Questions

I am developing an internet-related consumer product and considering founding a startup. For some reasons, I think I should not market it directly to the public, but try to reach an agreement with a large telecommunications company. An expert told me that first I must have at least one of the three: a patent, a large userbase or a product that would be difficult for someone else to develop without my help. Since I think the product may not be patentable or complex, I asked the expert what if I simply tell a company: "I haven't yet exposed this product to any of your competitors, and I can give you exclusivity in the countries in which you're doing business", and let them understand that if we don't reach an agreement then I will go to their competitors. The expert replied: "Perhaps, but that is a single-bullet gun". I understand that, but think maybe if the first attempt fails, I can still go to a second company and tell them that I believe that regardless of whether or not the first company implements my idea, they - the second company - can gain much from reaching an agreement with me. So, do you think there is a business potential here?

You should pursue patents if:
A) You have the resources available to enforce it, and litigate those who infringe on your patent
B) If you want your company to be more attractive to potential acquirers who do have the resources to enforce it

It looks like you're dealing with software though, which in most recent cases is very hard to patent.

Your strategy of trying to pre-sell to telecoms businesses sounds great, however you need traction to create leverage. Ideas are worth nothing, they are cheap and if all that's preventing someone from "stealing" your idea is you telling them, then that idea is going to be very hard to start a business around.

Instead of valuing "ideas", try to shift your perspective to value "execution" instead. If your idea is truly pivotal, you should be able to gather a small user base and demonstrate value. There will be problems you face while implementing your idea, and your unique solutions to those problems create value.

Once you create and demonstrate that value, you can then sell it, license it, etc. It will be a much simpler conversation.

Happy to discuss further if you like.


Answered 4 years ago

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