If you’re tech obsessed like me then things as simple as making your bed fill you with tech ideas. If you’re also like me, you probably don’t know how to create a self-making bed. So what do you do with the idea?
Depending on your situation and expertise, you have two options (besides forgetting it altogether): sell it to a company or put it into production yourself.
Sell Your Tech Invention to a Company
Pros: A little money for minimal work.
Starting a business is hard. Finding investors and building prototypes requires time, energy, and cash flow you might not have. If you are happy to see your invention made and get a few extra bucks, selling might be the best idea.
Products from big names like Sharper Image and Hasbro are often submitted by everyday people like you and me through Edison Nation.
Before you get in contact with companies that buy invention ideas, take a few precautions:
- Make sure your invention is unique.
- Seek a patent.
- Research invention-buying companies to find the right fit.
- If things get momentum, have a professional negotiate the exchange.
A patent attorney is the best person to work with in all of these steps. They can research existing patents, apply for a patent, and represent you.
Cons: No control of end design and bitter tears of regret if it’s a massive success.
Start a Business to Sell Your Invention
Pros: Control design, price, and distribution. Own a business. Potentially sell your business for a large amount.
Consider the two reasons you’d start a business to distribute your invention:
- Be your own boss and control your own product, or
- Build an eye-catching business with a plan to sell it.
There’s a reason companies like Google and Facebook are called “big fish”. Google has made a fortune buying innovation from others. Security system Nest, robot makers Meka and SCHAFT, and artificial intelligence companies DeepMind and Vision Factory are just a few of the entities Google has acquired in the last decade, with Nest’s pricetag at $3.2 billion.
Big fish don’t typically buy “ideas”. They buy businesses with viable products so that they can extend into new markets or increase their market share.
If you think your invention packs enough punch to attract a big fish, it might be worth starting a business to sell. Think of it as a very laborious investment.
Cons: A whole lot of work for a hoped-for paycheck–whether you sell the business or not, statistically only 10% of startups succeed. High potential to lose your shirt.
(There are plenty of guides on the internet to help you start a business–here’s an article on the benefits of a sole proprietorship vs. LLC helpful–so I won’t get into it here.)
Which Should You Choose?
Don’t just take your mom’s word that your idea is better than sliced bread, talk to industry experts. Research trends. Remember Mini CDs? They failed to see which way the wind was blowing–enter the USB and mp3. No one would buy the idea for Mini CDs today.
What does your gut tell you? Seek a patent and sell? Cash in your 401K and contact manufacturers? Ask yourself, in both viability of the invention and your own life goals: will this matter in ten years? If the answer is “yes”, go for it!
Jaren Nichols is Chief Operating Officer at ZipBooks Online Accounting Software, a modern accounting solution for small businesses. Jaren was previously a Product Manager at Google and holds an MBA from Harvard Business School.