In this week’s video I explain why your business should have an IP strategy and why it is so powerful.
Archive for the 'Copyrights' Category
In my previous column, I discussed intangible assets as intellectual property (IP) and recommended every small business have an IP strategy.
It’s not my job to tell you what your IP strategy should look like because, by definition, small business intellectual property is as unique as belly buttons. But it is my job is to help you get your head out of the tangible asset sand and start thinking about the increasing role IP is playing in the success of your business operation and customer acquisition.
Remember, your strategy will include IP you acquire from others, as well as the proprietary intangible assets you create. Here are some ways to think about both kinds of IP:
• Don’t think of your new delivery schedule as just a new route for your trucks; it’s your proprietary IP that’s making your business more efficient and more relevant to customers.
• The systems you’ve developed to produce products probably seem routine and common sense to you, right? No big deal. Well, it is a big deal because it’s one of the keys to your success. It’s an intangible asset you created and are maintaining as a trade secret – your proprietary IP. As such it should be recognized, protected and defended just as diligently as you lock the doors of your business at night.
• Don’t think of social media IP you’re borrowing from Facebook, Twitter, etc., as an obligatory task everyone else is doing; this acquired IP is an intangible resource you use to create communities from which come very tangible customers.
• Connect members of communities you build on social media IP with your face-to-face communities (customer list) by developing proprietary IP that integrates the two groups.
• Acquire customer relationship management (CRM) and email marketing IP, and integrate the two with your own program to deliver content to and connect with prospects and customers.
• When you buy your next computer, don’t think of it as replacing an old one. This time acquire an IP tool that puts you in a position to maximize time, energy and resources, and is the device from which you can create your own IP and manage your IP strategy.
Having an IP strategy doesn’t mean you abandon tangible assets – we’ll always need those. But it does mean you put them in the proper proportion with intangible assets. Today, the alpha member of the asset classes is IP. In fact, any and all tangible assets we acquire, and how we use them in the future, will be determined by IP innovations.
Grow your business more efficiently and effectively with an IP strategy.
In case you missed it, check out last week’s blog post and show segment where I talked about the history of business assets, how intellectual property has become the greatest business lever of all the asset classes, and why you need an IP strategy.
Click HERE for last week’s blog post.
Click HERE for my segment from last week’s Small Business Advocate Show®.
For 10,000 years, business leverage has come from three asset categories, shown below in chronological order of appearance:
- Muscle power: human or animal
- Tangible stuff: raw material, buildings, inventory, machines, etc.
- Intangible stuff: Patents, trademarks, copyrights, trade secrets and other intellectual property
For most of history, business power was heavily weighted on the first two categories. First the strongest caveman and biggest horses had the advantage. Later the fastest ships and largest factories got the jump on lesser competitors. For a small business it sounded like this: “We have the largest inventory in the tri-county area.”
But, as revealed in a study by IP attorney Kenneth Krosin, intangible assets became a powerful force in the latter third of the 20th century. Krosin discovered that at the end of the 1970s, corporate balance sheets were represented by 80% tangible assets and 20% intangible. But in 30 years, by 1997, the ratio of assets had essentially inverted to 73% intangible and the rest tangible.
Here’s what small businesses should take away from the breathtaking explosion of IP revealed by the Krosin study:
• The power of IP is no longer the wholly-owned franchise of big business.
• For centuries intellectual property provided only a marginal advantage even for big business, but has become a two-edged sword – one edge provides opportunity for those who leverage intangible assets more and tangible less, and the other edge delivers disruption for those who don’t.
• Exciting Internet resources and other digital innovations are converging and coalescing in front of our eyes to make intangible assets a much more powerful lever for all businesses.
• IP in the form of digital assets has evolved from two-dimensional tools, like websites, to add the third dimension of a virtual marketplace in cyberspace, aka The Cloud.
• Just because a small businesses may never reach 73% intangible assets doesn’t mean it shouldn’t have an IP strategy.
• Your IP strategy should include acquired intangible assets, like software, as well as the kind that you create, like a business process you maintain as a trade secret.
In The Age of the Customer, a small business must have an IP strategy that’s born from the acknowledgement that it is integral to the performance of virtually every talent and task in your business, and required to maintain marketplace viability.
What does your IP strategy look like?
Listen to my latest segment on The Small Business Advocate Show® where I talk about the history of business assets, how intellectual property has become the greatest business lever of all the asset classes and why you need an IP strategy. Click below to listen.
Around the turn of the century, I ran across a study that was conducted to look at changes in the way businesses leveraged assets to execute their business model between the 1970s and the 1990s. Reading the results of that survey was an “Aha!” moment for me, and it contributed significantly to my thinking about how we would do business in the 21st century.
