Think back to a time in your childhood or at university, or perhaps in a career situation, where you did something creative or special. Perhaps you were in school and had studied hard for a test, only to have someone else copy your answers. Or you may have come up with a good idea, only to find that someone else, after you had disclosed it to them, had pretended the idea was theirs and perhaps had gotten credit for your work. They may have stolen your idea for a business, plagiarized something you had written, or appropriated for themselves a cool idea or concept that you had thought up.
How did you feel?
Upset? Furious? Anxious? Did you wish upon them all sorts of malignancies and bad luck?
My question is: Why?
Why did this simple act, where someone took one of your ideas (it’s only an idea, right?) and passed it off as their own, why did this upset you? Why did you think about it and ruminate on it for ages afterwards. Why did it hit you in the gut in the way that it did?
What did they actually do to you?
When I ask people this question, they usually reply that they’re not entirely sure, but they all say that it felt like someone had stolen something from them.
But what had they stolen? It wasn’t a physical object - perhaps you’d caught them copying your answers in a test, or perhaps they didn’t do their bit on a group project but got the same marks as the rest of the team - but it wasn’t anything tangible that they’d pilfered. It wasn’t money that they’d stolen. It wasn’t as if they’d taken off with your girlfriend or boyfriend.
The Intimacy of IP
No, they’d stolen something much more intimate. They’d stolen your Intellectual Property. Your thoughts and ideas that you had worked hard at to conceptualize and eventually convert into some physical or abstract form had been stolen, or appropriated or trodden on by someone else.
Usually when I use this example people start realizing that the loss of IP can hurt just as much as the loss of a physical possession. Sure, it’s not irreparable (most of the time). Of course it can be re-done (most of the time). Yet it has a marked impact on the human psyche and can cause a lot of anguish, resentment and tension.
The Psychological Factors Determining Success
There’s no arguing with it - people mess new products and ideas up A LOT. As mentioned before, ninety-five percent (yes folks, 95%) of new products or concepts never make it to the real world or die shortly after being released. Some studies say 99% don’t make it, others say 94% don’t make it.
Whatever the actual percentage is, it’s still a huge waste of brainpower, effort, and hard-earned money, and a lot of these failures could have been avoided by getting a couple of the basics straight, identifying self-defeating behavior in your own mind, and having realistic expectations. That is what I’d like to focus on in this part of the program.
Most people tend to focus on external factors dictating business success, but few look at the internal, personal and psychological factors that tend to more often than not dominate the failure or success of a new concept.
As mentioned, I’ve been through this myself before, having set up a medical devices enterprise that manufactured and sold life-changing technology to people all over the world. I’ve fought with competitors, shareholders and co-directors, been held to ransom by inventors, seen profits fly out the window, experienced the havoc and excitement of foreign product launches, negotiated licensing deals with enterprises all over the world, experienced the frustration of dealing with governmental departments, and seen the remarkable change in people’s lives when a product that I helped bring to market changed their lives forever.
Crucially, however, I have experienced the theft of key pieces of Intellectual Property, which we managed to thwart in the nick of time. Twice. I can assure you it was more stressful than any of the other aspects of business risk because I immediately felt it was personal in nature. It hit something inside of me.
But here’s the painful truth - it’s unlikely that your patent will be completely watertight or will stop all infringers as mentioned before. It’s important to realize that a patent is a strategic business tool that you can use in negotiations, negotiations that would otherwise not have happened if you didn’t have any rights to your invention secured.
I want to get the message across that in this new era, IP rights won’t be tools of exclusion, but collaboration, but for this to work inventors have to realize the limitations of their brilliance and also of their Intellectual Property rights.
Let’s first have a look at what I call ‘the pathology of brilliance’, which gets in the way of so many potential business successes.
Let’s start off with a real world reality: there is no such thing as a billion dollar idea. In fact, there are very few million-dollar ideas. Every single person you’ve ever met who’s a millionaire or billionaire did not get there with a single flash of brilliance, a single concept, a single patent, or a single idea. Making money is a series of small steps, requiring improvisation and, most importantly, flexibility at every turn; invention and commercialization are a series of small steps that build on one another. But I’ve seen inventors turn down enormous sums of money with this reasoning: ‘if they’re offering X, then surely it’s worth 10X’.
Or 100X, or (yes, I’ve had this, as has every other venture funder or patent attorney that I know) 1000X.
I’ve been on both sides of the negotiating table, and I’ve been there when the inventor’s paranoia kicks in. It’s usually after the second or third potential funding meeting, when things start to look good and the funders start getting interested in working with the inventor. Funders would have done some initial investigations and a due diligence and, if everything comes up smelling like roses, they’d start talking money. This is when things tend to get derailed.
