March 2010
Inventors often license their inventions because they understand technology, but not business. That’s fine if you just want to get paid for inventing. But what if you also imagine a world transformed by your invention, and want to create that world by using business? Business professor Mark Motluck of Anderson University offered us some advice on how to get started.
First, realize that not every great technical idea is a great business opportunity. Not many people will buy a cart if they don’t have a horse to pull it. So find out whether your invention has, or or can be modified to have, economic value by using a:
Survey. Ask people whether they would buy your product, and how much they would pay for it. Ask them in person at places where they would buy your product (say at a shopping mall), or indirectly by mail, telephone, or through your website.
Focus group. Bring people to a neutral site and watch how they react to your product. What do they like or dislike? What changes would they make? A panel from your local Rotary Club might make an effective focus group.
Personal interview. Ask individuals who represent your potential customer population what they think of your product.
Observation and field trial. Give your product to potential customers. Let them use your product under real conditions so you can see whether it works and how it can be improved.
Second, plan your business. This forces you to think about profit, to think about whether you can really tap the economic value of your invention. Get help from others - from SCORE (see below) or from books such as “Entrepreneurship : Theory, Process, Practice” by Donald F. Kuratko (of Indiana University). But write the plan yourself, so that you really understand it.
Third, consider allying yourself temporarily with a business expert. You and the expert want different things from this alliance, but combine your complementary strengths to achieve them all. Before entering into an alliance, ask yourself whether both you and the expert will benefit.
Such experts include:
Business incubators (e.g., IUETC or Purdue’s Research Park). This is a good starting place for a small business. An incubator improves the economy by providing a promising small business with subsidized rent, reduced cost of duplicated activities (such as document copying, telephone and internet service, and climate control), advice from business professionals, and networking opportunities.
Venture capital (e.g., Heron Capital) or angel investor (e.g., Stepstone Angels) firms. These firms offer business expertise, networking opportunities, and investment dollars in exchange for partial control of your company.
University schools of business (e.g. Anderson, Butler; ask any university business professor at any university about these community outreach programs). These schools help your business (e.g., with marketing strategies, or with writing a business plan) in exchange for the real-world experience you give to their students.
Service Corps of Retired Executives (SCORE). This group improves the economy by helping you succeed with free or low cost advice on all aspects of business.
Small Business Administration (SBA). This government agency improves the economy by providing guaranteed, but hard to get, loans.
Kauffman Foundation. This organization promotes innovation by offering entrepreneurs money, knowledge, training, and business networks.
Thank you, Mr. Motluck, for sharing your business insights with us and for your efforts to connect inventors and students to reality.
First, realize that not every great technical idea is a great business opportunity. Not many people will buy a cart if they don’t have a horse to pull it. So find out whether your invention has, or or can be modified to have, economic value by using a:
Survey. Ask people whether they would buy your product, and how much they would pay for it. Ask them in person at places where they would buy your product (say at a shopping mall), or indirectly by mail, telephone, or through your website.
Focus group. Bring people to a neutral site and watch how they react to your product. What do they like or dislike? What changes would they make? A panel from your local Rotary Club might make an effective focus group.
Personal interview. Ask individuals who represent your potential customer population what they think of your product.
Observation and field trial. Give your product to potential customers. Let them use your product under real conditions so you can see whether it works and how it can be improved.
Second, plan your business. This forces you to think about profit, to think about whether you can really tap the economic value of your invention. Get help from others - from SCORE (see below) or from books such as “Entrepreneurship : Theory, Process, Practice” by Donald F. Kuratko (of Indiana University). But write the plan yourself, so that you really understand it.
Third, consider allying yourself temporarily with a business expert. You and the expert want different things from this alliance, but combine your complementary strengths to achieve them all. Before entering into an alliance, ask yourself whether both you and the expert will benefit.
Such experts include:
Business incubators (e.g., IUETC or Purdue’s Research Park). This is a good starting place for a small business. An incubator improves the economy by providing a promising small business with subsidized rent, reduced cost of duplicated activities (such as document copying, telephone and internet service, and climate control), advice from business professionals, and networking opportunities.
Venture capital (e.g., Heron Capital) or angel investor (e.g., Stepstone Angels) firms. These firms offer business expertise, networking opportunities, and investment dollars in exchange for partial control of your company.
University schools of business (e.g. Anderson, Butler; ask any university business professor at any university about these community outreach programs). These schools help your business (e.g., with marketing strategies, or with writing a business plan) in exchange for the real-world experience you give to their students.
Service Corps of Retired Executives (SCORE). This group improves the economy by helping you succeed with free or low cost advice on all aspects of business.
Small Business Administration (SBA). This government agency improves the economy by providing guaranteed, but hard to get, loans.
Kauffman Foundation. This organization promotes innovation by offering entrepreneurs money, knowledge, training, and business networks.
Thank you, Mr. Motluck, for sharing your business insights with us and for your efforts to connect inventors and students to reality.