Entrepreneurialism is a tricky business. There is much to worry about- finances, marketing, innovation, operations, etc., etc. they all need decisions.
In rolling out a new product, in our case Red Rover, there are many many decisions to make – what to include, what to leave out, how to sell it, what to charge for it, etc., etc. Most of these have frameworks through which the pros and cons can be factored. Our experience helps us feel at least reasonably confident about our decisions in these areas.
There are a couple of new decisions that we are going to have to make regarding Red Rover, however. Decisions that wouldn’t have been necessary even a few years ago.
They are complicated and I personally have no experience with them. Here are some of the thoughts.
1) To Patent or Not? We could try to patent the ideas behind Red Rover to help us get money from our methods, but should we?
The idea of patenting software ideas is distasteful to me personally. While I see more validity to the patent process for many industries, i.e. where there are monopolies over distribution, in software, and as a lifelong entrepreneur, my feeling is that the spoils should go to the person that has the idea and executes. After many years of being in business, I believe the execution is far more delicate, difficult, and important than the idea itself. It has always seemed to me, well, wussy, to be able to patent the idea without needing to execute.
But the fact is we are a very small and fairly unknown company with a great set of ideas. It would be easy for any other established software company, with the appropriate institutional relationships or contracts, to see our product and incorporate its features into their product. They would be stealing our ideas, sure, and executing using their established sales channel. (That marketing/sales trumps a good idea is just one reason execution is more important than the idea.)
A patent would theoretically protect us by allowing us to sue any other company that came out with a similar offering.
We will likely spend over 100% of our 2006 earnings on Red Rover development. This is a huge risk for us. We are betting on both our ideas and our ability to execute, and this bet could easily be lost due to someone else stealing it. Getting a patent, while expensive and additional investment, serves as “blackjack insurance” – in case someone else is holding the sales channel trump card, we won’t lose our whole bet. We will still hold the value of the patent.
I hate lawsuits. I hate the idea of suing someone who beat us. I also hate the idea of suing someone for using our ideas, as if our ideas were created out of a vacuum instead of, more accurately, being an amalgam of the work of thousands before us.
The fact that we are in education makes the conversation squirrely as well. It seems antithetical to be all about improving the world while trying to stop the spread of good ideas. On the other hand, martyrdom was never our aim.
While this fellow is not talking about us (he’s talking about Blackboard that owns, and is trying to defend, ridiculously broad patents around online learning) if we were to get the patents, he might just say the exact same thing about us:
“A patent on an educational concept — namely the relationship among students, instructors, and administrators — makes no sense,” said Greg Gay, project lead of ATutor. “Such ideas are public and have been practiced for centuries; they are not the result of research and development.” from this press release.
What we will be doing with Red Rover has not been done before (to our knowledge, a big qualifier). But it is a methodology for producing good introductions. Is that patentable? If it is legal, should it be ethical?
Does our fair need to be justly compensated (at least our own loans repaid!) for the contribution we make outweigh the silliness of trying to “own” ideas?
It’s funny. We are extremely well intentioned reasonable folk who aren’t even that greedy. We would like to make a fair, savvy, ethical, decision. I just don’t know what it is.
In a recent Educause article, this very issue was covered and the author proposed a three step patent process to protect both the IP holder and higher education. Click through if you’d like to see the proposal, but my immediate thought was that we simply do not have time. We do not have the time as a company to invest in either learning about the process or completing the process – either one would prevent us from actually building the software. We also do not have time in the marketplace. Step two in the process is a mediated peer review of the patent filing – at the current rate of change I feel like taking the time to play by these rules would make the outcome moot.
We’ll see. At the moment, however, we are going to proceed without insurance. We would rather build than legalize. I think that if we are successful, we have 3 months or so where we will still be protected by our own obscurity. 3 months to make a final decision.
