Acommon problem that inventors and entrepreneurs have is distributing their products. Gary Schwartzberg is a case in point. Schwartzberg, along with a partner, developed a new type of bagel. Dubbed the “Bageler,” the bagel was tube-shaped and filled with cream cheese.
Schwartzberg was able to get the product into supermarkets and schools in South Florida, where he lived, but couldn’t achieve wider distribution. He finally mailed Kraft a box of his cream-cheese-filled bagels with a proposal.
He picked Kraft because he wanted to use Philadelphia Cream Cheese (a Kraft product) to fill the bagel.
By coincidence, Kraft had been working on a similar product but couldn’t get it right. Schwartzberg had a patented process for “encapsulating” the cream cheese in the center of the bagel without the cream cheese escaping during the baking process. Kraft bit and after some back and forth, Schwartzberg and Kraft hammered out a deal. Schwartzberg told the Wall Street Journal that he couldn’t discuss the details of the deal because of a confidentiality agreement with Kraft, but says it’s structured as a strategic alliance and he “has skin in the game.” Schwartzberg’s product, which is now called Bagel-fuls, is sold nationwide by Kraft Foods.
Entrepreneurs and inventors are finding that large consumer products companies are increasingly interested in what they have to offer. For example, Lifetime Brands, the United States’ leading resource for nationally branded kitchenware, tabletop, and home décor products, is soliciting ideas from outside inventors. A section of its homepage titled “Share your ideas” reads, “Lifetime Brands recognizes that good ideas come from unexpected places. Is there something you’ve always wanted in your kitchen but just can’t find? Is there a tool or gadget that you’ve been itching to improve? Tell us about it!”
Instructions are then provided for how to submit a product idea. In a different industry, GE is looking outside its company for new ideas in a number of areas. It recently sponsored the GE Ecomagination Challenge, which was a $200 million solicitation for energy-related ideas. Phase II of the challenge, which focused on improving the use of energy in homes, solicited 809 new ideas. Although this specific challenge is over, GE will be soliciting ideas in other areas in similar ways. When an Inventors Digest reporter asked GE’s CEO Jeff Immelt at what stage an inventor needs to be in order to submit an idea to GE, he replied that GE would consider “any protected IP.”
Companies vary in terms of what stage an idea needs to be at before it can be submitted for consideration.
The best way to find out is to study the portion of a company’s Web site that provides instructions for how to submit ideas. Not all companies are open to new ideas, but many are. For example, P&G’s idea submission site is titled “P&G Connect + Develop.” General Mills’ site is titled “General Mills Open Innovation” and Black &
Decker’s idea site is simply titled “Product Ideas.” In fact, Black & Decker has a brochure posted on its site (simply click on the “About” tab and follow the link titled “Submit an Idea”) that describes its idea submission and evaluation process. Its process is similar to the process of many firms.

Questions for Critical Thinking
1. Why do you think companies are increasingly open to ideas from outside inventors?
2. For an inventor or entrepreneur, what are the upsides to working with a company like General Mills or GE?
What, if any, are the downsides?
3. Find an idea submission site for a company not mentioned in the feature. Describe how to submit an invention to the company. What seems to be the keys to getting an idea accepted by the company?
4. In most cases, do you think inventors and entrepreneurs get a fair shake when they license a product or enter into an alliance with a large firm?
What steps should entrepreneurs take to make sure they are getting a fair deal?