The most commented on story ever! Amazing 13,000 full comments and growing!!!
This truly shows the power of putting a story on a Homepage like AOL or Yahoo!
http://news.aol.com/story/_a/plane-boots-talking-toddler-and-mother/20070712092209990001
The recent incident where a Toddler and her mother were kicked of a plane aroused thousands of people to comment in an un-relenting barrage. Refresh the page and you will see the number of comment jump by the 100’s! Many of the comments are hilarious, look here!
Look at the stats
12,213 @ 4:59 pm 13,103 @ 5:10 13,829 @ 5:19 pm
That a burn rate of 80 full written comments per min, people really have a lot to say about this one!!!
www.techrd.com
Brian Glassman
The value of a Patent: Startup Web 2.0 and Software companies please take note!
This article attacks the following questions
What is the value in a patent or software patent?
Why should patents not be ignored?
Does my company really need patents?
July 3 2007 Authored by Brian Glassman
The following article highlights the many points of value that a patent has for a technology company. This article also demonstrates the many reasons why you should consider obtaining a patent for an invention that may be patentable. Remember not everything is patentable; a seasoned patent attorney can help determine the chances of obtaining a patent for your invention.
The value offered by a patent can be broken up loosely into seven (7) points.
Patents
1. Can give you a competitive advantage
2. Can increase your chances for obtaining financing
3. Are an asset of measurable book value
4. Can generate revenues
5. Can aid in development
6. Patent searching offers competitive intelligence which helps you learn about contending technology and competing companies
7. May be a key part of a company’s strategy
1. The competitive advantages offered by patents is the most pressing reason why you should get a patent. Patents offer a strong durable competitive advantage. A granted patent gives the owner (or assignee) the right to exclude people or companies from making, using, selling, offering to sell, or importing the patented invention for a certain period of time which currently is set at 20 years. That translates into 20 years of keeping competitors from violating the mentioned exclusionary rights. If they do violate those rights (called patent infringement) the owner of the patent, in some cases, may be able to sue for an amazing three times damages. In some cases, a patent or set of patents may cover so much technology that a company can own the key technology for a whole market. This is one of the few legal ways a company can have a monopoly on a market. See my article on competitive advantage in case you don’t understand the strategy of competitive advantages.[mts1]
2. Financers are aware of the increased competitive advantage offered by patents and consequently they seek to invest in companies which have patented key technologies. Financers know that a company with patents can increase their possible returns and their chances of success.
3. If the patented technology generates revenues, or has key strategic importance, then the patent has value. For instance, the Viagra patent which generates 1 billion dollars annually has a book value. As of 2007, the Viagra patent has a remaining life of 9 years (2007-2016) which can be used to estimate the value of the Viagra patent to be around $7 billion (net present value assuming constant sales of 1 billion at a 5% inflation rate).
As well, investors and acquiring firms strongly take the value of a company’s patents into account when valuing and investing in a company. In the event the company goes bankrupt, the investors take possession of patents they can sell which will help them reclaim some of their lost investment.
4. Similarly to the third point patents can generate revenues. Just like an apartment or car, a patent can be licensed for use and generate revenues. Unlike an apartment, patents can be licensed to multiple individuals at once. Some firms like IBM have dug down into their patent portfolios to generate an astonishing increase in revenues simply by increasing their patent licensing activities. Likewise, some firms hold nothing but patents and generate all of their revenues through licensing.
5. Creating a patent can aid in the development of the patented technology. This point is often over looked, but the actual act of creating a patent and thinking about the fine details can help you brainstorm different possible: designs, configurations, processes, and applications for the technology. Sit down with a patent attorney and quickly learn what makes a patent stronger, how to write the specification, and how to increase the coverage of your patent. Then try to cover as much technological ground as possible in your writings. Then have your patent attorney convert your writing into a proper patent. Never write or think you can write your own claims, not even with the help of a software! Leave that to a seasoned patent attorney!
The act of co-writing the patent will make you come up with new ideas, configurations, and ultimately improve the coverage of your patent. More importantly, co-writing the patent (with your attorney) will help you think about the finer points and help greatly with the technology’s development.