Study author and intellectual property attorney, Kenneth Krosin, found that in the late 1970s, corporate assets amounted to about 70% fixed assets, like buildings, equipment, tools, fixtures, inventory, etc., and about 30% intangible assets, a/k/a intellectual property (IP), such as patents, trademarks, licensing and trade secrets. But the big news in this study was that by the end of the 20th century, those asset category percentages had essentially inverted. By 1999, businesses were leveraging around 70% IP, and only 30% were assets that had serial numbers, stock numbers or an address.
Welcome to the Digital/Information Age.
In the speeches I deliver to small business owners around the country every year, I describe the findings of the Krosin study so I can poll the audience about how they’re leveraging IP. My unscientific findings show that, while most small businesses are not quite leveraging IP to fixed assets at a 70:30 ratio like the big businesses in the Krosin study, most are leveraging IP more every year and fixed assets less.
Besides the types of intellectual property - patents, etc., - there are two categories of IP: 1) the kind that someone else creates, for example, the patented software you license to use on your computer; and 2) the kind that a business creates for itself, like a delivery scheme developed internally that reduces fuel costs, which is often employed as a trade secret.
In the 21st century, it doesn’t really matter who creates the IP your small business is leveraging, as long as you’re continually finding new ways to do so. I believe that any small business that isn’t leveraging IP more and tangible assets less is headed for extinction.
I’m happy to report that Kenneth Krosin (foley.com) has become a member of my Brain Trust and has joined me several times on my small business radio program, The Small Business Advocate Show, to talk about IP and small business. I think you’ll enjoy my most recent interview on this topic with Ken. And don’t forget to leave a comment.
Is global warming real? I don’t know, and there are so many different views on this by learned scientists that it’s difficult to know for sure. The most recent report I’ve seen said that the past two years of cooling has reversed the warming trend of the past 30 years.
Is there climate change? Absolutely. Is this a bad thing? Maybe, maybe not. Remember that global warming actually began 10,000 years ago when Kentucky was under 5,000 feet of ice, and there were mammoth footprints, not carbon footprints. I think reasonable people agree that human beings have benefited from this warming trend over the past 10 millennia.
Is human behavior having an adverse impact on the environment? Probably. If so, we should try to do something about that. But here is a point I haven’t heard anyone else bring up: How do we know that human efforts to reverse global warming won’t go too far and actually trigger global cooling? I don’t know about you, but I prefer to be warm.
In the policy debate, the enviro-zealots want to regulate carbon as a commodity, possibly list carbon dioxide, one-half of the photosynthesis equation, as a dangerous gas, and legislate reductions of carbon emissions back to levels prior to 1990. But U.S. GDP was just $6 trillion in 1990, while in 2008 it will be more than double that at approximately $13 trillion. Any carbon reduction plan has to combine alternative energy sources, conservation and carbon reduction over a period of time that allows for an orderly transition that doesn’t make American businesses uncompetitive against countries like China and India, which have no interest in curtailing their carbon emissions.
Recently on my small business radio program I discussed global warming and related topics with Dr. David Deming. He is a noted scientific expert and an adjunct scholar with the National Center for Policy Analysis, and I think you’ll learn a lot from what he had to say about this issue. Thanks for listening and also for your comments.
As we approach the second decade of the 21st century, it’s clear that the strength of the American economy will come more from our ability to create and sell intellectual property (IP) than the tangible things we were so known for in most of our history. And as globalization – efficiently transporting goods, services and financial assets around the world – continues apace, our IP is also being delivered away from American shores and, therefore, the protection of U.S. intellectual property laws.
Our trading partners around the world have their own IP laws that dictate how our property will be treated there, but unfortunately, those laws often don’t provide adequate protection and, frankly, our innovations can get ripped off. This is where our federal government comes in.
The U.S. Department of Commerce (DOC) is the primary organization that negotiates our business relationships with other countries, including IP issues, and the leadership of that cabinet level department is changing. Barack Obama has chosen Bill Richardson to head up his DOC and since small businesses are creating more and more IP, and doing more and more international trade, this appointment bears watching. Richardson has an impressive resume as a governor and diplomat, but time will tell about his effectiveness as the head of the DOC.
Someone who will be watching the Richardson DOC is Dr. Mark Esper, with the U.S. Chamber of Commerce. Recently, Mike joined me on my small business radio program, The Small Business Advocate Show, to talk about IP, trade issues and the Richardson selection. Take a few minutes to meet Mike and listen to our conversation. And of course, comments are always welcome.