Kermit the Frog’s Secret to ScalabilityPosted: September 17, 2013
When just after college I learned I’d be working at Ha! Henson Associates — Jim Henson’s production company for movies, publishing, television, and so many things Muppet — I expected to work in an office building as tall as the company’s product roster was wide. Instead I found Muppet Mansion, an Upper East Side townhome with a winding staircase, and a 3-story-tall hot air balloon crawling with Muppet miniatures. Though Henson had other divisions in small buildings around NYC, LA, Canada, and Britain, I was mystified by how he produced so much with so little. I got my answer the first day on the job from then-VP of Licensing, Isabelle Miller.
Licensing is the rental of intellectual property for someone else’s use. Kermit and Miss Piggy’s images were on everything from toothbrushes to board games, because Henson Associates rented the use of their images to manufacturers.
Intellectual property can be a Muppet, an idea, a process, an invention, or other creative work, like illustration or writing. Payment for rental can be in cash up front, royalties on sales, or a combination. (It’s also possible to outright sell your ideas, but that’s not licensing, that’s really “Outright Selling Your Ideas.”)
Licensing has its challenges. You still have to find suitable licensing partners and trust a lot of folks en route as you share your precious intellectual property. Then, you have limited influence once your licensing contract is complete.
Yet, I’m a big fan of this business model!
Taking a product from idea to market and worthwhile financial return, especially for a consumer product, is a minefield of chutes and ladders. Licensing allows you to focus on what you likely do best: intellectual property generation. It leaves the rest to the best at product manufacturing, marketing, and distribution. All while you play happily in your version of a Muppet Mansion.
Best book on the subject of licensing: One Simple Idea, by Stephen Key
Homework: Brainstorm a list of intellectual property you own already – things you’ve created that are idling unprofitably, that might be licensed more lucratively. Buy the book. Rent an idea. Rinse and repeat.