Open Innovation is Alive and Well in the Pet Industry. Here’s How to Get in on the Action



It is an incredible time to be a product developer. Like solving problems? Enjoy being creative? Today, you do not have to start a business to launch an idea into the market. You can go the licensing route and begin receiving passive income for your creativity instead. That’s the beauty of open innovation, the increasingly widespread practice of companies looking outside their own walls for the best new product ideas. By licensing your idea to a company that has existing distribution and relationships with retailers, you can get to market fast. In that way, as a business model, licensing simply cannot be beat. Innovative companies recognize this — even ones with a long and storied history of research and development like GE.

The pet industry is particularly ripe for open innovation and licensing. According to the American Pet Products Association, 68 percent of U.S. households own a pet today. That’s a lot! Last year, Americans spent a record $66.75 billion on their beloved companions. During the recession, the industry barely took a hit. Thanks to the Internet, dogs and cats are more popular than ever. And there’s the well-documented trend occurring worldwide of young people increasingly referring to and treating their pets like surrogate children. There’s a huge opportunity here for people who are creative.

Which is why I traveled to the annual pet trade show SuperZoo in Las Vegas earlier this week to ask companies explicitly: What do you need from us? After licensing many of my own ideas for products, I know what open innovation looks like in practice. But since I’ve made it my mission to help other people license their ideas, I’m committed to going one step further. The show is not as large as the Global Pet Expo in Florida, but it was very well-attended, light-hearted, and a lot of fun. How could it not be, with dogs of different shapes, sizes, and colors running this way and that? Turns out, people who love their pets like to have a good time. The theme this year was “Better Together,” which spoke directly to the inclusive nature of the industry at large.

As is typical, some companies were receptive to open innovation and others weren’t. You can tell which are and which aren’t pretty easily. Companies whose products all share the same beautiful design aesthetic? Not a good fit. These companies aren’t really innovating. Their focus is on designing products that are extremely pretty to look at. Their in-house designers are tasked with creating the look and feel they want their brand to reflect. These companies do not look at outside submissions. They’re more likely to acquire a brand outright or bring in a designer they like to keep working with them.

But I also met CEOs like Tim Blurton of Hyper Pet LLC who embrace open innovation emphatically.

“We love inventors and people with ideas. And we love being able to work with them and take their ideas and make them marketable, so we both benefit,” Blurton said. “Bring us any ideas you’ve got! We’ll listen and see if we can work on them.”

For Dr. Steven Tsengas of OurPets, intellectual property is of paramount importance. His company has something like 170 patents to its name. Electronic pet toys are increasingly popular, he told me, as he pointed out several products of his that make use of Bluetooth technology.

For companies like Ethical Products Inc., which has been in business since 1952 and markets its products under the brand SPOT, working with inventors is a way of life. Ausra Dapkus, the vice-president of purchasing and product development who is in charge of working with product developers and inventors, described her role in the following way.

“I take their ideas and then communicate them to our factories overseas to bring those products to life,” she explained. “I try to translate their vision into something that can actually work in production, which can sometimes be a challenge… but somehow we always manage to work it out.”

At the Ethical Products booth, professional inventor Chuck Lamprey showed off one of his licensed products. (Full disclosure: I know Chuck because he was my student.) Since he began developing pet products seven years ago, Lamprey has since licensed about nine of his ideas, all of which are still selling on the market. At first, he told me he struggled to make a good first impression at trade shows because he’s shy. But in time, as his knowledge of the industry grew, he became much more comfortable approaching booths.

These days, he’s confident because he know he adds value. He walks up to companies he wants to invent for and says something along the lines of: “Hello, my name is Chuck. I have many products in the marketplace. If you have needs in a particular area, I would love to help you out.”

This year, several CEOs explicitly thanked him for stopping by and expressed how much they appreciated that he was paying attention to the industry and actually inventing for them.

“Repeat trade show attendance is very useful in that way. They get to know me and that I’m serious about this,” he explained. “What I want to do is add value. It’s not about me and it’s not even about the company. It’s about the consumer. What can I give to the industry?”

His attitude is spot on. You cannot merely submit your ideas for new products to as many companies as possible and hope for the best. Becoming a professional independent product developer is all about communication and the relationships you build. That’s why attending a trade show can be so effective. You’re able to introduce yourself face-to-face and shake hands.

But some of the companies I interviewed were frank with me. In principle, they loved the idea of open innovation. In practice, they were frustrated. They’d become wary of working with inventors because so many of them failed to do their homework. The ideas these companies had received didn’t take their brand into consideration whatsoever, so they had decided to stop looking at outside ideas altogether.

The benefits of open innovation are enormous, but sifting through submissions takes time. So does getting back to product developers about why their ideas aren’t a perfect fit, which is a crucial part of the process. When companies decide their limited resources are better spent elsewhere, we all lose out.

If you have an apple and the company you show your idea to is selling oranges, that’s not a good fit. Most likely they are not going to be interested. And in that case what you’re sending is basically spam.

There’s a balance to be struck. Licensing is very much a numbers game. You need to contact enough companies about your idea, not just the major one or two players. At the same time, firing your sell sheet off to every single company in an industry isn’t going to get you very far.

So please, check out the websites of each company on your list of potential licensees. What are they all about? Can you tailor your sell sheet to better fit the needs of their consumers in some way? (Sometimes this is as easily accomplished as using a different color.) Remember, there are actual people reviewing your submissions at these companies.

Many people were honest with me about the fact that selling pet products has fundamentally changed. Between Amazon and other online retailers, brick and mortar sales are simply not as important. Savvy Internet retailers like the startup Chewy.com, which was recently acquired by PetSmart, offer better customer service. Before you show your idea to a company, investigate how it sells its products. If you don’t understand the retail landscape, you’re at a disadvantage.

Some companies were very clear with me about letting inventors know they could already be working on something similar, which is why they won’t sign a non-disclosure agreement right away. That’s perfectly reasonable.

Like always, I kept my eyes out for simple products, which are my favorite. I was not disappointed. Catit’s Flower Fountain water bowl is the best-selling cat accessory toy on Amazon, I was told. It’s a compact water fountain with a flower design on top that enables you to adjust the flow of water to your cat’s liking. Simple, very cute, and with smart packaging to boot: By cutting out a few pieces, the shipping box is transformed into a toy. If you own a cat, you know how much they adore playing with boxes.

This is an exciting industry to invent for, truly. Who doesn’t love pets? Open innovation in the pet industry is a win for all of us.



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