpark 12:56 of what's out there and then if they 12:57 need to fine-tune the search they know 12:59 which classification to go to I talk to 13:01 my hands so I'm moving around too you 13:03 know vacations to go to right away to 13:05 fine-tune that if they need to and then 13:07 we want that intellectual property to 13:09 bump up against whatever else is there 13:11 so the inventor has got you know some 13:13 wiggle room in making changes to the 13:16 design that still will be covered a good 13:19 patent is not 13:20 industry-specific right it is not sighs 13:23 specific it is not material specific so 13:26 I had somebody one time they said well 13:28 we want to make it out of a 13:29 biodegradable material and I said well 13:31 you can and they said well why not I 13:32 said because your attorneys that it was 13:34 made out of aluminum that'd be pretty 13:36 much that's it right there oh you know 13:38 they were able to go back and file a CIP 13:40 and correct that but inventors need to 13:43 be aware that you know you say something 13:45 made out of but not limited to so in 13:47 five years a new material comes down 13:50 that makes your product better you don't 13:51 want to be obsolete vitally yeah you 13:53 know and as Venters and what we learn is 13:56 to be specific and it's so hard to 13:59 change those tides when you're doing a 14:01 patent because you don't want to be 14:03 specific and there's a difference 14:04 between the patent drawings in the 14:06 manufacturing drawing patent drawings 14:08 are very broad you know their their 14:10 labels to match the elements of the 14:13 patent but your manufacturing ones 14:14 they've got to be right down to 14:17 millimeters it's right and so you know 14:20 different mindsets and so I get in 14:22 better sometimes that are hard to 14:23 understand that but you're exactly right 14:25 a licensee is renting the right to use 14:29 the intellectual property mmm all right 14:31 and if they go in and it's going to be 14:33 cheaper to make it by making some 14:35 changes it's not it's your end up eating 14:38 your inventory you can still go and sell 14:40 it and a lot of times they will buy that 14:41 inventory and they will go ahead and go 14:43 to market with that unless there's just 14:45 some really serious material changes 14:47 because they don't want that gap in 14:49 selling they want to be able to you know 14:51 get to market as smoothly as possible so 14:56 that's kind of what we look at is in 14:58 getting the products out there but 15:00 companies come to professional trade 15:03 shows it's when you say I contact them I 15:05 look for them in a trade show yeah they 15:07 look for me at a trade show they come 15:09 shopping in our space at a trade show 15:10 and to see what is their next project 15:13 going to be it's something that they 15:15 usually picked up in a trade show trade 15:17 shows are like their mold where they're 15:18 going to go shopping hmm get to them 15:21 after the show they've got layers of 15:23 gatekeepers to keep you out is not 15:28 working on the project that they got it 15:29 the last trade show tips that's where 15:31 they go shopping so yeah I mean 15:34 and we I was going to definitely going 15:36 to get into that real quick so so the 15:37 best thing to do I have a product and 15:39 i'm not sure what to do with it try to 15:42 either locate and we'll go through your 15:44 contact information or the end to end of 15:48 the show but but just to go to a trade 15:50 show walk around do you take your 15:51 product do you take a sale sheet I mean 15:53 what's the best thing to do yes and yes 15:56 we had we just got back from entries 16:00 which is home health care and I went out 16:02 there with nine inventors and one of one 16:05 of the inventors was in there featured 16:06 showcase and I said okay you've got a 16:11 motorized wheelchair that starts out 16:13 with a hoverboard so cool now you can 16:15 take an old wheelchair and set it on top 16:18 of a hoverboard and you have got for a 16:21 few hundred dollars now a motorized 16:22 wheelchair that is just so stable and so 16:25 easy to use but it was sitting in a 16:28 showcase well you had another one there 16:30 and I did you need to get out and ride 16:31 this around he won third place for 16:34 innovation um but it was only because he 16:36 got out there and showed it around now 16:38 he is going to the national hardware 16:40 show with us he's out of Boston and the 16:43 hoverboard buddy system is he starts out 16:46 with a platform that goes on to any 16:48 hoverboard but he has different 16:49 accessories that go on to it so while he 16:51 was at meant trade