By Catherine Jewell, Information and Digital Outreach Division, WIPO
Serial entrepreneur, Louis Foreman, Founder and CEO of Enventys Partners, an integrated product design and launch company in the United States, shares useful insights on intellectual property (IP) and entrepreneurship. Over the last three decades, Foreman has created multiple successful startups. He holds over 10 US patents and his firm is responsible for the development and commercialization of more than 700 other patents. Foreman is a recent inductee into the IP Hall of Fame.
How did you get started as an entrepreneur?
I started my first business in my fraternity room selling lacrosse equipment. I then pivoted towards selling apparel because the teams needing the equipment also needed shirts, uniforms, hats, jackets and bags. By the time I left college, I had created the 24th largest screen printing manufacturing business in the US with around 300 employees and 80,000 square feet of manufacturing space.
What was your first encounter with intellectual property?
After college, NASCAR racing was becoming very popular, so I started a company selling NASCAR-licensed apparel. That business grew to around USD 20 million in revenue in less than two years. That was my first interaction with IP because of the trademarks and copyrights associated with sports apparel. I then went on to create custom-made soccer shin guards to prevent injuries, which I patented and licensed to almost every major soccer brand in the world. Then I started Enventys, a full-service product development and marketing agency. I’m really passionate about IP and business and believe it’s really important to pay things forward, so for the past 30 years I have also been sharing my knowledge of IP and entrepreneurship through various university teaching roles, which I find hugely rewarding.
And what does Enventys do?
We handle all aspects of product development and launch. Our staff of around 80 people includes industrial designers, mechanical, electrical and biomedical engineers, and brand and marketing experts, all working under one roof. So far, we’ve launched almost 3,000 consumer products and medical devices and have helped our clients raise hundreds of millions of dollars in capital to grow their companies.
We work with companies of all sizes to help them launch their products into the market. There are various scenarios. Clients may come with a problem and ask for our help in overcoming it, or they come with an idea and ask us to turn it into a product or with an existing product and ask us to improve it. Our business model ensures there is accountability at every stage of product development and launch. Clients can pay us for the effort we invest in developing a product, or we can take ownership of the entire process and tie our compensation to the product’s commercial success.
What are the main challenges associated with converting an idea into a profitable business?
Ideas are easy to come up with, but the market rewards execution, not the idea. At some point, you have to turn your idea into a product or a service. That could be doing it yourself, or licensing the IP to somebody else. The value of your idea is unlocked in its execution.
What first steps do new entrepreneurs need to consider?
Before investing time and money in an idea, you have to determine whether it’s feasible. Sometimes, entrepreneurs and inventors become so passionate about their idea they forget to work out where the capital they need to develop it is coming from. That’s when they fail. Before pursuing your idea and starting a business, you need to answer five questions.
- What is your product and what makes it unique? In other words, what is going to make someone want to buy your product or service?
- Who is your perfect customer? This will enable you to quantify the size of your market.
- Is there demand for your product? Talk to your customers, find out if they want your product and how much they’re willing to pay for it?
- How much money do you need? Don’t start your entrepreneurial journey until you know how much capital you need to set up your business successfully.
- Where is the funding come from? Secure funding before you start. It’s much harder to attract funding at a later stage, especially if your business is suffering.
Many businesses find it difficult to secure the funding they need to grow. Why is this?
When people say it’s hard to find money for their startup, it usually means they’re not doing a good job of explaining how investors will make a return on their investment (ROI). To attract investment you need to clearly explain why someone should invest in your business and what they’re going to get in return. It’s a communications issue and it’s a credibility issue. Raising capital is about promising a return, and having a track record to back it up. It’s tough, but there’s always someone willing to back a great idea.
Is crowdfunding a route to setting up a business?
Crowdfunding is a good way to get market validation and proof that there is demand for a product, which can lead to investor participation. Typically, before launching a product, you do market research and ask people about their willingness to buy your product. That feedback doesn’t generally translate into actual sales. With crowdfunding, the customer buys your product before it’s even made, which makes it possible to forecast the likelihood of your product’s success at launch and to attract investors.
Crowdfunding is a good way to get market validation and proof that there is demand for a product, which can lead to investor participation.
While it’s a way to get initial funding, crowd-funding is not enough to run a business. With a crowdfunding campaign, you’re pre-selling your product, so you have a responsibility to use the money raised to make and deliver it. The small margins you make in doing that won’t be enough to sustain a company.
Should businesses to be able to use their IP assets as collateral to secure funding?
Yes, the small business community would welcome IP-backed financing. It would increase the growth of businesses significantly. Big businesses with established brands, and a history of revenue around their IP, can go to sophisticated banks or investor groups and leverage their IP. They can use it as an asset and borrow money knowing that there’s value in it. That’s not currently the case for startups or small businesses.
