Reference no: EM131721276

Problem: Individual Inventors and Large Firms: Partnering to Bring New Products to Market

Distributing their products is a common problem facing inventors and entrepreneurs. gary Schwartzberg is a case in point. Schwartzberg, along with a partner, developed a new type of bagel. Dubbed the "Bageler," the bagel was tube-shaped and filled with cream cheese. Schwartzberg was able to get the product into supermarkets and schools in South Florida, where he lived, but couldn't achieve wider distribution. He finally mailed Kraft a box of his cream-cheese-filled bagels with a proposal. He picked Kraft because he wanted to use Philadelphia Cream Cheese (a Kraft product) to fill the bagel. By coincidence, Kraft had been working on a similar product but couldn't get it right. Schwartzberg had a patented process for "encapsulating" the cream cheese in the center of the bagel without the cream cheese escaping during the baking process. Kraft bit and, after some back and forth, Schwartzberg and Kraft hammered out a deal. Schwartzberg told the Wall Street Journal that he couldn't discuss the details of the deal because of a confidentiality agreement with Kraft, but says it's structured as a strategic alliance and he "has skin in the game."

Schwartzberg's product, which is now called Bagel-fuls, is sold nationwide by Kraft Foods. Entrepreneurs and inventors are finding that large consumer products companies are increasingly interested in what they have to offer. For example, Lifetime Brands, the United States' leading resource for nationally branded kitchenware, tabletop, and home décor products, is soliciting ideas from outside inventors. A section of its home page titled "Share your ideas" reads, "Lifetime Brands recognizes that good ideas come from unexpected places. If you have a great idea, we'd love to hear from you." Instructions are then provided for how to submit a product idea. Companies vary in terms of what stage an idea needs to be at before it can be submitted for consideration. The best way to find out is to study the portion of a company's website that provides instructions for how to submit ideas. not all companies are open to new ideas, but many are. For example, P&g's idea submission program is titled "P&g Connect + Develop." The program, which vets more than 4,000 submissions annually, has been so successful that P&g credits it with more than half of its new products over the past 10 years. Products that have emerged from the program include Olay Regenerist, Swiffer, and Pulsonic toothbrushes. general Mills's program is titled "g-Win," and has also experienced success, for both inventors and general Mills. Stanley Black & Decker's program is illustrative of how the submission and vetting process works. Simply go to the company's website at www.stanleyblack&decker.com, click on the "Company" tab, and follow the link titled "Submit an Idea."

Questions for Critical Thinking

1. Why do you think companies are increasingly open to ideas from outside inventors?

2. For an inventor or entrepreneur, what are the upsides to working with a company like general Mills or Stanley Black & Decker? What, if any, are the downsides?

3. Find an idea submission site for a company not mentioned in the feature. Describe how to submit an invention to the company. What appear to be the keys to getting an idea accepted by the company?

4. In most cases, do you think inventors and entrepreneurs get a fair shake when they license a product or enter into an alliance with a large firm? What steps should entrepreneurs take to make sure they are getting a fair deal?