What every Tech Startup should know about intellectual property

How leading Tech Startups protect their Technology effectively, managing Intellectual Property, Trade Secrets, Copyrights and Patents.

While the launch of a tech startup is exciting, each entrepreneur needs to establish a strong legal foundation to protect itself and its intellectual property (IP). Indeed, Intellectual Property (patents, designs, trademarks, copyrights, trade secrets) is a key driver in a Company’s commercial success.

Indeed the value of a start-up is usually directly linked to two aspects of intellectual property:

First, the protection of own intellectual property.

Startups are initially not in the position to challenge the top dogs. This is due to their financial power, reputation, market penetration and relationships to other players in the market. Therefore, to make a great idea into an economic success, the idea needs effective legal protection.

Second, the protection against third party’s intellectual property.

Intellectual property rights create monopolies. The owners of intellectual property rights use them to fend off competition. As a result Third party’s intellectual property can be a show-stopper. In effect, Startups have limited funds to use in legal matters and navigate through this complexity. Therefore, Startups need a strategy in place to avoid such pitfalls very early on.

This Tech Talk addresses how leading Tech Startups protect their Technology effectively, managing Intellectual Property, Trade Secrets, Copyrights and Patents we also address questions like:

  • Which type of intellectual property is best suited for my business?
  • Is it better to patent or to maintain secrecy?
  • How do I manage Process vs. Product IP?
  • Which third party intellectual property rights are relevant for my business?
  • How can I reach reasonable certainty with regards to third party’s intellectual property rights?
target=”_blank”>Herve Flutto

We talk with Daniel Hoppe, Certified IP Specialist Lawyer with the German based IP law firm PREU BOHLIG & PARTNER. He draws from his experience in advising start-ups in matters of intellectual property and from his experience in intellectual property litigation.


Check-out also our detailed posts on Commercial Growth and prototyping:

Check out our other Tech Talks and insights on Financing and B2B sales in our Startup Guide

Why “Innovation Management” is losing the Adoption game

Or how shift priorities towards Innovation for growth

In November 2018, Tendayi Viki was asking again in Forbes “Why large companies continue to struggle with innovation?” – a recurring question for too many years. This paper tackles the Redesign Innovation Labs for growth.

We do not pretend to have the magical recipe for Innovation. However, our daily work with both large companies and startups gives us a unique perspective on closing the Gap for putting “Innovation” in practice.

Companies “hear about the advantage of disruptive innovation or step-out innovation and decide that their organization should do “some of that.” But their organizations are designed to do something else very well. Namely, what they are already doing.”
– Why Big Companies Can’t Innovate, Harvard Business Review

From large companies, we hear how difficult it is to “Innovate” in specific industries; worst, many Managers believe they are laggards while other companies are faster, more flexible and prone to innovate! There is so much noise around “Innovation” that many Manager are in constant “catch-up” mode or FOMO (Fear Of Missing Out)

At the same time, from B2B Tech startups, and the frustration of “Innovation Labs” disconnected from the priorities of the Company’s core business. Several months into meetings, negotiating proposals and running Proof-of-concepts, the initial excitement for the “innovative” solution is often buried under business lack of focus, day-to-day priorities, one-off pilots and red tape.

On a rush to “Innovate”, many Managers and Entrepreneurs alike forget the 3 levels of maturity for adoption of Innovation:

  1. Technology maturity or what everyone is talking about today
  2. Market maturity or the ability for a viable roll-out at scale
  3. User maturity, rarely talked through but often most critical

In this paper, we will uncover together 3 challenges on a path to Redesign Innovation Labs for growth. We will also articulate 5 specific actions companies can execute to achieve sustainable Business Growth.

Challenge #1 – it’s Innovation Magic!

Remember how you watched the latest Magic show? Like a kid, you probably experienced a mix of Delight, Wonder and Superiority!

  • Delight – we are wired to be in awe of things that cannot be logically explained.
  • Wonder – we know these things are fantasy, but if magic is real, then maybe all kinds of other cool things that we want to believe are real, too.
  • Superiority – while there are some people who watch magic with wonder, there are plenty of others who get off on their perceived superiority to the magician. They can figure it out. .

Today, Innovation is like watching a magic show!
Delighted by the Technical novelty, we join the crowds of Innovation Summits & Tourism, Startup festivals and Pitching competitions. We know many of these things are fantasy but also wonder how it could work for our company. The first thing we burn to ask the Magician is “how did you do this”?

Challenge #2 – The “Innovation-as-a-service” Trap

Under pressure from shareholders, customers and competition, each business needs to “Innovate”. As so often, Managers focus on the easiest part of the equation – the How. We send people to training to acquire and learn the method and tools.

We establish Innovation Labs, “Silicon Valley Outpost”, Accelerator, Incubators and often even hire a Chief Innovation Officer! And then we outsource the essence of Innovation to external providers or “innovation-as-a-service” consulting firms, with the promise that you too can innovate … efficiently!

From this, the “Innovation Manager” feels free to share deep insights travelling the world, giving keynotes about Innovation at the ever growing audience of Innovation Forums.

Challenge #3 – The “Halo Effect”

Our business world is full of research and analysis that are comforting to managers: that success can be yours by following a „Innovation“ formula, that specific actions will lead to predictable outcomes.Innovation is one good example of “The Halo Effect” where the perception of one quality is contaminated by a more readily available quality. In this case, Innovative companies being rated as more performing when promoting Technology innovation.

What the authors claim to be the causes of long-term performance are more accurately understood as attributions made about companies that had been selected precisely for their long-term performance… In fact, lasting success is largely a delusion, a statistical anomaly… – The Halo effect, Phil Rosenzweig

So what we should do instead?

