Business Book - Editing & ConceptSample text
A License to Print Money
The world has changed. Gone are the days when ambitions were satisfied by a career in the corporate world. In this age of celebrity and independence people want to break free from the constraints of employment more than ever. For some, the ticket to freedom starts with an invention.
Many inventors, quite naturally, invent a product and then decide to sell the idea, either outright or under license.
For the brave few, the goal is to take their invention to market and risk all for the chance of making a successful business out of their idea.
Get the all the essentials right and you have a License To Print Money.
Take the Test. Get your License. This book will tell you how.
Why Listen To Me?
There have been many ‘How to’ books written on the subject of invention. Whether they are of any use to you depends on who is offering the advice.
So, time to quickly blow my own trumpet.
I began my career advising people on how to value and sell their businesses. Over ten years I successfully sold over 50 private companies and looked at hundreds more which weren’t quite ready for sale. This experience led me to notice patterns emerging in the companies which I sold – attributes I could then look at in other businesses. If these were not there, then I knew that these businesses would be less saleable.
Why is this important? Most inventors I know have one thing in mind – to make a lot of money from their invention, probably by establishing a business to successfully manufacture and sell their products and then sell the company later. If this is your goal, knowing how to design your company from the get-go to make it attractive later at sale will go a long way to making sure you realise your dreams.
During my time in M&A (Mergers & Acquisitions, the term ascribed to the buying and selling of businesses), I was approached by a friend who had invented a fantastic new toy – a laser gun for children which not only allowed kids to ‘shoot’ each other with light over great distances but also allowed the kids, if ‘locked-on’, to talk down the beam of light to their team members or opponents. Although I had by this time been selling businesses for over 10 years, I had never had the chance to help in actually setting up a business from scratch.
Intrigued by the potential rewards from taking this product to market (royalties from a major toy manufacturer in this case), I persuaded my otherwise staid colleagues that this was a wonderful new direction for our department to pursue.
Alas, on technical grounds, the idea couldn’t deliver on its promises. But during the time of the development, where I became involved in the prototyping, modelling, design, branding and even the presentations at the New York Toy Fair I learned a lot about invention and became absolutely hooked on it.
The world of invention is fascinating. Here is David taking on Goliath with something totally new which none of the huge R&D departments of the fat cat corporations have managed to think of. Inventions satisfy all the senses – probably the reason why most inventors are so passionate and single-minded about their ideas. There’s nothing wrong with that, but the passion also needs to be blended with a good deal of pragmatism if the dream is to be fulfilled.
With the above in mind, I was only too ready to take on the next invention challenge when it presented itself. Thus, with my ‘radar’ tuned in, I read a newspaper article about a British inventor who had invented a wind-up radio that required no batteries to operate. I filed this away as an interesting idea about which I would like to know more.
Some weeks later I watched a BBC TV program about the same man and his wind-up inventions and knew this was my chance to dive in again. The full story of the development of the Wind-up Radio has been told many times elsewhere, not least by the BBC who made two ‘QED’ documentaries charting my development of the product in the UK and South Africa. Suffice to say that, over a period of seven years, I took the fledgling invention from the drawing board to a global corporation with 650 staff, four factories and over 5 million products sold (see www.freeplayenergy.com).
Fame At Last
The Freeplay story had so many highlights it is hard to select just a few. We demonstrated the first radio to Nelson Mandela (he later opened our second factory) and presented our millionth radio to South African President, Thabo Mbeki as he opened our third factory. There were visits to our showcase operation from people like the Duke of Kent, Sir Richard Attenborough, US Vice President Al Gore and UNICEF Ambassador Steffi Graf. We received personal letters from Prince Charles and UK Prime Minister John Major. In the US we were featured on numerous news stations. Even Tom Hanks and Bill Clinton had their say.
Along the way we won the 1996 BBC design awards in our specialist category as well as the overall design award. We were voted 1998 Western Cape Exporter of the Year and I was named one of the World’s Top Ten Entrepreneurs of 1999 by Business Week Magazine.
We Learn From Our Mistakes
Now, this story is as much about the mistakes I made as my successes. But what better way to learn how difficult it is to get a new product off the ground. One of the biggest lessons I learned was that I was a better entrepreneur than a manager.
Whereas I embraced the challenge of getting the product developed and to market, once the company was up and running, a lot of the excitement then dissipated – mature companies are better run by experienced managers.
It was time to move on and for the learning to really begin.
I had been fortunate to successfully get a product to market first time and was left with the misconception that I could do this again and again. I never realised how unbelievably lucky I had been in the development of the Wind-up Radio until I tried the same approach with a series of other inventions over the next six years.
As Bill Gates pronounced, ‘Success is a lousy teacher. It seduces smart people into thinking they can’t lose.’
Taking a new product to market is very difficult. Even venture capitalists, with all their experience of assessing new ideas, estimate that only 1 in 10 will work out. And these are the 10 they have selected (financed, nurtured, supported and loved) from the many hundreds they will have looked at along the way. What chance has the inexperienced inventor of meeting all the challenges and having all the necessary skills and experience to make their idea really fly?
Widening the Net
Finally, and this is also important, I have also become an investor in a number of the ventures where I have helped inventors take their products to market. It’s a great insight that enables me to sit on the other side of the table and make judgements about whether the inventor and their team have what it takes to make their idea a success. A bit like a poacher turned game-keeper.