Use unicorn skills to commercialize patents
Recently I saw a note from a university congratulating its technology researchers who were awarded patents. But will these patents ever be used commercially or was it a waste of money? Can some of these patents be used commercially with some improvements to the current ecosystem?
About 97% of patents are gathering dust. Here are 3 reasons why:
VC is useless at this stage. VCs want Aha, ie proof of potential, and an unproven patent is usually not enough. In an analysis of $85 billion entrepreneurs, only 1% got VC after proving the technology. 23% got VC after proving their business strategy and potential using business skills. 76% built real unicorns with business skills and no VC. This means that someone has to prove both the business strategy and the financial potential of the patents without VC – if they want to commercialize it.
· Business-school entrepreneurship education is not aimed at this phase. Brian Chesky had to prove his venture’s potential before getting angel capital. He was given $20,000 from an incubator and advice to focus on making a few clients happy. Airbnb followed this advice and focused on New York City due to the huge influx of international visitors. Many of these New York visitors became hosts when they returned home. With this start, Airbnb grew to 10,000 users and 2,500 listings. After proving his strategy and leadership, Airbnb got angel capital and VC.
Unfortunately, business schools are more focused on “first-mover” ideas (which are defeated by the “smart-mover” strategies of unicorn entrepreneurs), technological innovations (which are usually not commercialized), business pitches (which are superficial) , and venture capital (which helps about 20 out of 100,000 companies – after Aha). By focusing on financially savvy strategies and unicorn skills of multi-billion dollar entrepreneurs, universities may be able to generate meaningful revenue from more patents, build more successful ventures, and boost the regional unicorn ecosystem.
· Most companies don’t know how to build unicorns on emerging trends. Many companies, from Control Data to Sears, have fallen into unicorn entrepreneurs due to their inability to compete on emerging trends. Companies often take over emerging companies that look like unicorns, but more than 70% of corporate takeovers would fail. And some companies, like Xerox, have not taken advantage of technologies they invented themselves because the strategy was not known and the potential not evident.
Universities could successfully commercialize more patents by tracking the 94% of multibillion dollar entrepreneurs who have avoided VC interference, rather than using the highly selective, failure-prone VC model that rarely hits home runs and where the VCs themselves cannot predict which ones venture will be a home run, as proven by one of the best VCs. Marc Andreessen, who invested in an early round of Instagram, did not follow up as he saw more potential elsewhere. Instagram proved him wrong — and right.
Here are 4 strategies that universities, companies, and those looking to commercialize unproven patents can use:
· Understand how billion dollar entrepreneurs really create unicorns and learn to jump the VC gap from idea to Aha, instead of listening to the proponents of the VC model.
Learn the unicorn skills actually used by billion dollar entrepreneurs to prove the potential of technologies and commercialize ventures and shift focus from capital intensive strategies and VC to finance smart strategies and capital smart finance.
· Change the focus from pitches to skills. Bragging about potential is easy. Reaching it is difficult. Reward the achievers, not the boasters.
· Change the incentives in particular. Reward tech developers based on the commercial success of their patents, not just for developing technologies or citations.
MY TAKE: Ideas and innovations build few unicorns. 99% of billion dollar unicorns are built by entrepreneurs with the business skills to develop the right strategy and the passion to persevere when no one else saw any potential. Universities can commercialize more technologies and make more money from more of their technologies by training the technology developers to prove the commercial potential of their technologies with unicorn skills, not VC.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.