6. The act of patent searching can clearly show you who your competitors are! Every patent writing process should start with a patent search, during which you or your patent attorney look for similar, identifiable, and possible competition technology. I recommend a two step search. One (1) search yourself on www.uspto.gov, and read the summary of invention paragraphs, if you find your invention, well, you’re out of luck. But if you don’t find it, (step 2) then have a seasoned expert conduct your patent search, preferably your patent attorney, because they have access to international databases like www.delphion.com. Performing a detailed search saves you money in case it was published in the US, and is more thorough in case it is patent in a foreign country, for example, Austria.
Look closely at their search results for similar technologies, who invented them, and who they are assigned too. The patent search results can clearly show you who are your competitors and who you may need to license key parts of your technological solution from in order to operate. (Remember patents give you the right to exclude, not to operate. So if you are patenting a new light bulb you still may have to license the patented glass it will be made out of).
7. Patents can be used strategically in a company’s business. For instance, Gillette exclusively licensed a patent for coating razor blades with diamond which would effectively increase the razor’s life five-fold. Gillette then sat on the patent never producing one diamond coated razor blade. Their brilliant strategy effectively kept the industry, their competitors, and potential new entrances from introducing and selling a longer lasting razor blade. Thus, they strategically averted a reduction in their revenues by exclusively licensing this key technology. (Note: if a razor lasted longer then customer annually would buy fewer razors).
Of course there are poor patents out there that may be poorly defendable, or even worse, they may be invalid. The best way to guard against this is get a solid patent firm which is up-to-date with today’s methods of writing patents. Again, the answer to “is my technology patentable?” is a difficult one. This question should be answered by a patent attorney.
So in conclusion, think critically about the benefits of having a patent, the act of creating a patent, and the future potential of any patent you are considering.
www.TechRD.com
Brian Glassman
Keywords: patent search, idea patent, patent attorney, patents it yourself, patent law firm, patent infringement, get a patent; apply for a patent, patent protection
About the Author: Brian Glassman is a Ph.D student in Business at Purdue’s Krannert School of Business and is specializing in commercialization of technology. He co-wrote one patent with his patent attorney and won second place in an intellectual property business plan competition hosted by the Licensing Executive Society. He has taken classes in Patent, Trademark, and Copyright law; as well as, intellectual property strategy from Duke University Law School.
Outsourcing Managment: Common problems of outsourcing and how to overcome them
Working between cultures and with different countries can be difficult and it adds an extra degree of complexity to any project. If you are a manager and are planning to outsource, or have a cross cultural project that you are managing, the following material developed by students of a Duke University Management Program will help you over come many of the issues that arise in an outsourcing project. The guide is practical. It highlights and provides solutions to common cross cultural management problems, as well as, provides tips to prevent problems from arising.
1. Outsourcing management guide .doc Outsourcing Managment Guide
(Created as a guide for managers dealing with cross cultural projects)
2. Outsourcing management guide presentation Click here to download Outsourcing Managment Presentation
So if you’re doing business process, IT, software development, HR, or customer service outsourcing it would benefit you to read the guide above.
Knowing the possible outsourcing management problems and having plans and tactics to deal with them before they arise is the sure way of increasing your outsourcing success.
Key words for this article
Global outsourcing, outsourcing, IT outsourcing, outsourcing of software development, outsourcing to India, Global outsourcing, software outsourcing India, outsourcing china, disadvantages of outsourcing advisory outsourcing services,
A Lesson on Strategy for Internet Startups:
A Lesson on Strategy for Internet Startups:
How to Fend off Competition on the Internet through Competitive Advantage!
By Brian Glassman
Co-Founder of WebsiteWorth
Purpose “Adding significant value to the internet through contribution and developments in business and technology”
Internet Companies Need to Think About Competitors!
A company operating heavily on the internet (like a new web 2.0 companies) must have strategies to keep competitors away from their core markets by creating competitive advantages and barriers to entry! It is really funny that even today, after the horrible internet bubble of 2001 website owners still do not know how to keep competitors at away or even at bay. The advantage of keeping competition out are obvious, it allows one to concentrate more on the core business and evidently generate higher revenues. So if you want to keep competitors away, by building a sustainable lead over your competitors, I highly suggest reading this whole article very careful!
