Sara Blakely is the billionaire inventor of Spanx. Was she an overnight success?
Nope, it took a lot of risk and many years of hard work, plus a good product that solved a problem suffered by millions of women.
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What are 3 other common invention myths?
3 Invention Myths That Never Die
Below are three of my favorite invention myths.
1. I’ll Just Sell My Idea to a Company and Make Millions
This is a perennial favorite that never seems to die.
Most people readily accept that, to get ahead in their job, they must work hard, and constantly improve their skills and their knowledge. But, oddly, just about every week such a person, upon hearing I am an inventor, will smile and say, “oh, great, I have tons of ideas all the time, I’ll just sell one of my ideas to a big company and get rich.”
These are otherwise credible people, but they think that in the invention trade, a great idea is all it takes to make millions.
Often, when I tell them that an idea is only the beginning. I tell them that the idea has to be validated, tested and converted into a working prototype and then a product. Finally, it must be patented, packaged and then sold. There next response is almost always the same, “Oh, I don’t want to do all of that, I just want to sell my idea.”
2. Once I Have a Patent – the World Will Beat a Path to My Door
There is a second group of people who realize there is actual work to being an inventor, but they think all of the work lies in getting a patent for their invention.
They recognize that they will have to spend a significant amount of money with a patent attorney seeking a patent for their invention – and that is indeed true. Obtaining a utility patent on an invention will cost $5,000 or more (often more than that depending on complexity). Furthermore, there is no guarantee that the US Patent Office will grant a patent on your invention. They seem to understand this information.
Whereas the first group thinks that just a “good idea” can be the ticket to success and riches, this group believes their ticket lies with having an issued patent.
The reality is that over 95% of all patent holders never make a cent on their inventions. Why? Just because an invention is patentable, doesn’t mean it is marketable to potentially millions of buyers. The underlying invention must solve a specific problem(s) that millions of people find annoying (see Sara Blakely story above). Then, it potentially could be a success, maybe a big success.
3. If I License My Invention… Everyone Will Make Money on it Except Me
This third myth is at least more nuanced than the other two, but it is a false narrative.
It stems from a false perception many people hold about businesses, regarding typical profit margins. A public survey done in 2013 showed that the average person believed an average profit margin for businesses was 36% – instead of the real average across 212 industries of 7.5%. That means that there were respondents who thought typical profit margins exceeded 50%.
The second misperception many people have is that royalty payments paid to inventors in a licensing deal are paid as a percentage of profits.
This belief would mean that if an inventor receives a 5% royalty (a typical royalty), the company would keep 95% of profits. This is completely incorrect. Royalties are always based upon a percentage of gross sales at wholesale, not profits. No wonder the perception of the inventor being ripped off is so widespread.
If the inventor’s licensed invention sells well in retail, then a 5% royalty may provide a lucrative income for the inventor. Furthermore, she does not have to do anything further other than to collect quarterly royalty payments from her mailbox, the company does all the rest. My invention has sold over $30 million in retail so far, for example – full disclosure, my royalty is less than 5%. But I have still done okay.
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