Ilock production facility located in Cairo, Egypt.
Beginnings around the world face a common challenge: how to collect capital to grow a business without giving up control. Typical Answers – Providing Entrepreneurship Funds, Bootstapping or Credit Getting – are not always applicable, especially in developing markets. But there is another unused strategy that entrepreneurs, which is licensing, should consider.
Licensing allows beginnings to generate capital, use industry expertise and gain market intelligence – all by maintaining ownership of their business. Mohamed Ali, an Egyptian entrepreneur, illustrates this approach. Utilizing the licensing power, it turned a temporary demand of $ 50 per patent at a $ 30 million manufacturing company in just five years.
Egyptian entrepreneur Mohamed Ali holding the product he invented and commercialized through … [+]
In 2016, Mohamed Ali’s life changed when his young daughter was almost electrified while playing with an electric outlet. When he and his wife asked for a security product to prevent similar incidents, they found that there was no such solution.
By realizing an opportunity, he built a prototype to address the issue. Initially, it was only for use at home, but when relatives and friends expressed interest, his wife encouraged him to commercialize the idea. Unsure where to start, they returned to the Internet for instructions.
Their search led them to my book A simple ideawhich introduced them with the concept of product licensing. Ali had assumed that success meant building a factory to produce his own invention, but the book opened his eyes to another approach – one that did not require important capital in the front.
As the licensing became the foundation for its success
Following the instructions in A simple ideaAli submitted a temporary patent request for $ 50, providing status pending patent at minimum cost. He then began to reach possible licensing partners through cold calls, electronic posts and LinkedIn.
This approach ultimately led to seven different licensing agreements, which provided three critical benefits:
1. Capital provided to finance growth
Instead of seeking investors or receiving debt, Mohamed used royalties from his licensing agreements to fund his next steps. These income allowed him to submit international patent applications and provide wider protection of intellectual property without diluting his ownership.
2. Won the industry expertise
Particating with determined manufacturers, he gained practical experience in product development, production and sales. This knowledge was invaluable when he later began his production facility in Cairo.
3. Market data collected in the real world
Instead of relying on assumptions, he gained true sales data from his licensing partners located in numerous markets. This knowledge helped him refine prices, understand the demand, and optimize his product before investing in production.
From licensing to owning a factory in Cairo, Egypt
With the funding, expertise and data obtained through the licensing of his invention, Mohamed was able to create his own production facility in Cairo. Today, his company Ilock produces over 70 different products and employs more than 200 people, mostly women. He has patents issued in Egypt, Russia and China, with more waiting patents.
Some of the products on the Ilock line.
His wife, who had supported her from the beginning, now runs the company’s marketing efforts. She prouds to see their products in large retail stores around the world, including Carrefour, Lidl and Spinneys. They are also available in Amazon.
What began as a single product to protect his daughter has evolved into a popular brand with increasing influence in the Middle East and Africa.
“The main problem, to me, wasn’t the product itself. It was how to bring it to the world,” he explains. “I could never imagine that the licensing would work – for them to get my idea and develop it and everything else. My life has changed completely, and not just my life; my friends, my family, people in my close environment too.”
Author, Stephen Key, with Mohamed Ali, Egyptian entrepreneur who returned a $ 50 temporary … [+]
Why is licensing is an overlooked growth strategy
Ali’s journey challenges conventional wisdom. Instead of raising capital first, he used licensing as a strategic stone to build his business. His success highlights the main lessons for entrepreneurs:
- Licensing can provide an alternative source of funding This does not seek to give up capital.
- Partnerships with created companies accelerate learning and market entry.
- Gaining real market data before starting a full -scale business reduces risk.
For beginnings, especially in developing markets, this approach is transformative. Many entrepreneurs believe that significant funds are needed to bring a product to the market, but Ali’s story proves differently.
He also sees a wider mission in his work. In its region, many believe that innovation must come from external sources. He wants to change that perception by telling others that local entrepreneurs can solve problems and create global opportunities.
As he says, “the main problem we have in the Middle East and Africa is not money, not education – is the ability to dream. We do not believe we can do it. We are waiting for others to do what we need.”
In 2023, he was recognized as one of 10 main entrepreneurs in Africa as part of the competition of African business heroes.
His goal is now not only to grow his company, but to inspire others. He believes that by running for example, he can encourage more innovators to follow their ideas, proving that with the right strategy, success is possible.
Licensing is more than one alternative to production – it is a powerful growth strategy. Mohamed Ali used it to get his idea from the concept to a multimillion dollar business, demonstrating that entrepreneurs do not need mass funds to succeed.
For those seeking to turn their ideas into flowering businesses, licensing offers a proven path forward while maintaining control over their vision and future.