Forums: Discussions for entrepreneurs and small business.

I got a couple of questions and I`m going to relate these to the YouTube scenario hopefully to garner better understanding. Web videos were available on Google, Yahoo and other search engines prior to the business model of YouTube.

How does one, therefore, go about protecting an idea like YouTube? Considering that there are several technologies they implemented in it`s creation, these technologies were already existent and not entirely new. Would patents suffice in such a scenario? Of course the logo and other graphical presentations can be copywrighted.

If for example the founders of YouTube, did not have the technical know-how to implement their project in it`s initial phase but knew what they wanted to do. How would they go about raising seed money? To then get the technical expertise that would bring the project to it`s fruition? ie they need ten techs to put up the 1st beta YouTube site but have no money to pay the techs.

Several ideas I had on this. Get techs, offer up and divide 10% of the startup business for their technical expertise. Get the beta site running, then use this to demo and get funding from VC`s and the like. I hope this makes sense.

On the other hand, they would not be able to protect via patents, the technologies they are about to develop until they have them underway. Lots of trial and error in the creation. What then would they need to patent initially so as to get started?

I think I can leave this off here and explorer more as I get responses. Would like the legal field and startup entrepreneurs to relay what they have done in similar situations, thank you.

Joe.

Thanks for your response. My business is similar in a sense and hence I`m trying to determine an appropriate way to protect my Intellectual Property before I start seeking funds. Growth of the company I`m setting up would be great and truely Viral in nature.

However, I am limited in funds as far as getting developers for it`s initial stages. Like YouTube and MySpace, once I have funds for early stage development, I would not require so money, except to increase, ie storage capacity as users sign on to use the services.

Unlike YouTube and MySpace, I have a well formed revenue generating business model. Multiple streams of generating revenue. In summing it up, without giving too much away. I would be able to generate revenue off every MySpace user or off every video posted on YouTube, without billing the end-user or limiting and detering the amount of subscribers.

My business takes on a well establiched business avenue, creates a niche and does it better than exisiting competitors.

My dilemma is that with no funds for the initial developers to begin working and perhaps set up a Beta site, it is difficult to demo the site for financing.

Where would one start with this? 

Having hundreds of thousands of users is much more effective than a patent. Why do so many people use YouTube - patent or not? Most people use YouTube because so many other people use YouTube.

Patents are a basically useless form of protection with respect to software and they certainly don`t help if your competition already has thousands or hundreds of thousands of users.

I am sort of tired of listening to patent attorneys talk about the value of patents. Patent attorneys love to talk about a patent as a great barrier to entry ... is there a patent attorney here who can point out any web company whose success is firmly rooted in patents? [ Other than the few patent trolls whose business model revolves around litigation. ]

To be fair, I`m also pretty tired of hearing entrepreneurs talk about protecting their intellectual property [which usually means ideas, not implementations]. Fanatical protection of ideas seems so rarely to lead to anything great being built. Who cares if an idea is great? Most people won`t pay a dime for an idea. A working implementation with stacks of customers is worth a lot more than an idea held closely to one`s chest.

It`s a form of intellectual arrogance to assume that your ideas are so great that no one has ever considered anything similar. Yes ideas get stolen and turned into great companies ... but if you`re the one who`s building the great company you can bet there is someone out there thinking "hey they stole my idea!".

As I mentioned, my business would be similar. I do not have the funds to hire developers yet and like YouTube, the patented s/w can only be done once the project is started and ther is actual s/w to patent.

I think I can patent screen shots of the GUI(user interface), showing functions I will incorporate, slideshots from one screen to another just for illustrative purposes in getting a patent and copywright. This is only to enable me to then take the business model and demonstrate it to intereseted parties as I seek out funding.

True, like `CookieMonster` mentioned above, patents are not and effecient method of protecting a business like YouTube or MySpace. Consider though that in the initial stages I would hate to have one of my interested investors or techies steal the idea and run with it.

`CampSteve`, My business is very Viral like Myspace. Very scalable and will eventually hit international markets sooner rather than later. It rquires no marketing or very little at all as users invite other users due to it`s functionality and hopefully popularity. Unlike MySpace and YouTube however it is not just a social site but one too that has a great business revenue genearation model behind it.  

It is highly scalable, meaning that it will take little initial capital, little labor and multiply over and over. There are some strategies and software that would be incorporated that would be propritory and would require patenting as well as some unique functionalities.

I`m hoping to get a Provisional Patent Pending on it so that I may discuss the details. That`s where I am beginning to stumble but I got sure feet. I look forward to discussing the project on this site in more details once I make and attempt at covering my rear. you guys have been might helpful.

I don`t think you know what you`re talking about. Sorry but your post is full of misconceptions and incorrect talking points. Good luck!

Sorry guys for the misconceptions. That response was written in a bit of a hurry.

To clarify, the point is that the business would be similar to YouTube in Magnitude, similar to MySpace in Viral Marketing. Sure there will be marketing expenses i just don`t expect to have a broad range of TV commercials promoting the business as it`s true marketing scheme is word of mouth between users.

I do not have the funds to get the developers working on coding and various other technical duties at the moment. I have screen shots of a prototype(sample) interface that I may use to raise the funds necessary for the actual project. Of course it does not have all the functionality built into it, hence the need for technical skills and labor.

Now the meat of my question is how much protection and what forms of such can I place on such a demonstrative piece so as to raise the necessary capital without losing the business to another speedy individual? Of course you cannot take a screenshot of Myspace, patent it, then proceed to seek the funds to get out there and create Myspace.

Look whether or not that post was written in a hurry, you obviously have serious misconceptions about business, marketing, and patents. Sorry but I can`t waste my time trying to help people who only want others to write what they want to hear. For example: you keep focusing on the protection angle even after you`ve been given good advice as to why that`s not smart and what you could do instead. Then you ramble on about frictionless marketing and so forth. No venture capitalist or investor - in their right mind - is going to make an investment based on screenshots. Unless they`ve backed you before and your prior venture was a huge hit. I`m guessing that`s not the case.

Your posts don`t make sense. You get good advice and then you respond by "oh well I`m just going to do this instead". If you don`t have the funds to hire developers you have a more pressing problem than protecting your "idea". Sorry pal but ideas are worthless. That`s why you got the idea for free. The worthwhile part ... hiring developers, building something, marketing, getting customers ... is where value is created. The worthwhile part ... i.e. not the idea ... isn`t free.

But go ahead and focus on protecting the idea. Have a nice day!