It takes no genius to figure out that, the fewer competitors you have the more revenues you can generate. Of course there are exceptions. There are a few industries which competitors actually work together and in combination generate more money for themselves than if they worked alone; however, this is not the norm and besides anti-collusion laws stops this from happening. For example the cereal industry composed mainly of General Mills, Kellogg, and Post had a common philosophy that they should keep their prices high instead of competing amongst each other on price. Why do you think a stupid thing like ground wheat is so expensive?
The Core: “Concept Competitive Advantage”
The core concept in business used to reduce the effects of competitors and is called “Competitive Advantage.” This article is only going to concentrate on the concept of competitive advantage because it is so poorly known, and will take a lot to explain.
Unfortunately internet companies are still slow to catch on to this concept. The idea behind “Competitive Advantage” is pretty much self-explanatory, but how to create it is not. Thus, the remaining amount of this article will speak about the many ways to create competitive advantages, and then use the mentioned theories to analyze YouTube’s competitive advantage.
The Theory of Competitive Advantage
Competitive advantages occur on many levels inside a company. To further complicate things recent topics like company culture have been added to the long list of items that enhance competitive advantage.
Competitive advantage is broken up into three main areas of:
1) Magnitude or size of the competitive advantage
2) Sustainability of the competitive advantage.
Or in other words, how long will this advantage last?
This point is a main focus point of this article.
3) Appropriability (how can one get a advantage)
For the sake of brevity, I will only cover the second point (how long will the advantage last).
To start, one can estimate how long a competitive advantage will last by looking at these four factors:
1) Reproducibility 2) Transferability 3) Embeddedness 4) Durability
5) Scarcity/ Rarity 6) Relevance and value
To understand these factors lets take a simple example of the first Sony Walkman CD player and its respective competitive advantages. Assume there were no patents on the Walkman.
The portable CD walkman was the first of its kind portable CD player to be released on the market. When first released on the market, it took competitor at least 8 months to copy the technology and setup a manufacturing facility to create copycat products. This is the first factor called “reproducibility” and offered Sony and competitive advantage of 8 month.
Although the design for the CD player could have been stolen from Sony (because design drawings are highly transferability) the factories needed to manufacture the CD player were not easily transferred, purchasable, or able to be stolen! Thus, the “transferability” was high on the designs and very low on the factories required to make the CD player. Thus, Sony has a small competitive advantage in that competitors could not buy the vital factories needed to make the portable CD player, because there were none on the market to purchase since it was a brand new technology! This forced competitors to reproduce the factories, or highly modify an existing factory which required time and money.
The third factor “Embeddedness” is the degree to which the advantage is stuck in the company that owns it. For example the inventive culture of Sony is totally embedded in the company and thus very hard to understand, copy, imitate, and ultimately extract. For this example Sony did not have any embedded elements which gave them a competitive advantage. In the case of Southwest Airline, the company’s culture of customer service is highly embedded in the company and thus offers them a competitive advantage.
The fourth is “durability.” When the Sony Walkman CD player was released eight months prior to competitors, Sony built up loyal customer base along with product credibility in the market place. A one may know, customers tend to be relatively loyal to a particular brand of electronics (I.E. people of 2006 & 2007 to IPods). Thus, for a competitor to convert Sony’s loyal base of customers to their own they would have to expend a large amount of effort and more importantly money (possibly in the tens of millions), this is why a strong loyal customer based can be considered a highly durable asset which can last for many years.
The fifth and sixth factors are scarcity/rarity and relevance/value and they will help you determine the magnitude (or size) of the competitive advantage. For Exxon-Mobile the scarcity of oil fields and their extremely high value make them, as resources, a tremendous competitive advantage. On top of that the very high cost associated with locating and setting up an oil field makes them of very high relevance competitively.