with the wheelchair 16:54 he's going to the national hardware show 16:56 with a two wheel dolly that is now 16:58 motorized Wow and a golf cart maybe I'll 17:03 show both of those in the product launch 17:05 area the you know the showcase premier 17:08 area to be out there but you will also 17:11 ride those around the entire convention 17:14 hall to get people's you know and the 17:16 media's attention about this and what 17:18 he's licensing then is that platform 17:21 that goes over the over the hoverboard 17:24 and that way then he's got about a half 17:26 a dozen different accessories that go 17:29 with it that will turn it into a 17:31 different work items so he's taken up a 17:33 fun toy and turned it into a work horse 17:37 yeah yeah wow talk about innovation 17:39 that's and being able to put like you 17:41 said put it on a stable base oh it's 17:44 it's amazing i I've ridden it many times 17:47 on 17:47 you know farmers market and at the 17:50 hardware show last year and it is so 17:52 stable and it just it's just zoom yes 17:55 wonderful that's so there are a lot of 18:00 shows out there yeah and is there a 18:03 place that people can find out where the 18:04 shows are or should they just contact 18:06 you or do you have it on your website or 18:07 should they get is there somewhere else 18:09 to go the easiest place to go with you 18:12 know when you look at who's going to be 18:14 selling your product all right so if 18:16 it's a baby product you know there's 18:18 somebody know off the top of my head 18:19 there's the ABC Kids Expo there's med 18:21 trade for home health care but there is 18:23 a show for everything yeah the national 18:25 beverage shots okay and I'm going with a 18:28 client to that one so there is a show 18:31 for everything now the national hardware 18:32 show is kind of all-encompassing it's 18:34 just a gigantic show you've got 18:36 everything there from home and garden to 18:38 car accessories and the pet products and 18:42 you know outdoor products anything that 18:45 you would find in your target walmart if 18:48 you're looking at your home your 18:49 basement your outdoors your garage your 18:51 kitchen anything so it's one of the ones 18:54 that's all encompassing it's easier 18:56 easier certainly easier for us to get 18:57 you I've been to the National asphalt 18:59 shell oh that was fun but very 19:03 successful for the inventor because he 19:05 had a cool way of putting those glass 19:07 beads down into go on asshole and he had 19:11 people actually coming in and buying his 19:13 prototypes and wheeling them out the 19:14 door and they were not cheap um but very 19:18 cool so the best way to find your trade 19:21 show is to look at you know where would 19:24 your product to be sold and then to 19:27 contact that sore and ask them for a 19:29 name of a Salesman or a distributor you 19:31 know the other way to do it is to you 19:33 know if the ideal licensee is pepsi-cola 19:36 bottling then you call them up and say 19:39 what trade shows do you go to hang all 19:43 right so some of it is you know you 19:44 better do a little reconnaissance you 19:45 got to dig around um because the trade 19:48 shows they're all over the country you 19:49 know the asphalt one was in Nashville 19:51 I've been to the global pet expo in 19:53 Orlando fashion shows in New York arm 19:57 the outdoor living show in Chicago 20:01 so they're all over the country and you 20:04 just never know some of them move around 20:05 some of them stay in the same place 20:06 every year but the best thing to do is 20:09 to start asking questions yeah I want 20:11 you know once to talk specifically about 20:13 their industry more than happy to point 20:16 them in the right direction or to let 20:18 them know if I've been to one of those 20:20 shows I don't have my travel with the 20:23 inventor to go to a specific show 20:24 because to work a show you cannot go by 20:27 yourself got to have multiple people 20:30 there to get the benefit out of it see 20:33 that's why I you know I would recommend 20:36 and I know you're giving out the 20:37 information and just allowing people you 20:39 know to make that you but anyone is 20:41 listening I would recommend speaking 20:43 with readers beforehand because they are 20:45 vast and a lot of times an inventor 20:48 buoys their product is for a certain 20:50 segment or certain market and you find 20:53 that sometimes you're like wait a minute 20:54 we have a better market to go after 20:56 exactly and the other thing is they're 20:58 expensive hmm you know going to a 21:01 professional show is expensive you know 21:03 you've got your space but you have to 