The world of do-it-yourself (DIY) seems to be rather in vogue these days. In fact, with such media properties like 24/7 cable channels and print and web versions of Make magazine you might think DIY is the newest cool thing. Nope. Ask my Dad.
My Dad has been and always will be a tinkerer.
Back in the 60’s I remember this love extended into the world of Heathkits – a mail order world of adult-level experiments that led to the creation of useful electronic appliances around the house… or so my Dad thought (my Mom has a different memory). His last great feat was our first color TV set which worked but he never got around to buying the wooden (yes I do mean real wood) cabinet for his creation.
Imagine having to explain to your friends that this “Young Frankenstein-esque Creature” is really our TV that Dad built. And yes it wont blow up. And no you dont want to ask him how he built it (unless you want the unabridged version).
Fast Forward to the 21st Century
The folks at Big Idea Group (BIG) have taken the world of invention and those tinkerers who inhabit it into an online world or marketplace for turning the best ideas into real products. And people are getting paid for participating.
BIG (see right hand column to access there site under “Open Business Models”) is another example of new businesses based on “open innovation” and the use of online communities and content co-creation. Last year, their success led BIG to sell a 30% stake in their company to WPP Group PLC, the global communications services group. The companies entered into a strategic partnership to help clients develop and commercialize new products through BIG’s network of 10,000 innovators.
Business Model – A Community That Let’s People Pursue Their Passion for Product Ideas
BIG’s community brings together individual creative inventors and innovation-driven companies to help refine and present ideas to “best-matched” licensing companies that in turn acquire the idea and turn it into a product.
For inventors, BIG offers a free, honest, confidential evaluation of their ideas. If BIG decide to become their agent, they’ll represent the inventor at no charge including services for – development, marketing, research. BIG makes money from individual inventors by sharing royalties with them not by charging inventors for services.
BIG’s Inventor Community members receive notification of Idea Hunts, Roadshows, contests in which they can participate. BIG Roadshows, staged 10-12 times a year in different cities around the US, are where inventors can privately present their ideas to a panel of industry experts.
For corporations, BIG offers a variety of programs to identify and acquire innovations via its innovator member community. These fee for service offerings include helping a company: launch an innovative brand, extend an existing product line, identify new technologies or materials, or find applications for existing technologies or materials. BIG offers companies exclusive first look at ideas in their area of focus through:
- Invention-Review Roadshows -“idea hunts” focused on an innovation topic, delivering hundreds of ideas from BIG inventors
- Invention Slams – “brainstorming and problem-solving” from top designers, product development assistance from “opportunity identification to shelf-ready product”, consulting on innovation process, design and management of public and internal innovation contests, or development and management of proprietary inventor networks
BIG makes money by: 1) licensing ideas and selling the rights to a company who can produce a product from an invention, 2) Collects a royalty stream and receives advance money from products in the market (sharing same with inventors), 3) Charges service fees to companies for product development assistance.
Since 2000, Big Idea Group has helped license or bring to market over 50 products for inventors from consumer goods, storage, luggage, pets, office supplies, crafts, kitchen, recreation, gardening, tools, and stationery. BIG takes a royalty from inventors of around 5% of wholesale revenue of the product. If BIG brings an idea to a manufacturer or retailer who licenses it, BIG splits advances and royalties 50-50 with the inventor.
BIG can charge companies $10,000 a month to go trawling for new gizmos and gadgets on their behalf (again, sharing advances and royalties with the inventor).
BIG charges $30,000 for an “idea hunt,” where it asks inventors to work on particular projects for a company. A hit results in advances and licensing fees for which Big Idea takes a 50% cut.
Why This Model Might Be Important to You?
Think about your own members and what they are passionate about. How can you devise a branded service that let’s them practice their passion or profession or maybe a new emerging area within a brokered community marketplace that links them to “seekers for the next great idea?”
Companies like BIG, InnoCentive, NineSigma, InnovationXchange and others we have studied in previous posts all have one thing in common. Designing a market where seekers and solvers (or the supply and demand of knowledge) come together to create new products, new research, new business partnerships and everyone benefits. Seekers get what they sought. Solvers can practice their passion and get paid for it. You (the community sponsor) get a cut of everyone’s value creation.
Four years after starting, BIG’s six staff team are netting $1 million a year on sales of $5 million.
Not bad for a group of tinkerers eh?