Build on your business and management strength to Redesign Innovation Labs for growth.
Stop focusing on Technology Push “Innovation” and instead address the key hurdles on the way to sell a new product or solution into the market – User Adoption. And be ready to transform your company in a challenging but rewarding process!

Focus on customer (re) discovery

Established companies have a deep market experience, established channels and long standing customer relationships. From there, Managers are best positioned to identify user’s problems, both internal and external.

B2B Tech startups engage in Proof-of-Concept with prospective customers to offset their lack of “track record”. For larger companies, this PoC can also be a fantastic opportunity to (re)discover their customers, adjust features, increase value capture – and secure user adoption along the way.

Be ready to Test-and-Learn

Most companies have established a functional, geography or product-driven organization or a mix of all. Many also have or thinking of establishing a Chief Digital / Innovation Officer.

One particularly useful organization is along the Customer Journey including a Customer Success team or some people committed to a great product value experience. These customer-centered teams are key in ensuring customer maximize value from new products. More importantly, embedded in the New Product development teams, they can provide invaluable insights to for new user-driven product innovation while increasing value capture! Check out our post on Sales organization.

Organize to Execute

Once the customer insights are flowing into your organization, the true business growth will come from implementing the new product or solution features. This phase will rely on a higher tolerance for Risk and the proper frugal mindset or Jugaad.

Methods such as Agile process to execute and iterate evolving product features over time can be helpful. This is done sometimes under a separate organization with required “Air Cover” to protect from interferences while also giving marketing freedom with eventually a distinct Brand.

Not-Your-Sales-as-usual

New products require also new sales processes, capabilities and metrics. First you will need to invest more qualified sales people time for Inbound vs. outbound sales and Solution vs. Product selling. The focus is on establishing a long-term relationship and on ensuring your customer is deriving sustained value from the solution. e.g. Partnerships and network effects.

When we work with a Startup, we define what are Key Performance Indicators and identify Solution-selling talent. While the solution might be new, the KPIs are generally well established in the given market but might be quite different from the established Company core business!

Business and Talent acquisitions

For many large companies, hiring the required talent, particularly round “hot new tech” such as AI, Cloud computing, Software Development is a real challenge.

We rave at the GAFA & Co. and their incredible ability to innovate and grow. We should not forget that most AI solutions the GAFA are now deploying to the market are arising from many Product & Talent-driven acquisitions over the past 5 years.

Used properly, Innovation marketing and “Acquihire” can be powerful tools to evolve the way your company culture, customers, employees and new hires image.

To bring it together, some takeaways:

Whatever you do to Redesign Innovation Labs for growth, Mind the Gap between Innovation and Adoption!

  • Focus on user-driven innovation to deliver true business performance & Growth
  • Listen and partner with your customers to increase your value capture
  • Review your organization design to ensure customer success and feedback
  • Implement Reverse Mentoring to upskill your organisation and evolve Culture
  • Set clear goals for your innovation initiative… you get what you measure
  • Challenge “Innovation-as-a-Service” solutions against your Business goals
  • Validate first startup Commercial value-add, not equity transaction
  • Foster experimentation Mindset to address new customer unmet needs
  • Consider creating a separate Brand & organization for execution

Looking forward to your comments, questions and feedback !

Smart fundraising for Tech Startups

We receive many investment requests from Technology Startups, Impact investing to even ICO’s. Some have great businesses to share; others underestimate the trap of fundraising for Tech Startups Seed or Series A financing.

We talk with Balz Roth, a professional Business Angel, investor and board member for SMEs and technology startups. Various successful exits of technology startups to companies like Intel (Lemoptix), Monolithic Power Systems (Sensima) and Everyware (Safe Swiss Cloud). Balz is also a Venture Partner at Go Beyond, an international business Angel Network.

This podcast provides hands-on, practical insights and tools towards a successful Fundraising for Tech Startups:

  • Do I really need 3rd party money to achieve my goals?
  • Which Investors are most likely to be a good fit for my Business and development stage?
  • Key steps towards a great first Investor meeting and the first Term Sheet
  • Critical ways how to take the relationship further and get through Closing

He draws from his broad investment,Venture Capital and Entrepreneurship experience to provide exciting insights, practical examples and answer live questions.

A good Fundraising for Tech Startups takes following aspects into account:

  • Typical company profile for a 3rd party equity investment
  • Achievements and track record for Seed vs. Series A
  • When is a good time to talk valuation?
  • When do convertible loans make sense?
  • Product vs. Licensing business model Timing
  • Risk & Return expectations

Further key items to bear in mind include:

  • How much Bootstrapping is good for business?
  • Customer-driven funding
  • Non-dilutive sources and grants
  • Business Angels vs. VC sweet spots?
  • How / when to engage with a Strategic investor? Sources of funding
Customer Cash to Finance Your Start-Up, Harvard Business Review

Airbnb is one of the most celebrated start-ups of the past decade, and its creation story is well-known: In 2007 two design school graduates dusted off some air mattresses and rented out space in their San Francisco apartment to conference attendees who couldn’t find hotel rooms, netting $1,000. A year later they made national headlines by helping people find lodging during the Democratic National Convention in Denver. By 2012 Airbnb had raised $120 million in venture funding and was valued at more than $1 billion. But familiar as this story may be, an often-overlooked fact is essential to understanding the company’s success: The business model is structured so that advance customer cash helps finance growth, making Airbnb less dependent than many other start-ups on early outside funding. Read along here.

Check-out also our detailed posts on Fundraising and Commercial Growth: