Tim Ferriss's 4-Hour Workweek and Lifestyle Design Blog. Tim is an author of 5 #1 NYT/WSJ bestsellers, investor (FB, Uber, Twitter, 50+ more), and host of The Tim Ferriss Show podcast (400M+ downloads)
Michael Phelps and Grant Hackett — Two Legends on Competing, Overcoming Adversity, Must-Read Books, and Much More (#494)
This past Tuesday, I was part of a segment on the CBS Early Show on personal outsourcing called “Average Joes, Janes Outsourcing Tasks.” Check out the video, one of the best I’ve seen on the topic, here. It includes case studies.
Two of my favorite articles on personal outsourcing — one from The Wall Street Journal and the other from the NY Times — compare different tasks and common problems.
There is an eight-foot stretch of shelves in my house containing nothing but full notebooks.
Some would call this hypergraphia (Dostoevsky was a member of this club), but I trust the weakest pen more than the strongest memory, and note taking is—in my experience—one of the most important skills for converting excessive information into precise action and follow-up.
Simple but effective note taking enables me to:
-Review book highlights in less than 10 minutes
-Connect scattered notes on a single theme in 10 minutes that would otherwise require dozens of hours
-Contact and connect mentors with relevant questions and help I can offer
-Impose structure on information for increased retention and recall
I fashion myself a note-taking geek of the first class. How dare I self-appoint myself into this priesthood? Relax, script kiddies. I’m using a much broader definition of “geek,” this one borrowed from “Understanding Geeks” in the current issue of Inc. Magazine (that said, I was recently on Geekbrief.tv, birthplace of the ubercool iYule.tv):
“Someone with an intense curiosity about a specific subject. Not limited to tech–there are also gaming geeks, music geeks, etc.”
Here are a few recommendations from inside the world of a compulsive note taker, including both the macro (books and notepad principles) and micro (page features and formatting):
1. Create an indexing system:
Indexing AJ Jacobs’ latest book (click to enlarge all thumbnails)
Information is useful only to the extent that you can find it when you need it. Most of us have the experience of note proliferation—notes on the backs of envelopes, billing statements, hotel paper, etc.–that somehow never gets consolidated. Consolidate and create an index.
My favorite notepads (covered below) generally don’t have page numbers off the shelf. Here’s how you progress with a non-paginated pad:
A. Put page numbers on the upper-right of each right-hand page but not on the left (e.g., 1, 2, 3, etc.). I do about 30 pages at a time, as needed.
B. Whenever you complete a page, put the page number in an index on the inside cover (front or back) and a few words to describe the content.
If it’s on the left-hand page, just take the prior page and add “.5” to it. Thus, if you flip over page 10, for example, and write on the back, that second page is “10.5” in the index.
Brainstorming blog post topics and paginating on the right-hand pages
The page numbers in the index do NOT need to be in order, as you’ll be scanning for content, then referring to the page. If you write on the same topic again, simply put that page number next to the previous index entry.
Creating an index like this for non-fiction books I read allows me to refer back and review key concepts in 5-10 minutes without rereading the entire book and searching for underlined sections.
Notes from “The Biology of Sleep” at Stanford University (Notice the bottom-right square allocated to follow-up questions, which is standard)
2. Choose the Proper Pad for the Job:
My current repetoire of active notepads.
Not all notepads are created equal.
This doesn’t mean that one is better for all things, just that you should match the form factor and durability of a notepad to the content.
Below is a photo of several different notepads I use:
-I use the big notebook, which contains graph paper, for larger projects such as future books, TV programs, feature-length articles, LitLiberation, conference panel notes, etc. I don’t want to turn 10 pages to get an overview of all the pieces of a single topic/event. Cons: terrible for traveling and intimidating for interview subjects. The larger the pad, the more reserved interviewees will be.
Notes from my first SXSW (Notice the bottom-right follow-up, in this case, people to contact)
SXSW panel titled “Blog to Book”; Notice the bottom panel and how I number the participants so I can just label comments/notes with each respective number. No spacial guessing required.
-I use the hard-backed red rectangular notebook, bought in Milan, as a default notepad. It is the perfect fits-in-ass-pocket checkbook size. Telephone interview notes, lists (dreamlining, asset assessment, cash-flow projections), projects requiring less than 3 hours to complete, random observations about emotional state or internal problem solving, random silliness like songs (think Adam Sandler), etc. Here is one beauty, written at 4am during an airport layover after a sleepless red eye:
The fattest midget I ever met
Some called him the triple threat
Ugly, dirty, and smelly yet
The fattest midget I ever met.
Hey… if you’re bound to have rare flashes of insight/stupidity, you might as well capture them on paper.
