Lawyers Laughing All the Way to the Patent Bank

By Mark Evans in Apple/iPod, Google No Comments

There’s a Spanish proverb that “fools and obstinate men make rich lawyers”. Given the high-tech landscape these days, it would be easy to tweak it to read “Fools, obstinate men and patents make rich lawyers.”

In the past month or so, the patent marketplace has gone crazy. A consortium happily coughs up $4.5 billion for Nortel’s 6,000 patents. Google wants to spend $12.5-billion for Motorola Mobility and its 17,000 patents, and Wi-Lan has bid $480 million for Mosaid.

For all the talk about patents protecting innovation, it is looking more and more like patents will be used as a weapon to discourage innovation….unless you’re willing to pay for the privilege. We should have seen the writing on the wall in 2006 when RIM paid $612.5-million for NTP, a patent troll, to go away.

With high-tech companies aggressively building their patent portfolios, we should prepare ourselves for a flurry of lawsuits or, at least, threats of lawsuits as everyone attempts to protect their investments.

It goes without saying this will be a goldmine for lawyers who will be happy as pigs in shit as the patent wars are unleashed. With the stakes so high given how much money is being spent on patents, the legals fees for both sides (the patents owners and the alleged patent infringers) will be enormous.

My take is this is going to be a disaster for the high-tech industry as patents rather than innovation take centre stage. For people creating new products and services, it means having to look over their shoulder for an army of lawyers who will contend that a patent has been infringed.

That’s no way to encourage innovation.

Canada Needs to Save RIM

By Mark Evans in Wireless 12 Comments Tags: , , ,

CanadarimCanada needs to save Research in Motion, the country’s flagship high-tech company and, arguably, one of the country’s most important economic engines.

Putting aside speculation about who may want to acquire RIM in the wake of Google’s $12.5-billion plan to purchase of Motorola Mobility, the fact remains the Canadian government needs to be pro-active to protect and bolster RIM’s status as a world-class technology company.

Whatever tools at the federal government’s disposal should be used to make sure RIM stays vibrant as an independent company or division of another company with a strong Canadian presence.

As much as I’m not a big believer in government intervention economically, RIM is a special situation because it plays a crucial role within the Canadian economy – not only as a large employer but a company that spins off many start-ups by ex-RIM employees who want to use their expertise and wealth.

If the Canadian government, however, decides not to pro-actively help RIM, it risks having another Nortel on its hands. This is not to suggest RIM is going to seek bankruptcy protection but it may need the government’s help.

For those of you with short memories, Nortel was allowed to disintegrate and be sold off in pieces while the Canadian government did squat other than make some noise about reviewing a few of the deals, which was mostly about political optics.

There was a role for the government to play to keep Nortel alive, even if meant transforming it into a smaller, more focused company. If something had been done to help Nortel come out of bankruptcy protection, Canada would still have a high-tech leader that would employ thousands of people and have a kick-ass patent portfolio.

Instead, Nortel was allowed to die, punctuated by the $4.5-billion sale of its patent portfolio. It was an embarrassing end to a company that had been a global technology leader.

With Nortel’s demise fresh in the federal government’s mind, it should be wise for Ottawa to be pro-active, creative and engaged to keep RIM alive and kicking.

Life in the Slow (Dial-Up) Lane (Part II)

By Mark Evans in Browsers, ILEC News, Analysis No Comments Tags: , ,

Dial upIt is difficult to appreciate the convenience of high-speed Internet access until you have to live without it. Most people in North America takes high-speed access for granted given it’s available in most locations via cable, DSL, satellite or Wi-Fi.

But if you happen to spend two weeks at a cottage in rural Prince Edward Island, it doesn’t take long to discover how living digitally without high-speed access is difficult and painful.

Faced with the prospect of no Internet access at all after discovering Rogers’ wireless Edge network isn’t data-friendly, we rigged up dial-up access after scrambling to buy the last US Robotics external modem in PEI.

After more than a week of experiencing the joys (sic!) of dial-up, it is obvious the Web is pretty much unusable without high-speed access.

