Authors: Matthew Wahlrab and Craig Rochester
Founders of companies face many obstacles when transitioning from a spark of an idea, to finding market fit and scaling, to exiting. Intellectual property (IP) management documents aspects of the business that drive growth and, when done well, provides a foundation for scaling that doesn’t require rethinking the business at each growth stage milestone.
The documentation and assessment inherent in IP management primes companies to evolve and expand their protection strategies as they go. At critical points, documentation makes it clear to prospective clients that the business can solve their pain points. It also shows investors that the founders can create and expand a defensive moat.
The six IP management elements presented below provide a framework of functions for leading an efficient and productive growth business. These elements include practical guidelines for protecting innovation amongst competing needs, as well as for developing a management structure for identifying opportunities, growing the business, and leveraging IP and IP rights to manage risks that all growing businesses face
Focus
“The documentation and assessment
inherent in IP management primes
companies to evolve and expand their
protection strategies as they go.”
Element #1: IP strategy development
An IP strategy provides a singular point of truth connecting business technical differentiation to business sales. Transparent disclosure that is easy for everyone in the enterprise to understand helps the business prioritize major expenses like product development, finding product-market fit, and securing IP rights as the business grows.
A good IP strategy will identify which IP protection methods are needed now, which can wait, and which business growth signals indicate that the time may be right for new investment in IP rights such as patents, trademarks, and licenses. Strategy may limit the scale of investment in patents until marketing validates demand, while at the same time attempting to ensure patent coverage will beat the filing dates of competitors who may be secretly exploring the market. There is often an interplay between marketing and IP stakeholders, for example in coordinating trademarks to establish the startup’s brand and begin building goodwill when early market goals are reached. With a sound strategy in place, you can be more fiscally responsible with the capital you have, for example by planning for “Stacked Protection” or through the development of an IP roadmap that is synchronized with your business growth.
Since most businesses will need to be agile when finding market demand, and in some cases execute larger pivots, optionality created by a diversified IP portfolio is a big win. Informed groundwork protecting various innovation initiatives provides flexibility in your ability to pursue whichever business directions turn out to have the most potential.
Element #2: Evaluation and decision-making processes
Big ideas create market opportunities in more industries than any one startup could be expected to explore simultaneously. With a myriad of potential verticals and use cases for their core technology, startups often struggle to determine the best strategic moves for finding product-market fit. Navigating the intersection between the startup’s technical breakthrough, market demand, and a financially viable business model can be especially tricky with constrained resources.
Fortunately, in spite of limited resources, startups can often find important technical, IP, market, and competitor insights in publicly available information. The combination of relevant information from these four categories creates a more holistic perspective of the competitive landscape of a market that a startup may be considering entering.
Monitoring technical information, for example from peer-reviewed journal articles, can reveal which open technical hurdles need to be overcome and the latest thinking on where a solution might be found. Similarly, gathering marketing collateral from competitors can reveal insights into the pain points competing solutions are seeking to resolve. Today, many SaaS startups publish their product roadmap, highlighting essential product development and third-party integration opportunities you may prioritize to beat your competitor to the market. This gathered information can greatly enhance clarity in the decision-making process while simultaneously creating valuable know-how for the business .
Through business development outreach, startups can overlay valuable insights from early conversations with prospective customers on top of publicly available information. Confidence in the decision-making process is increased when gathered intelligence confirms market intelligence from outreach efforts. Typical market intelligence information that can be tracked includes the demographics of prospective buyers, their roles and motivations to buy, and pricing information. When combined with publicly available information, this in-house information can be used to develop IP, market, and product development strategies.
Element #3: Integrated IP and innovation management
Oftentimes, financial constraints mean that startups are unable to purchase important technology for implementing new features or for supporting a full range of integrations. A common solution is to pour money and other resources into a build, build, build strategy. But, while a build strategy can help your startup get to a Minimum Viable Product (MVP), there are often precious few financial resources left over for commercialization of the product.
