Licensing Your Ideas

I’ve always had more ideas than businesses I wanted to run.

That used to feel like a problem.

Then, more than 25 years ago, I came across a book called How to License Your Million Dollar Idea by Harvey Reese.

It changed how I thought about ideas.

The basic premise was simple: You don’t necessarily have to build a company around an idea. Sometimes you can develop the idea, find the right company, and let them manufacture, market and sell it.

You get a royalty.

They do most of the rest.

That model immediately appealed to me.

I like spotting problems, coming up with solutions and figuring out how something might work. I’m considerably less excited about building the organization required to manufacture, distribute and operate everything that comes afterward.

Licensing offered another path.

Years ago, while buying and renovating houses, I kept running into the same annoying problem when painting windows. Masking them took forever.

So I came up with a simple masking product designed to make the job easier.

I developed the idea, protected it and eventually licensed it to the company behind Duck Brand tape. They had something I didn’t: manufacturing, distribution, salespeople and relationships with thousands of retailers.

The product eventually made its way into more than 5,000 stores.

I never had to build a tape company.

That experience shaped the way I still think about opportunities today.

We tend to assume that having a good idea means we need to start a business around it.

We don’t.

Sometimes the better question is:

Who already has everything needed to make this idea work?

Reese’s book is dated in places, but the underlying idea still holds up. If you’re someone who sees opportunities everywhere but doesn’t necessarily want to build and operate another company, it’s worth a read.

Sometimes the best way to build an idea is to let someone else build the business around it.