One thing that comes up a lot during the many conversations that we have each week with entrepreneurs, is a founder stating their desire to pursue patents on their “proprietary” idea. While patents can prove to be very important for certain technologies – and as a preventative measure, further touched on below – they often bog down founders and prove to be extremely antithetical to the golden rule of startups, to move and ideate fast.
A hard truth, is that most ideas aren’t proprietary; everything has already been done by everyone before. Think of how many times someone says “I had that idea years ago! I should’ve patented it and made millions when I had the chance!” (I heard that at the corner Walgreens the other day in reference to wall-mounts – circa 2006 – for TV’s). Sure, groundbreaking cancer-cure technologies and components of space tourism technologies are proprietary; but unless the venture is literally a cure for cancer (or climate change) there is likely not much there in the realm of patentable property. And even if there is, industry giants can find ways to work around patents of copyable tech; if they really want to steal an idea, they can afford the ten years and millions of dollars of litigation fees that it would take to challenge them in court, while most entrepreneurs can’t.
It’s still of vital importance to do research into existing patents in the space as an early-stage startup; as a measure to make sure that whatever technology/product you’re planning to create has not already been developed and patented – and also as a way to further help establish your market efficacy and product market fit. This research early on can help save the headaches later on (and help solve the biggest question facing early-stage startups – do people want the product?)
Instead of patents – the way to defend from competitors doing similar things to your venture is through distance. The best defense is a good offense; a startup’s overarching goal is to move fast; through moving fast and learning and adapting to the insights gained from the consumer to develop the best possible product for the market, an entrepreneur creates distance from the competition. This “offensive” centers around sprints focused on pivoting and tweaking the product frequently to meet the gathered market research – 42% of startups fail because of lack of consumer interest in the product or service – and it succeeds through creating fanatics out of users – meaning that they are devoted to the venture and won’t consider an alternative; their love for the product leads them to become dedicated users, basically selling the brand themselves. Once users are fanatics, it’s very easy to envision a variety of exits; large players in the industry will acquire the venture for the users and customer base and for how the venture will compliment their other offerings and add to their profit margins – in addition, the gathered insights and distance created can open the path for the venture to exit through operationalization.
To talk more about distance and creating fanatics out of users feel free to reach out on LinkedIn.
Michael joined FarShore as a Partner Outreach Analyst right after graduating from the University of Wisconsin. Most of his time is spent attending (now-virtual) startup events across the globe – and engaging with exciting entrepreneurs looking to grow their ventures and build out their brands. When he’s not talking shop with ambitious founders (and loving every minute of it), Michael can likely be found reading, watching sports, or exploring the streets of Downtown Chicago.