-The flexible softcover moleskine is excellent for interviews, especially if you are in motion or in the field. I’ve found, however, that if that is the only notebook I carry, I put in material I would prefer to preserve for months or years, and the soft moleskine gets ripped to pieces in backpacks, luggage, and pockets over just a few weeks. There are hardback versions, but they tend to be square-ish and fit poorly in pockets. I limit this format to interviews, contact info when on the run, and temporary to-do/not-to-do lists.
I don’t use digital notetaking tools. Call me old-fashioned, but I’ve noticed that some of the most innovative techies in Silicon Valley do the same, whether with day-planner calendars, memo pads, or just simple notecards with a binder clip. It’s a personal choice, and I like paper. It can be lost, but it can’t be deleted, and I find it faster.
Quite a few of you have asked, so here’s the scoop. The $2,600 date took place this past Saturday, and we had an AWESOME time. I promised I wouldn’t show pictures, but the smart young lass looks a lot like Natalie Portman, so the night immediately started off on a much-relieved foot. She’s a veeeery pretty girl.
Big smiles all around.
Festivities began at the famous Alfredo’s Steakhouse in SF, where Marco made the meal one to remember. The delicious medium-rare Chicago steaks were matched with wine I brought along, in this case, a particularly sentimental and special bottle: Rombauer Vineyards’ Proprietor Selection 2004 Zinfandel (think of it as this wine on steroids).
Bigger smiles all around.
Once full and well buzzed, we set off for the beginning of entertainment: seats 10 feet from the main platform at Cirque du Soleil’s Kooza. It was incredible, and as an acrobatics fetishist, it was in seventh heaven. Hard drumming, aerials, gainers, wheels of death… Here’s just a taste of what we feasted our eyes on:
After Cirque du Soleil… well, I’ll leave the rest of the date to your overactive imaginations! It’s entirely possible nothing happened, but if it had, I wouldn’t be one to kiss and tell. Some things are more fun left unexplained 🙂
The Dream Date Challenge:
What would your dream date look like?
Pick a city anywhere in the world, and for a budget of no more than $500, describe your dream date in 300 words or less (bullet points are fine). My favorite 5 will get at least 12 copies of the 1st printing (it’s now in the 25th) of The 4-Hour Workweek to give away as X-mas/Festivus presents.
Kurt Vonnegut is one of my few idols, an elegantly simple poet-philosopher of the first class. I grew up near where he lived in Sag Harbor, and I’ve enjoyed his writing since I was in junior high, where I silently hoped to one day have the courage to visit him.
Alas, I am too late. He passed on April 11, 2007.
I was very fortunate, however, to stumble upon the best interview I’ve ever seen with him, and it also happened to be his last.
I’ve edited J. Rentilly’s piece from US Airways Magazine for length to take two minutes at average reading speed, selecting the questions and answers I found most relevant to designing a rewarding life (the first half) or thought-provoking (the second half).
I believe this is two minutes very well spent.
It covers his views on creativity, seriousness, the power (or lack thereof) of the written word, and more. I hope you enjoy it as much as I did…
Tell me the reasons you’ve been attracted to a life of creation, whether as a writer or an artist.
I’ve been drawing all my life, just as a hobby, without really having shows or anything. It’s just an agreeable thing to do, and I recommend it to everybody. I always say to people, practice an art, no matter how well or badly [you do it], because then you have the experience of becoming, and it makes your soul grow. That includes singing, dancing, writing, drawing, playing a musical instrument. One thing I hate about school committees today is that they cut arts programs out of the curriculum because they say the arts aren’t a way to make a living. Well, there are lots of things worth doing that are no way to make a living. [Laughs.] They are agreeable ways to make a more agreeable life.
In the process of your becoming, you’ve given the world much warmth and humor. That matters, doesn’t it?
I asked my son Mark what he thought life was all about, and he said, “We are here to help each other get through this thing, whatever it is.” I think that says it best. You can do that as a comedian, a writer, a painter, a musician. He’s a pediatrician. There are all kinds of ways we can help each other get through today. There are some things that help. Musicians really do it for me. I wish I were one, because they help a lot. They help us get through a couple hours.
“A lack of seriousness,” you wrote, “has led to all sorts of wonderful insights.”
Yes. The world is too serious. To get mad at a work of art — because maybe somebody, somewhere is blowing his stack over what I’ve done — is like getting mad at a hot fudge sundae.
Nearly forty years after Slaughterhouse-Five, people still love reading your books. Why do you think your books have such enduring appeal?
