Question 3. What is your success rate and what percent of royalties do you make?by Stephen Paul Gnass
The Confusion Problem
This is a lengthy reply because there is a lot of confusion about marketing firms. First, we would like to clarify that we do not receive any royalties from products that are licensed as a result of being on our cyberspace site or in the trade show. We are not a marketing firm, nor a product development firm, nor an invention submission company.
Invention Marketing Firms and the Question of "Success Rate"
One key way to spot these kind of firms is that they offer to handle "everything" from idea evaluation to patent search, patent application, invention promotion, submission,and licensing. They charge upfront fees anywhere from $3,000 to 30,000 (whatever the market will bear) "in addition" to a percentage of royalties. However, after collecting their high fees, these firms have no incentive to help the client because their intention is to make money by collecting the fees, not by marketing inventions. They are notorious for providing poor, ineffective and minimal services like filing weak or wrong type of patents (design instead of utility). Sometimes they charge thousands for patent services and while the inventor assumes he's receiving a patent, he later finds out they filed a $10.00 disclosure document or $75 provisional patent application instead of a patent. They also put together generic evaluation reports that are literally worthless to the inventor, and do generic mailings to outdated lists, etc.).
After a free initial idea review, these scam companies claim that the idea has enormous potential and always promise inventors "success", misleading inventors to believe that they will make a lot of money if they sign up with the firm. The FTC has investigated and charged many of these firms, finding their claims misleading and their services poor and not worth the high fees they charge.
This is where the idea of *success rate* came from. Since they charge such high fees and promise inventors success, they are mandated by law to disclose their *success rates* in their published literature to prospective clients. Success by the FTC is defined as how many people have at least received more in income than they paid in fees to the firm. In other words, if an inventor paid $10,000 to the firm, has the inventor received at least $10,000 back in revenues? In my opinion, this is not a very good measure of "success". Yet looking at the fine print in their literature usually reveals that virtually "zero" people have received more in income than they paid the firm.
Because of the increasing investigative expose's on TV about these unscrupulous firms, many people think that this question of *success rate* also applies to any and all organizations that provide any services to inventors. But this is not so. On top of that, there is a problem because there is no standard definition for the word "success". When individuals ask companies and organizations about their "success" rate, what criteria makes a person a success?
The Question: "What Is Success?"
The word "success" is a relative term anyway, isn't it? What is success? Most of us assume we know what success is. But is there a standard definition for the word "success" in general? Is a person successful if he/she earns $10,000 from his invention? Or $100,000? Or $1,000,000? Or 100 million? At which point is he considered "successful"? What if a person spends 5 million dollars on his invention, has generated 1 million dollars in sales and is 4 million dollars in debt - is he successful or not? I would say that this is a matter of perspective - most businesses borrow money before they become profitable. So whose definition are you using?
Is a person successful only if he benefits monetarily from his invention, or is he successful if he creates a socially beneficial product for a segment of the population (like the handicapped or sick children) and sells it at cost, making no profits? What if a person is already wealthy and is just happy that his product is on the market and that people are benefiting from its use and he doesn't care about profits?
Is success determined by one's current status in life, or is it something that is determined by what a person has accomplished over his/her overall lifespan? Is a person successful only if he/she gets chauffeured in a limousine, eats in fancy restaurants, and travels around the world? Or are there an infinite variety of definitions for the word "success" depending on the individual person? Are you clear on what success means to you? So do you begin to see that the term is really ambiguous?
When we get questions about how many people have succeeded at the Invention Convention, I respond, "succeeded at what?". Because success is relative to what the exhibitors are looking for - whether they were doing marketing research with the VIPs and public to find out if there was enough interest to pursue the idea, or if their goal was to get media coverage, or whether they were seeking a manufacturer, prototype maker, patent attorney, etc.
Clients are at different levels of the inventing process - some have only a prototype, or blueprint, others have limited manufactured runs, others are already on the market and need publicity. Success is a very personal and relative term to each of the exhibitors. And we have had many exhibitors "succeed" at achieving what they came to the Invention Convention for, although their products may not yet be on the market generating profits because they are still on the journey, while others may have determined that their product did not have the kind of potential they initially thought it did (which is part of the function of the trade show).
In regards to the question of clients that have ultimately achieved licensing or received investment, our clients are not obligated to stay in touch with us after they have utilized our services. And since this process is not an instant process anyway, more often than not, those who have eventually achieved licensing or investment after exhibiting do so many months or even years later, and usually do not take the time to let us know.
In the many cases that we know of, it's been by default because we found out years later sometimes from the inventor when he came back to exhibit another product. But frequently, people move from city to city or even state to state, and as anyone in business knows, it's very costly, time consuming, and difficult for any business to keep track of a large amount of individuals over a long period of time. And we do know some people that have taken years to go through the process. The Invention Convention and many of the contacts have even lead to the success of the inventor where he might even have a completely different product.
