Innovation

Question on HighTable.com from Amar S. How do we find partners to help fund and license our concept? I am part of a two physician team that has a formula for an appetite-suppressing meal replacement bar. The concept allows us to take any soup and turn it into a bar. Our initial focus will be to produce vegan/vegetarian, allergy-free, low carb, low fat, high protein and kosher bars. We have a great idea, but we are having trouble finding established companies to partner with for development.

My answer. Amar, the farther along you can develop your idea, the easier it will be to attract interest from potential backers or licensees, and the more control you’ll be able to maintain. Very few established companies are interested in helping you develop such a product from an untested idea.

You say you have a formula, a concept. If I were an investor, I would be more interested if you had produced some initial batches, conducted tests with them, and tried them out with the kinds of people who would be your consumers. What did they like and not like? If it’s for weight loss, did they have any results? What about packaging and shelf life?

As a potential investor, I would want to see what processes you used, what equipment, how it would scale up, what sets it apart from similar products. How would the production costs pencil out against the likely retail price point, after backing out all the distribution channel costs? Does it require testing and approval from any regulatory agencies? How are the processes and products protectable? Are there pieces you can patent?

Where and how would it be sold? Would it be a grocery item? Health food or natural food stores? Sold online? How would it be marketed initially?

You’ve been in a service and consulting business. Now you’re looking at a manufacturing and distribution business. It takes a different mindset and skill set. You might say, “We just want to sell or license the concept to a big player, then wash our hands of it.” But even if you find a taker, you’ll realize the least return from this approach. You’ll lose control, and somebody else will make most of the money.

I’d look for three things first:

1. Raise some seed capital to do the things I outlined above. At the earliest stage, this money usually comes from your savings, family, or a true believer. (For example, a client of mine who produces gluten-free products has been approached by a VC who has celiac disease. BUT, she has been in operation for several years, and has a track record of growth.)

2. Partner with a person experienced in taking such products to market, with operational, marketing, fund raising experience. Not that he/she is an expert in all three areas, but has been there in the trenches

3. Find an attorney who can advise you how to protect your formulations and processes through patents, trademarks, etc.

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My advice to a woman whose profession is no longer providing a decent living nor a passionate calling.

Think big, beyond your current profession. Ask how else can you apply your valuable skills.

Think concrete, beyond attractive generalities. Research specific opportunities with the orgs you listed.

Think now, not six months from now. Life is too short to spend another year on the poverty-inducing things you’ve moved past.

Think benefits you provide, beyond particular skills you have. People pay a pittance for skills; they pay well for the ability to produce desired results.

Fill in my Model of Success, pulling together the high demand skills you have. Where is the overlap of what you love doing, what you’re best at, and what big ambitious complex projects demand and will pay for?

Think big projects, where there’s plenty of money for you to get paid well. No more little projects

Think essential roles, big projects where your input is essential and will be well paid, not things where someone can say, Thanks, now go away.

Think lucrative. No more pro bono, or helping those who need you but can’t pay much, at least until you are on sound financial footing yourself.

Think partnering and piggybacking with others, so you’re not trying to create it alone.

Think hard-headed, so you don’t get talked out of good pay for value.

Think high rates, because people don’t value what they don’t pay for.

And never ever subsidize anybody wealthier than you are!

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