We’ve talked to a number of investor these last months and I can classify their questions into three categories:

• Intellectual Property Protection (IPP)
• Revenues
• and Operations

Revenues is a straightforward concept and reflects market potential, market share, and business-model. Operations can also mean business-model as that clearly affects your operations, it also concerns the team, and it very much concerns *the last mile*—a very detailed understanding of how your product comes of the “factory line” and goes into a customers hands (every step and every screw has to be planned out). And IPP, well IPP is something special.

Intellectual Property Protection refers to legal and other ways that you protect the innovation and knowledge that is built within your company and its people. It is not as straightforward as simply taking out a patent, copyright, or trademark, though those are usually the first avenues that investors will pursue when talking to you about IP. IPP can just as much come from keeping information tacit—inside the heads of your team—, developing systems that spread an innovation across many parts—e.g. the way technology companies prevent copying from factories they outsource production to, by only giving them parts to produce, but not the whole—, another systematic answer could be deep vertical integration, which ensures a higher quality of products and services than can be replicated by vertically smaller competitors (a strategy pursued by Apple and Starbucks), and last but not least: speed—in some industries it pays to just scale very quickly, rather than build a protective base around IP (a contrast between e.g. web and medicine).

But let’s get real for a second. You’re an inventor, you developed something new. The most obvious path to pursue is a patent. The first issue is cost, because taking out a patent is not cheap. Basically, by filing a patent in your country, you can protect yourself for a while because there is a period, 1-2 years, I believe, where you are filing it and it can serve as a type of legal instrument to prevent other companies from filing a similar patent. But in the end, you have to shell out maybe €5000 per country to protect your invention internationally—and those costs do not cover the legal cost or protecting a patent once it’s being breached. Let’s get real x 2: you’re a startup and while your technology may be innovative, it may not be what the market needs (which can relate to actual taste, but also to cost, to regulatory issues, etc.) and that means that your patent, if you decide to take it out, may not be worth squat. Let’s get real x 3: your invention may not be unique, at least not in its current form, and pursuing a patent in that case is not even feasible.

So practically speaking, what do you do? Just to be clear, I don’t have the final answer to this, though it is something I am constantly thinking about as a potential risk in our, a technology startup. So my interpretation and approach are entirely my own, but I am writing this to start a discussion more than to give the final answer.

The answer to me is all about strategy. IP protection has to make sense in the context of a longer term business strategy, long term meaning to me longer than 2 years and preferably longer than 5 (if you have an actual patent and it has market value as well, you have over a decade of protection). And IP, just like a business, is something that can be split up to cover different areas related to supply, to the manufacturing, to the end-product, to the service, etc. So the more broad and comprehensive your way of protecting your intellectual value is, the less it can actually be replicated by your competitors.

All IP concerns aside, it is sometimes of benefit to not protect the whole value chain. This is true in our business, which I will write about some other time, where we can split up our technology into core-components that are integrated into new solutions which act as a platform for more solutions. Locking off that whole chain is perhaps of some benefit, but in some ways we would like to have people innovate in their respective areas and for us to focus on developing better products out of that. My point is that IP protection should be seen as something that can be shifted to those areas most critical to your business and that new development in your industry is not necessarily something to be scared of. In the end, we are in the product business and if we can produce superior solutions for customers that outweighs comprehensive IP solutions.

So the conclusion is, even if you are developing a product that is not entirely novel, there are places in the value chain where you can still develop an IP solution. And if you are developing novel solution, it has advantages on both the supply and the market side, to not make your IP too restrictive and thus diminish your product potential.

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Unlike other Mondays’ reputation, March 17th was a bright one in London.

…Post-reporting from the “Creative Business in the Digital Era” seminar, in 01zero-one centre in Soho.

The idea in the CBDE was to bring together people from different walks of the creative industry (music, cinema, publishing, photography…) whose common point is the zeros and the ones: digital works and concepts.

…so as to exchange on intellectual property, open rights, business models, digital marketing, creativity, its stimulation, its canalisation…

If it wasn’t for Suw Charman-Anderson and Michael Holloway from the Open Rights Group (a growing NGO community focusing on Digital Rights Issues) I would have probably stayed home and the other guys may have crossed each other on the pub. So thank you guys for setting up and animating the whole day!

The project has a wiki, at our disposal beforehand – a great thing, given the variety of the people attending.

On Monday we warmed up with a notion-shower by Suw, then got in the shoes of Radiohead and their In RainBows experiment and finally had some real entrepreneurs of the digital era sharing their vision:

A great Tom speaker and Reynolds author of “Blood, Sweat and Tea” distributed under a Creative Commons Licence.

John Buckman, multi-entrepreneur, mostly known as Magnatune CEO and as Bookmooch owner.

And finally, David Bausola and Rob Myers, the principal conceptual stormers behind the project “Where are the Joneses?”.

What are the Joneses? Based on a series-like format, it is mostly a transmedia chameleon; the product is shaped by its environment and its audience, the significance changes depending the angle you choose to look at it.

Nobody knew in advance where the joneses were, the public decided the how-what-where, sending them around Europe to find their siblings, participating themselves in the scenario, in the acting etc.

Mr and Ms Jones, if you came to France you might have recognised Laurent Godard as your sibling : he’s the father of Flateurville, a “discussional” building of a village to finally come up with a film. How? Through regular interactions with the audience, in a “salle de jeux” every Thursday evening. More to discover “sur place” if you happen to be in Paris.

The whole experience made me more aware of the fact that prediction is a quite autistic procedure in digital business, you’d better keep it away if you want things going on smoothly. Well I suppose that it had always been like this, long before I woke up, but in digital business where cycles are faster and faster, prediction seems really outdated.

So, just for the pleasure of philosophizing a bit, prediction may have been only a temporary solution for the industrial first era of business, serving to bridge the gap of the missing dialogue with the “consumer”.

John Buckman made this quite clear to me when discussing on his Magnatune and Bookmooch activities where he applies a trial-error-adaptation schema.

“listen” and “reply” in a way that makes sense, seem to form the principia of digital business for those who do it. The commercial transaction being replaced by a commercial natural language dialogue? trial and error this question as well…

Shall this be confirmed, does it mean we’re finally moving on from Industry to Internet? spring feels good…

(to be internetically correct, if someone who reads this is on the south hemisphere, enterring fall, please replace the season by the metallic mecanism as far as spring is concerned, it also feels good)

To get back to last Monday,

My personal favourite gadget presented that day is CCMixter, a pool-tool of music creativity on a “molecular” level : you can post and find samples, remixes,  a capellas and build on them since they are licensed under creative commons. Quite solid concept, as it connects the two extremities of the 2.0 value chain: the artist with the user. Plus it teased some of my memory parts referring to other music tools, like C-sound. I wonder what applies in the case of music-code copyrights…

Cheese.

Accuse me of writting cheese, “come on Georgia, stop name dropping and all”

Nope nope, cheesy or not, the sensation of this seminar was like a cute baby incarnating the taste for openness, the playfulness of creativity and the cosiness of legally-correct digital business.

loved it.

Cheers.

Georgia

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