Can you really make money with online invention sites?

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Are online invention sites like Quirky and Edison Nation worth the time and trouble?

A few years ago, I signed up with GeniusCrowds, an invention crowdsourcing platform that recruited members to submit ideas that they wanted to bring to market. These ideas were centered on a pre-selected subject area like “Children’s Toys” or “Kitchen Utensils.” Members voted on the feasibility and originality of submitted ideas, which earned points for their originator. Members were also awarded points for their participation in discussions and voting. These points could be redeemed for gift cards.

GeniusCrowds, working with a retailer, would then pick the most promising idea out of the lot and work to develop it. Ideas chosen for development were paid a separate and undisclosed fee. If the idea shot up to the level of actual product, the member earned a royalty.

While it all sounded good in theory, there were many complaints and questions about this platform. For starters, members had no clue which retailers were working with GeniusCrowds- if any. Quite often, popular ideas with hundreds of votes were not picked for development, while unpopular or even “already-been-done” ideas were selected instead. Most of the 5,000+ members on GeniusCrowds never saw their idea do more than just garner a few points for “participation.” Other members worried about intellectual property theft.

I eventually got bored with GeniusCrowds and stopped posting my ideas on the platform. While I had accumulated a significant number of points on this site, I still didn’t have enough for a gift card.

For anyone thinking of checking out GeniusCrowds, don’t. As of May 2013, the platform is no longer in existence. Citing a need to re-evaluate its business model, the site went on hiatus in February and then completely shut down in May when it could not “find the right potential partner who would engage with our community of five thousand folks,” according to CEO and co-founder CJ Kettler.

The problem with online invention sites

GeniusCrowds, Edison Nation and Lifetime Brands all work on the premise that inventors submit ideas online, the ideas are evaluated either privately or by the online community, and those inventions deemed sufficiently popular or qualified progress towards marketing and development. The finished product is sold through retailers and/or the invention platform and the proceeds (if any) are split between the inventor and the platform.

In theory, it all sounds very simple. However, there are several underlying issues with making quick money through online invention sites.

It’s like winning a (smaller) lottery

According to “The User’s Guide to Online Inventing,” your odds of generating a successful online invention are 4000 to 1. By comparison, the traditional invention route, though more expensive and time-consuming, has a success level of about 3% (from the time of patent filing). Now, although 3% doesn’t sound great, it sure beats the 0.00025% chance of success with online invention.

You get a slice of a slice of the pie

Quirky outlines that if your invention goes to market and is sold, you and the online community that commented on or influenced the invention receive 30% of all direct sales revenues (i.e., via Quirky.com) and 10% of all indirect sales revenues (i.e., via third party retailers). You, as the idea originator, receive about 35% of those revenue sums outlined above; in essence, you get one-third of 30% and/or one-third of 10%.

Don’t quit your day job.

Edison Nation, because its invention development process excludes obtaining feedback from an online community, purportedly gives you a bigger share; licensing revenues for an idea that is developed into a product are split 50/50 between Edison Nation and the inventor.

Forget having any IP rights

Maybe your invention would otherwise have been gathering dust in your desk drawer had you not submitted it online; however, once you do submit it, forget about ever developing it further or claiming it as your own. Online invention sites have you sign away the IP (intellectual property) rights to your invention as one of the conditions of developing it and putting it on the market. This can really sting if, later down the line, your alarm-clock-with-consequences or better-than-a-smartphone device becomes a multimillion dollar industry and even spawns related products.

Little/no direct feedback

The biggest complaint that most would-be inventors have with online invention sites is the lack of feedback from the administrators and idea evaluators. Popular ideas with lots of community support are frequently not selected for further development and the inventors are rarely told why. Likewise, ideas that are selected for further study can suddenly be dropped without explanation. For budding inventors, being excluded from the decision-making process is often the most frustrating part of online inventing- and the biggest reason why these inventors eventually leave the platform.

Online invention scams

Finally, there are many online invention sites that make their money not on idea development but on the fees that members pony up for “marketing,” “business plan writing,” “website development” or “patent filing.” National Invention Services, Inc. was one such invention promotion scam that swindled roughly three-quarters of a million dollars from its victims before being sued by the FTC. More recently, Davison Design and Development, Inc. was brought to court by the FTC and, in the court’s final judgment, ordered to pay $26 million to consumers.

What’s an aspiring inventor to do?

If you have lots of free time and not much money, you may want to take a stab at submitting your ideas through online invention sites like Edison Nation or Quirky. However, filing a provisional patent costs just over a hundred bucks; with that patent in hand, you might wish to consider building your own prototype and entering a few invention contests sponsored by colleges, universities and non-profit organizations.

The National Congress of Inventor Organizations is also a great place to get started. Finally, if you are concerned about a particular online invention site, enter the name of that company into the search engine located on the FTC’s website to find out if there is a scam going on.

Photo credit by Magnate Lab

3 Comments

  1. “Filing a provisional patent is only 100.00” This is only the case if your invention is a 100% original product. It is not the case if your invention is an enhancement to an existing product. A provisional patent for that costs thousands and many ideas are enhancements to something that already exists.

    Reply
    1. There is no such thing as a provisional patent. There is only a provisional patent application, which is basically a date-of-conception document that is valid for 1 year (you have to file for a patent in that time frame), and it costs $65 – $350 depending on a number of factors, but if you are a first time inventor filing for yourself (not a business) it will be $65, period. There is no cost difference due to the content, whether it is an enhancement, or 100% original, whatever that means. There is also no difference in the cost for a utility patent or design patent contingent on the content of what is being patented, unless a lawyers decides to charge you more … which they will depending on how many claims there are, as well as things like if it is for the health or medical industry.

    2. Did that get published?

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