The Difference Between Inventors and Entrepreneurs
This weekend I finally got around to watching the film “Flash of Genius.” The movie tells the story of Dr. Robert Kearns, the inventor of the intermittent windshield wiper, and his battle against Ford Motor Co. over Ford’s alleged infringement of Kearns’ patents. After a decades-long battle which cost Dr. Kearns his job, his marriage and his sanity, he finally prevailed in infringement lawsuits against Ford and Chrysler.
The story is illustrative of the difference between and inventor and an entrepreneur. Dr. Kearns is an obviously brilliant engineer but, in my opinion, naïve in the ways of business. For example, at one point, Dr. Kearns and his investors demonstrate the invention in front of Ford engineers. The engineers kept asking to look under the hood. Wisely, Dr. Kearns and his team refused their requests. However, there is no indication that Ford was asked to sign a non-disclosure agreement prior to the demonstration, which for my clients is standard operating procedure before demonstrating their product to investors and others.
Another example is how Dr. Kearns envisions how he will manufacture his invention. Instead of licensing the technology out to the automakers, Dr. Kearns instead desires to manufacture the wipers in his own factory and sell them to Ford, Chrysler, General Motors and the like. In my opinion, Dr. Kearns’ strategy would have been inefficient and unnecessarily costly, as Kearns Corporation (as he referred to it) would have been responsible for hiring and paying employees, leasing space, purchasing equipment and shipping costs. With a licensing structure, these obligations would have fallen on the licensees, and the licensor (in this case, Dr. Kearns and his investors) would simply receive a stream of royalty payments.
The story of Dr. Robert Kearns is an interesting one, and it exemplifies some of the obstacles inventors face in reaping financial rewards from their intellectual know-how. It also exemplifies some of the obstacles which inventors create for themselves without engaging in the proper amount of planning and hiring a team of qualified advisors to assist with the business operation itself.
What do you call an inventor who creates a proper business plan and hires a team of advisors? I call him an “entrepreneur”.