Blog entries written by Andre Carter
| IP Rights and Government Contracting—Same Strategy | |||
| Written by Andre Carter | |||
| Let’s assume that you’ve made the strategic decision to break into the vast government market. What you may not realize is that once you’ve done so, you will have created some new intellectual property (IP) in your company. And if you decide to set yourself up with a designated government status—small business, woman-owned, minority-owned, etc.—that can be viewed as a type of IP, too. There are a number of places on the operational level where the analogy between capturing traditional IP rights and capturing government status tracks almost perfectly. If you’ve taken the IP rights effort seriously and done it diligently, the government status endeavor will seem familiar. First, let’s look at filing for rights. If you want to establish yourself as a “woman owned business,” for example, you can self-certify in most instances—not unlike with trade secrets or copyrights where you can self-designate and proceed with business. Similarly, if you file for a patent, you can create an advantage against large companies in the marketplace. In the government market, the Small Business Administration 8(a) status is not terribly different. If you can obtain this status, you have a preference in how your proposals and bid responses are analyzed. Like a patent, it can take some time to get your official certification and you will go through several rounds of questions and clarifications. But from a marketing standpoint, you can use the “8(a) pending” status in your efforts once all of the information is filed, just like you can use “patent pending” once your patent application is filed. This means that you can begin a lot of your marketing and business development efforts before your certification comes in the mail. Next let’s think about the duration question. As with your traditional IP rights, all of these various statuses have expirations. This is important to remember—Just as your patent has an expiration date, so does your 8(a) status, which lasts for seven years. And with all of these designations, there’s another kind of “expiration date” to consider, and that’s when your earnings reach the upper limit that allows you to qualify for the status. So with this particular form of IP, you need to manage both the duration of your rights and the pace/nature of your company’s growth. This makes it slightly more surgical than a simple IP right, but the analogy holds. Lastly, the nature of your marketing/business development effort will need to have a specific focus, sort of like original equipment manufacturer (OEM) or IP right plans. You’ll want to decide if there are any products or services that you have that would make sense to be on the GSA schedule, which allows agencies to buy that service (up to a certain amount) without a bid process. You might also want to find others to market or place that service on their schedules, creating a distribution channel of sorts for your GSA offerings. Your business development activity in this area needs to focus on companies that can assist and leverage your status and offerings to customers with whom their already work on a routine basis. These offerings and services will also require you to create a pricing strategy that offers the government your best pricing. Therefore you need to rationalize this pricing across your business model to make sure it fits properly and doesn’t create precedents that your model can’t support. The reality is that pursuing and obtaining government business can be quite lucrative and offer incremental revenue beyond your other lines of business. However, you need to devise and fully execute a model, and all of the support elements, to fully respect this line of business. When you do all of that, you end up with skills and rights that can translate into a great opportunity and new partners. | |||
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| IP Leverage and Goverment Contracting: Same Skills Need Apply | |||
| Written by Andre Carter | |||
| The irony for small businesses about government contracting and intellectual property rights is that IP can help you when working with the government but the two disciplines can feel a lot alike. The government contracting effort that you might be thinking of starting can be very lucrative, like IP, and requires you to learn an entirely new set of rules, procedures, and habits in order to be effective. The knowledge base required for a small company includes not only the FAR (Federal Acquisition Regulations) and how they impact your specific offering, but also how and in what form those things provide by way of special leverage. Depending on your business’s composition or your current stage of growth there are several avenues by which you can take advantage of government contracting opportunities: small business set-asides within larger contracts, small and disadvantaged business designations (“8a”), or exclusives for women-owned, disabled-veteran-owned, and/or minority-owned companies, among others.These and other statuses available for smaller business provide you with great opportunities to partner with larger companies in much the same way that IP does. Full execution or exploitation of a contract opportunity may require some of what your small business has to offer. And as with IP-based partnerships, large companies have a financial incentive to form partnerships. In fact, it is likely that there are contracts that they CAN’T get without a small company like yours. And like with IP deal, large companies won’t forego their sense of what’s rational just to do business with you. This mean you need to present yourself as a solid, capable firm with the ability and resources to do what you market your enterprise as able to do. The most basic reason for this is that the work you sign on to do for a particular project under any of the aforementioned award statuses will require you to do so. If you lead in the bid then you are called the “prime.” And even if you are teamed with the world’s largest company, you really have to lead and ACT like the “prime” to protect your company. As we’ve discussed here on the IN Blog