This week I had a unique front-to-end business experience within a span of 24 hours.
Tuesday evening I attended the Founders Showcase event in San Francisco, which highlighted the most exciting startups in the earliest stages of starting up, together with several hundred Silicon Valley and Bay Area entrepreneurs, VCs, lawyers, etc.
On Wednesday I attended the Western M&A Forum, which discussed how mature startups and large companies actually exit and finish – get sold, with a group of leading M&A executives, bankers, CEOs, lawyers again, and others.
When asked what his investment strategy in the fund is, he said the “strategy of being lucky”, but only half in jest. Acting dumb as a fox and being brutally blunt, I think he meant exactly that. I asked myself in all seriousness – What is the place for strategy when investing in startups, and what is the place for strategy in startups themselves? At least, what is the place for intellectual property strategy?
As we saw with the Groupon IPO, things can get very seriously big very fast. When Google found itself naked without IP protection – it was forced to spend billions to back-fill its IP portfolio (Motorola Mobility, IBM patent acquisition, etc).
Yahoo! is rumored by Forbes to be preparing a frontal attack on Web behemoths with its 1,100 patents. When will Groupon have to deal with all that? And how? What would it have cost if it had been done early on? If you are a startup, or investing in startups, that’s a great IP question to ask – today.
At the Western M&A Forum last Wednesday, the keynote speaker was Tony Zingale, a top-flight entrepreneur and executive, who built several companies, and sold the last one (Mercury) to HP for $5 billion. He acquired lots of companies in his years, and his #1 advice before any M&A activity is: “Strategy is everything!” A room full of battle-scarred M&A execs agreed overwhelmingly.
So, between “Lucky” and “Everything” – where is it? I couldn’t agree more with both. For startups, you do your best first, and then you hope for the best. But hope alone won’t cut it. Ignoring IP or investing “just enough” to get by won’t cut it either. Good IP strategy (well executed) is the very right to be in the big game – and a chance to win, albeit not a guarantee.
If you don’t show up, you lose automatically. If you do show up, say to your own professional football game, but without your pro gear — no matter how good you are there will be bruises, concussions, and worse.
What is your IP strategy? How does it fit with your investment, growth, funding, M&A strategy?
How and where are you investing your R&D dollars, are each of your IP assets generating either advantage or cash, who else is doing what, what will you be surprised by, who is paying attention on your behalf?
Nortel created an IP miracle with $4.5 billion sale of its portfolio – what miracles are possible for you? The IP Strategy book I wrote about earlier is a good place to start thinking from.
P.S. Another notable Arrington quote was “If failing (in business) doesn’t make you a loser, then succeeding doesn’t make you a winner.” Brilliant, whether you’ve failed or succeeded or both.
1. © Founders Showcase
2. © File/Portfolio.com