To start, you can forget about video given using a 56K pipe is like trying to squeeze an elephant down a straw.

Browsing the Web is possible but dial-up forces you to become very selective. While Google is fairly dial-up friendly, the results need to be carefully scanned before deciding which Web site to check out. If you make a “mistake”, it can take minutes to recover.

If there a few sites you want to check out, it means opening the browser tabs, and then coming back many minutes later for them appear. The upside is you can really multi-task. For example, you could exercise, make breakfast, fix something around the house, AND still have time before the Web sites are ready to read.

This leaves e-mail, which is where dial-up works best – and that, my friends, is totally relative. It takes time but new e-mail eventually appears in your inbox, although an e-mail client such as Mail or Outlook seems to work better than GMail or Hotmail.

With the PEI holiday over, I’ll miss the lobster, red sand, beautiful sunsets and slower lifestyle. I will not, however, miss dial-up access.

Some Startups Should Be Allowed to Die

By Mark Evans in Social Media, Startups No Comments Tags: , ,

Dead endThe first startup I joined, Blanketware, lasted five years, which is a lifetime in the scheme of things. Looking back, the company, which developed natural-language navigation technology to make it easy for people to do things online, should have been allowed to die after a couple of years when it became apparent that success was proving elusive.

But startups are difficult “lovers” to give up on after all the time, effort and money invested. As much as it is becomes obvious an idea has failed to resonate, entrepreneurs also believe there are better things around the corner.

While optimism reigns eternal, it’s not always a positive thing if it means keep something alive that should respectfully die.

This reality struck home with the news that Sprouter, the social network for entrepreneurs, was not closing its doors on Aug. 3 as it previously announced. Instead, “a few of the potential parties that have come forward offering to keep the service going”.

While this is obviously encouraging news for Sprouters’ founders and investors, you wonder if its possible resuscitation is a good thing. After all, Sprouter struggled to find a way to make money despite building a strong brand. At the end of the day, if a company can’t make money, it shouldn’t exist so people and money can move on to things with better prospects.

To paraphrase the Clash, the conundrum now facing Sprouter  is deciding whether it “should it should stay or should it go now”. If it stays, it means pulling in enough money to give it time to discover a business model. If it decides to go now, it means calling it a day, and moving on. Either way, it’s a difficult decision.

While we like to celebrate the successes of startups – the acquisitions, the large investment rounds, etc. – there aren’t a lot of stories that put the spotlight on failures unless they are spectacular. As I mentioned in a recent Globe & Mail column, there is as much to learn from failure as success.

Sprouter is a rare instance in which a startup’s failure captured a lot of attention. But its struggles are just a tip of the iceberg when you consider the high fatality rate of startups.

Things Startups Shouldn’t Spend Money On

By Mark Evans in Startups 4 Comments Tags: , , ,

In working with many startups, one of the biggest dangers facing them is, surprisingly, having money in the bank.

It’s one thing to bootstrap an idea because it forces entrepreneurs to be creative and flexible, although it can be frustrating not to have the financial resources to move aggressively or execute quickly.

And while money makes life a lot easier for startups, entrepreneurs also have to be careful about handling their new-found “wealth”. Since plunging into the startup world 10 years ago, I’ve seen too many spend money like it’s burning a hole in their pockets, buying products and services they would never have considered when there was no or little money kicking around.

For most start-ups, here’s “danger list” that should be avoided unless really necessary.

1. Office space, particularly cool, funky space. For whatever reason, too many startups decide the only way they’re going to be successful is moving from the basement or the spare room to an office space in the happening part of town, complete with exposed brick and a fridge full of snacks and soft drinks. It is based on the belief that attractive office space will attract talented people, while forgetting that an exciting idea is far more compelling.

