To quote Monte Python, “now for something completely different.”
Today’s topic: The Strange Lives of Inventors
Just about every inventor has a “water cooler” conversation with a colleague at work that goes something like this:
Colleague: I heard you were working on some sort of product or invention, how is it going?
Inventor: It is going well. I just filed my first patent with my attorney – going to cost me a bit, over $5,000. But it is a step in the right direction.
Colleague: Wow! Well, at least you are guaranteed a patent so no one can steal your idea, right? How long does it take to get your patent, six months or so?
Inventor: Well, there is no guarantee I will be granted a patent. Also a patent doesn’t prevent anyone from stealing my idea, just gives me the right to file an infringement lawsuit if they do – assuming I could afford the legal expenses. It usually takes 3 or more years for a patent to issue.
Colleague: Ohh…. But, with a patent, you can just sell the idea to a big company and cash in for a cool million…
Inventor: Companies don’t buy ideas, only fully developed products.
Even then, they rarely will choose to buy the product, instead they license the rights to produce and sell it and then pay the inventor a small royalty of perhaps 5%. Of course, there is no guarantee that a company will choose to license my product, but they might.
Colleague: Hmm…. So, if I understand correctly, here is the status. You are spending over $5,000 hoping that a patent might be granted 3 years from now. If someone knocks off your product, you might be able stop them by hiring an expensive attorney to sue them. If you patent issues, you might be able to find a big company that would pay you a small royalty to make and sell your product. But nothing is guaranteed, except for the money you are spending on pursuing a patent. Do, I have that right?
Inventor: Yes, you do.
Colleague: Have you considered investing in penny stocks or cattle futures? They might be less risky.
After a couple of conversations like the above, inventors begin to realize that we lead rather strange lives. We toil away many hours of our precious free time, working on an invention that just might be the next “big thing”… or not.
There are no guarantees.
We aren’t guaranteed a patent will be allowed for our product. There is no guarantee that we can afford to finance manufacturing and product development or that a bank will lend us money on such a risky venture. We are guaranteed to spend a good deal of capital up front in the hope that years from now we will experience a financial windfall from a successful product. Also, our friends and colleagues will conclude that we have lost our minds and much of our money, chasing a fruitless enterprise.
So, why do we do it?
We choose to labor away on a venture that, in some small way, really could change the world. It is extremely satisfying and exciting to see our own invented product being sold in stores. If we license our product successfully, we may collect a royalty payment every quarter that could be lucrative. Unlike our work a day colleagues, the royalty is paid to us without us having to work, it can be an ongoing passive income stream.
For my own small success, I have many buyers of Savvy Caddy wallets tell me it is the “best wallet” they ever owned. I made two trips to China and have seen the wallets being made in the factory. I have pitched my product on national television on QVC to millions of viewers. I may never be rich, but these experiences have enriched my life in ways that could never have occurred if I just continued working as a professional for a “safe” paycheck. Lastly, I have been able to help other inventors move towards success.
That is why!