How Much Is Your Idea Worth?
You have to pay special attention today.
I’ve spent hours looking for a way to talk to you about a topic that is key but, at the same time, a true pain.
¿How much is your idea worth??
Open your eyes.
¿Quieres vender tu idea? ¿Ya le pusiste precio?
Let me guess your answers:
“Yes” and “It’s negotiable.”
I’d love to tell you that you’re very close to achieving it.
But, as you know, I’m not very good at sweetening the truth. 🙂
Let’s get down to brass tacks!
First, try to answer these six questions:
1- Who are your potential buyers?
I’m not referring to major platforms selling…
List them by first and last name. Had you already done it?
2- Why will they buy your invention?
…well, users would be thrilled with…
Nooooo! The question is: Why will a distributor or manufacturer buy your invention?
This is someone who is supposedly already positioned in the market, does not live too badly, and knows the market like no one else.
So, why will they buy it?
3- How much does your potential buyer sell?
Tick-tock, tick-tock… So…
You have to know all the details, from their billing to the future of their business strategy.
If you don’t have these data, chances are you won’t get past the first meeting.
4 – ¿Cómo encaja tu producto en su estrategia?
I’m referring to their business and product strategies.
You have to find arguments justifying the purchase at both levels.
We’ll take a look at that later. 🙂
5 – ¿Cómo pusiste precio a tu invento?
Formula: 15 days in Punta Cana + 20 years of living in style = a load of €
Nothing could be farther from the truth. Shortly, I’ll recount an experience.
6 – ¿Qué harás si todas las puertas se cierran?
Please don’t leave this consideration out of your analysis.
It’s key, even if the doors do open.
Open your eyes; I’m going to give you some pieces of the puzzle:
Who are your potential buyers?
The easy answer is to list those that already sell similar products.
Remember that indirect competitors exist.
That is, companies that aspire to the money of the party you considered to be your potential buyer. They have and probably seek alternative solutions that have not attained success.
From among them, seek out those that may have the dough to pay for your invention.
Also, remember that companies are made up of PERSONS… Pinpoint who the decision-makers are in each case, draw their organization chart (purchasing, innovation, operations, commercial, etc.) and really analyze who might see value in your proposal.
Why did they buy your invention?
Don’t think you’re the all-powerful owner of the invention and the patent.
That’s 5% of the story.
It’s key that you have some data showing that the market accepts your proposal.
Careful: surveys or predictions don’t count. The only thing left are “user-prototype” interaction hands-on experiments.
On the other hand, make sure you have a working prototype that is perfectly documented, industrializable and that, moreover, fits into the buyer’s strategy.
How much does your potential buyer sell?
Remember, you get what you pay for.
You have to present arguments and scenarios showing how the buyer will benefit and profit.
Don’t worry, if they’re interested, they will run their numbers; however, you have to take them the work already done.
It’s essential for you to be able to justify how your invention will maximize those periods in which their sales dip:
That the value you contribute will make it possible to increase the margin on their products.
As if that weren’t enough, that your invention translates into clear competitive advantages for their product catalog.
I’m not saying that your invention has to deliver on everything. But almost. 🙂
How does your product fit into their strategy?
There’s no room for guesswork.
If you look at social media, websites, product evolution, values shared with your potential buyer, you can build a strategy and link it to a timeline.
This exercise will not only allow you to figure out the strategy, it will also allow you to define when’s the right time to approach the buyer.
A single product, your invention, can be sold using very different pitches.
This analysis will let you select the right path.
How did you set your invention’s price?
I must confess that I love the formula: 15 days in Punta Cana + 20 years of living in style = €XXXXX.
I must also confess that, with it, we’ll never get out of the starting gate.
In some pitches in which we’ve had the opportunity to participate, this is what we’ve done:
- Place the ingredients on the table: buyer’s income statements, information on the news or other media speaking of their projections, etc.
- Translate into numbers: present a business plan for at least five years. Use this potential buyer’s actual product evolution, possible production costs, etc. The best scenario would be to be able to extrapolate the results obtained by you yourself with the initial experiments.
- The method: apply one or more business valuation methods prior to defining a price. Remember that your invention must be valued in terms of at least the cash it will be able to generate in the future.
Forget about delivering a spiel; you have to calculate a price and know how that conclusion was arrived at.
What will you do if all the doors close on you?
I already told you, this answer is key for two reasons:
It gives you negotiating power.
