The startup world idolizes the lone innovator: Mark Zuckerberg, Steve Jobs, Bill Gates, Thomas Edison, Nikolai Tesla, Buckminster Fuller. We love that these stories fit the classic template of the hero’s journey: the world is suffering because of a problem, the hero recognizes the problem, retreats to his lab to find the solution, returns with an innovation that changes the world and everyone dances with joy.
Except – this is not true.
I stumbled on a fascinating paper by Mark Lemley, a professor at Stanford Law School, titled “The Myth Of The Sole Inventor“. His paper challenges the fundamental assumptions behind patent law, namely “the idea that a lone genius can solve problems that stump the experts, and that the lone genius will do so only if properly incented.”
Prof. Lemley traces the stories behind the stories of disruptive inventions, from James Watt’s steam engine and Eli Whitney’s cotton gin, through the telegraph, sewing machine, lightbulb, movie projector, automobile, airplane, radio, television, and the electronic computer.
In almost every case, although we attribute each of these advancements to specific inventors (usually American), the reality is that similar ideas popped up in various places around the same time, mostly because it is the next logical step in the idea’s development. This is a real problem for patent law: if the intention is to protect a concept early so an entrepreneur can develop and market it, but in reality the idea is already “in the air”, does intellectual property protection encourage or stifle innovation?
And what does this mean to the high-performance startup entrepreneur? I’m not convinced that intellectual property protection is as important at the definition and validation stages of a startup as the conventional wisdom says it is.
First and foremost, your “technology innovation” is not as crucial to the success of your startup as you think. If you thought of it, chances are that others are thinking it too. So it is quite likely that as you launch your product or service, you will find similar projects launching at about the same time. Don’t panic, instead focus on developing a business model that gets you real traction in the market ahead of the others. This is your primary mission as a startup: the development and validation of a repeatable and profitable business model.
Second, understand if your innovation is “sustaining” or “disruptive“. A sustaining innovation is one that improves a product in ways customers expect, for example integrating both a back and front camera on a smartphone, or a self-parking car. A disruptive innovation creates a new market with a new value network – basis of comparing value propositions between your new offer and previous offers. For example, when the iPad first appeared, there were already tablets on the market but they were all trying to be simply PCs in a tablet form factor. The iPad changed the paradigm by introducing a simplified OS, longer battery life, and optimisation for viewing pictures and video. It opened a whole new market and became the reference for that market.
Most innovations are sustaining, and most successful businesses are based on sustaining technologies, being the next logical step that the market expects. This is good, because instead of struggling to generate a new market, you can lead people who are already in the market towards your offer. Only in very rare cases will your technical innovation be disruptive. Instead of spending time, money and effort to convert a sustaining innovation into a disruptive innovation (if it can be done at all), focus on creating a business model and strategy that disrupts the market. Once you are actively in the market, connecting and serving customers, then you can notice opportunities to generate truly disruptive technology innovations. Business success comes more from how you execute than how you innovate.
And third, you may want to reconsider how you plan to “protect your IP” (intellectual property). Of course you will be pounced on by patent lawyers, who love to be around startups and convince you to invest in an expensive patent process with your valuable money. Don’t get caught in the “patent mill”, which will suck valuable cash as you struggle to ignite customer demand. Better to have your offer succeed commercially than to have spent a ton of money on protecting an idea. I now suggest my clients to only invest in IP protection (including trademarks and patents) only when they have their seed round. Use your investor’s money on lawyers, not your own precious cash. Investors are more interested in technology that is patentable than something that is already patented.
Another option is to flip your IP strategy: instead of protecting it, make it open source. Toss it out to the crowd to debug, refine and improve. You will end up with a better product, faster.
The bottom line here is that although your startup needs an innovation as a lever for fast growth, don’t obsess. Better a startup that is commercially successful with an incremental technology innovation than a startup that fails trying to launch a disruptive innovation.
And recognize that you will not be alone as you launch. Don’t waste valuable resources adopting a defensive strategy to keep your ideas to yourself. Better to be out there gaining traction and building revenue now. When you get big enough to attract the attention of your competitors, AND when you get access to “other people’s money” , then you can determine what elements of your IP to protect and how to do it in a way that promotes innovation rather than stifles it.
For more information
Mark Lemley, “The Myth Of The Sole Inventor”, Michigan Law Review (PDF)
Brant Cooper, “The Difference Between Sustaining Innovation And Disruptive Innovation” (YouTube)
Joseph Campbell, “The Power Of Myth”
Image: Jennifer Rouse (dzingeek) via Flicker
Used under Creative Commons licence