And sometimes, results are indirect, yet are still a result of the exhibitor's participation in the Invention Convention®. One exhibitor met another exhibitor at the Invention Convention®, who flew him out to New York to attend the toy show - where the exhibitor received $100,000 check from a contact he made there, and was funded to start his invention laboratory. We just found out recently about it from the exhibitor, about seven years later!
And we have quite a few cases of inventors that raised money or made a licensing deal as a result of participating in the Invention Convention® which we consider "success stories". We delivered the services - yet down the road, due to circumstances outside of our control, the deal fell apart for the inventor. A few of these examples include:
What Is the True Measure of an Inventor's Success?
The bottom line is that nobody can guarantee anyone success. We believe that ultimately, the success of an inventor depends on several determinants, and we feel that most of these are internal to the inventors. Some of these include:
a good product is the core of an invention's success. If bottom line, the product doesn't have a big enough market, or a long enough market life, etc., the inventor's efforts, no matter how much time, energy or money he invests, will be wasted.
*his belief in his product:
however, on the flip side, there are cases where the inventor has a good product, but does not necessarily have the "best" product in the field (although the product must still have a big enough market and meet other key criteria), yet the inventor's belief in the product, and personal traits of persistence, dedication, and determination carry the inventor into success over another inventor with a better product.
sometimes an inventor has an excellent product in terms of meeting key criteria, yet due to the inventor's lack of knowledge or inexperience, the product never makes it. For example, I've seen many cases where the inventor spent tens of thousands of dollars on doing the wrong things - for example in manufacturing product on his own too prematurely, and he ended up with a garage full of product he couldn't sell - not even to liquidators who usually pay pennies on the dollar.
*his business and negotiating skills, how realistic he is, willingness to be flexible with any offers (level of competency)
I've seen cases of clients with excellent products, who met key contacts at the Invention Convention®, who blew the deals in the negotiation stages because they were unrealistic in the percentages that they wanted. They were perceived as "crazy" inventors, and the companies backed off.
*knowing what he is looking for:
I've also seen cases of clients with excellent products, who met key contacts that were interested, but who weren't focused and as a result they were looking for "everything" - manufacturers, investors, distributors, licensees - and as a result, their efforts were too scattered and they failed in their efforts.
*his attorney or advisory team:
On the other hand, I've seen cases of clients with excellent products, who had the necessary business skills, yet their attorney or advisory team killed the deal
*his mental attitude:
Sometimes, the individual has a negative mental attitude which affects the outcome of his negotiations, etc. And even though they received many excellent services along the way, their mental attitude prevents them from seeing opportunities.
Legitimate Organizations and Their True Measure of Success
There are a tiny handful of legitimate companies that take on products in the idea stage and do everything to commercialize them, taking their fees as a percentage of royalties. But these companies DON'T CHARGE the inventors any fees upfront (maybe $100 processing fee), and are EXTREMELY PICKY about the products they accept (since they will be paying for all the development costs). For this reason, they normally accept only about 1/10th of 1 percent of the products submitted to them. As you can see, the majority of inventors have to take another route.
In truth, many legitimate organizations that help inventors only specialize in just a part or phase (but important part) of the entire puzzle - included in this are university evaluation services, patent attorneys, prototype makers, trade shows, advertising vehicles, etc. - and the true measure of their success is whether they provided the service that they offered their clients, and whether they have SATISFIED CLIENTS as a result of providing effective services. Did they fulfill an important need in the invention process? Were people happy with their services?
For example, we all know that a patent attorney specializes in filing patents. The filing of a good patent plays a very important part in the potential success of the product. Yet, having a patent - in and of itself - does not guarantee that the inventor will succeed. As we've stated, there are many other factors that enter into whether the inventor ultimately succeeds or not. So the question of *success rate* does not apply to a patent attorney. What the inventor does with the patent, is up to the inventor, and is not the responsibility of the patent attorney, nor should a patent attorney be expected to be a marketing wizard or genie in predicting the inventor's future. Many times, because inventors ask, patent attorneys feel obliged to give inventors their opinions on the marketability of the invention. But once the patent attorney finishes his patent services, he has performed his job and his duty. And it's the same thing with prototype makers, trade shows, advertising vehicles, etc.
So what you're really looking for when shopping for and hiring a patent attorney, is one that is efficient and known to provide "high quality" patent services. For this reason, it is useful to ask for some satisfied (yet not necessarily successful) clients.
What you're really looking for when shopping for any services that you'll be using, is that their services are high quality and that they do a good job - like with a dentist, or auto mechanic, etc. Many times, good patent attorneys and other needed services are found by word-of-mouth and referrals.