I’ve said it before: I write in the voice of a child. That makes me readable in high school. [Laughs.] Not too many big sentences. But I hope that my ideas attract a lively dialogue, even if my sentences are simple. Simple sentences have always served me well. And I don’t use semicolons. It’s hard to read anyway, especially for high school kids. Also, I avoid irony. I don’t like people saying one thing and meaning the other.
When Timequake was published ten years ago, you said you were basically retired as a writer. You’ve published two essay collections since then, God Bless You, Dr. Kevorkian and the best-selling A Man Without a Country. I wonder if the visual arts have become a substitute for writing in your life.
Well, it’s something to do in my old age. [Laughs.] As you may know, I’m suing a cigarette company because their product hasn’t killed me yet.
Is it a different creative process for you, sitting down to write or picking up a paintbrush?
No. I used to teach a writer’s workshop at the University of Iowa back in the ’60s, and I would say at the start of every semester, “The role model for this course is Vincent van Gogh — who sold two paintings to his brother.” [Laughs.] I just sit and wait to see what’s inside me, and that’s the case for writing or for drawing, and then out it comes. There are times when nothing comes. James Brooks, the fine abstract-expressionist, I asked him what painting was like for him, and he said, “I put the first stroke on the canvas and then the canvas has to do half the work.” That’s how serious painters are. They’re waiting for the canvas to do half the work. [Laughs.] Come on. Wake up.
We live in a very visual world today. Do words have any power left?
I was at a symposium some years back with my friends Joseph Heller and William Styron, both dead now, and we were talking about the death of the novel and the death of poetry, and Styron pointed out that the novel has always been an elitist art form. It’s an art form for very few people, because only a few can read very well. I’ve said that to open a novel is to arrive in a music hall and be handed a viola. You have to perform. [Laughs.] To stare at horizontal lines of phonetic symbols and Arabic numbers and to be able to put a show on in your head, it requires the reader to perform. If you can do it, you can go whaling in the South Pacific with Herman Melville, or you can watch Madame Bovary make a mess of her life in Paris. With pictures and movies, all you have to do is sit there and look at them and it happens to you.
Many years ago, you said that a writer’s job is to use the time of a stranger in such a way that he or she will not feel the time was wasted. There are a lot of ways for a stranger to pass time these days.
That’s right. There are all these other things to do with time. It used to be people would wonder what the hell they were going to do for the winter. [Laughs.] Then a big book would come out — a big, wonderful book — and everybody would be reading it to pass the time. It was a very primitive experiment, before television, where people would have to look at ink on paper, for God’s sake. I myself grew up when radio was very important. I’d come home from school and turn on the radio. There were funny comedians and wonderful music, and there were plays. I used to pass time with radio. Now, you don’t have to be literate to have a nice time.
You’ve stated that television is one of the most viable art forms in the world today.
Well, it is. It works like a dream. It’s a way to hold attention, and it’s awfully good at that. For a lot of people, TV is life itself. Churches used to provide people with better company than they had at home, but now, no matter what your neighborhood life or family life is like, you turn on the television and you get relatives, family. I don’t know if you’ve heard about this, but scientists have created baby geese that believe that an airplane is their mother. Human beings will believe in all kinds of things that aren’t true, and that’s okay. And TV is a part of that.
Is there another book in you, by chance?
No. Look, I’m 84 years old. Writers of fiction have usually done their best work by the time they’re 45. Chess masters are through when they’re 35, and so are baseball players. There are plenty of other people writing. Let them do it.
So what’s the old man’s game, then?
My country is in ruins. So I’m a fish in a poisoned fishbowl. I’m mostly just heartsick about this. There should have been hope. This should have been a great country. But we are despised all over the world now. I was hoping to build a country and add to its literature. That’s why I served in World War II, and that’s why I wrote books.
When someone reads one of your books, what would you like them to take from the experience?
Well, I’d like the guy — or the girl, of course — to put the book down and think, “This is the greatest man who ever lived.” [Laughs.]
[For the complete interview, including background on Kurt’s writing, please click here.]
I recently came across this article in Princeton Alumni Weekly magazine, edited here for length. How would your life change if you bought nothing new for a year? How much of it would be good change vs. bad?
Princeton friends John Perry and Sarah Pelmas had debated repeatedly with their San Francisco buddies about the impact of the U.S. consumer lifestyle on the planet and on their own quality of life. In late 2005, they decided to do something about it: The 10 friends challenged each other to see if they could all go through the whole of 2006 without buying anything new.
The group called themselves The Compact, after the Mayflower Compact, and pledged that for the entire year, they would purchase secondhand or borrow everything they needed, except for food and essentials like toiletries and medicine.
