After many years of counseling small companies on how to license their technology to large companies as an IP attorney, the tables are now turned. My new role is as CEO of a startup company with breakthrough battery charging technology available for licensing. I am finding that many of the things I knew to be true as an expert, really aren’t true at all now that I am an entrepreneur. This is the second post in what I hope will be an ongoing narrative that tells of my journey through the world of Open Innovation as we attempt to find one or more licensing partners for our company’s breakthrough battery fast charging technology. (The first post is here.)
One piece of advice that I knew even before embarking on this entrepreneurial journey that was absolutely not true was”build a better mousetrap and the world will beat a path to your door.” As I have written about before, ideas themselves mean little when 90 % or more of the “better mousetraps” covered by patents are worthless. So, I knew that our technology destined to become “shelfware” unless we did something to get our name out there. An old friend with sales experience gave me perhaps the best advice which was along the lines of “you gotta be in it to win it.” So, as we move along the path to successful licensing, I am working hard to be “in it” so that we can find that special company that will become our licensing partner. This effectively means that as someone seeking to license my company’s technology, it is my job to meet as many people as possible.
In the past few months, I have been continually surprised at the number of people who actively seek me out to discuss my company and our technology. Many of these are also cold-calls where someone finds out about us and wants more information. Significantly, these cold calls have almost always resulted from our efforts to generate press not just related to the benefits of our technology itself, but press that clearly indicates that we are seeking licensing partners. This is in contrast to many, if not most, press efforts dealing with new technology, which tend to focus of the “gee whiz” nature of the breakthrough, not the business plans of the IP holders. As someone who is looking to license my company’s technology, it is more important for me to advertise that I have something for sale–that is, our technology–than it is to gain accolades from the public about the greatness of our ingenuity.
In recent months, there have also been tons of meetings with potential licensees, as well as potential investors and team members, many of which have moved into the preliminary negotiation stage. As I map out the next few months, I can visualize literally dozens more. This reality has led me to realize that as the CEO of a small company seeking to license our technology, my role and responsibility in this position can be characterized at this stage of our company’s existence as “Chief Frog Kisser.” Really, what I do every day is kiss alot of frogs as I seek out our prince–that is, the person or persons who are going to invest in my company, or join our team, license our technology, or champion us within their networks, or a combination of the above.
Sometimes this is a very pleasant process. I have met many people over the last few months who will likely become friends. Many people have generously given their time, advice and introductions to their deep networks. But sometimes this is not a very pleasant process. I have thought a lot about why some interactions result in less-than-optimum experiences, and can almost unilaterally chalk these up to the other person’s being close-minded or too sure of their knowledge. There is no reason to lose sleep over these ineffective conversations because it is doubtful that people with this sort of perspective would be likely to be successful in the world of Open Innovation.
So I continue to seek out new opportunities to meet potential partners on a daily basis. However, I often find that my pragmatism is not shared by most IP owners who seek to license their technology to another party. Instead of casting a wide net to find potential partners (sorry for changing the metaphor on you from frogs to fish), they tend to self-select who they think is the right connections, and stick with that choice. Even worse, when they identify someone who they think may make a good partner, they set the hook and reel in the catch without regard to whether there is a shark, minnow or yummy sushi grade tuna on the other end. The lawyers usually get brought in at this point, and the parties start down the path of expensive negotiation, even in the face of the fact there is not a good match. What then happens is that the IP owner pays his lawyers to draft an agreement and–even worse–burns time and effort, even when the other company is not likely to be the catch it was thought to be. These are folks who apparently believe the myth of the better mousetrap, and they are not only unlikely to be successful, they will probably lose much of their and their investor’s money.
That’s why it’s more important for startup companies to kiss innumerable frogs before trying to reel in a big fish. Those of us seeking to licensing our technology to other companies, gain investment or otherwise enhance our businesses prospects must meet as many potential suitors as possible before we make a commitment. We also need to be willing to move on quickly when the chemistry isn’t there. Of course, when you have gained the attention of an ostensibly attractive suitor, it can be hard to move on, but recognizing early that your company is not the right pedigree for this “prince” is part of the growing process, and by extension, the way a start up company will maximize long term shareholder value.
So, this Chief Frog Kisser is puckering up. One of these days–hopefully very soon–we will meet our prince and we will live happily ever after! But in the meantime, pass the Chap Stick.