Forums: Discussions for entrepreneurs and small business.

One of the most important reasons why someone never starts a business is that they`re afraid someone will steal their idea. They spend so much time getting patents, legally positioned, and not talking, they never go anywhere.

On the other hand, many professionals have written plenty of content to say that in most cases, nobody cares. Yes, there are the horror stories of how a huge enterprise stole an idea from an unknown inventor, and went on to make millions. But not all that often.

Now consider something like facial tissues. We all know about Kleenex, but who knew about them before they came onto the market? Then they arrived. So? How many people immediately went out and bought them, having waited impatiently for facial tissues?

Not long after these nose-blow devices arrived, people started copying the idea. The more people copying, the more product. Kleenex, being first and having an advertising budget, became known for the item. Kleenex became synonymous for "facial tissue."

Wasn`t it the many copies that spread the word? Did the Kimberley-Clark company HAVE TO have a 100% monopoly on the market? At the time (1926) they were just a company trying to figure out a way to more easily remove cold cream from people`s (actors`) faces.

Now consider Compaq, the first company to reverse-engineer and clone an IBM personal computer. Prior to their competition on the market, PCs were only the PC Jr., and expensive. It was partly because of Compaq`s copying (stealing?) the idea that prices came down, and people started hearing about that new thing---the PC.

Technical devices tend to be more a one-shot thing, including such things as new medical cures. But for MOST of the new inventions of the world, having someone else take the idea and run with it simply increased market awareness.

Do you have to have a 100% lock on your product? Do you have the budget and resources to take your "Major Gizmo" and make it a national phenomenon? Is it worth it to wait, and make sure nobody but you ever brings the product to market?

Suppose Major Gizmos become a billion-dollar per year business. 1% of that business would generate $10-million per year. Is that a depressing number, worth fighting to keep your idea proprietary?

Think about the Apple computers. They fought to keep their technology secret, proprietary, and hidden. They didn`t want anyone to steal their ideas. In 2002, Apple was the 6th largest computer maker, with approximately 3% of the market. Is it worth it?

Sure it is! The company still generates millions and millions of dollars.

So what`s your balance? Which is more important---keeping your idea a secret, and ensuring that it`s totally patented and "lawyered up," or getting the idea out there? How will you start generating all those millions if nobody`s ever heard about the product, nobody knows it exists, and therefore, nobody cares?

Craig.

Wasn`t it "Henny Youngman" that said..."take my IDEA please!"

This is something I`ve thought much about and thanks Craig for bringing
up the topic.

I have a concept for a new kind of camping trailer. This is kind of my "big
idea", the one that encompasses my grandest entrepreneurial dreams. It
will change the face of the camping industry, with several product lines
and other concepts that evolve from it. It is unlike anything out there in
many defining ways (though it`s still a trailer, wheels, hitch and all).

I`ve often wondered if it is even worth patenting. Don`t get me wrong, I
believe in protecting intellectual property but it is something I question.
If competition is going to spring up, then it will be done in a slightly
different way no matter my level of legal protection. The strategy I am
building has more to do with being first to market and building brand
loyalty. A disruptive approach is much stronger than a patent, I believe.

Does Starbucks have a patent on premium coffee?

Does Apple own the mp3 player?

Does Harley-Davidson have a patent on the motorcycle?

Does Disney own the process of animation or the idea of a theme park?

No, but these companies were the first to build empires in their industry.
It`s funny to think of Kleenex as a facial tissue empire, but it is! These
companies are smart and do have the necessary legal protection, but they
have found their balance for success. Priority was to get the product out
there first and deal with competition as it arose.

If you spend all your resources protecting your product from competition
before there even is competition, much less a market of your own, you
may be hindering your success. I like to think that protection comes in
more forms than just legal documents. Smart strategy, disciplined
execution and a strong brand are also forms of protecting an idea.

I think we have to categorize inventions if we`re going to look at the idea of patenting. In something like this camper, you`re going to need huge manufacturing capabilities, far beyond the typical entrerpreneur`s resources, right?

It`s also a technical thing, rather than a craft item, artistic, informative, or "simple" kind of thing.

For something huge like a whole type of vehicle, patenting an idea and all the other related things makes perfect sense. Where I`m looking has more to do with things you make yourself.

Consider Kathy`s signal flag banners. What happens if someone "steals" the idea? They can`t copyright the flags, as they`re international standards. They can`t copyright the concept of "banner," as it`s a generic idea. They might possibly copyright some totally unique system of making the banners, but it would be an interesting problem.

Instead, they can "copy" the whole idea. So what happens next? They can`t make them much cheaper, but so what if they can? The banners would start appearing wherever they could afford to advertise.

Right now, most people haven`t heard of signal flag banners. So although they may be interested in the novelty, they`d be "first implementers." On the other hand, suppose there are 50 companies making these banners, and you start seeing them all over the place.

In that case, when you think of a banner, it would be more natural to think about getting a signal flag banner. You`d go to Froogle, or Google, or eBay, and *expect* to see lots of those banners. The market would increase rapidly, with more people searching out the product. That would be good for us.

