There is immense value in ideas. Business vision often separates the startup giants from the startup failures. And when an idea is game-changing, it must be protected at all costs.
This is why patents for startups must be seriously considered. Intellectual property (IP) must be viewed as valuable from tangible products or wealth. Why? Because that is exactly what it will become with the right direction.
Let’s explore why patenting ideas and products can add impressive value to any startup, and why such idea protection is necessary today.
Why people need to rethink patenting
Without an IP, companies have to aim to scale and grow quickly to capture as much market share before their competitors do. With no patent, companies can’t legally stop others from developing the same product and have to make sure that theirs is better than any potential competitor.
Without a patent, companies need to sink a significant amount of money into customer acquisition and retention. Not being able to stand out causes companies to burn an enormous amount of money in a short span of time to try to win over each other’s users. Additionally, they need to offer perks such as discounts or coupons in order to retain their existing users and keep them satisfied.
The end result is that companies have fewer resources to spend on the more important things in a young company’s existence – things such as improving the actual product and achieving growth. Money spent fighting competitors means that little of it will actually go into proper growth and scaling. Most critically, this will end up affecting the company’s overall valuation, crippling growth in the critical early stages.
We can see this exact situation playing out in markets throughout Asia. Recently, ride-sharing application Grab bought Uber out in Southeast Asia, squeezing them out of the market in order to avoid burning more unnecessary money.
Using a patent to dominate the market
Beyond saving time and money in the early stages, patenting ideas and products can add valuation to any given startup in the long run. Devoid of worrying about gaining ground on competitors, startups can focus on actual growth.
With an IP, companies are protected from 14 to 20 years, giving them plenty of time to dominate a market. Because of this, they don’t need to rush to capture market shares in fear of competitors stepping in because they have their unique selling point – all thanks to an IP.
Establishing an IP early gives companies that edge helps them stand out well above their competitors, allowing them to win over new users and retain them much more easily. If a company does raise a sum of money, these funds can be focused on more important things.
This is important when it comes to investors, who want to see growth potential in a company before agreeing to give them more money. The end result is a higher valuation as inventors know that their funds will be well spent on growth. For any startup, the future burns much brighter when combined with a patent.
Protection against competition
An additional benefit that patents provide is that they give companies a level of protection against nefarious organizations that attempt to copy their products. If a company doesn’t patent their product, they’re just asking for it to get stolen by someone around the globe.
For startups, new ideas and the resulting products are the bread and butter of their operation. And as with anything valuable, these physical products – as well as the intangible things such as software and concepts – absolutely must be protected.
While it can be time-consuming, patenting a product is the most effective means to protect a product against those that would steal it.
While patents may sometimes seem like an old-school business tactic, it can be a valuable tool in any company’s arsenal. Startups need to break out of this misconception and start patenting their products early. For efficient operations, effective scaling and growth, and an additional layer of protection, patents are one of the best ways to approach a trendy new product in 2020.
This article is by Jeremy Foo, a serial entrepreneur from Singapore.