On May 31, 2013, I spoke with Glen Duff, a client of mine who is the inventor of an exceptionally easy to use wake board. In part 1 of our interview, which kicked off our Fun in the Sun Summer 2013 series, we discussed how the patented Zup™ Board is the best selling product that Overton’s has ever seen in their 37 year history, as well as the importance of an inventor’s perseverance, bringing on industry experts to advise and engaging in a project you are passionate about.
In part 2, which is the final segment, Glen talks about how the patented Zup™ wake board is being made in America, which at a time when so many larger operations are moving offshore and outsourcing jobs is really quite refreshing. While there is a certain allure to selling products made in America, Glen explains that there is also a very real business reason as well. It is quite difficult to reliably enforce high quality standards when manufacturing is overseas.
We also discuss how Glen views himself as his competition as he continues to engage in research and development for improvements and future products, and how great it is to be able to put on a pair of shorts and jump on a boat as part of R&D efforts. I also ask him if he could go back in time to give himself advise based on what he knows now, what advise would he give? This leads us into an interesting discussion relating to the relative merits of licensing versus manufacturing and distributing yourself.
The Road Forward: Software Patents in the Post-Alice Market
Join Gene Quinn and Scott Alter for a discussion on patent eligibility, techniques for claiming software, prosecution strategies and more. Wednesday, March 4, 2015 at 12pm ET ~ CLICK HERE to REGISTER
QUINN: That’s excellent, that’s great news and I am glad to hear that you’re succeeding and it’s moved forward. Now, where are you actually producing the Zup™?
DUFF: Fortunately they’re being manufactured and assembled in Ohio. One of our goals was to utilize as much domestic resourcing as possible. As you might know most of the water sports products in the world today are coming out of Asia. We have been successfully resourcing 85-90% of all of our materials and production in the U.S. Even our novel new DoublesZUP tow handle, which we have a patent pending application on, is being made domestically for the most part and assembled in Florida at the home of Master Line, which is the most well respected tow handle and rope manufacturer in the industry. We hope to keep this and the next couple of products that we’ve begun designing in the U.S.A. Hopefully, the volume and costs will be able to be maintained domestically. If so, we can achieve a better speed to market and hopefully get a better response from the marketplace. Retailers fully appreciate the fact that we have domestic production and assembly.
QUINN: And is that part of your selling point? Does the fact that it is “Made in America” make it more interesting for Overtons?
DUFF: Well, it does. And you would think it is and you would think it would be because they’re rah-rah U.S.A., but the reality is, they’ve been burned so many times by difficult situations of quality, delivery and rapidly inflating costs overseas. In my other business which is a souvenir design business, we’ve seen in the last 27 years the pendulum swinging toward Asia and now it’s swinging back to American with a vigor we haven’t seen in the last few years.
QUINN: And that’s something that’s important, too. Once you get a success if you don’t keep pushing the envelope, then pretty soon others are going to want to get into what you’re doing and they’re going to want to push the envelope. It’s good to hear you’re doing that.
DUFF: Absolutely. That’s a good point, Gene. What we’ve found is that we are almost becoming our own competition, because we’re trying to outsmart what we think that the potential competition would come out with and bring those items to market first! We always knew we wanted a family of products and we knew we were going to start with what we call the low hanging fruit of a fun board that is good for all, but next we’re going to be coming out with a pro board, which will be more expensive, but have a lot nicer up-scaled features. Then we’re also going the other direction and we’re going to do the simpler, lower cost, higher volume board as well, which will allow more people in the market to entertain purchasing something in our product family. We want to build the brand that consumers go to and recognize for fun and ease on the water, not just to be the creative brand, but the Amazon of the water sports industry.
QUINN: That’s the thing you have to do. And so, now, are you guys already beginning the process of working on that next generation of products?
DUFF: Yes, in fact, I just spent the last two months working on R&D with my team proactively protecting several new very innovative, beautiful and creative products.
QUINN: That’s excellent, but as your patent attorney, let me cut you off there… Glad to hear you are continuously advancing the product, but let’s leave it at that for now. A bit of a tease, I know.
So, you started with the provisional patent for the Zup™ Board and then when the product continued to look and test good, we then wound up doing the patent search and when that looked good, we filed the non-provisional patent application. You’ve been carefully progressing with development, little by little. Now you’ve recieved your patent and you’ve moved forward with other patent applications pending. Next you’ve started the process to protect some trademark items and you’re moving along in that process. While it may seem like a very long process at times, you’re quite successful over what really is really a pretty short timeframe. A lot of others take a lot of time to get from where you were, to the type of success you’re starting to see this first season on the market. Still, I bet there are some things that you wish you would of known earlier. One of the things I like to ask folks is this: Looking back now, based on what you now know, what advice would you give to Glen five years ago?
