NEEDED: A NEW INVENTORS & ENTREPRENEURS POLICY!
(OR - WHY WE NEED TO RADICALLY CHANGE HOW WE DEAL WITH INVENTORS & ENTREPRENEURS....):
As I've gotten older (& hopefully a bit wiser), I have realized just how incredibly hard we, as a society make it for the average inventor or entrepreneur to be able to secure funding or any form of backing / support, and not just in Australia, but everywhere around the developed world. I recently got quite angry with the situation and it's sheer ridiculousness, and I even considered (for a brief moment) writing to a politician in order to point out the stupidity of the situation, the many hurdles inventors / entrepreneurs face, and then of course there's also the cost of all this loss of innovation and ideas to society (... but I am a bit shy though, and so, in the end I decided instead to just write it as an article - however, if any politician wants to contact me then I'm available for paid consultations on how to actually fix the situation! lol).
You see, I realized that if we were to treat other similar (creative / visionary) industries or endeavors - such as eg: Making Movies - just as hard for all those involved in creating ideas or story-lines etc for the movies / movie industry as we do for all of our inventors / entrepreneurs and the like, then I honestly believe it would be virtually impossible for any movies to be made ever again!.
Let me explain:
Imagine that we have TWO people;
- ONE person is a scriptwriter, director, actor or even an ordinary person - with say an idea for a great new movie - or TV Show (and which has the potential to make Millions of $$$$ and employ dozens, or possibly even hundreds of workers for somewhere between 3-6 months employment if it's a movie - and possibly a year - or even a couple of years or more if it's in the tiny minority that go on to become a hit TV show....). Some movies can employ thousands of workers, but that is very rare in Australia unless it is a very big-budget production (most Australian movies are not). Regardless, it is still only short-term employment when compared to the inventor / entrepreneur guy scenario, and when the movie wraps up most of them will become unemployed again, until their next project.(Note: The success rate for Australian movies which will make enough money to cover their production cost - let alone becoming profitable - in this country is probably very low - maybe 1 in every 25? or 50? or 100? maybe even lower?........)
- ONE person is an inventor or entrepreneur - with say an idea for a new business, device, software or a new product etc (and which has the potential to make Billions of $$$ and employ hundreds, possibly even many thousands of workers for decades to come....). There's nothing like this product / software / business anywhere else in the world, and or it helps / solves a problem that affects millions, perhaps even saves lives, and so if it's done right then this project is almost sure of making the investors and everyone else involved in it a lot of money. An obscene amount of money, if the product / software / business is truly unique / brilliant / detects, cures or treats a common disease / is hot or trendy etc.
Now, suppose that both people have very little or no money at all to fund their idea from start-to-finish out of their own pocket , (which is usually the norm in this situation), and so they both decide to approach the necessary people to make their movie / concept / software / idea etc become a reality......
The Movie / Scriptwriter Guy Scenario:
The movie / TV idea guy jots down a brief outline of his concept in writing and then makes a meeting with a production company / movie studio / TV station. He goes to the meeting and "sells" them on his brilliant idea / storyline. They tell him they love it and that he'll soon be hearing from their lawyers to sign the contracts (.......and he might even get a small payment up-front, to help him get started on the project and or also help him feed his family in the meantime whilst he waits for their full payment of money to come to him - this is especially common when a contract is for payment / financial remuneration primarily or partly covered via royalties, if that is what they've agreed upon). If he's smart he'll take a friend or a lawyer with him to the meeting, (or he could use a non-disclosure document) to use as a witness, just in case his idea is ever stolen.
Sometimes, if the author / scriptwriter has actually already written the entire movie script, and it's perfect / doesn't need any more work, then his own participation in the project is now finished! (.....unless the movie company also should want / need him to work in some way during the production, which sometimes can happen).
He's now usually completely cashed-up and or free to now go off and write another masterpiece...
(OK, I've probably over-simplified it a bit, but you get my drift - and there are many stories of overnight and fast success in the movie / TV industry, as I'm sure the opposite can be true, but regardless, IMHO it's still less work, less involved and much faster / far easier than for my next example....)
The Inventor / Entrepreneur Guy Scenario:
The Inventor / Entrepreneur guy has a lot more work before he can meet with an investor or the like to get funding for his brilliant idea. He must first do some - or all - of the following tasks:
- Outline of Concept / Product etc - Often required for Patent Process: The Inventor / Entrepreneur guy has to write up a comprehensive outline of his concept in writing for it's submission to the patent office. Depending on the complexity of the idea / product/ software etc, this can require anything from a couple of pages to sometimes even many thousands of pages (eg: medical and software documentations, in particular, can and often do require many thousands of pages for the patent process).