“We thought that if we stopped participating in the cycle of disposable consumption and empty shopping, we could tread a little more lightly on the planet,” says Perry, a communications director at a high-tech company, who majored in English at Princeton.
Sounds hard? They say it wasn’t. They shopped less overall and got creative when they needed specific items. They reserved “shopping” for times when there was something they really couldn’t do without. When Perry needed a pressure cooker to prepare vegetarian dishes for his partner and their two children, he found a used one on the Internet. Pelmas and her husband, who are renovating their home, found secondhand appliances and recycled wood for baseboards and cabinets. But they were stumped by how to find used nails, screws, and hinges, and broke down and bought them new instead — the only time they cheated. Pelmas also struggled with finding sports sunglasses for rowing. Never able to find a used pair, she taped up her old ones and kept using them instead.
“It seems impossible and daunting, but it really isn’t,” says Pelmas, who studied English and creative writing at Princeton and now works as a school administrator. One of the benefits of ditching recreational shopping was more time for friends and family. “It’s completely changed the way we look at things,” Pelmas says. “Most things don’t seem necessary anymore.”
The Compact unexpectedly morphed into a national — and international — phenomenon after the media in San Francisco caught wind of the project. Before the year was out, stories about it had run in dozens of U.S. and international media outlets. The Compactors started hearing from people around the country and around the world, including environmentalists and people concerned about global warming, but also from parents worried that their children were becoming too materialistic, and people troubled by the consequences of U.S. oil dependency.
About 8,000 people have joined the e-mail list The Compact created to discuss the project, and groups modeled after The Compact have sprouted in 38 communities across the United States and in countries including Romania, New Zealand, and Japan. You can read more about The Compact on its blog at sfcompact.blogspot.com.
The project was supposed to wind down at the end of 2006, but Perry and Pelmas plan to continue living in the spirit of The Compact. “When you stop engaging in ‘retail therapy,’ you realize how much you have and how little you really need,” Perry said.
By E.B. Boyd ’89
E.B. Boyd ’89 is a freelance writer in San Francisco.
This bear scared me when I was little, but it made $1,000,000 per month in royalties for the inventor. Stephen worked on it.
This is a continuation of my previous Q&A with Stephen Key, who has licensed to companies ranging from Coca-Cola and Disney to Nestle. He was also involved with the design of both Teddy Ruxpin and Lazer Tag. This second and final part will cover royalty rates, negotiation, and how he calls into companies to sell his concepts (including actual call scripts).
Before we get started, here are a few other resources that I have in my licensing and product design library, which really focuses on deal making and arranging revenue splits:
Inventing Small Products (Stanley Mason, like Stephen, is a specialist at tweaking/combining existing products as a lucrative shortcut to successful deals)
-How much money does it take to license your idea? How much time does it take?
In review, I spend $100 on a provisional patent application so I can legitimately claim “patent pending” status for a full year, $80 or less on a sell sheet that I have created by a graphic design college student. My third cost is the cost of making phone calls to manufacturers. So for many simple products your total costs are $200 to see if your idea has legs. Of course there are always exceptions. Some products will cost more, but you’d be surprised at how little you can spend to be “pitch ready.”
Sample Sell Sheet
-What is a typical royalty rate?
Royalty rates can range from .0001% to 25%. Royalties are usually based on the wholesale price. This is the price the manufacturer sells to the retailers for, or that they sell to a distributor for.
A very general rough way of figuring out the wholesale price of an item is to just cut the retail price in half. This doesn’t work for all industries or product categories, but it’s a nice way to get a rough estimate of what your royalty might be for your idea.
If you think your product is going to sell for $10 at a retail store. You half that, to get a wholesale price $5. Your royalty would be on this $5 wholesale price.
So why would you ever want a .0001% royalty rate? Well if your invention went of every bottle of Coca-Cola that sold worldwide. That might not be a bad royalty rate. Or if you had a software product that only aardvark researchers bought, 25% might be very fair, since the manufacturer isn’t going to sell many units.
In my experience a 5% royalty is most common for consumer goods. I usually ask for 7% and settle on 5%.
I’ve licensed many novelty products that have sold in stores for one or two years and then never sold again. That can be fun, and I wouldn’t discourage people from licensing novelties, but that’s not where I made my millions. I’ve made serious money by selling ideas that I knew could sell 100,000’s or millions of unit every year.
My advice is to pick a product area that does high unit volume. This way that 5% of the wholesale price on every unit can really add up.
To further illustrate my point, I’ll tell you a little story. I had a student that had already filed a patent when he came to us. My approach, as you know, is to use provisional patents that only cost $100, so you don’t need to spend a bunch of money in advance of selling the idea.
