A Missed Business Opportunity: When Control Ruins Innovation
The Story of a Lost Invention
In 1995, I worked with a small company making flowmeters and flow sensors for the semiconductor industry. These devices needed electronic outputs for flow control. While metering wasn’t new, adding electronic sensing improved accuracy — a critical need for handling corrosive fluids that could damage expensive semiconductor chips.
An inventor, whom I’ll call Tim, created a proof-of-concept design that used standard Ethernet 802.11 protocol with an RJ-45 connector. It was efficient, required no external power, and was easy to integrate. After testing, the team agreed the design only needed refinement for manufacturability and custom electronics.
The Breakdown in Negotiations
Tim presented his idea to the company owner, Jeff. But instead of offering a fair deal, Jeff proposed terms that gave Tim almost nothing: no royalties, minimal cash, and a complete loss of rights.
Tim walked away, discouraged.
The Missed Market
By 1997, a competitor launched a product based on Tim’s concept. It wasn’t perfect — I later spotted weaknesses Jeff could have avoided — but it sold. Hundreds of units moved at premium prices. Eventually, the rival company was acquired for $30 million, and the product remains in production today.
Jeff’s decision not only lost his company millions in revenue but also handed the market to a competitor.
The Business Lesson
The failure wasn’t technical — it was strategic and relational. Jeff tried to dominate negotiations instead of building a partnership. Tim, insulted, left. The rival company seized the opportunity and profited, despite releasing a mediocre product.
Conclusion: Fairness Builds Business
Missed business opportunities often stem from poor negotiation, short-sighted control, and undervaluing inventors. A fair price and royalty deal could have created a lasting partnership, opened new product lines, and prevented competitors from entering the market.
In innovation-driven industries like semiconductors, fairness and good planning aren’t optional — they’re competitive advantages.
Norman T. Neher, P.E.
Analytical Engineering Services, Inc.
Elko New Market, MN
www.aesmn.org