How to secure the IP created from a focus group?

March 4, 2009 · Posted in innovation, Intellectual Property, strategy · Comment 

Securing intellectual property is a tricky problem. The growing trend towards open innovation methods makes it even more confusing. In reality what you’re trying to achieve is securing the value you can gather from the intellectual property.

Noted security expert Bruce Schneier points out that the best security is in layers and intelligently handles failures.

Non-disclosure agreements are one way but those often make people unwilling to participate. You can attempt to give members of the focus group some benefit for keeping it quiet. Perhaps offer them some shares for the products? Or maybe just offer future cash payments contingent on it remaining secret? This is the carrot versus the stick of a non-disclosure agreement.

Bruce Schneier has said many times that secrecy can’t be the basis of security. Ideas get out. So you need layers that catch the failures of each other. That way no single failure will penetrate the barrier.

If one focus group can come up with the idea, another would also be able to come up with that idea. So instead of using focus groups to get ideas of ??how?? to solve a need use the focus group to accurately understand ??what?? will satisfy their need. A product or service is a ??how??. The customers don’t really care about ??how?? they just want their needs satisfied.

The specific ??how?? ideas that come from a focus group help you better understand ??what?? they are trying to accomplish and ??what?? will satisfy their needs. Its the innovators job to find the best ??how?? ways to satisfy all their needs related to the task they are trying to perform.

Every ??how?? idea covers less than 1% of the entire intellectual territory. This presentation explains that math.

Using that technique you can uncover ALL the ??how?? ways to satisfy the needs for the task. With that information it is possible to then develop a layered approach to securing your intellectual property. One part of that can include patents.

OutCompete developed an approach and software that allows development of airtight patent fences around any valuable IP. this approach is based on thorough consideration of principles of protection of IP (after the patent is granted), as well as on research of patent trolls’ successes and techniques they use. So even if the 1% idea from the focus group leaks out you have built a patent fence covering the other 99%

The first layer was secrecy. The second layer is the patent fence. The next layer is flexibility.

Innovation = Satisfying Customers’ Unmet Desires. To produce the highest consistent value from innovation you must be satisfying unmet desires. When copy cats move in the pricing war begins. Its time to move quickly to the next area. With the complete innovation map you can both quickly and efficiently step to the next high value area. Plus you can do it in such a way that it builds on your strength which makes it harder and harder for others to copy cat you.

The Mind of the OutCompete Strategist Volume 1 “The Mind of the OutCompete Strategist” by Len Kaplan describes strategies that do that. ??Fat Product, Lean Process?? and ??Catch Me If You Can?? are two strategies to build that third layer of security.

The forth layer is business models that benefit from sharing. Open Source projects have found business models that actually benefit from “giving it away”. The key element to these types of models is finding something not directly part of the intellectual property and can’t be easily copied, that is your unique competitive advantage. There are many ways to do this and the Predictive Innovation Method will uncover your unique competitive advantage.

When you are ready to secure the value of intellectual property, I can help you with each layer.

Innovation at Google

February 10, 2009 · Posted in innovation · Comment 

Google is great example for people interested in innovation because they do many things right as well as wrong. They create a lot of great innovations but mostly through brute force and a lot of luck.

By examining Google I hope to show you how to achieve the greatest possible innovation success. If you haven’t read my Blog then you might be asking, “Who are you and why should I listen to what you have to say?” Fair enough.

For over 25 years I’ve help create and bring to market dozens of innovations worth billions of dollars. As result of my experience I discovered a system to reliably create targeted high value innovations on demand using resources you already have or can easily acquire.

I have a special connection to Google. Larry Page, one of the founders of Google attended U of M. He was an undergrad when I was there preparing for a PhD in a new area of Information Theory. He used some of the exact techniques I helped develop when he started Google.

In 1992, before there was such a thing as the web, I was at Apple writing white papers describing what the web would look like and how to build it. Some of that work led to the software development methodology called Agile. Google is an avid user of Agile.

In 1994, years before the founders of Google even met, I was implementing the web at Hewlett Packard. We already knew that search was a major concern. We solved the problem internally at HP by using the Topic Real Time engine, the same technology the CIA used to scan and categorize millions of documents per second. One of the insights we implemented was sharing search criteria so people could benefit from the human contribution to search. This is the exact same innovation, although implemented differently, that launched Google. So that should answer a little bit about my understanding of the web, search and why what I have to say about innovation will help you achieve the greatest success.

In the presentation, Douglas Merrill hits an early innovation home run when he says, “Google tries to answer the question you meant”. That is exactly the point of innovation. Give you what you want. The search term “Apples” plural returns pages about the fruit. The singular term “Apple” mostly returns pages about the computer company. This is a great understanding of the desired Outcome.
The customer doesn’t care how to do it, they just want the result they desire. Inventions are about how, Innovations are about what customers’ want.

The best definition of innovation is:

“Satisfy customer’s unmet desires.”

When you get the definition of innovation correct you suddenly see where a lot of confusion comes from and how to fix it.