- Patent Lawyer: Before he can patent it though, he will usually need to hire a good patent lawyer to to conduct some research to see if it's viable - it may already have been patented somewhere else in the world, or it may have already been patented however the product is not protected under any patent in the Australian market and so maybe it's still a viable patent in Australia / or still worthwhile doing but doing it without registering any patent .... It's sometimes very complex, time consuming, and individual situations vary greatly, hence the reason the inventor will probably need to hire a lawyer. He will need to find the right patent lawyer all on his own, which may take him some time, and then he'll a;so need to pay for the lawyer out of his own pocket, too (and patent attorneys / lawyers are HIDEOUSLY expensive - fees can be often 2 to even 3+ times more costly than their peers working in Criminal Law, doe example. Some patents for very complex products, medications or software etc can easily end up costing AUD $50,000.00 to $100,000.00+ or more.
- Non Disclosure Agreement: Inventor / Entrepreneur guy will need to get a non-disclosure agreement made up for his invention / concept / product / business idea, to prevent people from stealing his idea (well, actually it won't prevent it, but it will act as a deterrent, plus give you legal proof to sue them should they steal it....). Inventor / Entrepreneur guy will usually need to again pay out some cash to a legal professional for the creation of a legally secure non-disclosure agreement....
- Business Plan: Whilst he's awaiting patent approval, the Inventor / Entrepreneur guy will usually need to do other work before he's ready to see that Bank / Investor / Venture Capitalist etc (note: sometimes this process can take YEARS to complete, and so he may have to skip ahead and approach investors whilst it's still only "patent pending") - First on the list is probably writing up the business plan. Depending on the complexity of his product / idea / concept / business idea, and his own ability at doing this sort of task (....not that many inventor / creative types are naturally very good at creating business plans or spreadsheets etc.....) then a good business plan might take anywhere from a week to even a year or more to complete!.He'll usually need to include financial projections in his business plan too, informing the prospective investors how much he thinks his idea / concept will make (in it's 1st year, 2nd year, 3rd year, etc). If he's not very good at working out financials or this sort of thing, then it can be very hard and slow to do....He will usually also have to provide his intimate and personal financial details in his business plan too, such as how much money he has invested already, how much money he owes, and how much money or collateral he has readily available (eg: savings, family home, car, machinery, etc) or which are "owned" by his fledgeling business. This is so that the investors & venture capitalists will know what assets they are able to sell / seize from the inventor / entrepreneur should the project fail miserably and they lose their investment.......He will also have to detail any wages that are required in his business plan. As for his own personal wages for during the project (and sometimes even until it's completion years later), the inventor / entrepreneur guy will usually be expected to work for either very little wages, or a fraction of the cost of anyone else or sometimes for NO WAGES whatsoever! - This is in order for the prospective investors / venture capitalists to have some "proof" that the inventor / entrepreneur guy is really serious about his idea, and so will put in the necessary hard work to get it off the ground & work his guts out 24/7 for the next 2-3 years until it's a success.........(just watch the excellent BBC Program, "Dragons Den" if you think I'm full of B.S. or don't know what I'm talking about.... ). Then, there's the slideshow presentation......
- Slideshow Presentation: This is probably considered optional by some, BUT for a very complex idea, such as a software program or website idea etc, it can sometimes be essential in order to have a chance at securing investment. If an investor cannot easily and or quickly "see" what the product actually does or it's true potential etc, then they will not invest. Sometimes the only way they can "get" the idea is when it's visualized within a short slideshow presentation. A slideshow presentation outlining the product / concept / idea / business is especially needed if it's the sort of idea / product / software etc that needs to be explained easily via a slideshow in order for the prospective investor(s) to understand the idea / concept and ideally then want to invest in it. A good slideshow presentation might take the inventor / entrepreneur guy anywhere from a week to a month to complete, depending on his technical / computer skills (.......he can't outsource this job to Fiverr or anywhere else! - remember, it's a ground-breaking invention / concept and he's still awaiting patent approval, so he cannot let anyone know about it yet or he risks it being stolen..... he'll just have to create the screen-cast / slideshow entirely on his own....).
- Printed Booklet / Brochure(s): Once inventor / entrepreneur guy has finished creating the slideshow / screen-cast presentation, he'll maybe also need to create a booklet / brochure / or book etc to hand out to the prospective investor(s) at the future meeting(s). This item is probably considered to be optional or even worthless by some, but I can tell you now that if you are meeting with big investors or Venture Capitalists and you are asking them to part with many thousands, sometimes millions of dollars, then you probably want to cover all your bases. A printed booklet / brochure often helps them to better visualize your idea, plus it has another benefit too - it is a physical product and so they can take it away with them if they need some time to think on it, and so it might make the difference between funding success & failure..... (note: You need to make them sign a non-disclosure agreement before you begin the meeting / hand out any brochures on your invention / concept.....). If inventor / entrepreneur guy's idea or concept is very complex or technical in nature, then having a printed brochure / booklet to distribute to investors is probably essential for ensuring / helping win them over & secure finance.
