Why Midsized Companies Are Your Best Targets for Licensing

Earlier this year at the National Hardware Show in Las Vegas, I had the pleasure of meeting Bill Freimuth. For nearly 30 years, Freimuth headed up sales and manufacturing worldwide for Fiskars Brands, the consumer goods company. Before that, he sold product for Ryobi, Stern Rubber Company, and Medalist Industries. Needless to say: The man understands how large, well-established manufacturers bring new products to market. But about a decade ago, Freimuth was motivated to go into business for himself. So he did. Today, he's the president of Centurion Brands, a mid-sized manufacturer of garden tools and accessories, which he cofounded with his partner Bruce Tsai.

At the show, his excitement for Centurion's new products was palpable. In particular, he was eager to describe the benefits of an innovative kneepad he had recently partnered with two independent product developers to bring to market. To him, open innovation was a no-brainer -- he and Tsai are always on the lookout for good new ideas, he told me. Where they came from? That didn't matter.

Freimuth's speed impressed me most. He'd only met Tim Broster, the inventor of the Armadillo kneepad, and Todd Ragsdale, Broster's business partner, in February of this year. Yet here their product was right in front of me, just a few months later.

That's one of the massive advantages of seeking out a mid-sized player to license your concept for a new product: Speed.

An industry veteran whose insight is truly relevant, Freimuth was kind enough to let me pick his brain about developing and licensing products for the hardware industry.

I wanted to know most--what is he really looking for?

1. Simple improvements to existing products. "We're in what most people would consider a mundane industry. And so we ask ourselves, how can we improve these basic products?" Freimuth said. "That sets us apart -- other larger companies aren't asking that question. And we're very successful at it. Part of our strategy is to target categories that do about $300 to $400 million at wholesale. The big boys, they don't want to attack markets that are doing less than $2 billion. But we're small and nimble. We can turn on a dime. It takes a lot of effort to turn a battleship. There's often so much bureaucracy, it takes years to get anything done. When you're smaller, you can really move. You don't have to let grass grow between your toes while you're debating whether something should be purple or pink."

Centurion does not sell a kneepad currently. The benefits of the Armadillo kneepad -- namely, that its design is substantially more flexible, versatile, and comfortable than other kneepads on the market -- were enough to convince him to take it on.

2. Some perceived ownership over your invention idea. Freimuth prefers the ideas he reviews to be patented. "Yes, patents can be worked around. But if you've filed a utility patent and a design patent, it's going to take those who try some time. The fact that they had already filed patents on the kneepad was key for us. There are people trying to rip it off as we speak! They can try. But we're already down the road a bit. We'll be working on a second version while they're still trying." Broster and Ragsdale spent years developing the concept before seeking out a licensee. Clearly, the work they had already put in made it easier for Centurion to get on board.

3. Priority and discretion. "I'm pretty upfront -- I don't play a lot of games. So I'll ask, who have you shown it to? If you've shown it to the world, and you're coming to me last, I'm going to want to know why those other companies didn't jump on it. My advice? Don't approach everyone. Know who you're approaching and why. Focus on who is going to do the best job. When you approach everyone, you devalue your intellectual property. Those companies might begin working around the clock trying to figure out how to beat your patent. Before your product even makes it to market, it can die. A lot of the inventors I meet are damn good at inventing, but poor business people. They think they know what they're doing, but they put blind faith in people."

Freimuth wants you to do your due diligence first. "Find out from other people. Have they done much licensing? What's their track record? How many new products have they brought to market? People don't plan to fail; they fail to plan."

4. Concepts he can execute on quickly. "If we like an idea after analyzing it, we take it to three or four other people we trust to get their opinion. If they tell us they'd buy it, we go for it. 'Speed is life' is a motto of mine. We could sit around debating and talking and hoping, or we can go to the marketplace and say, 'Hey, this item is for sale!'"

I think Freimuth's attitude is absolutely fantastic. He's truly practicing open innovation. If you have ideas for new garden and outdoor living products, he said to get in touch with him.

As for their part, Broster and Ragsdale told me Freimuth has been instrumental to their momentum. "I think he's one of the main reasons [Centurion] has already gotten our product where we want it to be. He has sourcing contacts, he knows buyers -- his network is vast. He's been a wealth of knowledge."

The Armadillo kneepad is set to rollout regionally this fall and broadly in 2017.

Originally published on Inc.com September 2nd 2016. 

 

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