21:05 pay it to rent everything right down to 21:07 the trash can and a lot of times they've 21:11 got rules about how you get it into 21:13 there so you've got higher Union help to 21:16 get it in the door I hate going to 21:19 Atlanta because they've got different 21:21 rules than Las Vegas and in Las Vegas I 21:24 can wheel everything in on a two wheel 21:26 dolly and so I line up my inventors and 21:28 we unload it on the curb and we push it 21:30 in the door you know Chicago isn't 21:34 easier to work with um but you know 21:37 different different cities have 21:39 different rules and where you can find 21:41 yourself real quick at a 21:42 ten-thousand-dollar mark yeah that's why 21:45 I againi you may think you're saving a 21:47 few dollars by not you know bringing 21:49 somebody on like Rita but in long run if 21:52 you serious about your product you know 21:54 contact somebody who knows yeah the 21:57 gentleman we went to the National 21:58 asphalt show he was getting there a day 21:59 ahead of me and I said do not talk to 22:01 anybody if you don't know who they are 22:04 and so I got there any goes well you 22:07 know these guys offered they were so 22:08 nice and I said don't tell me how much 22:12 your invoices and heat afterwards 22:14 said it was twenty-five hundred dollars 22:16 for that invoice and so yeah you've got 22:19 to be very much aware it's not nice it's 22:21 business and everybody is going to 22:22 charge you something yeah and and of 22:24 course the guys were nice they charging 22:26 popular yeah yeah nice twenty-five 22:28 hundred dollars worth film yeah yeah so 22:30 no no I totally agree and if you can 22:32 pick and choose the right shows I could 22:36 see it being very beneficial because you 22:37 don't have to go to a mall you don't 22:38 want to do a shotgun approach if you get 22:39 somebody like yourself who knows which 22:41 ones to target and even then going to a 22:44 professional trade show is far more 22:47 valuable dollar for dollar to your 22:49 market research and selling your 22:51 products than doing a marketing campaign 22:53 with an advertising agency because 22:56 they've got no skin in the game they're 22:57 going to send you an invoice you don't 23:00 know if it's going to be successful in 23:01 infomercials are probably the worst stay 23:05 away from there always somebody calls 23:07 you on the phone and says oh you know 23:08 we've got this TV event I know your you 23:10 know your blood starts you know pumping 23:11 and you get real excited first question 23:13 out of your mouth is how much is it yes 23:16 always ask how much is it it's amazing 23:19 how they hide that down in the fine 23:21 print yeah it's great advice because 23:23 they're getting you excited because they 23:24 know you're mostly attached yep but if 23:27 you know you've got a product for 23:29 serving breakfast and it airs at two in 23:31 the morning anybody serving breakfast is 23:33 still asleep that's true exactly and if 23:36 it is common sense and again in most 23:38 inventors you gotta really step back 23:40 don't make quick decisions it's usually 23:43 not going to benefit you in less again 23:44 you got some good education you talk to 23:46:00 somebody you really need to get someone 23:48:00 who's not emotionally attached to is all 23:50:00 about business you know again somebody 23:52:00 like Rita who will make the right 23:53:00 decision because again read out how do 23:55:00 you work with your inventors you charge 23:58:00 your money up front how does that work 23:59:00 no I do not charge you a frenzy because 24:02:00 I cannot guarantee we will get to deal 24:03:00 then it takes time and persistence and 24:05:00 patience that we end up having a pretty 24:08:00 close relationship I charge a percentage 24:10:00 of the royalties from the licensing exam 24:13:00 so the easiest way to look at it is for 24:16:00 every dollar royalty that we are paid 24:18:00 for the product I get 20 cents and the 24:21:00 inventor gets 80 cents and for that 24:23:00 twenty cents then we do the legal and 24:26:00 financial review so that we know 24:28:00 the licensee is doing what they're 24:30:00 supposed to be doing what they promised 24:31:00 and they're doing it in a timely manner 24:33:00 so we go out and we kind of look at you 24:34:00 know if they say they only sold this 24:36:00 many but we know that they sold out at 24:38:00 several ace hardware stores then we want 24:40:00 to go in and do an audit and then we're 24:43:00 looking at you know the numbers since 24:45:00 you know the previous audit or for a 24:47:00 period of time so that we know that 24:49:00 they're being straight