Invention & Innovation Invention & Innovation

Choosing a Venture Entrepreneurs may seek a business venture in one of two ways: 1.Idea-Driven Enterprise 2.Market-Driven Enterprise

Idea-Driven Enterprise The idea and/or innovation or invention comes first. The idea and/or innovation or invention comes first. Then you need to find out if enough people actually want, need, and would purchase it to earn a profit. Then you need to find out if enough people actually want, need, and would purchase it to earn a profit.

Market-Driven Enterprise Entrepreneurs look for existing opportunities where there is a need, or want for a particular kind of product or service. Entrepreneurs look for existing opportunities where there is a need, or want for a particular kind of product or service. Entrepreneurs research trends in the market, particularly in following areas: Entrepreneurs research trends in the market, particularly in following areas: 1. technology 1. technology 2. social and demographic (i.e. the environment, fashion, health, family and entertainment) 2. social and demographic (i.e. the environment, fashion, health, family and entertainment) 3. the economy 3. the economy 4. political and legal 4. political and legal 5. competition – Does the product or service exist? If so, how will yours be different from the competition? If not, how will you keep yourself ahead of any competition that may eventually exist) 5. competition – Does the product or service exist? If so, how will yours be different from the competition? If not, how will you keep yourself ahead of any competition that may eventually exist)

Business Plan A successful entrepreneur will develop a business plan which will include industry and market research, a marketing strategy, and sales and profit projections. A successful entrepreneur will develop a business plan which will include industry and market research, a marketing strategy, and sales and profit projections. In order to obtain financial support from banks and/or potential investors an entrepreneur needs demonstrate s/he has done his/her homework and is confident the business has real potential for success. In order to obtain financial support from banks and/or potential investors an entrepreneur needs demonstrate s/he has done his/her homework and is confident the business has real potential for success.

Part 1: Inventions Invention Defined: A product or process that does something that has never been done before. A product or process that does something that has never been done before. Inventions and Entrepreneurship When the invention fills a market need, its sets the stage for entrepreneurship. When the invention fills a market need, its sets the stage for entrepreneurship. Not all inventors are entrepreneurs. Not all inventors are entrepreneurs. Some inventions do not make it into the market. Some inventions do not make it into the market.

Canadian Inventors Alexander Graham Bell – telephone Alexander Graham Bell – telephone Joseph-Armand Bombardier – snowmobile Joseph-Armand Bombardier – snowmobile Gideon Sundback – Zipper Gideon Sundback – Zipper James Hillier – Microscope James Hillier – Microscope James Naismith – Basketball James Naismith – Basketball Frederick Grant Banting – Insulin Frederick Grant Banting – Insulin Wilfred Bigelow – Pacemaker Wilfred Bigelow – Pacemaker Dianne Croteau – Actar 911 (CPR Doll) Dianne Croteau – Actar 911 (CPR Doll)

Taking the Next Step Entrepreneurship begins when the new invention or innovation becomes the inspiration for a new venture for profit or not-for-profit. Entrepreneurship begins when the new invention or innovation becomes the inspiration for a new venture for profit or not-for-profit.

Those First Steps 1. Protect the invention or innovation by obtaining: a. a patent; or a. a patent; or b. a copyright b. a copyright Creator must decide to either: a. license the idea; a. license the idea; b. franchise it; b. franchise it; c. produce it; or c. produce it; or d. or sell the rights to someone else to do with it as s/he pleases d. or sell the rights to someone else to do with it as s/he pleases

Intellectual Property Patents, Copyrights, & Trademarks Patent Gives the holder the sole right to make, use, or sell an invention for a set period of time, preventing others from using it without permission. Gives the holder the sole right to make, use, or sell an invention for a set period of time, preventing others from using it without permission. If someone were to use it without permission, s/he or they could be sued for a great deal of money. If someone were to use it without permission, s/he or they could be sued for a great deal of money.

Intellectual Property Copyright Gives someone the exclusive right to publish, produce, sell, or distribute works of literature, music, art, and software. Gives someone the exclusive right to publish, produce, sell, or distribute works of literature, music, art, and software.Trademark: A word, symbol, or design, or a combination of these, used to distinguish one company’s goods or services from other goods or services. A word, symbol, or design, or a combination of these, used to distinguish one company’s goods or services from other goods or services. Government Website internetopic.nsf/eng/Home internetopic.nsf/eng/Home

Name that Trademark?

Patents The process of obtaining a patent or copyright: is long is long is expensive is expensive often requires the help of a lawyer often requires the help of a lawyer requires a search for similar patents or copyrights to ensure it is not too much like something else that is already patented or has a copyright. requires a search for similar patents or copyrights to ensure it is not too much like something else that is already patented or has a copyright.

Licensing Agreements Licensing The inventor allows another business to use his or her invention for a fee. The inventor allows another business to use his or her invention for a fee. The inventor is not responsible for manufacturing or distributing the product The inventor is not responsible for manufacturing or distributing the productRoyalty The fee, collected by the inventor, which can be either a fixed amount or a percentage of the total sales revenue. The fee, collected by the inventor, which can be either a fixed amount or a percentage of the total sales revenue.

Examples of Licensing Agreements Computer software programs are licensed to computer manufacturers and software developers. Javascript was licensed to Microsoft and IBM. Computer software programs are licensed to computer manufacturers and software developers. Javascript was licensed to Microsoft and IBM. Sports teams, stars, musicians license the use of their name, pictures, and logos on products. Sports teams, stars, musicians license the use of their name, pictures, and logos on products.

Franchising Agreements Franchise Agreement Similar to licensing agreements Similar to licensing agreements It is an arrangement for one business, such as Tim Horton’s, to license the rights to its name and procedures to another business or person. It is an arrangement for one business, such as Tim Horton’s, to license the rights to its name and procedures to another business or person.Franchiser The parent company who grants the franchise and provides goods and/or services to the franchises. The parent company who grants the franchise and provides goods and/or services to the franchises.Franchisee A person who runs a franchise operation and is under a contract, or licensing agreement, with the franchiser. A person who runs a franchise operation and is under a contract, or licensing agreement, with the franchiser.

Producing the Invention Long and very expensive process Long and very expensive process Venture Capitalists Inventors may partner up with venture capitalists who provide capital (funding) to help produce the invention. In return, the venture capitalist often retain part ownership of the company. (i.e. Dragon’s Den venture capitalists) Inventors may partner up with venture capitalists who provide capital (funding) to help produce the invention. In return, the venture capitalist often retain part ownership of the company. (i.e. Dragon’s Den venture capitalists) A contract will outline the role of each person. A contract will outline the role of each person.

Selling the Rights When an inventor gives up complete control of his/her/their invention and sells the patent or copyright to someone else. When an inventor gives up complete control of his/her/their invention and sells the patent or copyright to someone else.Pros?Cons?

Part 2: Innovation Innovation Defined Using new technology, materials, or processes to improve: Using new technology, materials, or processes to improve: a. existing products, or a. existing products, or b. how they are used; b. how they are used; c how they are produced; c how they are produced; d. how they are packaged; d. how they are packaged; e. how they are distributed; and/or e. how they are distributed; and/or f. how they are designed. f. how they are designed. Innovators often benefit from building on what inventors have already done. Innovators often benefit from building on what inventors have already done. Most innovations arise out of seeking a competitive advantage over another business. Most innovations arise out of seeking a competitive advantage over another business.

Activity 1) Explain the difference between an invention and an innovation. Give an example of each 2) Outline the three ways to protect your ideas and innovations.