Discover how patents may not lead to financial success
To begin with, there are few if any things that are guaranteed in life and business. Having a brilliant idea for a product or service is not one of them. Financial success comes from creating a revenue stream. I have seen many a good idea that was presented to me or to our company for us to develop and the failure to success ratio has been clearly in favor of the former. There are two main categories that seem to form the basis for inventors, entrepreneurs, investors, scientists, etc hinge their business model thinking on the following criteria:
- Have a unique enough idea that is difficult or impossible for others to offer to the market.
- Seek protection from the domestic and foreign patent offices.
Either way, both concepts bet the whole endeavor on uniqueness and / or forced market protection. It should be no surprise that the startup business failure rate is so high because neither one deals with generating revenue for the organization. In the day and age of the Web and the many other electronic means the world has become very flat and accessible.
It is a really bad idea thinking that you have something so unique that nobody else can reproduce your bright idea. I get weekly calls from companies in Asia about how they will be able to provide just about any gizmo you can think of. False hope is also the root cause for patents not working effectively in guaranteeing revenue. The best time for you to sell and ship anything with better than average success, is the “patent pending” time. Once you have to disclosure key information about the patent and this is public knowledge it does not take an awful lot of tweaking and voila you have more competitors than you can shake a stick at.
I am not saying that a really brilliant idea or patent will not work, but you need to prove to investors and banks that you can ship product/service and make money off of it. Single best road to getting out of either issue is to focus on delivering a solution that fills a need (existing or newly created). Then comes a solid channel to the market and then creating a process delivering predictable outcome capable of repeating over and over. This has to culminate in a solid revenue stream that helps sustain your company.