Douglas says there are three types of innovations:

  • Incremental
  • Incremental with side effects
  • and Transformational.

That is non-sense. Customers don’t care about those distinctions and neither should you. All customers care about is how well their desires are met. Period.

As an innovator all you care about is how many customers you can satisfy for the least cost and effort. Sometimes the so called “transformational” innovations are the cheapest and easiest way for you to get the greatest return on investments. Other times the small improvements are the way to go. That is more of a strategy decision than anything fundamental about innovation. But for you to make those strategy decisions you need to know all the possible innovations for your industry. That can only be done with the Predictive Innovation Method. You can find out more about that on my blog or at

Another quote from the presentation is, “Innovation for it’s own sake isn’t useful.” The heart of that statement is absolutely correct. If a change doesn’t satisfy customers’ unmet desires then its not innovation. It might be an invention, but its not innovation. If it fails to satisfy an unmet desire it doesn’t innovate. Ideas that could be innovations still can fail because of poor implementation. So innovation is more than just ideas. Innovation is thinking plus doing. In fact there are 7 essential elements to a complete innovation system and idea formation isn’t even the 1st step.

Now here is the biggest mistake most people make about innovation.
“Users don’t know what they want, but they know what problems they have.” Wrong Wrong WRONG! Users know exactly what they want. What they don’t know is how to get it. If a user expresses a problem they tell you “I want this, you give me that, and its not what I want.”
In the broadest sense customers desires are

“What I want, where I want, when I want, the way I want, with whom I want, for the price I want with no hassle.”

All innovations progress towards that ideal vision. Each new innovation gets closer to that ideal for one or more aspects of the product.

He said customers didn’t know they wanted some of the features that Gmail offered. Not true. Gmail did not do anything that people haven’t wanted for their written communication since the beginning of time. It did some of the things better but it didn’t do anything new. In fact the specifications for Gmail could have been written thousands of years ago.

Whether its e-mail or letters written on parchment the essential aspects of reading written communication have not changed and never will. The desired Outcomes are the same for reading all written communication. You want to find what you are seeking when you are seeking it and process the important information in a way that is useful for the task you are doing. The only thing that changes is how well that is done and the methods for doing it. Any product that does not at least partially achieve all essential Outcomes will fail to satisfy customers.

The simple formula for what will be an innovation is “it achieves each of the essential outcomes for the task the customer is trying to do and achieves one outcome or more better than what is on the market.”

Too much bureaucracy kills innovation. Companies rarely make money from doing something new. They make money from doing the same thing many times. So the types of controls for a manufacturing or sales organization won’t work for innovation. But there can and should be effective controls.

Google got lucky to hit it big before the Dot Com bust when money was easy to get. They can afford to “wait as long as they can to kill innovations”. That method just won’t work for most businesses. You don’t have the resources to fiddle with ideas until they fizzle out. Plus, you might not have the time to experiment before competitors beat you to market. When he says, “wait as long as you can to kill innovations”, he is really saying they don’t have a reliable method for recognizing innovations early on.

One thing that is always true about innovation is it will be different from what has come before. That means the entrenched experts will hate really good innovations. But, customers will love it. What you need is a way to let real customers tell you as quickly as possible if you are doing the right thing. There are two parts to doing this.

First, start with an outcome based innovation method, such as Predictive Innovation. The outcomes never change so if the idea satisfies all the outcomes then its good. If it doesn’t satisfy all the outcomes kill it right away. Second you need to directly ask customers “does it satisfy the outcome better than what is already available”, “Do you care about satisfying this outcome better at this time”, and “are we satisfying it properly?” Only customers can answer those questions. Ask the customers as soon as possible and as frequently as possible.

The spelling correction and search suggestion feature of Google search engine came from watching what customers actually do and like. Regardless of what experts say the only real expert is the customer. They might not be able to tell you what they want but if you watch them you will see what they want. Find it out and deliver it.

Three suggestions he makes really boil down to the same concept. He says, “Allow people to work on things they are passionate about.” All innovations are projects. They have a beginning and an end. Passion is very important for pursuing anything through to completion. Passion is especially important for things that are new. So this rule is very meaningful to moving from the idea to the delivered innovation.

Passion can’t be forced on someone, it only thrives when people have freedom. Give employees freedom to follow their passions. Give customers freedom to walk away and also freedom to personalize what you offer them. Their improvements will often point you to the next big innovation.

Use your products. He presents this as a rule but its not always appropriate. Unless you actually benefit from using your product your input won’t be meaningful. Of course if you could benefit from your product and you don’t use it then there is a serious problem. But if you really aren’t the target market of your product you should be intimately involved with people who are and do use your product. Talk to them, watch what they do and don’t do. Make sure you understand what they really want to achieve, then figure out how to help them do it.

And he finished up by saying that leadership is essential to creating diverse teams and that is important to innovation. Different talents, skills and points of view can be very helpful to innovation. In the real world most companies have to use the resources they already have. Fortunately, if you use the right system you can achieve great innovation success. In the end making the decisions that create success in the truest sign of leadership.