It was to late for this particular student. He’d already spent about $6,000 on a patent. His invention was a drum key that made tightening the thumbscrews on a drum easy, so drummers don’t have to hurt their thumbs to get their drums tuned up.
Drummers loved it. He took our inventRight course and licensed his idea to a musical instruments manufacturer. The manufacturer was already selling another drum key and gave him an idea of how many of his drum keys they thought they would sell each year.
So he did the numbers, then realized that it would take a year just to earn back in royalties what he had spent on the patent. It was a low volume product. The lesson – pick high volume products and you’ll make much, much more money.
Six thousand a year in royalties just isn’t worth the time for me. It takes almost the same amount of energy to license a small idea as it does a big one, so why not go for the big one?
In my prior life, I worked as a product designer at Worlds Of Wonder (a now defunct toy company). I watched the inventor of Teddy Ruxpin, the talking teddy bear popular back in the late 80’s, make $1,000,000 in royalties a month!
I know that’s a long winded response to your questions about what a typical royalty rate is, but I wanted to give your readers some solid advice and examples that they can take and use when licensing their ideas.
-What should people consider when working on their first idea?
Most inventions are just slight variations of existing ideas. I’ve found it easier to sell ideas that aren’t too radically different. The easier it is for people to understand the idea, the better.
I prefer simple ideas, but I’ve worked on a few tough ones also. My Michael Jordan wall ball was super simple [a basketball hoop attached to a cut out of Michael Jordan, all of which was attached to a door]. I licensed the idea almost overnight and received royalties for ten years. It was a great product for me to start off with because it was so simple, required very little research and the manufacturing was easy. My spin label invention is much more complicated and after many years and millions of labels, I’m still working on getting it to where I want it to be.
My best advice is to make your first idea a simple one, so you can go through the whole process of selling an idea. Then work on the harder ones after you’ve gotten a little experience under your belt.
-Who do you call at companies when you try to license a new idea?
Sales guys are great, but my first choice is the marketing manager of a product line at the company that would easily understand your invention. Avoid purchasing. [Note from Tim: Find the manufacturers’ names by browsing the relevant categories in a department store, or online at a place like Amazon.]
For example, if you have a new comfortable grip hammer innovation, call and ask for the “marketing manager of the easy comfort grip hammer line” at Stanley. Use the product line name when you call. It’ll sound like you know exactly whom you are calling for. I think you get the idea. This is just one of many tricks I use to get into the decision makers at companies. If this doesn’t work, there are many other tricks you can use to get your idea in front of a decision maker.
You can license almost anything. You just need a new product benefit and some IP (Patent, Copyright or Trademark). In some industries like the toy industry, you don’t even need any IP.
However, I wouldn’t recommend licensing toys. It’s too competitive. You might have to show 200 ideas before you get interest in even one. I don’t like those numbers.
I prefer to sell ideas to industries that don’t see so many new ideas each year. I’m talking about industries that don’t currently have many innovative new products. The packaging industry is one of these industries.
I licensed my spin label invention to a packaging company. They thought I was a genius. I’m not a genius. I’m just more creative than they are, and they don’t see many new ideas.
I guess my little secret tip for you to contemplate is to consider coming up with new ideas in industries that may be a little stale. You won’t have much competition and they’ll think you are brilliant. [Note from Tim: a good method for examining industries is to browse categories or departments in a store like Wal-Mart and look for products that haven’t changed in a long time, or those where most products are nearly identical. Can you reinvigorate a commodity with a small tweak?]
-Do you have any words of advice regarding negotiating for those new to licensing ideas?
The ability to hold back information and dole it out in small intriguing bits and pieces is a critical part of my approach. It works almost every time. And more importantly, it keeps the dialog going. Once the dialog stops, the deal slows down and fizzles out.
If you keep the dialog going with a manufacturer, you’re more likely to close the deal. So don’t give them all the information up front. The manufacturer has no reason to call you back if you give them everything up front.
This is one of the biggest mistakes I see inventors make. They give up to much to soon and don’t know how to keep a dialog going with a manufacturer. [Tim’s note: Don’t oversell. This is as true for PR as it is for licensing — the goal isn’t to sell in one call, it’s to get a second conversation or spark questions that lead towards a deal.]
Odds and Ends: Hacking Japan and Living Like a Rockstar in Tokyo
A number of you have asked me to do a “How to Live Like a Rockstar in Tokyo” post like the how-to article I wrote for living large on little in Buenos Aires. Now you can get some of my top picks and tricks for Tokyo. I have a series of sidebars called “Tokyo Tips” in the debut issue of Everywhere magazine, which is out now. It’s a gorgeous magazine and one of the best I’ve seen in the travel genre. It should be available starting today in most bookstores.