The factors of scarcity/rarity and relevance/value also applies to things like operations where a company like General Dynamic is only of two company in the world able to design and build nuclear submarines. Thus, their operational skills are highly scare and not easily replicated, consequently they are rendered a large and long lasting competitive advantage.
So when evaluating a competitive advantage, compare each element on the first four factors to determine the total time the competitive advantage will last, and compare it on the last two factors to determine the magnitude and extent of the competitive advantage.
What can be a competitive advantage?
The question you probably are asking now is, “How do I increase my own competitive advantages?” The following section will outline areas of competitive advantage from weakest to strongest but remember they are only an outline, to determine the exact size of the competitive advantage one must compare it on the last two factors mentioned above. Once you understand the general areas of competitive advantage you will be able to select and create the ones which offer you the greatest competitive advantage and time advantage over your competitors.
The first category and the least effective type of competitive advantage is called “simplistic competitive advantages” and are usual based on marketing tactics.
(See #1 in the list below).
One can see that prices can be matched relatively quickly by competitors and are not at all durable. The same is true with promotions. Similarly, distribution advantages like having your product in more stores or having more affiliate websites can be quickly reproduced by competitors. Usually, these actions are used more to send a message to competitors than to actually create a competitive advantage. Unfortunately, most small internet companies use this type of tactics and strategies to fend of competitors.
1. Simplistic Competitive Advantages
Marketing (Coke vs. Pepsi change promotional campaigns all the time to gain small advantages)
Price advantage (Sam’s club vs. Costco, prices are match with a week)
Promotions advantages
Advertising advantages
Distribution advantages
Resources are the second major area of competitive advantages and the majority of them are outlined below. I consider these much stronger than the simplistic competitive advantages. Notably, Clorox and their bleach have been able to retain market position thought their competitive advantage of a durable and hard to reproduce brand which has attached a durable loyal customer base. Where as, companies like Exxon-Mobile have a massive competitive advantage in their highly durable, non-reproducible, massive oil fields.
2. Resources
Capital (Microsoft Capital can be put to work creating anything they want)
Trade secrets (Bush’s Baked Bean, Coca-Cola can not be reproduced or transferred)
Trademarks and copyrights (Disney characters are hard to reproduce and expensive to buy)
Patents (IBM’s patents can’t be reproduce, expensive to transfer, and durable for 20 year)
Customer Bases (Clorox, durability in Loyalty, hard and expensive to transfer)
Employee base (Avon, 5 million sales people takes a lot of time to reproduce).
Partnership network (Corning, hard to reproduce relationship, relationships are not transferable).
Technology (Sony, the designs are durable since they take time and money to reproduce).
Operating resources (Exxon-Mobile’s oil fields, one can only find oil thus highly durable).
And so on…
Operations and capabilities are the next area of competitive advantage and are highly depends upon the situation and how important it plays into the business at hand. For example, the Dell computers company was the first to setup and operate a “just-in-time manufacturing system” which was highly successful because took years for competitors to copy their operations. Similarly, Wal-Mart’s supply-chain and the massive cost and time efficiencies they gain from buying and shipping in such large quantities require a company of similar size to imitate and thus are extremely difficult to copy! Finally, Southwest and their highly standardized fleet of airplane 737 and maintenance equipment give them a lower cost per seat miles than any other airline, offering them to a operational competitive advantage.
3. Operational
Efficiencies and capabilities
Supply Chain (Wal-Mart, efficiencies gained from their huge size are highly durable).
Distribution (Dell Computers and their just in time service)
R&D (Apple’s design talent is hard to reproduce as well as Sony’s inventiveness)
Marketing (Procter & Gamble and their marketing might)
Financial (Berkshire Hathaway and their skill in investing)
M&A (Cisco skill in acquiring and integrating small companies)
Operational (Southwest operational effectiveness and economies of scale)
Design (Nike and their talented design capabilities)
And so on…
Finally, I feel the strongest competitive advantage is a company’s culture, because if it is correctly aligned with the company’s goals it can really drive performance more than any temporary resources or operational capability. For example Southwest Airlines and their culture of treating the customer well, having fun, and being a family drives their business. Also, Southwest Airline’s culture gives them the ability to maintain high levels of customer service and pay their employee slightly lower wages than other airlines. It no wonder that they have been making profits for the last 10 years when all other airlines during that same period experienced profit loses. Disney and Nordstrom’s are other examples of companies with strong cultures which are almost impossible to copy, not at all transferable, and totally imbedded in the company thus creating a very durable competitive advantage if the other parts of the whole are operating properly.
