00:00
One phenomenon I think has been occurring over the last 15, 20 years—I've been practicing for 25 years—and a lot of companies are downsizing their R&D departments, and not having product developers on salary. They used to have these W-2 employees whose job it was to come up with new ideas. And when an idea came from the outside, there was always an obstacle to an inventor, because if a company takes on an idea from the outside, from an independent inventor, the product development team just looks terrible at the company, because they're—the board of directors is like, “Oh, what are we paying you guys all this salary for if we end up having to pay royalties to outside inventors anyway?” So I think a lot of companies have just completely gutted their internal R&D, and are soliciting ideas from the outside. So you found, over the course of the years that you've been licensing, you have identified companies that encourage innovation in submission of ideas.
Yeah, well, let's, let's go and talk about the first point that you just just mentioned, about how more and more companies are downsizing their R&D. They're downsizing more than R&D now. They're downsizing every single department at their companies, at this moment possibly even considering moving out of their place of office, you know, office space, because they’re paying rent but nobody's using it. It's a very interesting time for companies. And it's a scary time, and there is a need for them to continually sell products in order for them to stay afloat. And one strategy that's worked well, that's constantly worked—is validated—is to launch new strategies, or new products every single year. iPhone—till this day they are still coming out with new iPhones. I don't even know what number iPhone they’re on. It’s probably more than ten now, I don't know. Samsung Galaxy, I don't know, Honda Civic 2021, they're already thinking about, it's probably already out.
And Apple has—just as one example—on the iPhone, they have 49 plus patents, just covering different aspects of it. So you're right.
Yeah, the innovation, it just keeps on growing. There's always a next generation of these products, but then these companies are doing it with half or less than half the department's size. Especially right now when they're laying people off or furloughing people. And yeah, they are hiring a lot more contractors. Technically, when we are doing licensing deals on our tax returns, we do a 1099 because we're a contractor. So that is going to be a lot more common, especially for these companies that do want to stay afloat, but also recognize that they need to come up with a new product every single year. And they can't do that ever, you know, can get banger products from the internal team. They're already overworked as it is. So let's just go and open up the doors and have the rest of the world pitch in, all right? And then we'll go and take it from here. You pass the baton, we’ll run.
And sometimes it's even their own customers, like they realize their customers are evangelists for the products. So why not?
Yeah, Lego is a great example of that.
03:21
Sorry, what’s a great example?
Lego.
Okay. Yep.
Yeah, they have this whole, they have their own version of submitting new products, and people actually vote and there's like, if you want to do friends, the coffee table seat, you know, coffee, the couch and all that you could do that, you know, submit that idea and enough people vote for it, I think it actually gets produced, you get some credits you possibly get paid. I'm not entirely sure on that. I haven't read it all the way through. But there is a submission for Legos to come up with a new Lego theme. Under Armour has a specific website where you could submit your product right then and there. And they'll tell you how to, you know, what they're looking for and how to do it. And they'll reach out or you know, they'll reach back. If you're in the dog or pet industry, Kong, K-O-N-G, that rubber dog toy that's supposed to stimulate the dog but also be indestructible—they accept outside ideas, and there's a whole submission form.
04:22
Okay, so, wow, so that's—those are several companies just—and some of them, like huge multinational corporations. So it's not just—these are companies that if they wanted to develop products in house, they certainly could afford the R&D departments but they're, they're now going to outside ideas. Because frankly, it's faster, it's less expensive, and sometimes their own consumers are the ones in the best position to help decide. You know, they know what they want.