- Business Cards: Inventor / Entrepreneur guy will need to have business cards printed up if he wants to be taken seriously in the business world..... He'll need to again cough up and find some more cash....
- Build / Find the team required for the project: This is probably the most ridiculous of all the jobs an inventor / entrepreneur is asked to do!. The Inventor / Entrepreneur guy now has to go out and find all of the people that are needed to build or run the business for his great idea / concept / product / business idea, and so as well as finding them he'll also need to get them to agree to work for him if the project is successful and gets financing and goes ahead......He cannot just hire / choose anyone either - the credentials and expertise of his entire team will be closely scrutinized by any and all prospective investors, and will have a HUGE bearing on whether the prospective investors will take a chance on his idea or not.......Sometimes, such as with software projects or a (complex) website idea, the Inventor / Entrepreneur guy will often be expected to have already hired all these professionals, and be paying their wages already out of his own pocket / mortgage on his family home.....Once he's found his "team", he will need to add all their Bio's and details etc into his business plan.....
- BUILD A WORKING PROTOTYPE: Often, Mr. Inventor / Entrepreneur guy will also need to build a working prototype of his idea / concept, in order to prove "proof of concept". Some investors will not commit to investing without first seeing a working prototype. The financial cost for building the working prototype also usually falls on the poor inventor / entrepreneur guy, who must somehow find the time, expertise or money required to build it....(and not all inventors can do this without hiring the necessary experts to do it for them - I myself cannot write any code or engineer a device / product, and yet I have dozens if not hundreds of ideas that are software or engineering / manufacturing based etc - things I cannot create myself / have no expertise in - and yet which I believe are worthy of production & which likely could make lots of money).
Note: For some industries or products, Mr. Inventor / Entrepreneur guy may also even be expected to have already funded and produced the item in question, plus gotten it out to market and already have signed up some paying customers before the investors / Venture Capitalist's will even consider investing in it....
- Meeting with Potential Investors: FINALLY !!! - Mr. Inventor / Entrepreneur guy can finally now go and arrange meetings with a Bank / Investors / Venture Capitalists etc.....Often after a meeting with potential Investors / Venture Capitalists, the inventor / entrepreneur will usually walk away with nothing other than some interest shown and perhaps a promise to look into it further / meet up again.That is probably a best-case-scenario (.....except for if they make an offer immediately on the spot! - which probably does happen sometimes, somewhere, it's just that I've personally never heard of it happening.......). It might take many months for him to secure any funding, if at all.Mr. Inventor / Entrepreneur guy may need to approach many investors before he succeeds & gets even some small seed-funding (translation: just enough money to get the project some part of the way - he'll probably need to go out again and find more investors as the project progresses, otherwise the project will not get money to be completed and will be abandoned...).
- Seed Funding: So, here we are, finally - by now, Inventor / entrepreneur guy should actually have gotten some seed funding & is on the road to starting his new business / concept / software / etc.
- Late Stage (2, 3, 4 etc) Funding: Mr. Inventor / Entrepreneur guy will probably still need to find more funding later on as the project proceeds or when the small amount of seed funding runs out. If he fails to find the necessary funding to complete the project, then the project will probably close (unless he is lucky enough for it to be bought out - and lucky enough that the new owners of his business still want to keep him on the team / in his former own business....) & he will sometimes be left with little or nothing to show for all his hard work and efforts, or for handing over his valuable Intellectual Property (his idea / concept).If he does succeed with securing more funding, then he is probably now running his own successful business or perhaps receiving some royalties for his patent / licensing etc.
Except that he most probably isn't!!!! -
You see, it has all been made so very hard & costly for Mr. Inventor / Entrepreneur guy to get his idea / business off the ground, that he most likely gave up long ago and or probably went broke / lost his house / lost his wife & family about 4 steps & 2 years ago.......
All that Mr. Inventor / Entrepreneur guy probably now has to worry about is: whether you'd like any fries with that.
Now, tell me if it isn't utterly INSANE that we make it so bloody hard (or even virtually impossible) for our talented inventors and entrepreneurs to get their ideas and projects funded / their business ideas up-and-running - These are the very people that ANY country needs to have in spades in order for the country to succeed, or simply do very well & not get left behind in today's competitive and tough global economy.
Perhaps it's a pity that the movie producers don't run the invention / start-up business industries... I'm sure they'd get a lot more done.
Please tell me your thoughts on this topic, I'd love to hear your opinions and in particular any personal experiences or difficulties that you or someone you know has faced.
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Karen is the co-founder of Business-In-Site.com and is an expert on WordPress with over8+ years experience building WordPress websites for clients. She has written hundreds of articles and is the lead writer and editor for Business-In-site.