4. Company Cultural
Southwest Airlines
Nordstrom’s
Disney
Internet Companies and Their Competitive Advantages
Let’s examine YouTube’s competitive advantages. At the end of 2006 YouTube’s competitive advantage were mainly based in their resources, specifically their customer base and their content base. YouTube has a large customer bases which it serves million of videos per day to. However, let examine the durability of their customer base.
YouTube’s customer bases is seeking entertainment. Interestingly their loyalty is more towards the best entertainment and not a particular website. Further, since YouTube’s customers are not really integrated into YouTube’s service since they didn’t sign any contracts nor are paying for any services, nor have any software installed on their computer. Consequently YouTube’s customers would have a very easy time switching to a competitor. Thus, YouTube’s viewer base is not very durable and does not offer a long lasting great competitive advantage.
YouTube’s content base (namely their video library) is more durable since it is much harder to reproduce, but it is slightly transferable since the content is mainly owned by the viewers who uploaded it. This gives them a competitive advantage in that they own millions of videos. But when you look closely, only a small percentage of their videos are actually valuable and highly viewed by their customers. Further, competitors like NBC and CBS which plan to create competing websites have large video libraries, all be it slightly different, which if put online could count easily reproduce the valuable content that YouTube’s had.
Second, YouTube has an operational competitive advantage for distributing huge amounts of videos to viewers; however, this technology can be provided by companies like
Cisco and can be quickly put into place for companies like NBC, Joost, CBS, and Rever who plan to create competing websites.
So in all, YouTube does not have a great competitive advantage because their large customer bases can easily switch (transfer) between competing websites, and because their video content, even though unique, can be reproduced by competitors (like NBC) transferring their own content to competing websites. Finally, YouTube’s operational advantages are totally imitable by a large company like NBC. Unfortunately, YouTube never patented their video distribution technology so they better figure out a better way of fend of competitors.
In Conclusion: Think Critically
Think critically about how you’re going to fend off competitors by breaking up your company’s competitive advantages into the four areas of simplistic, resource, operational, and cultural and then analyze them on the four factors to see the amount of time they offer you a competitive advantage for. Then analyze them on the last two factors to see the size of the competitive advantage. Thinking critically about your competitive advantages, because if done properly they can mean long lived success, and if neglected opens the door for competitors to take a slice of your profits and at worst ruin you.
How to estimate your time to Market for your technology!
Innovation experts and business executives needed to keep in mind that predicted market launch dates for technology past 3 years out are almost always wrong! Thus, they should be very careful in basing their long term strategies on expert’s prediction of when the technology is going to be ready.
I find it extremely amusing that every technologist quotes some amount of time till a far reaching technology is developed enough for market launch. This is so common that I think that every other article in MIT Technology Review quoted a time frame for when that article’s technology will be ready for market. The only problem is that on average, everyone is completely wrong in their time estimates. My guess is that a longitudinal study will show that people are on average, any from 200% to 500% off in their prediction of market launch for a particular technology. This was backed up by finding from the book the Innovator Dilemma by Clayton Christensen.
The problem is that so many variables affect the amount of time it takes to develop a technology. Some of these variables are: trends of competing technologies; trends of complementing technologies; funding for development which may be based of the health of the financial markets; cultural trends; political trends; economic trends; demographic trends; and of course the ability of the company to develop the technology. All of these variables interact with each other on micro and macro bases and occur at a local, nationwide, and global level.
The error associated with predicting any one of these trends is large. When you added up the errors, and try to estimate the time to market for a technology a major problem arises. The combined error from summing the trends may be as large as the time frame for development. This makes the time prediction for development of a technology almost useless.