Through an integrated IP and innovation management approach, however, your startup can access needed innovation while preserving resources for other essential growth activities. Integrating IP and innovation management changes the game, enabling companies to pull all the levers available to them to access new innovation. Levers like funded development, collaboration agreements to access valuable technology, and channel partnerships for exchanging what the company has a surplus of for things your startup needs.
Integration of IP with R&D also allows a startup to identify external B2B opportunities, de-risk new investments in technology, reduce blind spots with enhanced research, make more strategic bets, and allocate capital more wisely. It’s a recipe for surer success — and if you’re operating in a new market with few, young competitors, integrating IP and innovation management with a high level of discipline and market intelligence creates a major competitive advantage.
Element #4: Organization and communication
In a startup, founders famously wear many hats. Yet, as your startup grows, your company may become increasingly siloed as you hire more staff to meet market demand for your offerings. Typically, your sales team is focused on existing products; your engineers are wrapped up in developing future products; your executive level, meanwhile, is thinking about quarterly numbers, sale channels, hiring, and the development pipeline. Frequently, the rush for each group to hit its own objectives bypasses communication on what’s critical for the startup to develop from a strategic, future-facing perspective. Let’s put this in context.
The sales team promises a deadline that the engineering team works flat out to meet. They successfully ship the product, maybe software or hardware, so now it’s visible and usable public knowledge. Only at this point does the startup consider that — thinking strategically — they might want to protect elements of the know-how behind the product. Once technology leaves an organization, however, it’s tough to protect.
To prevent our clients from hitting this particular stumbling block, we plug into their teams’ regular workflow to flag potentially valuable IP as it’s being developed. We strive to eliminate time-intensive, stressful, and expensive retroactive protection attempts, without creating significant extra work day-to-day.
We find tracking Technology Readiness Levels (TRLs) comes in useful here. Developed by NASA back in the 1970s, TRLs track developments across all product categories: alerting stakeholders on breakthroughs, fostering organization-wide transparency with clear check-ins and deadlines, providing opportunities to proactively identify brand protection issues and risk mitigation strategies, and ensuring the right people have the relevant product and IP-related information they need, without it burdening those who don’t need it.
Element #5: Leadership and accountability
In the time-sensitive world of IP, where rapid decisions can make or break a competitive strategy, responsible management and clear leadership are key to avoiding missed opportunities and counterproductive finger-pointing.
For a small startup, leadership often works with outside counsel to implement IP protection, with all the associated pain of a steep learning curve and high attorney fees. For larger companies, the responsibility for developing, protecting, and leveraging IP usually rests with an internal manager or team. But for any size of startup, active management and reporting of IP protection status and planning is a function that is crucial to making sure that the protection is effective if called upon for use.
Element #6: IP and business development
IP strategy should always be coordinated with business development strategy and outreach planning. Gathered primary market intelligence and publicly available information, for example, help with developing outreach materials that are more likely to be viewed by prospective clients as valuable to them. Public information dissemination should be done with the IP team in the loop so that there are no surprises when aspects of technology are made public (impacting the ability to patent, among other things).
A good IP strategy allows you to enter a market with confidence and get creative with deals, without the nagging fear of your ideas being pilfered in the process. You can have more open, relaxed conversations with potential adopters, collaborators, and investors, knowing the information you share is safeguarded via an NDA or even better protected by a patent, for example.
Getting your IP in shape so that it’s an asset in sourcing partnerships, generating collaborations, and surviving due diligence is a savvy investment, too. Less expensive than product development, foundational IP protection enables you to introduce optionality into your business roadmap, establish an IP rights position, and tell your innovation story in your sales and marketing material — all of which support driving the revenue that’s all-important for young companies.
Manage your IP for efficiency, productivity, and scalability
At Rapid Alpha, we help our clients to structure and prioritize their IP to maximize technical, creative, and strategic differentiation compared to their competitors.
This enables companies to go beyond being the fastest to develop and launch new products. A better product is also a product that’s protected well enough that it can’t be copied and sold by a competitor; one that’s encased in an IP portfolio that forces the competition to think about licensing or even acquisition.
Interested in working together? Reach out to our team here.