Invention Convention® trade show & Invention Connection® cyberspace show - Impartial and Targeted Networking Vehicles
Likewise, we provide specific services with the Invention Convention trade show and Invention Connection cyberspace show. We specialize in an aspect of the invention process.
Whether the vehicle is the trade show or the cyberspace show, we provide an impartial networking forum that help inventors introduce their new products to "VIPs" that are seeking new products. We provide a high quality arena (exhibit space in the trade show, and a full page cyber-exhibit in the cyber-show) for inventors to showcase their products. At the same time, we invite a wide range of VIPs (investors, business angels, manufacturers, distributors, licensees, catalog companies, product scouts from companies, etc.) and media to come attend and preview the new products at the trade show or cyber-show.
Please note that in regards to the products displayed, we do not judge or rate any of the products displayed because we understand that the market is the ultimate judge of a product's worthiness or usefulness. Our forums give anyone who believes in their product an equal chance to "get up to bat". Once they're up to bat, it's up to them to hit a home run by using our coaching, training, support and contacts, etc.
Over the past decade, we have established recognized brand names for the Invention Convention® trade show, and the Invention Connection® database of VIPs and media. Our database has been cultivated over a 12-year period as a result of researching key investor angels, buyers, media, and others, many who have attended the shows, or know about our trade show history.
As a result, the key strength of the Invention Connection® cyberspace convention is that we are known as established and credible in producing the Invention Convention® trade show. We have been successful at bringing inventors, media and VIPs together. This track record and expertise in the invention industry is what we bring to the Invention Connection® cyberspace show.
Similar to a Mall
Another example is that the trade show and cyberspace convention both work very much like the concept of a mall. The mall owner promotes the entire complex/facility to bring people to the mall, while all the individual store owners promote their products and services specifically to the people in the mall and to their own target markets to bring in revenues and prospects. Together, the mall owner and store owners create a synergy that brings in a much broader mix of people that create cross-over traffic and business for all of the store owners. (But unlike most malls, we do not charge a percentages of all sales ie. deals.)
Much More Than Traditional Advertising
Like advertising in a magazine or newspaper, our cyberbooth web pages have a variety of classified and display prices - yet the Invention Connection® is much, much more! Consider this, an ad in a publication like the Wall Street Journal or a magazine can cost hundreds or thousands of dollars for a "small" black&white classified ad to run just "one" single day in a daily newspaper or one month in a magazine. Yet we charge one low flat price for a "full year" of our "full color, full page" cyber-booth web pages - and this price includes professional writing, design, scanning, and all technical work of your web page in addition to many more services! And our classified ads cost just pennies a day.
Education, Coaching Support and a Vehicle
Another example is a college that takes 2-4 years or more to educate students. The students get the degree based upon their own initiative to study and learn. Yet what the student does with those tools after he graduates - whether he gets a job that pays $25,000 or $250,000, is not necessarily a reflection of the education that he received. The college is not responsible for the student's success or failure - only for providing a good education.
In the same way, we provide education, coaching support and a neutral forum, a vehicle, and believe that an inventor's chances of success will greatly increase as a cyber-exhibitor if he/she learns as much as possible about the process of marketing inventions, remains flexible and open, makes sure that he/she does not abdicate his/her responsibility and accountability for his/her own success. Like the store owners in a mall, he or she should take pro-active action to seek targeted VIPs while being featured on the Invention Connection® Cyberspace Convention.
Our true measurement of success is our high percentage of
clients over 12 years that are satisfied with the quality of the services
they paid for and received. And we have testimonials
available that you can review at
High Quality and Dedication
A common thread you'll see in reviewing these testimonials is that past clients and industry leaders recognize what an enormous task the Invention Convention is - bringing VIPs, media, inventors, expert speakers, and the public together - and they acknowledge the high quality of the Invention Convention® and all the sub-events (awards program, seminars, mixers, etc.), as well as the high caliber of the different audiences who attend. They acknowledge that we are dedicated and sincere in our efforts. We have truly brought the right kinds of VIPs who are searching for products to the shows to review the products being presented.
We bring this same dedication and quality to the Invention Connection® Cyberspace Convention. Due to the ease of accessibility for VIPs and media to preview new products on the Invention Connection® on the internet right from their desktops without traveling, we believe that the Invention Connection® even have a higher potential for networking and dealmaking than the Invention Convention® trade show.
On a final note, we would like to remind you that the Invention Convention® and Invention Connection® are not automatic magical solutions - you still need to have a viable product, and the personal knowledge and skills necessary to succeed. And you still need to do the research and development steps as well as educate yourself. But we believe that when we do our part, and you do your part, that the synergistic effect of both of our efforts often creates results that are greater than the sum of the parts.Back to top / Back to Frequently Asked Questions / Next Question