Know-How Exchange : Strategy

BTW, there is no Z part, just X and Y.

Assuming I obtain a patent:

X is a part that will represent, by far, most of the cost of the product, and the most resources to manufacture.

If we are talking about global sales, I mean a very good success, then, being a first-time start-up company, (seeking business angel support, little experience) it's not likely I'd be able to handle the manufacture of X where the units could be in the thousands.

This is a classic situation. Having an idea, but unable to manufacture, or perhaps even pay for contract manufacture, because of the number of units that might be needed.

Y is the "part" that is not really technical, and is cheap to manufacture. Relatively speaking, it would be easy to design and manufacture or buy-in Y. But Y is critical to the nature of the product and it's what sells the product.

What is think is that *in principle* it would be possible to grant a licence that covered manufacture of *the product*. Never-the-less, for I to set up a company and make a contract for the design and supply of Y to the licensee.

The licensee would have a licence for the whole product (I think that may be necessary, not sure). That gives "manufacturing" to a company that can do it, also using it's established distribution network etc. I'd be just a Y parts supplier (under joint-venture), but the parts are critical.

I do wonder, basically, if design, of part Y, which I'd supply, could be a marketing/design *joint-venture* between my future company and the licensee. In principle possibly yes I think.

Of course the success of the product critically depends on Y. So, in practice I do wonder whether a manufacturer would demand it soley develop and manufacture both X and Y, which is everything. Pricipally because the risk might be too great, in their eyes, to give control of Y to my start-up company.

The only thing I think I may have at the moment is an ability to design, manufacture and possibly supply Y to a licensee. Sales and distribution of the product would, I think, have to be according to a licensee's established sales and distribution network.

I think, in essence, I might, at this stage, be said to have an opportunity of starting a design company more than anything. And if not that, just a licensor. I don't know what other kind of business I could be at this stage in relation to my idea.

Comments welomed. TIA.

I'm trying to become self-employed, but don't know what kind of business, if any, I could reasonably develop at this stage, in relation to my product idea, given my lack of current experience and a necessary reliance on business angels for capital.

I was wondering if the experts here could shed some light on whether there was perhaps some mileage in the potential to create *some* kind of business related to my product idea, but not much is forthcoming.

I'd have liked to do something beyond simply being a licensor, but perhaps this is not realitic, but I understand feasible in principle. That is, feasible in principle to licence a product, yet manufacture a part of the product under a joint-venture arrangement. This was my best idea in an attempt to become self-employed.

I've already considered buying in part X and Y and simply assembling to produce part Z (the product). Even this could be difficult, and that's why I wondered about the potential to form a company around part Y only. But because Y is critical, I wonder whether a licensee would accept an agreement me taking responsibility for part Y. Possibly not. I'm not sure. This effort would probably involve design and marketing efforts in relation to Y, something which a licensee might want total control over I muse.

Speculation as to my entrapreneur "status" is pointless, IMHO.

If I could, I'd set up as a manufacturer of the product.

If not possible (this is apparantly likely) I'd try to arrange to get responsibility for part Y and sell & send it to a licensee, who assembles and distributes Z (product Z = X + Y).

I think it is given, ("You can go the way you mention with no issues I think"- Lazenby) that granting a licence and then supplying Y under, some joint-venture, is *in principle* not dissalowed.

No other novel suggestion has come forth, by way of a business arrangement, beyond my idea of creating a company to essentially research, design & procure/deliver Y, (the artistic part) for the benefit of the licensee.

I may investigate this further, it's the only idea *I* have.