The inventor is happy with what we discuss around the table. But then something strange happens when he or she is lying awake in bed that night. Instead of thinking of ways in which we can get the product going as soon as possible by working together and collaborating, he/she starts getting paranoid. This is normal in any transaction of any consequence.
But the invention, that until that stage had been an intangible idea, something potentially worthless, and an item that even the inventor wasn’t even sure had any worth, suddenly becomes a reality. A reality in which he’s cut out of the deal, someone steals his idea for a zillionth of its true worth, and he’s left with only the paltry amount of money that they offered him for it... All of a sudden it’s not worth the $750,000 that’s on the table, or the $2 million cash injection for a 50% stake of the start-up. No, in their minds it’s now worth at least $100 million. $200 million. $10 billion.
I’ve seen this behavior kill extremely good, extremely favorable deals. People sometimes just get in their own way, become distrustful, and think that everyone’s going to do them out of their fair share of the invention.
Please believe me when I say that, if you’re dealing with a reputable funding or business consultancy outfit, then they’ve got way more to lose than you if they screw you over - they only have one reputation, while you might still have many ideas. It’s important that you grasp this from the outset: most of the companies in the innovation space are built around their good reputation, and working with a paranoid inventor poses a bigger risk to them than to the inventor.
Most of the time, the very thing the inventor is trying to achieve - getting their product in every home, business, school, [insert dream here] - gets put in jeopardy by the inventor him-/herself due to the torrents of thoughts that start spiraling around in their minds. I’ve found that a lot of the time the inventor wants to ensure acknowledgment that they were the person that came up with this great idea, that it’s called the ‘McKenzie Drill’ or the ‘Collins Grommet’ this or the other, that the media knows it’s them that came up with this product or concept, or that they lead the company because they thought of the idea. Now don’t get me wrong - it’s good to dream, it’s good to want the best for your idea, but it’s seldom that the inventor becomes the CEO, Chairman of the Board, head of marketing, main shareholder, chief inventor, AND the business is successful. Running a business and growing it demands a wide variety of skill sets which simply aren’t found in a single person anywhere in the world. If you think you are that special person, well, you’re wrong. And you’ll only realize this once you’ve lost everything and start blaming all the people who had tried to help you.
I’m not out to kill your plans or your enthusiasm: rather, if you’re serious about wanting your idea to benefit society, then you have to face up to the fact that you might not be the most ideal person to run every single business function in your eventual enterprise and you need to also realize that this one single idea might not be worth billions when seen in isolation.
Inventors tend to work alone and try to do everything themselves - this is what Michael Berger refers to as ‘entrepreneurial seizure’ in his E-myth series of books. The number of inventors that I’ve met that think they are awesome graphic designers, patent drafters, web-designers, lawyers, marketers, procurement specialists, market analysts, and corporate strategists, all rolled into one, is astounding. Once funders pick up on this you will have a hard time getting money for your concept or getting someone to work with you and I guarantee you that your idea will most likely become one of the 95% failed ideas.
If anyone were willing to lay down cash for an idea that you’ve thought up, my inclination would be to think very, very carefully before foregoing the money. If it’s a reputable crowd, they will have done their calculations and they won’t want to do you in. Bear in mind, also, that you are a creative person – the thought that if you’ve had one idea, you’ll have another one can take a lot of pressure off you. And then you’ll have gone through the motions at least once, you’ll know the ropes, and your next idea might be even better and you’ll have a better understanding of what it takes to get an idea to market. It sounds awful to say it, but take great care not to become too attached to a single idea - you have to remain objective, and while you must try your best to keep the momentum going, you must also be willing to sacrifice it if it becomes too consuming and it’s clear that it’s not going anywhere.
And you must keep on innovating. If you truly want to escape your day job or make a dent in the universe, don’t think that you’re going to do it with a single idea. If you don’t keep on innovating and taking a somewhat more dispassionate look at your invention, then there is one guarantee I can give you: you will alienate the very people that can help you. Sometimes these are very reputable people who are genuinely interested in helping you and your greatest contribution can be to let them help you. You cannot be the sole exponent of a business.
I’m certainly not saying that I’m above all of this – as mentioned, I made many of these same mistakes when I started up my first company, but I was astounded to see how many other inventors were making these mistakes as well.
I’m waiting for the hate mail to arrive, but I have yet to be proven wrong and have included this section in the program with all sincerity. Don’t think the world owes you something just because you’ve come up with a good/great/wonderful/earth-shattering idea. It doesn’t. So let’s see what you CAN do to get your idea out there any make money from it.