many times, if a company doesn’t believe that you can hold your own, they likely won’t partner to employ your IP and partnering requires an implicit quality in the standard of services. Another way in which government contracting success and IP leveraging are similar is that they both require constant diligence. The same daily struggle to perfect, refine, and leverage IP rights is good training for pursuing contracts with the government. The sales cycle in the government is constant, and both contracting vendors and actual clients generally take awhile to gain confidence in a new vendor. In order for either to take a chance on a new partner, they’ll really need to believe that the new vendor can deliver. The proof that they do need something new and different is the RFP, which acts as a lever to get them to begin making that assessment and allowing you to build what you can offer into a solution. The requirements and specific needs will be built into each RFP. Without that consistent contact, how can those questions be favorable to you? The key to success in government contracting lies in understand that just like the perfection of IP rights, there is no end to the process. Ultimately, if you treat your government marketing in the same way that we’ve discussed treating your IP, you’ll get a status and a great brand in the agencies that you target. That will feel a lot like your IP process, and that’s because it is! If you have commercial IP that you’ve previously perfected, the process of government contracting can be easier and the upside greater. | |||
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| Sometimes You Win, and Sometimes You Lose | |||
| Written by Andre Carter | |||
| The importance of intellectual property is largely a philosophical question, but often you only need to look at your past experience to find a story or episode that highlights the answer to, “Why is IP so important?” Last month at a wedding, I ran into two former business associates from two separate ventures. Naturally, talk turns to the past with people you seldom see, and often in an encapsulated short-hand version, distilled down by hindsight to its essential components, and known only to the people who were there at the time. The stories or things that we remembered during this meeting were IP related, remembered as such, and discussed as such. The first was a co-founder of an industrial product business that we worked to fund. We’d had a meeting with a foreign investor who repeatedly wanted to know how the product would actually be manufactured. We took time to explain the plan with an eye toward shorting the diligence gap. It, of course, led to deeper discussions of “the product” and an effort to explain the technology behind the product. We even went so far as to show the patent diagrams; we were well-prepared. We outlined how the patent designs supported our exclusivity by having those elements tie to manufacturing efficiencies of the product design. “A hidden gem,” we called it and now laughed as we asked ourselves, “Why’d we tell them where we hid it?” We also laughed as we remembered how we even laid out the key places where the patent provided hurdles to imitators in design and manufacture. We’d left the meeting with a strong sense that it had gone well. Unfortunately, to this day, we’ve never seen those diagrams again. What we DID see was a competing product that got announced by a firm deal with that same investor (no connection, I’m sure) that perfectly circumvented the key elements of our product’s patent. Luckily, they did a lot of basic things incorrectly, but in that situation we saw how powerful our IP was, especially our fill explanation of our strategy to thwart imitators. What we learned is that even the strategy in the creation of IP rights is IP. And from all of the things we did with that product, that’s what we remembered. The second episode occurred in the mobility space and involved a guy who had the operations relationship with one of our foreign distributors. We had a product that didn’t have a patent due to prior art claims. We sold a ton of our product and used the refinement of the product, which was constant, as a means to keep ahead of competitors. We also had to plan intricately our manufacturing of the product so no one else could copy it. This was a concern because we didn’t manufacture in-house but rather through a series of contracted manufacturing firms. I had meeting with the foreign distributor “in-country” where they took me to lunch, a couple of meetings, and even back to their house for a beer on the patio. They asked for better pricing or to reduce the price by allowing the manufacture and package in-country. I of course, refused and explained how that wouldn’t work. My operations guy told me when I returned that it had all gone really well and that they placed an order—the order was fewer than normal, but not worry since they’d ordered heavy last time. Two months later we got a number of direct returns of a new “knock-off” product being distributed alongside ours apparently. My ops guy, once he figured out the country of origin of the knock-off, didn’t want to tell me. They had used all the information from our various conversations to test their attempt to mimic our product. Fortunately, we had placed a lot in the establishment of IP branding and package identification—so much so that when they cross -old their product for ours, they got high returns when people didn’t see a real match to our logo or name on the product they received. Many of the returns we got, because the package was “different,” were unopened and perceived as defective. After a few months the original distributor was losing so much money on returns and building inventory that we actually got a better deal than we originally had before the whole thing started. The IP branding and packaging ID did that for us. And we could laugh about it years and years later. The IP is how those stories are remembered now, though I don’t believe we used the phrase then. IP is important because in many of the stories the thing you remember is the thing that was important and IP is clearly important. | |||
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