with us sure 24:50:00 they're moving on to their next idea 24:53:00 they won't use me I want to have to deal 24:54:00 with that I don't charge upfront simply 24:56:00 because i can't make you urine tea yeah 24:58:00 well the twenty cents that sounds way 25:00:00 more than fair i've heard some some 25:02:00 stories where the cost you know again 50 25:04:00 50 or even i know it's crazy that's that 25:08:00 that sounds great now what kind of time 25:10:00 frame you know and I know the every 25:12:00 product is different you know somebody 25:13:00 comes on board you say hey we like your 25:15:00 product this is what we're going to do 25:17:00 is there you know this obviously time is 25:20:00 going to go by I hear let licensing 25:22:00 takes a little bit about it does i mean 25:24:00 i always tell people look at somewhere 25:26:00 between nine and twelve months I've seen 25:28:00 it happen in a few weeks we have 25:30:00 gentleman that had a very cool product 25:32:00 that went on the back of an RV and his 25:35:00 first time at a trade show the CEOs wife 25:38:00 was there and she called her husband she 25:40:00 knows you need to get down here and see 25:41:00 this she had a signed deal and roughly 25:43:00 about eight weeks and I mean it was they 25:47:00 were very good to him that was you know 25:49:00 a very fair deal he got everything that 25:51:00 he wanted out of that um I've seen 25:54:00 nightmare cases where you know there was 25:56:00 a good offer made but the inventor 25:58:00 wanted to bring in a separate attorney 26:00:00 that is like the kiss of death it took 26:03:00 us two years to get a signed deal and 26:06:00 their royalties eventually were cut in 26:08:00 half because the licensee said no and 26:11:00 then they got a twelve thousand dollar 26:12:00 invoice from the attorney is my job 26:16:00 negotiating the deal and not being an 26:19:00 attorney now I have attorneys behind me 26:21:00 that cover our backs that they don't sit 26:23:00 at the table because then you're 26:24:00 negotiating with the CEO they were if 26:27:00 you don't bring your attorney to the 26:28:00 table they don't bring their the deal is 26:31:00 between us and the CEO it's the 26:34:00 attorneys job to say all right well you 26:36:00 know you need to talk about this these 26:38:00 are the risks and then you decide which 26:40:00 risks you're willing to accept 26:41:00 and which ones you're not willing to 26:43:00 accept but as soon as those attorneys 26:44:00 sit down all you're going to be doing is 26:46:00 generating billable time well right 26:49:00 there that is a huge piece of 26:51:00 information because the first thing an 26:52:00 inventor would do is oh I'm getting it a 26:54:00 lesson di better contact my attorney 26:56:00 which obviously now you say is a huge 26:59:00 mistake you want to do everything we 27:00:00 believe and right but you put those 27:02:00 attorneys together the only people that 27:04:00 will make the money is the attorneys and 27:07:00 there's nothing wrong you're asking the 27:08:00 attorney to protect you they're doing 27:10:00 what you're paying right and like I said 27:12:00 we've got them in the background but 27:14:00 they're not setting a stable yeah very 27:16:00 important very important I I would 27:18:00 totally agree with that because as soon 27:19:00 as you pull your hand like that the 27:20:00 other company or the CEOs as well yeah I 27:22:00 have to do it because I would think that 27:26:00 the companies that want to license your 27:28:00 product and I could be wrong they want 27:29:00 to get into that product they wouldn't 27:31:00 waste their time they want that product 27:32:00 for a reason they want to get a gun 27:34:00 exactly they don't want to waste they 27:36:00 don't want to waste the time they don't 27:37:00 want that heartache the lessening of 27:42:00 their stomach lining by getting into 27:44:00 hardcore negotiations and I usually see 27:47:00 them you know sometimes it's taken us 27:49:00 longer there's been a couple of clients 27:50:00 that we worked out longer um can't be 27:53:00 afraid to pull a deal if it's not 27:54:00 working out and move on we look at the 27:56:00 size of the company the ratings of the 27:58:00 company and that's sometimes an inventor 28:00:00 is so excited they don't think about 28:01:00 going and looking at the financial 28:03:00 ratings of a company and you know are 28:06:00 they registered with their local Better 28:08:00 Business Bureau do they have any 28:09:00 complaints filed against them you know 28:11:00 are they manufacturing other products 28:13:00 that have really bad ratings hmm so 28:15:00 that's my job yeah yeah well