Free Book Summary A Simple Idea – By Stephen Key
Stephen Key was a mentor to Tim Ferriss. If you’re unfamiliar with Tim, he wrote two best-selling books, The 4-Hour Workweek and The 4-Hour Body. One Simple Idea is a book on how to license your ideas. Licensing is one of the most lucrative business models in the world. Think of these companies, Microsoft, Oracle, and Apple. All of these companies license their ideas and make more money per person than 99% of all other companies. I’m a big fan of real estate, but if you need to make money with less risk and less capital requirements, then licensing is the way to go.
Why is this important to me?
Most people are unfamiliar with the power of licensing and royalty controls. This book shows you how and I’ll expand on why.
Why grant licenses? I have had several businesses and I can tell you that licensing is by far the most lucrative of all. When you own the intellectual property (intellectual property), your marginal revenue from the next license sold is infinite. That is a very good markup by anyone’s standards.
Investing is one of the most powerful learning strategies in the world. Inversion means looking at the opposite or the reverse of something. I already told you that licenses are one of the best models out there. Let’s use investment to show you why. When you sell someone else’s stuff, you are only as good as your next sale. This means that whatever happens, you have to buy what you sell every time. Therefore, your gross profit can range from 0% to 50% depending on your cost structure and level of competition. This is what Wal-Mart does. Keep in mind that they are the best cost cutters in the world and competing with them head-on would be a disaster.
Let’s say you are a consulting or service company. Once again, you are only as good as your next consulting job. I know that consultants make a lot of money, but for every hour they consult, they lose that hour of opportunity to do something else. Therefore, you are trading hours for dollars.
One Simple Idea is packed with great information and Stephen’s 10-step plan that shows you how. We will touch on a few points.
First of all, there are two main reasons for obtaining a license. Number 1 is royalty checks. You can earn money while you sleep. Now you are NOT exchanging dollars for hours because you may be doing something else and still receiving checks. Number 2 is omnipresence. You can do this from anywhere in the world. You don’t have to be handcuffed to a desk in some vaulted, closed building. All you need is a computer and ideas.
Stephen describes several key factors for successful licensing. For the sake of time, I will highlight some of the topics in this review.
1. Look for ideas: You don’t have to be Einstein to have a revolutionary idea. If you’ve ever been shopping, you can come up with ideas. The key here is to focus on the things that really bother you. If they bother you, they may bother others. This is a starting point for a new idea. Think about the problems and look for solutions. This also gives you a reason to go shopping.
2. Show your idea: the traditional licensing model works like this. Find an idea, build an expensive prototype, spend a small fortune on patent protection, and hope it sells. This is why most people don’t think of licensing as a viable career because the barriers SEEM too great to overcome. Now it’s easy to test your idea before spending money. Google has incorporated traffic. It’s a ready-to-use platform for idea creation and testing. An easy way to do this is to create a video of your idea and request feedback. You can do this for a few hundred dollars. This process alone will save you tons of pain and money. You need to test the idea before doing anything else.
3. Protect your idea: contrary to negative beliefs; most companies do NOT want to steal your idea. The traditional way to protect your idea was to apply for a patent. This is a very expensive endeavor. One thing Stephen points out to avoid this is a PPA. This is a provisional patent application and costs $ 110 to ship. This grants you Patent Pending status, which is all you need for 1 year to test your idea and bring it to market. This concept can pay for this book 5,000 times.
4. Present your idea: If you decide to take your idea to market, then you must be business trained. This means you need money, administration and accounting, production, sales, and marketing. Then after you have all of this, you need clients. This is like a beginner climbing Mount Everest in winter. All probabilities point to his death with this approach. Presenting your idea to the greats is the way to go. They have the brand, the infrastructure and the distribution channel to reach millions of people NOW. Presenting your idea is the best way to do it and causes more fear. Everyone hates cold calling, but this is necessary in order for you to present your idea. This is much easier than it sounds because companies want new ideas and that is the hook for you to get in.
One Simple Idea is an excellent guide to help you turn your ideas into a royalty check.
I hope this short summary has been helpful to you. The key to any new idea is to incorporate it into your daily routine until it becomes a habit. Habits are formed in just 21 days. One thing you can get out of this book is the PPA. The biggest obstacle to getting ideas to market is the high cost of obtaining protection and the fear that someone will steal your things. For $ 110, you can protect it for a year, and if it makes you money, you can protect it for longer. Remember, in this game, the first to market wins.