There is a big difference between an entrepreneur’s vision and the entrepreneur’s inventions. Often the entrepreneur (and their investors) confuse the two.
Entrepreneurs are fond of having big, bold visions of the future. A future of self-driving cars or virtual reality universes or DNA-based pharmaceuticals that fix every medical problem or hyperloop transport or whatever. This is catnip for investors, who get the vision and imagine thousands of self-driving cars zooming through city streets – each one of them meaning money in the investor’s pocket.
As the entrepreneur does their investor pitch, some angel investor will inevitably ask “do you have a patent on that?” This is the single worst question that can be asked.
The angel investment stage is typically where the entrepreneur explores product-market fit. In other words, the entrepreneur has a feeling, and maybe even a little data, that shows there is a place in the market for their product. They may have uncovered a need or use case, and maybe they have a solution.
The process of product-market fit is to dig into the market to figure out who is the ultimate customer and more clearly understand their needs. This process inevitably uncovers things the entrepreneur did not know.
From a pure practical standpoint, the entrepreneur has a vision for a new product or service in the market. But there is always cognitive dissonance in the “vision.”
What It Means When “There is Nothing Like It!”
The mere fact that none of the 8 billion people on the planet fail to see the solution generally means the entrepreneur is wrong. But there is a hope, a vision, where someone likes the entrepreneur’s solution and is willing the pay for it. This is the cognitive dissonance.
The product-market fit process is a process of deconstructing why none of the 8 billion people in the world want the product. Or, more positively stated, the product-market fit process is identifying which of the 8 billion people have the problem being solved by the entrepreneur, and then understanding how much value those consumers place on a solution to that problem.
Inevitably, the product-market fit process will uncover more specifics about the consumers, their problems, and the solutions to those problems. In the startup community parlance, the company will “pivot” when they uncover a dead end on the first idea but another idea opens up.
Patents on the entrepreneur’s visions are always – without exception – the wrong thing to patent.
Throughout history, the valuable patents are never on the vision, they are on the invention that makes the vision happen.
There were something like 20 patents on the light bulb before Thomas Edison’s patent on the light bulb filament. His patent was not on a “vision” of a light bulb, it was on the very last piece of the puzzle that made it work. It took Edison thousands of experiments to find the filament that unlocked the potential of the light bulb.
One of the biggest mistakes an entrepreneur makes is getting a patent too early.
US patent law changed in 1995 so that patents must expire 20 years after the earliest filing date. However, patent attorneys have never listened.
Those early patents are handcuffs that limit protection as a business works through the hard technical and business problems of the product-market fit exercise.
We do not want a patent on the light bulb. There were 20 people before Edison that had those. Those 20 patents were worthless.
We want the patent on the filament that actually worked in the light bulb. We want a patent on the last piece of the puzzle, that 1000th trial that finally achieved the results we were seeking.
We do not want a patent on the vision, we want a patent on the invention.