I first met Stephen Key in 2001. Two months later, I used a few recommendations of his — shared over the customary gin tonic — to help a friend double overseas sales in less than two weeks in New Zealand and Australia.
How? Licensing. It can be a beautifully elegant model.
Stephen is somewhat famous in inventing circles for two reasons. First, he consistently earns millions of dollars licensing his ideas to companies like Disney, Nestle, and Coca-Cola. Second, he is fast. It seldom takes him more than three weeks to go from idea to a signed deal.
He is not high-tech. There are no multi-year product development cycles. He specializes is creating simple products or improving upon existing products, often using nothing more than a single-sided drawing or photograph. Coupled with refined cold-calling skills, Stephen meets with some of the most influential marketing executives in the world. In this interview, we’ll explore how this advisor to American Inventor rents his ideas to Fortune 500 companies.
1- What exactly is licensing, and why is it a good option for people with ideas but little time or patience?
I think licensing is a bit of mystery to many people. It really doesn’t have to be.
Licensing is renting your idea to a manufacturer. The manufacturer handles the marketing, manufacturing, distribution and basically everything else required to bring the product to market.
Usually quarterly (four times a year), the manufacturer pays you a royalty on every unit they sell. This royalty—generally a percentage of the total wholesale price—is your payment for bringing them a new product idea that they can sell to their customers.
It’s an attractive low-risk alternative to manufacturing products and taking them to market yourself.
Using licensing, I can spend my time coming up with new product ideas instead of worrying about balance sheets, cash flow, employees and all the other hassles of running a company. I might pitch three ideas one month and no ideas for the next two months. You can have total flexibility with your work schedule.
Here’s one tip on how to make sure you get paid a certain amount four times a year.
Minimum Guarantees – So here’s why I use the term “renting” when describing licensing your idea to a manufacturer. It’s very important to make sure the manufacturer performs. You need a performance clause in the licensing contract. Without a performance clause, the manufacturer could just sit on the idea and do nothing with it. I’ve seen it happen.
Ensure you have a “Minimum Guarantee” clause in the contract. A minimum guarantee clause basically says the manufacturer needs to perform and sell a specified number of units every quarter or every year. Otherwise, you get your idea back and you can license your idea to another manufacturer.
It isn’t usually necessary to call in [enforce] the minimum guarantee clause. Most of the time you want to give the manufacturer a chance to perform. After all, you are partnering with them and they’ve spent big money on setting up their facilities to manufacture your new product.
Here’s another tip: Don’t front load the deal. I see many people with ideas doing this. They ask for large up front fees and make it to hard for the manufacturer to say yes to the deal. Instead ask only a small amount of money up front and scale up the minimum guarantees each quarter.
An example of minimum guarantees:
100,000 units quarter one
200,000 units quarter two
300,000 units quarter three
Let’s say the manufacturer sells 110,000 units quarter one. You would get paid a royalty on each of the 110,000 units sold.
Then let’s say the manufacturer only sells 190,000 units quarter two. The manufacturer can choose to pay you the royalty for the minimum 200,000 units they guaranteed you they would sell and they would retain the rights to manufacture your idea.
You should be OK with these “Minimum Guarantee” numbers since you set them up when you negotiated the contract. Set up numbers you think the manufacture can meet and that you’ll be OK with if the manufacture just meets the agreed upon “Minimum Guarantee”.
Of course you would prefer to earn royalties on 600,000 units every quarter, but you know you are guaranteed at least a certain “Minimum Guarantee” every quarter. This makes it nice when budgeting to buy that new sports car you’ve had your eye on.
2- I’ve heard you say that the most important thing you can do when licensing an idea is to spend as little time and money on the project before you get feedback from a manufacturer. Why?
Yes, that’s true. Unfortunately, it’s the exact opposite of what most people do. Most people go out and spend $3k to $20k or more on a patent and a few grand or more on a prototype first.
Time is the enemy in this process.
I’ve talked to inventors who have been contemplating or working on ideas for years. That’s not me. When I have an idea, it only takes me three days to three weeks to find out if the idea has legs.
On average, I recommend that my students take no longer than three weeks to three months before they make the decision to keep working on the project or dump the idea and move onto the next one.
Spend very little time or money on a project before you get feedback from manufacturers. The reason for this is simple: You’re not going to hit every idea out of the ballpark. Sometimes the benefits of the idea just aren’t intriguing enough. Maybe the idea has some manufacturing problems. Maybe the idea has been tried before and you didn’t find it with your research. There can be many reasons why manufacturers decide not to move forward with an idea.
