Do you have a unique R&D process, product development, or analytic software “platform” that can be used by other businesses to develop new products, formulas, or technologies? Are you looking for a way to generate more revenues with it? If so, licensing it out is one of the best ways to leverage it.
It’s a strategy that’s been popular in the pharmaceutical and biotechnology fields for years. For example, pharmaceutical giant Bayer announced a licensing deal with One Drop – a developer of AI-powered digital therapeutic solutions – to use its data platform for research in several disease areas.
Let’s take a closer look at how this model works and how it could benefit your company.
What is a Platform Business Model?
A platform business model is basically an extension of the horizontal model, which means that rather than producing an end product or service, you create some kind of research, software, or other asset management development tool that other companies can use.
For example, in the biotechnology field, this may include detection kits with specialized bioindicators, disposable equipment like plates for specific arrays, or software platforms that allow companies to analyze large amounts of data quickly and accurately. By licensing it out, you can generate significant revenue from your initial investment in the platform itself.
Benefits of Licensing Your Platform
Licensing your platform offers numerous benefits for your company. Firstly, licensing lets you retain control over who uses it and how it’s used. This allows you to protect your intellectual property while generating revenue from its use.
Additionally, since all of the costs associated with developing and maintaining the platform are borne by you initially, there are no upfront costs associated with licensing it — making it much more cost effective than traditional marketing strategies.
Plus, when you license out your platform to multiple customers simultaneously, you can generate significant recurring revenue on an ongoing basis — something that isn’t always possible with traditional marketing strategies.
Finally, licensing your platform-based IP allows you to focus on innovation instead of manufacturing and selling your own products directly; these tasks are outsourced to your licensing partners, who specialize in those areas. This leaves your company free to concentrate on creating new and innovative platforms to expand your growth through licensing.
Summing it Up
If your company is looking for ways to reduce costs while still achieving success, licensing your platform-based business model is an excellent option that provides numerous benefits, such as controlling costs associated with developing and marketing products, reducing research and development expenses, expanding into new markets quickly; focusing on innovation rather than production; and gaining sustainable revenue streams from multiple sources all at once.
If you’re interested in exploring licensing this type of business model further, contact us today! We can help create a licensing campaign tailored specifically around your goals while ensuring that your platform IP will generate maximum returns over time!
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses of all sizes use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He’s licensed some of the biggest Hollywood entertainment blockbusters including the Batman Movies (1 and 2), and the number one kid’s action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges, and startup events. His first book, Hidden Wealth: The Money Making Power of Licensing was released in 2019 and is available on Amazon.com. He’s also a published writer with articles appearing in several prestigious trade magazine including The Licensing Journal, Intellectual Property Magazine, and License India. Rand also mentors at the Cal State Fullerton School of Business and Economics and is a judge for their startup business plan competitions.