Business ideas

The traditional stereotype of the innovator is that of an eccentric, slightly unworldly Absent Minded Professor, so caught up in the beauty he finds in his work that he neglects everything else around him.

Although we are taught to be cautious about stereotypes, because there are always exceptions, the stereotype endures because there are still enough people who appear to fit it perfectly.

So while there are inventors who are also hard-headed businessmen – Edison being the most famous example – there are also many whose obsession with inventing itself closes their minds to the business applications of what they invent.

Such inventors may therefore be very successful in terms of designing something original but not successful in terms of reaping the rewards of their skill.

This is not only their loss. The failure to exploit a good idea commercially also means that those who would have bought it and benefitted from it are not able to do so. Many great inventions which would have aided humanity have rusted away as prototypes because the minds that built them were not geared to bringing them to market.

Others with brilliant ideas have had them stolen, because they were unable to master the formalities of patent law.

Many have signed away their rights to most of the profit from their inventions because they were badly advised, or because they lacked the knowledge or the confidence to exploit it themselves.

To make the most of their inventions, inventors must accept that they are in business. They might choose to sell out at a later stage, but they need first to establish the commercial viability of what they sell if they are to command a decent price.

That means they must develop not only a business idea but the business itself. However, starting and managing a business demands two things most inventors lack: business experience and money.

Of these, it is more important to get business experience on board first. Get the right sort of business experience, and the money usually follows.

For many inventors, that business experience takes the form of a “Godfather”, a businessmen who knows his way around. Such a “Godfather” should ideally have a specialist knowledge of the sector in which the inventor hopes to establish himself, and a track record of securing patents and bringing them to market.

A “Godfather” acts as a mentor or counsellor to the inventor. He might serve as a Non-Executive Director of the inventor’s company, and a minority shareholding should give him a stake in its success, but the inventor should beware of people offering to go into partnership with him. There are a lot of sharks out there who want to feast off someone else’s ideas but who bring nothing to the table themselves.

Only once the inventor is confident that he is being well advised should he seek outside investment.

Where “Godfathers” bring their advice and experience to the inventor’s company, equity investors, known as “Angels” bring their cash.

It may be that a “Godfather” is also an “Angel”. A “Godfather” should already have been successful and will probably have money of his own to invest. It might seem natural to show his confidence in a business he advises by investing in it.

Equally, “Angels” may also be successful businessmen, bringing with them ideas and contacts as well as their cash.

However, there may be a conflict of interest. An investor’s priority will always be protection of his investment, which is not necessarily the same as what is best for the business in the longer term. A “Godfather” who becomes an “Angel” may lose the objectivity that makes his advice so valuable.

In business as in theology, part of a Godfather’s duty is to teach about Angels.

Guy Kingston produces and presents the Mind Your Own Business podcast, offering free business advice to entrepreneurs and business owners. As well as audio podcasts there are more articles like this, compelling videos and a must-read blog. All at http://www.myobpod.com or you can network and join in discussions on the MYOB Facebook group (http://www.facebook.com/group.php?gid=12117784275). Article posted by Empica (http://www.empica.com)

Article Source: ArticlesBase.com - Is Your Godfather an Angel