You need to call a handful of potential manufacturers that might sell your idea. It takes very little time and next to no money to make the calls, and it’s the only way you’ll get the critical early-stage feedback.
File a provisional patent application ($100), create your sell sheet ($0-$80) and start making phone calls as soon as possible. That’s totally the opposite of what most people do. Most people dream or plan and research the idea to death.
The reality is that you will never be as knowledgeable about a particular industry as a manufacturer that been in the business for thirty years. They’ve seen everything imaginable in their product area. Their opinion is the only one that matters. Get your idea in front of them as soon as possible and get the feedback you need to pursue it or kill it.
Here’s a summary of my solution to the patent and prototype hang ups many people seem to have.
PROBLEM (What most people do):
The majority of people I talk to think the first thing they need to do is go out and spend money to have an expensive patent filled by a patent attorney. Here’s why that’s wrong: Many times you’re going to get complaints from manufacturers that your idea needs to be fixed in one way or another. No problem. You’re creative and they aren’t. Go back to the drawing board and fix the problems the manufacturer presented.
The only problem is that if you’ve wasted $3k to $20k on a patent, now your going to need to file another patent covering the new features of your product. Another $3-20k? I don’t think so. There is a better way.
A PPA also allows you to say “patent pending.” It’s a huge benefit to the small guy! If you come up with a new version of your invention, just file another PPA with the additional features. With my approach, you should be able to get a “go” or “no go” in three weeks to three months.
Make sure to put another one to five months aside for negotiations and you’ll still have many months left on your twelve month PPA.
Then when you license your idea to a manufacturer, you’ll put in the contract that the manufacturer is responsible for paying your attorney to upgrade your PPA to a full patent and put it in your name! This is how I get multiple patents, in my name, paid for by manufacturers.
PROBLEM (What most people do):
People think you need to have a polished and perfect prototype in order to sell an idea. I have sold many ideas with very simple prototypes and many without prototypes at all .
What people don’t understand is that you are not selling your prototype or your patent. I’ll say that again. You’re not selling your prototype or patent. You are selling the benefits of your idea.
SOLUTION (My method for you):
Create a sell sheet. What the heck is a “sell sheet”? It’s a regular 8 ½” x 11” piece of paper. It’s like an ad for your idea. It has the big benefit of your product in one sentence at the top, maybe a few sub benefits or features in bullets below and a picture or drawing of your idea. “Oh, but I have to build a prototype,” many will say. No, you don’t.
You don’t need a prototype until you get some interest. If you don’t get any interest, you haven’t wasted time on a prototype.
Your sell sheet should be like a billboard on the freeway. People should be able to glance at it for a few seconds and understand the benefit of buying your invention. They don’t need to understand every feature or hear you make clichéd statements like, “if we only sell this to 1% of all households in the country, this new idea will make millions”.
My one line benefit statement for one of my biggest ideas was, “I have a new label innovation that ads 75% more space to your container.” That’s it. I didn’t need to explain how when I called on the phone, they just wanted to know more.
Benefits, benefits. That’s what you are selling. Not your patent or prototype.
Stephen in motion: Repurposing existing products in 5 minutes for a call sheet model or prototype…
[To be continued in Part II: negotiated royalty rates, who to call within companies, product idea criteria, what product categories to avoid, and more]
Thich Nhat Hanh, the Buddhist monk and zen teacher once nominated for the Nobel Peace Prize by Martin Luther King, Jr., has a knack for making the esoteric understandable.
In discussing what some call “present state awareness”–experiencing and savoring the present—he offers a simple parable:
Let’s say that you want to eat a peach for dessert one evening, but you decide to only allow yourself this luxury after washing the dishes. If, while washing the dishes, all you think of is eating the peach, what will you be thinking of when you eat the peach?
The clogged inbox, that difficult conversation you’ve been putting off, tomorrow’s to-do list?
The peach is eaten but not enjoyed, and so on we continue through life, victims of a progressively lopsided culture that values achievement over appreciation. But let’s get specific.
If we define “achievement” as obtaining things we desire (whether raises, relationships, cars, pets, or otherwise) that have the potential to give us pleasure, let’s define “appreciation” as our ability to get pleasure out of those things. To focus on the former to the exclusion of the latter is like valuing cooking over eating.
How then, do we develop the skill of appreciation, which is tied so closely to present state awareness?
There are a few unorthodox tools that we’ve explored already for state awareness, like the 21-day no-complaint experiment, but the most common mainstream prescription is meditation.
