New Twist On Selling Ideas Online

Submitted by Dmitri Davydov on Sat, 2008-04-26 19:05.
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Small businesses looking to find a hot idea -- or trying to sell a hot idea to a big company -- are about to get some help.

Next week, Eureka Ranch Technology Ltd. of Cincinnati plans to unveil the USA National Innovation Marketplace -- an online registry where researchers and inventors can post ideas they've developed. Businesses can then browse through those ideas by category, much like searching through résumés at a job-hunting site. If the companies see something they like, they can contact the inventor to buy the idea or collaborate on it.

Companies of any size can use the registry. But small companies will be able to view new innovations first. They also can list ideas or products that they've developed and want to pitch to big businesses.

The goal, says Eureka founder Doug Hall, is to have small businesses incubate ideas from researchers and then sell them to large companies. The time is right for the idea, he says, since big businesses are coming under greater pressure to innovate quickly -- but often lack the internal resources to do the job.

"Small businesses are best at taking an idea and taking it to first sale," he says.

Big Supporters

The registry has some big supporters. It's getting money and advice from the Manufacturing Extension Partnership Network, a program for small and medium-size businesses partly funded by a Department of Commerce agency. Retail giant Best Buy Co. and a Procter & Gamble Co. division called Future Works will be on the site's advisory board.

A Best Buy spokeswoman says the company hopes to tap the innovation registry for products that it could sell in its stores, or for technology that could make its business processes more efficient. P&G says the company has a mandate to connect with outside researchers to complement its internal innovation work.

Mr. Hall says he is in discussions to add other large corporations to the board. He adds that there's no potential conflict of interest in having innovation-seeking companies involved with the project. "Anybody can use the registry," he says. "Everybody gets to see the same ideas."

Soft Launch

The registry's site,, will have a soft launch on April 28. At that point, it will start accepting ideas from inventors and allowing businesses to view those ideas, both on a limited basis. Mr. Hall says the database should be functioning at full throttle by early next year as more people begin to use it.

Newly posted innovations will be accessible only to small businesses certified by their local Manufacturing Extension Partnership Network center. After 100 days, though, ideas are publicly available to everybody, including big companies.

At first, the database will be free for both buyers and sellers of ideas. But eventually sellers will be charged a "few hundred to a few thousand dollars, depending on cost efficiencies we are able to realize," Mr. Hall says. Sellers will also have their ideas rated by a computer model that will calculate their sales potential, among other factors.

Is It Safe?

To be sure, putting ideas online for anyone to see raises the specter of intellectual piracy. Mr. Hall says he advises people to post only ideas for which they have patent protection. If they don't, he recommends describing only what the product promises -- not how it is created.

On the other hand, there's the danger that people will post ideas that they don't actually own and try to sell them. Mr. Hall says his company is looking into "validation systems" that would help establish ownership and the accuracy of claims made.

Another caveat: Buyers and sellers are responsible for making their own deals. Small operators can get advice from the Manufacturing Extension Partnership Network. (Eureka doesn't take a commission.)

For all the potential risks, Mr. Hall argues that the site comes at a crucial time, as companies come under greater pressure to innovate -- but also face big obstacles to developing new ideas.

Large companies tend to face more internal red tape and "have a harder time sifting through new ideas," says Neil Lerner, director of the Small Business Development Center at the University of Wisconsin in Madison. "Small businesses can definitely be more nimble."

Small businesses, on the other hand, can have trouble finding new ideas to increase sales or hooking up with big companies to fund their work and sell their products on a broad scale.

The innovation registry would give small business "access to a network they normally wouldn't have," says Richard Bendis, chief executive of Bendis Investment Group and a board member of the National Association of Seed and Venture Funds. (Mr. Bendis isn't connected with the registry project.)

Via - StartupJournal.Com

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