2. Hiring a full-time marketing person. Most startup entrepreneurs are developers as opposed to marketers or communicators. As a result, they don’t understand how marketing works, how marketers do their jobs, and when they’re needed. Since entrepreneurs don’t have marketing expertise, they think hiring a marketer makes sense because, after all, every company should do marketing. The problem is many marketers are hired before they are really needed, and entrepreneurs don’t have the ability to assess how a marketing person is performing. Rather than hiring a full-time marketer, I would recommend hiring someone on a freelance or contract basis.

3. Hiring a PR agency on anything other than a project basis. Much like entrepreneurs are not terribly savvy when it comes to marketing, they have little insight into public relations. When they are looking to attract attention, entrepreneurs realize they may need a PR firm but the trouble is PR firms are looking to get what they need – an assignment with a healthy monthly retainer – as opposed to what the startup needs. My advice to startups when it comes to PR is to hire an agency on a project basis for a month or so. If the relationship is successful, the startup can hire the PR agency for another engagement when they’re needed.

4. Swag. There’s a mystery between a startup and the need to have swag – stickers, t-shirts, jackets, hoodies, pens, USB keys, bags, etc. Like cool office space, too many startups believe a sign of making it is placing a large order for swag. It may look good when your employees descend on an event with matching t-shirts but how much return does swag really generate.

5. New computers. Startups are dominated by geeks; geeks like new technology so if there are a few bucks collecting dust, buying a new computer, laptop or tablet is easy to justify. Truth be told, most of these new “toys” aren’t needed because existing devices are perfectly fine. There are, of course, exceptions to the rule. If your lead developer needs a more powerful computer to be more efficient, that can be justified. If, however, a non-developer wants a new computer so they can have run more tabs in their browser or create a PowerPoint presentation in less time, that should get the alarms bells ringing.

6. Travel. Travel is expensive. It costs money and, as important, time, and it can be a major disruption to have a key person out of the office when there is a lot going on. Travel to attend or speak at a conference seems like a great idea but it can often be a waste of time because it generates few of the returns (e.g. new contacts, potential customers) that are envisioned. While it is a good idea to “get out of the house” once in awhile, startups need to think about things through. Another rule should be not sending more than one person to an out-of-town event, which is complete overkill.

7. Hiring too many friends. On one hand, it’s good to hire people you know and trust given the time people who work for a startup spend together. The danger is people are hired based more on friendship than how good they are at doing their jobs. Given each hire for a startup is crucial, employing a friend who isn’t as good as another candidate is a mistake. Another reason not to hire too many friends is it can be difficult to fire them if they’re not performing well given how it could impact the friendship.

Are there any other things startups should avoid spending money on?

The Power of StumbleUpon

By Mark Evans in Social Media No Comments Tags: ,

StumbleUpon may not get a lot of attention but there’s no doubt about the key role it is playing in driving Web site traffic.

According to StatCounter, StumbleUpon was the biggest traffic driver among social media Web sites in the U.S. in July, supplanting Facebook. But when people think of what generates Web site traffic, StumbleUpon may not come to mind. In many respects, StumbleUpon is the unsung hero of the social media world.

StumbleUpon’s stature may have something to do with its “hiatus” for a couple of years after it was acquired by eBay, a strange deal that made little sense, particularly given eBay subsequently seemed to ignore StumbleUpon. Now that StumbleUpon is an independent entity again, it has regained its mojo.

Nevertheless, it is still surprising to see the power of StumbleUpon in action because you never know when it is going to drive traffic. A good example is yesterday’s post on my reacquaintance with dial-up Internet access while on vacation in rural Prince Edward Island.

StumbleUpon more than doubled the traffic to my blog. Keep in mind, the blog attracts around 500 unique visitors a day so StumbleUpon had a major impact.

The biggest lesson is how there are many services that can be leveraged to drive Web site and blog traffic beyond the obvious ones such as Facebook and Twitter. It’s a big, wide social media world in which people discover and get their content using a variety of sources.

For more on StumbleUpon’s traffic magic, check out this GigaOm post.

More: SocialMouths had a good post looking at the quality of referrals from StumbleUpon, including a good point that many StumbleUpon visitors don’t stick around too long because they’re actively looking to discover new content.

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