Take the following example, an individual estimates that competitor technology, complementing technology, and the political influence have a + 0.5, + 1, +/- 1 year possible influence on a technologies market readiness date, respectively. If the technology is predicted to be ready in the 3 years the error associate with that prediction could make the technology ready anywhere from 2 year to 4.5 year.
The longer the development time the more uncertain the answer. It is obvious that when someone says a particular technology will be developed for launch in 6 months the error in their prediction is a bit smaller because the larger trends do not play out so quickly in such a short time frame. Combined with the certainty in project management one can predict short term product launches with much more accurately then a longer term project.
Longer project that extend for 2, 5, 10, 20 years or more are affected by these large scale trends. Recently, I read in an article on fusion at Technology Review in which they predict Fusion reactors to be ready for usage in 30 year (see link below). Now, let’s look at a famous example where a trend changed the development time.
By any of even today’s standard the creation of the nuclear bomb, back at the start of its development in 1939, should have taken 20 years to develop. But the war and its political influence shorten that time frame to 1945, or just 6 short years. The challenges in development were tremendous and the effort put in by the many dedicated US citizen was monumental! By, any method of prediction they would have seen a reduced time frame of 10 years, but the dedication and will of the people persevered to short it to 6 years.
The point is, that predictions about development time for technologies that are quote as being market ready in 5 or more years are almost always wrong, and at best + or - 200% off. Innovation experts and business executives need to keep that in mind when betting on their next technologies to develop, and developing a long term strategy.
Brian Glassman
Ph.D. Student in Commercialization and Innovation Management
Purdue University, West Lafayette Indiana
Mr. Glassman’s Resume
To who it may concern
My resume as of 3/8/07 can be downloaded at the link below.
Glassman Resume 3-8-07
Thank you
Brian
Creating a Internet Websites? Use this quick guide to Marketing Research for succesful Internet Ventures!
Hello Everyone
Checkout my page on containing a presentation, supporting documents, and web tools links on how to conduct marketing research for successful internet web sites! Marketing is a skill under valued on the internet; however, it is key to success in business. So why is the website developers ignoring it? See it value at my website http://www.techrd.com/a-quick-and-dirty-guide-sheet-to-do/
Thanks Brian
Innovation and Blogs at UC-Davis
I recently ran across and very interesting web-Blog by a professor Dr. Hargadon at the University of California at Davis. His Blog centers on creativity, innovation and design.
A recent post of his speaks about how the Ethanol industry has not been mentioning the lower mph of ethanol fuels like E85 and E10 when compared to gasoline, to which I posted a responses. Please visit his site and the subsequent conversation at the links below.
Thanks Brian Glassman
http://www.andrewhargadon.com/blog/?p=91
Market leaders Dell and Apple should collude in Safety!
Business collusion is illegal in the U.S., but safety collusion is not! Amazingly, the words “Lithium Ion” has a brand value to the public, but two of its larger computer distributors failed to catch the dysfunctional batteries which they placed in the open market.
Together they have lowered the brand value of this still emerging product component, and likely hurt the other products brand value which dependent upon this component, like cell phones and other laptops. This can be seen in Qantas airline’s band of ALL Dell and Mac batteries in-flight use along with the massive recall of Apple’s Laptop batteries.
But since neither of them exclusively owns the name “Lithium-Ion” why should they care?
Collusion for safety standard is almost necessary for possibly dangerous emerging component or product categories, because as I put it “any one player in the game can kick the ball out of the field for everyone, and end the game.”
The brand name of “Lithium-Ion” is tarnished and it will take several months for the publics confident in this new component to come back. The lesson here is that for possibly dangerous emerging high tech components, safety infractions can hurt every company using that component, and that safety collusion for standard is the better than having someone else’s mistake affect your product.
Ideally this can be done by enforcing safety testing to place a safety standard trademark on your component. Also, I see this as being a necessity in emerging markets like Robotics.
Then again, “When the going gets hot, the hot ones logoff!”
Brian Glassman
http://www.smh.com.au/news/biztech/safety-first-for-carryon-dells/2006/08/23/1156012601607.html