again 28:17:00 that's one and that's why when you say 28:19:00 twenty twenty cents i doubt it you know 28:21:00 and again those i think it's a great 28:24:00 deal i think it's a great deal for an 28:26:00 inventor to be able to give some give 28:27:00 their product or somebody like yourself 28:29:00 who's been doing this a long time you 28:31:00 know what you're doing you have all the 28:32:00 contacts so twenty twenty cents i think 28:35:00 is well worth it well i know what i'm 28:38:00 talking to talking to Rick about it you 28:40:00 guys how do you even do that at that 28:43:00 rate and it's like you know I gotta be 28:45:00 able to sleep at night and the secret in 28:46:00 life is to not be too greedy and you 28:48:00 know what you're doing there's a big 28:49:00 difference when somebody asks for a lot 28:51:00 of money up front you have to wonder why 28:53:00 they doing that you're 28:55:00 now you have skin in the game because 28:57:00 you know that you can deliver it's a big 28:59:00 difference that's right it really really 29:02:00 is really is so going back to the 29:04:00 contracts because these are questions 29:05:00 that I get all the time and having 29:07:00 somebody like you want i'm trying to get 29:08:00 get the answers that i can give make it 29:11:00 sound like I know what I'm doing when 29:15:00 you talk about licensing a product and 29:18:00 the amounts that the inventors might 29:21:00 make on those contracts what is the 29:23:00 what's the average percentage that 29:25:00 someone is going to get average is five 29:28:00 to seven percent of the wholesale price 29:30:00 that is the only thing a licensee can 29:32:00 control it got no control over retail 29:35:00 because that's going into a store the 29:37:00 store page wholesale for it so figure 29:39:00 five to seven percent of wholesale 29:41:00 alright so you know for a lot of 29:44:00 inventors they say and this is really 29:46:00 key deficit I can do better than that 29:47:00 myself you know i do myself i get to 29:49:00 keep all of it all of what exactly 29:52:00 alright you're looking at a multiple of 29:54:00 five for manufacturing that means if 29:55:00 you've got a suggested retail price you 29:59:00 know where it fits in at ten bucks all 30:01:00 right that that's all in consumer is God 30:03:00 when it comes to pricing you don't give 30:05:00 a well I'm going to charge fifteen 30:06:00 dollars for a ten dollar item the sewers 30:08:00 not going to buy it so consumers is okay 30:11:00 this is a ten dollar item that means you 30:12:00 have got to make it package it in shirt 30:15:00 for two all right because the 30:18:00 distributor is going to buy it for 250 30:19:00 they're going to wholesale it to the 30:21:00 store and the store is then I'm going to 30:22:00 sell it for ten and one piece that wall 30:24:00 do it you cannot do it all yourself you 30:26:00 just can't there are not enough hours in 30:27:00 the day you do not have enough stomach 30:29:00 lining for this right or the book of 30:31:00 business store owners all right they 30:35:00 don't know you they don't know if you're 30:37:00 going to be able to steal your orders 30:38:00 they want to deal with a distributor 30:40:00 they know so now a distributor is in 30:42:00 there right so when you're looking at 30:44:00 that pricing and now you've sold it to a 30:46:00 distributor for 250 you've only got 30:48:00 fifty cents left for your marketing and 30:50:00 marketing can cost more than everything 30:53:00 else combined marketing is this nasty 30:56:00 animal out there that you can spend 30:58:00 forever so you know in better go to the 31:00:00 bank and they take money out people that 31:03:00 license it go to the bank and they put 31:05:00 money in which side of that do you want 31:06:00 to be on okay yeah and 31:09:00 what inventors don't really account for 31:11:00 is the time they're going to spend doing 31:14:00 all this there no and they don't what I 31:17:00 when I talk to our inventor the command 31:18:00 I said this is a great product but 31:20:00 you're giving yourself a job if that's 31:23:00 what you want to do then that's great 31:25:00 but dealing with somebody like yourself 31:27:00 for you now they can go and concentrate 31:29:00 on something else they're going to get 31:30:00 that paycheck they're going to get the 31:31:00 right documentation it's going to be 31:33:00 said you're you're behind that and for a 31:36:00 lot of inventors you know that royalty 31:38:00 check that comes in every quarter is 31:40:00 extra disposable income you know when 31:42:00 you've got a better widget all right 31:44:00 you're going to get something that may 