“We want to find the next Funko”: David Born on helping companies enter the world of licensing with Born to License

David, it’s great to catch up. We’re here to discuss your latest venture, Born to License. Before we dive into what you’re doing with this new company, what led you to launch it?
I’ve been thinking about doing this for years. The questions have always been: Is this going to be a distraction from what we’re doing at Born Licensing? Or is this a great way to diversify the business? The advertising side of our business is tough. The deals that we sign are substantial, but there’s no consistency or predictability… We can sign a big deal, but the odds of that deal being renewed are slim to none, because advertisers will often want to move onto something new or fresh messaging. There’s only been a few campaigns where they’ll license something, and then something else, and then something else… It was a great revenue stream for us across a number of years – but that’s pretty rare. So as a business owner, I don’t know when our next big deal is coming – and that makes it difficult to scale the business.

Last year was a tough one and it prompted me to take a big step back and look at the business to see what else we could do to make cashflow more consistent and diversify the business. Because I have a relatively high profile in the licensing industry, when people research licensing online, they often come across me… Over the years, people come to us asking for help outside of the advertising space and we’ve always said no. It was getting to the point where we were getting 10 to 15 emails a day from people asking for help!

It became clear that I could solve two problems at the same time… I could help all these people that wanted our help, while diversifying the business and addressing my consistency concern with the advertising side of our business. So we set up Born to License and announced it to the industry earlier this year, on January 1st.

Fantastic. Can you talk me through some of the key aims and services for Born to License?
Well, there are some interesting comparisons with the Born Licensing part of the business. There, we work with advertising agencies who mostly don’t understand licensing and who need a lot of hand holding. We’re taking that very successful template and applying that to all other categories. We’ve signed 11 clients and have a few contracts out there now to sign more. My goal was to sign 10 by the end of 2024 to prove the model works, so to hit that within our first five months was great – it’s showed itself to be a business I can scale.

“All of the pain points associated with working with new companies is absorbed by us.”

The other nice thing is that we’re helping to grow the licensing industry, but these licensees that we’re working with were really struggling to get their foot in the door. They didn’t know who to contact or what to say. You can’t just send an email asking to have a certain character in a certain category. Every licensor is under-resourced and inundated with requests for licensing. You need to approach them in a certain way that gives them all the information they need to understand that it’s an opportunity they should be involved with. We can do that – we have great relationships with licensors. When we send an email or make a call, that email or call gets returned, because we don’t reach out to licensors unless we truly believe in the opportunity.

Are licensees coming to you with a firm idea of what they want to do in licensing?
Most of the time they come to us with a licence in mind. We’ll talk about that, but most will be suggesting the biggest, hottest brand of the moment… And these are licensees that have never done licensing before. We often have to explain that some licences are more difficult to get than others… With the very in-demand brands, you have to demonstrate that you understand licensing and can launch licensed products without any problems. So we’ll work to understand their consumers, their timing and their budget. Then based on that information, we’ll suggest properties that we believe is best for both parties – similar to how we’ll answer a brief on the advertising side.

And by working with companies new to licensing, you’re growing the pool of licensees engaging in our industry – something that will ultimately benefit lots of licensors.
Look at Funko. Their first licensed product was an Austin Powers bobblehead. If that deal hadn’t of worked, who knows if Funko would’ve gone on to become such a big player in licensing. If they had a bad experience with that first deal, they might’ve been put off licensing forever. Funko is such an important part of the licensing industry today – and that all rested on that first experience of licensing… That’s what we’re trying to with Born to License – we want to find the next Funko. Who’s the next company to have enormous impact in licensing and benefit the entire industry…

Are brand owners generally excited at the prospect of working with a company that’s totally new to licensing?
No.

Oh!
No! Most of the licensors we work with aren’t excited to work with companies new to licensing – and some have flat out rules to say they won’t work with companies that haven’t licensed things before. Those ones will say: “Come back us once they’ve launched their first licensed product and we’ll reassess things.”

