Sep 09
22
Big Business versus Innovation.
In the beginning man hunted for his livelihood with club,
spear and rocks.
Now man hunts for his livelihood by trying to ensure that he
can retain what is his, against all comers.
Any successful business is based on disrupting existing
business models.
Today, it is no longer sufficient to be good at what you do.
Building a better mousetrap is no longer sufficient to guarantee success.
To succeed in business, you must be prepared to take on the
men that run the corporations whose business you will be disrupting.
Additionally, some of the business partners and investors
that surround you have interests that may not always align themselves with the stated
aims and objectives of your business.
So a successful business plan must allow for:
Attacks from without (Target business and industries and
of curse political lobbyists).
Attacks from within (Investors, shills, underlings.).
All of the people that will be opposing your business are
merely protecting their existing turf.
Their jobs, salaries, bonuses and of course, the resulting
inability to feed their families when you succeed.
Therefore, just like the mother protecting her cubs, big
business, and its minions have to fight tooth and nail to prevent the innovator,
the disrupter from boarding their corporate gravy train.
Occasionally the weapons will be regulatory.
Fill in this form in triplicate – submit it for approval
and we will get back to you in six months.
Occasionally, advertising.
Do not buy product “X”, its untried and may have harmful RF
radiation being emitted by its untested circuitry.
Occasionally, it might be a smear campaign on a Talk show…
Yes, we hired him to straighten out our books, he cheated us, and all the employees;
we were innocent of any wrongdoing.
So the average entrepreneur has to grow a thick skin.
Arm himself to the teeth and wade in.
Because business is war. There is no second place. There are
winners and there are losers.
So what is the secret of success?
Persistence.
Re-route, more persistence. Re-write, more persistence. Obtain seed
funding, more persistence and do not stop persisting until the mousetrap is
being sold in every 711 throughout the world.
So, you have to ask yourself… Have you got what it takes,
buddy?
Well, have you?
In that case, you might like some insurance…..
Patent the invention.
Place the invention in a holding company (preferably a trust)
that only you are a director and shareholder of.
License the rights to use/manufacture to a third-party
company. Write the license in a manner that requires performance criteria conformance
to retain exclusivity.
Issue royalty payments against Gross sales, never net
profits.
Then look for finance for the third party company.
Don’t under any circumstances accept any lien or guarantee
against the patent holding company, under any circumstances.
If asked to give a personal guarantee, offer your
grandmother but exclude specifically any rights over any of the assets of the
patent holding company. (Write that into the Guarantee…. I the here-under
signed do hereby sign away all of my world possessions EXCEPT the trust…)
And – believe me, there is not a single investor that is
investing because he believes in your invention, or that is investing because they
think you are really nice hard working person.
Investors are like the jackals circling the carcass, waiting
for the opportunity to leap into the centre and take as much of the fresh kill
as they can.
The successful entrepreneur will understand that the
investors will take profits at times that are not complimentary to the designs
of the business plan.
The successful entrepreneur will in fact attempt to network
to increase his shareholders thereby reducing the risk of damage through the
actions of a single shareholding block.
In conclusion – inventors invent, accountants count and CEO’s
strategize and network.
Hire a good accountant, surround yourself with people who
you respect and do not make the mistake of wanting to be the CEO just because
you’re an inventor. You might think you’re doing a good job – but put it this
way…
If you were sitting in the jump seat of a 747 flying at
35,000 at 850 NM per hr., who would you rather be up in the front seat… a
trained pilot with 2500 hours flying time in 747’s or the 12 year old kid that
really really knows he could be a good pilot if someone just gave him the
chance.
Your company might be a lot more successful if you get in
someone that has a few hours in their logbook. (It’s also easier to get funded…).