The problem with meditation is that it too often gets mixed with mysticism and judgment (attempting to forcefully exclude certain thoughts and emotions). Who really wants to visualize a candle flame for 30 minutes? It can work, but it doesn’t work for most.
Here’s where we enter the 60-second solution: gratitude training. From Cornell to the University of Michigan, scientists are looking at the far-reaching effects of practicing gratitude just like exercise.
“The first group kept a diary of the events that occurred during the day… the second group recorded their unpleasant experiences, [and] the last group made a daily list of things for which they were grateful.
The results of the study indicated that daily gratitude exercises resulted in higher reported levels of alertness, enthusiasm, determination, optimism and energy. Additionally, the gratitude group experienced less depression and stress, was more likely to help others, exercised more regularly and made more progress toward personal goals. According to the findings, people who feel grateful are also more likely to feel loved.
McCollough and Emmons also noted that gratitude encouraged a positive cycle of reciprocal kindness among people since one act of gratitude encourages another… McCullough suggests that anyone can increase their sense of well-being and create positive social effects just from counting their blessings.”
In practical terms, here is one example of how you can test the effects of gratitude training in less than 10 minutes over the next week:
Ask yourself the following question each morning, immediately upon waking up and before getting out of bed:
What am I truly grateful for in my life?
Aim for five answers, and if you have trouble at first, ask yourself alternative probing questions such as:
What relationships do I have that others don’t?
What do I take for granted?
What freedoms, unique abilities, and options do I have that others don’t?
What advantages have I been given in life?
Which allies and supporters have helped me to get to where I am?
I returned from a media fast this weekend to quite a firestorm over my last post. Suffice to say, there have been more than a few flame wars.
I’d just like to point out a few things that are easily missed:
First, this is the “Experiments in Lifestyle Design” blog! I go out of my way to try unorthodox things for limited periods of time, after which I share what was interesting, what worked, and what failed. The 21-day no-complaint experiment is another good example. I covered AJ Jacobs’ attempt to follow the bible word-for-word for one reason: it’s thought-provoking and causes people to test assumptions about what can and can’t be done, not because I’m recommending everyone go out and stone adulterers, for example.
Some of what I explore will naturally be controversial because it’s unusual or even the opposite of common practice. I don’t do it for “flame baiting” (I can do without the headaches) but because that’s the nature of this blog. Test new things and share the outcomes. Some of it will be extremely effective and useful, some of it will be impractical but funny, and some of it will end up impractical in all but a few contexts. I just hope all of it is thought-provoking on some level.
Second, I find it funny that a few smart bloggers have personally attacked me with every 4-letter word under the sun, all in the name of criticizing how rude I am! One thing noticeably absent from my blog is personal attacks. It’s too bad that people who are otherwise civil sometimes use the informal nature of their blogs as an excuse to attack people instead of ideas. It’s a waste of intellectual horsepower. C’mon, guys. I’m not rude in person, and the blog post didn’t hurt anyone. Take a breather. Please don’t miss the end of the post in question, where I write:
“A good long weekend of getting lost with someone will reveal most of the character you need to see. No need to orchestrate bad service at a restaurant, for example, if you can achieve the same end doing something fun but uncontrolled.”
Sometimes you need to make friends and influence people. Other times, you should just test drive them and push their buttons.
The art of irritation can, in fact, be just as valuable as the art of persuasion. How so? Let’s start with the problem: people are good liars and actors… up to a point.
What if it were possible to fast-forward relationships, whether with new friends, business partners, or romances? To get past the honeymoon facade of niceties and see their true tendencies underneath all it all?
I’ve been experimenting with methods of “removing the mask” so-to-speak, and it can be done. Relationships cost a premium of attention and time, and I—like most–want people in my life whose real personalities and motives will uplift and strengthen me instead of drain and demoralize me.
Catching bad apples early begins with recognizing a truism:
Instead, imagine using spotting planes, counterfeit police cars, and thermal night-vision cameras to break the record for the famed Cannonball Run from NY to LA: 32 hours and 7 minutes. How to do it? Sustain approximately 130 miles per hour on average the entire time (when you factor in refueling time). This is who I interviewed today.
This post is by request. How long does it take to learn Chinese or Japanese vs. Spanish or Irish Gaelic? I would argue less than an hour.
Here’s the reasoning…
Before you invest (or waste) hundreds and thousands of hours on a language, you should deconstruct it. During my thesis research at Princeton, which focused on neuroscience and unorthodox acquisition of Japanese by native English speakers, as well as when redesigning curricula for Berlitz, this neglected deconstruction step surfaced as one of the distinguishing habits of the fastest language learners… Continue reading “How to Learn (But Not Master) Any Language in 1 Hour (Plus: A Favor)”