This is what we want to clearly communicate to the licensing world. When we bring a new licensee to you, all of the pain points associated with working with new companies is absorbed by us. We manage the entire process. We present a proposal with forecasts, timings, SKU lists – everything a licensor needs to make a decision. There’s no back-and-forth with the licensee.

“The plan is to create strong business models that help grow our industry.”

We help with the licensing agreement to ensure the licensee understands all of the terms and understands the CMF needs to be paid and what that means. And once the contract is signed, we have Jenna Chalkley – our Head of Product Development – who is there throughout that entire stage, helping with approvals and making sure things go as smoothly as possible. We also help them with the royalty reporting, the CMF reporting, marketing commitment reporting… Anything that comes up, we help with and absorb that pain so licensors don’t experience any hand holding.

Smart! You mention Jenna there, and we have an interview with her coming next week. What edge does having a product development person in-house give an agency?
When I set up Born to License, I wanted to replicate the success we have with Born Licensing as much as possible. We are involved throughout that entire process with ad agencies to make things as smooth as possible, and we wanted to also do that here with Born to License. I wasn’t interested in just connecting two parties and then step out of the process. I don’t believe that’s a recipe for long-term success.

There are some really great licensing consultants out there doing similar work to us and I wanted us to have a real point of difference. Having Jenna on board gives us that and enables us to support the entire process. And it means we can have conversations about what to launch next. We can be ahead of the curve and position brand ideas for future launches… We want all of our clients to have a strong, long term licensing strategy. We want licensing to become a big part of their business for a long time. We don’t want clients that just dabble in licensing.

What sorts of categories are your current roster of clients working in?
The clients we’ve signed are pretty broad. Our licensees are in apparel, jewellery, gaming – both digital and board games. We have homewares clients… We’re not selective about the categories but we are selective about the clients. We want to make sure they’re serious about licensing and have suitable budgets to accommodate licensing.

We get a lot of companies come to us and they’re in their first or second year of sales and things are going quite well… It still might be too risky for a company like that to take on licensing. We encourage companies to keep building their business and customer base, so they can properly consider licensing when the time is right.

So our decisions aren’t focused on categories… It comes down to: Who is this company? How successful are they? How serious are they about licensing? How realistic are they about timings and affordability?

Great insights there, thank you. The first product to launch from one of your clients was the Care Bears gold-dipped rose from Steven Singer Jewelers. Is this launch indicative of what you want to be doing with clients?
Yes, and that was a process. They didn’t come to us saying: “We want a Care Bears license.” They came to us wanting to do licensing and they had a few ideas in mind. We had to work through the feasibility of what they wanted to do. The Care Bears team are amazing to work with and it was absolutely the right brand for Steven Singer Jewelers to work with as their first licensed launch. We know that will open doors to other licensors and we’re in the process of finalising their next license – there will be a new licensed rose coming later this year, which is very exciting.

But that project was exactly how we want to work with our clients. We really got to understand their product, their consumers and their appetite for licensing – and then found the perfect property for them to start with.

Great stuff. Now, I spoke to you last week about your aims for Born Licensing when that launched 10 years ago. What are your aims for Born to License? When do you want this business to be in 10 years?
Well, one of the key consistencies between launching Born Licensing and now launching Born to License is a focus on delivering incremental revenue to the licensing industry. It’s always been our focus and that will never change. If there are other ways to continue to diversify and deliver on that aim, I’ll certainly explore that.

The plan is to create strong business models that help grow our industry. I’m really passionate about licensing and the opportunities that our industry has given me… I’ve been in this industry since I was 20 years old and it means a lot to me – the people mean a lot to me. It’s the best industry that you can work in, full of people that are passionate, smart, creative… Just generally great people to be around.

I want to continue seeing the industry grow, innovate and be strong enough to let us all continue to do what we love to do.

Perfect note to end on. Thanks again David.