New Revenues from Existing Technology

A leading manufacturer of products in a niche market had a wealth of specialist intellectual property in both hardware and software developed over more than 20 years.

What they wanted to do was to find new sources of revenue from this IP, but they were caught in the very common trap of already being committed 100% to servicing their existing markets, with maintenance and new releases of their products in those markets. So if they did not have the time to create new products, how were we going to find new sources of revenue?

Effectivus stepped in to help them with the problem.

The answer was to look for other manufacturers with whom they could collaborate. We needed to find manufacturers who had access to markets we currently did not, that did not compete, and who had products and customers who would benefit from their technology.

As an intermediary effectivus was able to approach other manufacturers, without initially revealing the name of the client, and test the water. We established several criteria; they should not be competitive with the client, nor any other licensee. We should be able to establish a real need that their customers had which our client’s IP could satisfy in a way that those customers would value highly. They needed to have the resources to put effort into understanding the IP and extending their products to take advantage of it. It helped if they had already licensed technology from a third party; sometimes the first time is pretty painful for high-tech companies used to growing all their own IP. Finally, they needed to be motivated to get us all through the process and in particular the commercial and legal negotiations.

We found several. One who was delivering solutions further down the value chain, another who was manufacturing equipment for use further up the chain, and a third who had a solution in an adjacent market. We were able to identify individual elements of the IP that would solve important problems that each manufacturer’s customers faced, and package it in such a way that it could be easily incorporated into their products, often as high value options.

We developed a commercial agreement with each partner which would suit their markets, but would also deliver a return to Effectivus’s client. The process was complicated by the need to understand the licensee’s customers and their needs, then the licensee’s product portfolio, and the client’s IP portfolio. Some creative thinking helped us find that sweet spot where the end user would receive benefits they would value, the licensee would gain additional revenue and our client would receive royalties.

The result? A win-win relationship and a happy client.

This entry was posted in past glories and tagged , , , , . Bookmark the permalink.

Agree, disagree, enjoyed? Sparked a completely different thought or idea? Post a comment!

Enjoyed that? Then sign up to receive the monthly effectivus .

Leave a Reply

Your email address will not be published. Required fields are marked *