31:45:00 be tased for a family vacation it pays 31:47:00 makes a car payment I we had a gentleman 31:50:00 down arsonist gets really nice private 31:51:00 schools based on the royalties um but it 31:54:00 doesn't always mean you're going to get 31:55:00 to quit your day job ends on do you have 31:58:00 a game changer in a particular industry 32:00:00 and for a lot of inventors you know they 32:03:00 don't all right but going in and this 32:06:00 fantasy would start doing a start-up is 32:08:00 just crazy because you can't do 32:10:00 everything you cannot be your salesman 32:12:00 and you cannot be the business runner 32:13:00 you've got to pick one or the other well 32:15:00 that means then you've got to bring in 32:16:00 somebody else well are you bringing in 32:19:00 somebody who knows that particular 32:21:00 industry or not and so there's so many 32:24:00 there's so many hurdles to get over to 32:27:00 do a start-up going inventors are you 32:29:00 know they may try it eventually they 32:32:00 call me and they say oh forgot thanks 32:34:00 take this off my back and I had one 32:35:00 gentleman we licensed his product he had 32:38:00 sold over a million units but it never 32:40:00 quite done big enough to be on its own 32:42:00 and his wife was his distribution 32:44:00 network and every night at the dinner 32:46:00 table after dinner she was the marketing 32:48:00 about the packaging and pension me 32:50:00 apartment and everything and she finds 32:52:00 it I'm going to Florida see the ramekins 32:54:00 you can come with me or you can stay 32:56:00 here but I quit yeah close like know 32:59:00 what and you know I always tell people a 33:01:00 good invention is like a child you can 33:04:00 see that you nurtured it sucks you dry 33:06:00 you throw it out and until you throw it 33:08:00 out it is not going to grow up and take 33:10:00 care of you my daughter get a little 33:12:00 cranky when I say that but you get the 33:14:00 idea yeah try to be able to get it out 33:16:00 there so it grows legs of its own or 33:18:00 it's never going to pay you enough to 33:19:00 make it worthwhile yeah that's great 33:22:00 advice it really is 33:23:00 it's just setting proper expectations 33:25:00 you know we get a lot of methods as you 33:27:00 do they want millions and millions and 33:29:00 millions of dollars and you know it's 33:31:00 just it's just not going to happen if it 33:33:00 grows to that that's great but you know 33:36:00 i would think that even a company 33:38:00 licensing a product they're taking a big 33:41:00 chance also probably right oh absolutely 33:43:00 and gives i want money upfront well 33:45:00 you're not going to get money upfront 33:46:00 the reality is they're putting in 33:47:00 somewhere between a quarter and a half a 33:50:00 million dollars to get some 33:52:00 manufacturing the tooling to get it out 33:53:00 there to do the marketing part of it and 33:55:00 most inventors do not come to me so you 33:57:00 know I've got 250 thousand dollars to 33:59:00 throw this can you help me they're on a 34:00:00 budget you know they've got limited 34:03:00 dollars to spend and so when they expect 34:05:00 then that are going to get this 34:06:00 outrageous amount upfront well no you've 34:08:00 got skin in the game with them they're 34:10:00 willing to take a risk on your product 34:12:00 because they think that they can make a 34:13:00 pop from it and you share in that you 34:16:00 share in the risk you took the risk our 34:17:00 front now they're taking the risk 34:18:00 everybody kind of shares in the pain and 34:21:00 the reward yeah yeah well it sounds like 34:24:00 you have a lot of fun was what you're 34:26:00 doing there's no diet and the reason you 34:28:00 have a lot of fun i think is because 34:29:00 again i'll say it you know what you're 34:32:00 doing you know we have seen so many 34:34:00 wonderful products help that products to 34:36:00 the big garden we've got two wheel girls 34:38:00 going to the hardware show this year and 34:40:00 they both have very different functions 34:42:00 on products of course that's a 34:45:00 hoverboard buddy product and you can go 34:48:00 to the inventor lady website and see the 34:50:00 products now that we're teeing up to 34:52:00 take with us but step further the yard 34:55:00 stuff for the car stuff inside the house 34:57:00 outside the house babies and dogs and or 35:02:00 the pet industry is something i think is 35:04:00 a big industry we get a lot of pet 35:05:00 products here and there's a huge pet 35:08:00 section at the national harbor show Wow 35:10:00 yeah that's what I've heard and I'm glad 35:13:00 you're kind of confirming to the 