It allows you to design a plan B.
Believe me, in a negotiation, the other party may notice if they’re your only option. It’s the worst thing that could happen to you in this scenario.
Si tuvieras que definirlo ahora ¿Cuánto vale tu idea?
🙂
I truly hope that you can take advantage of these tips.
Remember... With these tips, I don't intend to sell you anything.
I fulfill my commitment to support our community of inventors.
Warm regards
Tell us your idea
Business Director - Inventors' Advisor at Let´s Prototype
Erick Remedios has been linked to entrepreneurship and the launch of innovative projects and inventions for over a decade. His start in the entrepreneurship sector began as the Project Management Director at the network of Private Investors, Business In Fact, S.A., a club of private investors specialized in high-risk investments, which he ended up managing as General Director for at least 5 years.
As the director of the Private Investors network specialized in innovative projects in the startup phase, Erick Remedios participated in more than 40 investment operations, with his main functions being: advising entrepreneurs and inventors, as well as private investors interested in investing in such projects.
Erick Remedios has been one of the influential figures in the development of the ecosystem of entrepreneurs and private investors in Spain. Since 2012, he has participated in numerous private investment forums, has advised entrepreneurial projects as a member of their Boards of Directors, and has served as a lecturer in numerous Public and private Universities, specialized public centers in entrepreneurship, and internationally leading business schools, such as It Aérea Business School, where he leads the management of the Business Model Design Module for entrepreneurs, mostly Aerospace Engineering graduates.
Specialized Centers in Entrepreneurship and the Launch of Innovative Projects where Erick Remedios has participated:
- Direction of the Program - Sanse Emprende from the City Council of San Sebastián de los Reyes, Madrid.
- Direction of the Espoban Program – Diputación de Córdoba and European Center for Business Innovation. Training of entrepreneurs and inventors and preparing them to attract capital through private investors.
- Speaker on the subject of launching innovative projects at Universities such as: Pablo Olavide, University of Seville, University of Málaga, University of Cádiz, University of Huelva, University of Almería, University of Jaen, University of Granada.
- Direction of the Entrepreneurship Module – IT Aérea Business School.
- ENyD Business School: Professor and lecturer in the area of Entrepreneurship and Private Investment.
- Avanza Castellón - Mentor of entrepreneurs and inventors in the program of the Diputación de Castellón.
- Ávila Emprende – Program of the City Council of Ávila. Mentor of entrepreneurs in sales processes and product development.
- Aula UGR- Professor of entrepreneurship and management of launching innovative projects in programs aimed at training teachers from the University of Granada.
- Master Up - Professor of entrepreneurship and investment management in the Official Master's for entrepreneurs from the University of Cadiz.
At the same time, numerous companies have signed Erick Remedios as an advisor and member of their Board of Directors, companies in which Mr. Remedios has also acted as the representative of the private investors who have placed their trust and economic resources, including:
- Tu Fabrica de Eventos
- Baby Radio
- Graffos
- Neurobia Research
- HitsBook
- Bit Credit
- Glelemo
Currently, Mr. Remedios is leading the international expansion of Let´s Prototype in the United States, while also advising inventors on startup processes for projects related to innovative Hardware or Software elements, both in terms of product design, a specialty of Let´s Prototype, and in terms of designing strategies for selling inventions and patents.
Interviews with Mr. Remedios and publications authored by him in Media:
- School of Business and Management: [Link](https://www.youtube.com/watch?v=ch3nRTFvxhw)
- Diputación de Córdoba. Training for Investors: [Link](https://www.youtube.com/watch?v=Cj2fvxkD-zI)
- Spanish Television - Program Emprende: [Link](https://www.youtube.com/watch?v=vZRi98CE20M)
- TV2 - Spanish Television: [Link](https://www.youtube.com/watch?v=ms22bxyllKc)
- University of Cadiz: Article for Inventors: [Link](https://emprendedores.uca.es/lean-prototyping-el-puente-entre-el-concepto-el-prototipo-y-las-patentes/)
- University of Granada: Article for Inventors: [Link](https://ugremprendedora.ugr.es/6-tips-para-convertir-tu-idea-o-concepto-en-prototipo-lean-prototyping/)
Latest posts by Erick Remedios (see all)
- Ventajas competitivas de los produtos innovadores - November 15, 2024
- Tipos de negocios rentables para emprender en USA - October 1, 2024
- Best 3D printing firms - August 28, 2024