The small business community would welcome IP-backed financing. It would increase the growth of businesses significantly.
Why is IP so relevant to the long-term success of companies?
IP is our incentive to innovate. When you look at the risks associated with launching a business and bringing a new product to market, you need some ability to prevent others from copying what you’ve created. Without IP, the formula entrepreneurs use to determine return on investment is altered to the point where there’s no reason to invest. IP is the underlying asset we leverage to start a company, to invest our own time and capital to build a business, hire employees, and launch new products and services. Without that incentive, it would be up to governments to subsidize invention, and governments are not great innovators.
What common IP mistakes do companies make?
A big mistake is destroying the novelty of an invention before seeking protection. Many entrepreneurs and inventors don’t understand IP and don’t know what they don’t know. They build a prototype and offer it for sale. Then, a few years later, after raising some capital, they try to patent it, only to discover it’s no longer patentable. Or they rush to file a patent without doing a prior art search and spend a lot of money filing a patent for something that already exists. Today, patent information is readily accessible and ascertaining whether someone has already thought of your idea is relatively straightforward.
What’s the key to building greater understanding of IP?
Education is the key to filling the IP knowledge gap. Today, most universities offer entrepreneurship classes, but few go into any depth on IP. We should be incorporating IP into the curricula of high schools and middle schools, because IP is incredibly important and touches so many activities. IP is so critical to society, yet is misunderstood by so many. We need to celebrate IP and encourage people to learn more about it.
Education is the key to filling the IP knowledge gap.
We also need to change society’s perception of failure. Nobody likes to fail, but failure is an ingredient of invention. Take James Dyson, inventor of the bag-less vacuum cleaner, he developed 5,127 prototypes, but were they all failures? No, because each prototype proved something was better or worse. If you’re not willing to fail in the invention process, you’ll never unlock a game-changing technology. The world’s great innovators see failure as a learning experience.
If you’re not willing to fail in the invention process, you’ll never unlock a game-changing technology. The world’s great innovators see failure as a learning experience.
What’s your advice on developing an IP strategy?
Think about IP before you even start your company. Surround yourself with people who have done it before. Surround yourself with a team that complements the skills you have. If you’re the visionary inventor, focus on the invention and let others protect the invention. If you’re the great salesperson but not great at product development, find the people who can do that for you.
What shifts are you seeing in the innovation landscape?
Innovation is happening faster than at any point in the world’s history. Technology is getting better and is unlocking still more new technologies. We consumers have an insatiable demand for something that’s new and better, and that’s what’s fueling this trend.
How can IP offices make life easier for SMEs?
There are always ways to improve the customer experience. I served on the USPTO’s Patent Advisory Committee for seven years and during that time, the USPTO made it easier for examiners to meet directly with applicants. That was a game changer because most inventors don’t understand the patent process, or how accommodating the patent system can be for inventors. They don’t understand that prior art searches are designed to help applicants amend their claims to get protection. Patenting is a process; you just need to understand the rules. That way you reduce the chance of failure because you understand exactly how it’s done. We need to demystify the role of the patent office. The patent office wants to encourage innovation, they want you to get patents, and they’re incredibly accommodating in that process.
We need to demystify the role of the patent office. The patent office wants to encourage innovation, they want you to get patents, and they’re incredibly accommodating in that process.
Are you optimistic about the future?
Yes, I am. Materials science, 5G, are all going to unleash so many more IoT devices because processing speeds are going to be faster, and chips so much cheaper. Everything we do is going to be connected and more efficient. There are so many new technologies to be commercialized thanks to the technological innovations that are being unleashed.
What advice do you have for young people?
Look at everything you do in life, and question why we do it that way. When you start to say there’s a better way to doing something, that’s the first step to finding it.
Eight key takeaways from Louis Foreman
- The value of your idea is unlocked in its execution.
- Before investing time and money in an idea, determine whether it’s feasible. Answer these questions: What makes your product unique? Who is your perfect customer? Is there demand for your product? How much money do you need? Where is the funding come from?
- To attract investment you need to clearly explain why someone should invest in your business and what they’re going to get in return.
- IP is an entrepreneur’s incentive to innovate. Without IP, the formula entrepreneurs use to determine return on investment is altered to the point where there’s no reason to invest.
- Today, patent information is readily accessible and ascertaining whether someone has already thought of your idea is relatively straightforward.
- Think about IP before you even start your company. Surround yourself with people who have done it before.
- Patenting is a process; you just need to understand the rules. That way you reduce the chance of failure because you understand exactly how it’s done.
- When you start to say there’s a better way to doing something, that’s the first step to finding it.