35:14:00 hardware show looks like a comment 35:16:00 emulation of a lot of different products 35:19:00 and it's one of the ones that it's a 35:20:00 must must attend it seems like it is 35:23:00 it's huge about 4,500 exhibitors Wow at 35:26:00 the show and just a lot of fun a lot of 35:30:00 energy Tuesday Wednesday and Thursday we 35:33:00 actually I rent a house out there for 35:36:00 me in the staff and then we drive the 35:39:00 products out there and and and 35:41:00 everything so yeah it's a big deal next 35:43:00 one it's great Super Bowl yeah yeah it 35:46:00 sounds like it in and again you know 35:47:00 you're making it fun because you never 35:49:00 know what you're doing you're organized 35:50:00 you know what to do you have the 35:52:00 connections you know nobody takin 35:54:00 advantage you guys when you get there 35:55:00 it's a lot different than going there on 35:57:00 your own and saying okay holding a 35:59:00 product and walking down the aisle is 36:00:00 gone now to what I did that's that's so 36:02:00 hard to go by yourself the first time it 36:04:00 is so hard and where we've got you know 36:07:00 multiple people that have been there for 36:08:00 years I actually take someone who I say 36:11:00 all right this is the bouncer if someone 36:12:00 comes in and harassing you this is all 36:14:00 you have to say and then he knows what 36:16:00 to do so that you know you can move on 36:18:00 and be talking about your product get 36:20:00 out there show your product we've got 36:21:00 you know snap think it's a sign product 36:23:00 so it's some you know a lot of people 36:26:00 really learn and then they can grow up 36:28:00 and get their own space then you know 36:30:00 maybe they'll come with us one year or 36:32:00 two years and then there then they're 36:33:00 ready now they've you know kind of 36:35:00 geared on that it is not unusual that 36:37:00 people will go to trade shows every year 36:40:00 that they're trying to sell their 36:41:00 product because they get the biggest 36:42:00 bang for their marketing dollar that's 36:44:00 great now you go there with products you 36:47:00 walk around and kind of go I want that 36:49:00 part can you go talk to them oh 36:50:00 absolutely hey that's great you know I 36:54:00 get more people that come to me just 36:56:00 because of the advertising network and 36:58:00 asked if I will help them you know for 37:00:00 next year yeah now all that I believe I 37:02:00 mean just you know again just your 37:04:00 success stories I mean we'll definitely 37:06:00 bring people in and and that's when the 37:08:00 greatest part about it we're kind of 37:09:00 running out of time I had so many other 37:12:00 questions but we'll we'll catch up with 37:14:00 those but I do want people I would i do 37:16:00 want to you to let the people know how 37:18:00 to connect with you if they have a 37:20:00 product if they have questions is is 37:22:00 there a best way to connect with you i 37:24:00 nearly every website we got our website 37:26:00 inventor lady calm that was a funny 37:28:00 story because i was down at the chamber 37:29:00 one day and this guy goes i know you 37:31:00 you're that inventor lady that works for 37:33:00 me lady calm was available so inventor 37:38:00 lady is the easiest way to find me 37:39:00 inventor lady calm you can google reader 37:41:00 compton i come up i'm on facebook i'm on 37:43:00 linkedin easy to find my phone number is 37:45:00 everywhere but you can put that out on 37:47:00 your 37:48:00 your website yeah yeah and all of this 37:50:00 information will be on our show notes on 37:52:00 event is Launchpad also and you know I 37:55:00 would definitely encourage anyone that's 37:58:00 what since our show that had some 38:00:00 questions about licensing certainly send 38:02:00 them to me but send them over to read at 38:03:00 inventor lady calm which would be 38:05:00 awesome and if you have a product you're 38:07:00 looking to license it I mean definitely 38:09:00 look into utilizing rita services 38:11:00 because as you can see very 38:13:00 knowledgeable and experienced in this 38:15:00 industry so and this was done a ton of 38:18:00 fun thank you so much i look forward to 38:20:00 doing it again and you know if you've 38:22:00 got a product you need to get at the 38:23:00 artichoke give me a call yes thank you 38:26:00 so much rita and we will catch up with 38:28:00 you soon would definitely get invite you 38:29:00 back on the show maybe I give us a 38:31:00 little report on what happened at the 38:33:00 hardware show absolutely all right you 38:36:00 take care have a great day alrighty you 38:38:00 too thanks so much bye-bye