Don't Compete. Differentiate - IP is the Key.

Those who follow my blog may have noticed my increased activity in the field of intellectual property over the past year. This is largely due to Xupo's strong IP position, as it has been repeatedly scored well in the IP100 league table. Of course it’s a subject as exciting as it is lucrative. In September I had the honor to briefly speak at the European Union Intellectual Property Office’s Observatory Panel. At this point I would like to express my gratitude for the privilege of learning about EUIPO and congratulate on the tremendous progress in a multitude of areas ranging from consumer safety to tackling organised crime in cooperation with policy makers and law enforcement across 28 member states. I was faced with the question whether IP is useful to support creativity and entrepreneurship and whether there are specific opportunities for young entrepreneurs. Up to 80% of a company’s valuation is based on IP, and trademarks and copyright are only the tip of the iceberg, and it is vital for entrepreneurs and creative individuals to recognise the value of this. IP isn’t just about copyright, patents, and trademarks, it’s the very fabric of what gives your business its identity. Whether you are driven by creativity or business, it starts with an idea – that’s the first bit of IP. Designs, trade secrets, critical business or production processes, key staff, suppliers, r&d, critical organisational data, patents, critical databases, brand and reputation, know-how, know-who, software, critical relationships, technical & manufacturing specifications, industry/market insights, and the list goes on and on. this makes up the entrepreneur’s IP iceberg, which you can use as a stronghold or chop it up and sell the pieces. From my own experience, IP is KEY to entrepreneurship, be it as an entry barrier or competitive advantage, and if structured strategically, makes it more credible, backable, investable. After all, in order to scale you don’t just want to compete, you want to outsmart your competitors and create a class of your own. Connect-In raised investment through seed, angel, and crowd-funding, and I attribute that to IP. Investors often say they back the jockey, not the horse, ulti mately coming back on the entrepreneur’s IP, in form of know-how, networks, insights, or just downright creativity. On this ground, we have become rather picky and turned down a number of investment offers this year. I mentor entrepreneurially minded teenagers through Orbit (which I encourage you to follow) and have noticed that many tried to learn more about IP yet were confused by jargon and websites with poor user interface. This means that an interested audience is lost. This calls for mentoring by those who have “been there, done that”. I also advocate a closer cooperation between policy makers, industries and entrepreneurial networks with the goal of nurturing IP-rich start-ups and entrepreneurs, not merely in legal and technological aspects but also, considering a mere 7% of patents are commercially viable, from a commercial view point. That's why investors may worry more about granted patents than pending ones. Metis Partners and EUIPO, separately, have been making significant progress in this field and I look forward to seeing new opportunities emerge. During an event earlier this year, IdeasPowered17, I reached out to Metis Partners and in the UK and StartUp Grind, and Wayra in Germany, in order to encourage a collaboration between IP professionals and start-up networks, aiming to facilitate synergies, encourage sponsorship, and improve funding opportunities for European entrepreneurs. The idea is to highlight strength in the categories of software, know-how, etc. as it is proven to attract sponsors and increase traction given the ever increasing economic value of start-ups in terms of job creation and international trade. Especially when it comes to technology, European start-ups are up against heavily funded competition from the bay area. This way, U.S. competitors are able to buy market share early on. If Europe wants to nurture new generations of hardware and software innovations, create jobs and fuel trade, more has to happen, a mindset to be created that values IP across the society. Another major topic at the ObsPanel was the fight against counterfeit goods in Europe. Now, we are talking anything from pirated media over fake airbags and ball bearings to counterfeit micro chips, batteries and even pharmaceuticals. As you see already, none of the above imply “victimless crimes” – much the opposite, as the consumer is the victim. In the context of media we have to look at different mindsets and motivating factors, as well as societal and technological changes. When it comes to content, for instance, I assume all of us bought MCs, LPS, hard copies of books, VHS, DVDs, CDs. Back in the day, that is. We used to pay for tangible products, which could be sold on, sometimes with a profit. The tectonic shift in media consumption towards temporary ownership through downloads, alongside the simplicity of reproduction and sharing have made it more attractive to pirate content. Nevertheless, embedding into peoples' mind the notion of credibility by referencing prior work and the achievement of putting together sources, disseminating them and eventually adding own thoughts, thus CREATING IP, should be paramount and not limited to tertiary education. This should be drip-fed, rather than blasting it out in an all-out campaign, and parents and teachers should feel encouraged to discourage the use of counterfeit products. On this note, having discussed counterfeit consumer goods, pharmaceuticals and components, we did not pay much attention to a fake that has made the headlines over the past year: Fake News. However, in the interest of not wandering off too far I’ll leave it here for now. For more on IP from a UK startup's point of view and IoT tech insights, follow Raj Sark at Xupo.