DUFF: My struggle in the beginning of this particular product, and I think every inventor has to go through this thinking process, is to decide if you want to create and idea and license it or create an idea, sell the idea or create a company and produce and distribute it. Licensing is relatively easy and potentially less risk financially and less time consuming, but licensing also has its negatives. So I went to Surf Expo with my wife to help us decide what to do. This was just as we were about to get final approval on the utility patent . We needed to determine if we were going to license the product idea or were we comfortable allowing my friends taking the big risk to start a business to make and market these boards? Since I already have a full-time successful business with two awesome talented partners, I didn’t have time to start a new business, so I really wanted to find somebody to license to or find someone I trusted to start a company around the idea. Well, my two buddies from church, who used to work with me in Student Ministries, were going into business school to get their MBA and they needed a “pet project”. Well, we’re sitting on the boat one day and they asked if they could start a company selling the board they had come to enjoy over the years. We met for months to pray and evaluate the pros and cons. I gave them training sessions on what it would mean if they were to start a company. Because I had started one 27 years ago, I realized the sacrifices and the hard work and the long hours. I explained that it was going to be a difficult task. I wanted them to have a reality check of what they were considering and asking for. It always sounds exciting at first, but they had no idea the impact on their personal life. This was a potential major commitment. But they followed through and are sticking with it consistently. That is what it takes. When my wife and I returned from the industry tradeshow we knew what to do. At the tradeshow, we found that the President of the Water Sports Industry Association loved our product, but he warned us that if we were to license this product into the existing market that what we would find was two-fold: one, they wouldn’t do it with the same heart, they wouldn’t have the same passion as the inventors and the team that created it and, two, they wouldn’t potentially invest the right amount of money into it and in some cases they may actually bury the product concept and prevent it from coming into the market, because they may see our product as competition to their market. It could have a potentially negative impact on say kneeboards. I was warned to stay away from licensing, in this particular case, and if we really wanted to see it grow, to go full-time into it. So I asked my two friends if they really wanted to take this on and I would be their mentor as they go through the process of beginning a company. So that took the stress off of me. I gave them equity in the new venture, which owned a full utility patent. They showed what they were made of and created a very successful business with a simple concept, “to help lots of people enjoy their time on the water!”
QUINN: You raise an interesting point, which is something that I think a lot of people don’t take into consideration. It’s also a consideration for artists. You hear the artists, for example, who sign these contracts and they get these seven record deals and then if somebody doesn’t like them they get shelved and there’s not a lot that can be done sometimes. The same thing can happen in the patent space. It’s not that licensing is bad, it can be a good thing, but like so many things it’s not one size fits all. You have to make conscious choices about which one is better for you, which one is better based on the product in the industry in the market because I’ve seen sometimes the situation where people get into a licensing deal and depending upon whether the licensing deal is done right or not, their product may be sold at a deep discount in order to entice someone to buy another , different product. If the inventor is getting a percentage of the sales that could be a disaster. Some licensing deals may not be the best idea.
Let me throw this out. Even if you were going to at some point want to go down the licensing path it would seem so much of what you do in the very beginning, the prototyping and laying the foundation with the patents and so and so forth, that’s the same process they have to go through regardless of the path ultimately selected.
DUFF: Correct. You definitely want to take the idea to the point where it is able to be a successful product; it has high-perceived value, low cost, and there’s a clear market for the patent protected product. You obviously will like it, but independent of your excitement and ego, it should be enjoyed in the marketplace. You should watch people use your product, and be willing to take honest feedback. I fell into that trap a little bit in my first two patents where I liked it, other people sort of liked it, but they didn’t really use it day to day. With this new water sports product, I don’t have to encourage people to use it. They call me and say, “Hey can we use it?” So it has staying power, it has draw, it has, you know, “pull” into the marketplace. It wasn’t just being pushed into the market by us.
Once you can prove a little bit of success, then you can get a licensing deal or sell the business or IP. You should work out most of the details, the engineering and the industrial design and create your branding. Then you’ve got something that you can actually sell, license or start a business with. We’re actually expecting a few offers to buy our patents or company over the next few years. We’re not really that interested, because it’s fun to do this stuff. I don’t have to do that much work, because my partners are earning their sweat equity daily! They created a company that is based on a double bottom line philosophy, which is a philanthropic mode of supporting our favorite charities and ministries. In fact, we’re preparing to send several demo boards to summer camps around the nation. We know after some of my kids have worked at different summer camps and tried to teach wake boarding and water skiing to tons of kids, they realized that this is the product that you need for newbie’s who are trying the sport for the first time.
QUINN: Okay, one last question. Are you saying that are you going to entertain discussions or offers that may present or is the answer just no for right now? I ask because knowing a bit more about the product than the average person having worked on the patent, I can imagine some people will be quite interested in acquiring this little universe you’ve created.
DUFF: I’ve learned “to never say never”, but currently I don’t think we would be interested. We smell a lot of opportunity with this team to help put lots of smiles on faces, on the water. We consider it a calling to do this and a luxury to be able to work on things we enjoy with our friends and family.
QUINN: It always is. A lot of people don’t get to spend time working on something that they find fun. Work is work and fun is fun and the two don’t usually converge.
DUFF: Well I have always found that if I worked hard on what I am passionate about, I’ll make an acceptable living.
QUINN: I know this is a labor of love and I can only imagine you guys must be having a blast when you’re testing out new designs.
DUFF: Righ! When your R&D includes board shorts and fun on the water with great friends, it doesn’t get much better than that.
QUINN: Absolutely. Well, great. I really appreciate your taking the time to chat with me.
DUFF: Yes, and I’m excited to get Renee and you out on the Zup™ Board this summer, so just pop on down. You’re only an hour and a half away.
QUINN: Yes. We will. We’ll follow up with that for sure.
DUFF: Good, and remember, “with this board, everybody getZUP!”