It comes down to making a decision about whether you need a monopoly on an idea. Or, whether someone taking that idea would shut you out of the process totally. In either of those cases, then by all means, patent the thing and keep it secret. How many ideas fall into that category, though?

I like this line of thought Craig ... great ideas.

In terms of us, well ... heck, if they want to borrow my code off the page, they can. It still won`t give them our company. What makes us, well, us is the unique way in which my artist and I have learned to work together. So you can steal the code all you want, but it`s still not going to make you better sites.

This gets me to the point of opensource. Many people now give away their code because more gets done with it. An example of this is APIs ... like Flickr started handing out their API and look at all the cool things you can do now. It really only made the Flickr service better and more popular. Same thing with handing out Google API, PayPal API, Amazon API, and pretty much any opensource software ... the original brand becomes more powerful because they can get people to develop new things for them, FOR FREE, and spread their tools around the world with some pretty awesome viral marketing.

It also makes the original thing better as a whole. Like suddenly the original product is 20x better because other people tweaked it, hacked it, and made it better.

The make it your own concept is becoming pretty strong nowadays. A friend of mine is building this thing call the chumby that you can make into anything you want - and every one is unique because it`s uniquely yours. By opening up your technology, you`re creating a loyal fan base, customers for life, a better product, more reach for your brand ... YOU NAME IT!

My personal thing is that I don`t believe in patenting my graphics, logo, whatever. Having a patent means they stay the same. I don`t want to sit still. I want fresh content and continual revision. I think patents for web site material just invites stagnation. I know most people might not see if that way, but what can I say? I`m a developer in the e-generation. Steal my tagline? It doesn`t matter, I have another 10 in my head to keep you guessing.

I`d never be so dumb as to say we have a monopoly on what we do. There`s tons of webdevs in the sea! I`ll just stick with "they don`t matter because we do it best".

Yes, that`s what it comes down to: "They can steal my code and images, but they still won`t be me or my company."

Does the fact that you can go to Burger King, Steak-n-Shake, Wendy`s, or Mom`s Diner change your intention when you want a MacDonald`s quarter-pounder? No.

On the other hand, if it hadn`t been for the proliferation of similar fast-burger places, the whole concept of "fast food" wouldn`t have become a cultural term.

Great example Craig.

Whilst I very much agree with the concept of your thread about intellectual property and the good for the common people I am not sure I agree with some of the points.

For a start I disagree with your assumption that it is one of the most important reasons why someone doesnt start a business but they do spend the time and money on the patent. Certainly here in the UK patenting is exceptionally rarely done (in relative terms) and many who have previously gone to public forum business angels/ venture capitalists have been criticised/ not received funding due to the lack of a patent or other form of protection on their intellectual property rights.

I would also certainly say that things like fear of loss of financial security/ fear of the unknown/ lack of practical knowledge are all much more common reasons why someone will not go into business than fear that their idea will be poached.

 Whilst 1% of a multi billion pound industry would certainly be very nice I think that many people believe that they "deserve" a greater share if they are the originator of the idea but then that is why we have intellectual property rights and mechanisms which can be used to help protect them. I am not however certain that the examples that have been given of APIs are a good analogy though. In all those cases you have highly successful companies then releasing their software which acts as a viral marketing campaign. I am however not convinced that if an unsuccessful/ unknown company were to release software that they could then become a successful commercial venture off the back of it. Classic examples are the likes of OpenOffice or GIMP which have very high user rates but as far as I am aware none of their inventors appear on any rich lists.  


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Astaroth Solutions - Bespoke web development

AstarothSolutions :-)
Understand that I`m not claiming the fear of having an idea stolen is right near the top of reasons businesses don`t get going. That`s a statistical statement coming from a number of people who write books about small business startups.

Personally, I was surprised that it ranked so high. But I can see the logic. You`re right that there are many other reasons too, including that fear of no security, worry about finances, and paying the bills.

What I was looking at here, bringing up for discussion, has more to do with a "reality check." In other words, there are all these reasons people have for not starting a business. They have an idea, but they don`t want to implement it. How come?

Most people can see the fairly obvious problems, like lack of money, resources, or fear of losing their income. This particular one, though, is an attempt to get folks thinking. Do they REALLY need a patent? As you`ve said, in the UK it`s not apparently as pressing an issue as it seems to be here in the US.

The main point is that IF someone isn`t starting the business, AND they`re constantly putting it off for the sake of a patent, then it`s worth taking a moment to think about that process. What`s the relative value of the patent to the lack of starting the business.

I`m not at all saying patents are pointless. There are lots of situations where they really matter a whole lot! But...there also are plenty of situations where the patent is something that can be taken care of later, if at all. In those situations, many times having people copy the idea serves to promote and increase the business.

To the point of the API examples, what about PKZip and WinZip? The idea of a "zip" compression started as shareware. PKZip was the first, but I don`t believe Philip Katz copyrighted the process. I think we could say that *either* due to people copying the application *or* due to it`s being essentially free, all contributed to the proliferation of the concept and the specific software. Would you agree?

Craig:

Imitation is the highest form of compliment!

Once again, I agree. Especially when an idea is so new. It needs traction and the only way is to give it away.

Tony Russ
Design Ideas Marketing Associates
www.designideas.tv