Entrepreneurs have been fed this lie that the first thing they need to do is get a patent, then work on the business.
This is a bad strategy.
As an investor who finances IP for startups, I want some data to support the investment in patents.
The best strategy is to do the marketing first, then get a patent second.
Essentially, he starts with a landing page that talks about the benefits of the product and runs ads against it. The landing page typically collects an email address so that the customer would be part of the initial launch of the product.
The landing page and ads allow Tim to figure out the messaging, customer value, and even pricing of the product. He is testing which elements are the most important and which do not matter. He is also getting data to know how much it will cost him to acquire a customer, which gets plugged into the economic model to see if the business will make money or not.
If the landing page experiment shows demand for the product, the business gets a green light to proceed. If the landing page experiment does not look promising, he has spent only a small amount of money.
A patent has value only when a market exists
Tim Ferriss’s technique answers the single most important question for a business: is there a market for this product or service. This question is answered first, before there is investment in anything else.
A patent without a market is worthless.
However, if you can show a market need for a product, that patent has value.
As an investor in IP, my main concern is not whether the idea is “cool” or “ground breaking” or “disruptive.” My interest is in whether anyone will buy the product. If you can show me that there is a market for the product, I am all in.
In the US, we have a one-year grace period between when we publicly disclose our invention to file our patent. I do not mind using this grace period to invest in the product-market fit experiments before getting the patent.
Nobody is going to steal your invention
Entrepreneurs often have been working on their ideas for a long time. Because they are so focused on their ideas and all the research and work they have done on their project, they assume that everyone else sees the world the same way.
To the entrepreneur, they assume that once the world sees their idea, it will be copied.
If the product is not in the market, the data suggests that 7 billion people do not think they need the product. It is the entrepreneur’s job to make the customers aware of the product, then convince them that they need it.
Part of the problem is a psychological wall
There is a psychological wall that many entrepreneurs face.
Many entrepreneurs have cognitive dissonance where desperately want to believe they will be successful, but they are so afraid of failing that they are not willing to try. Many will continue “innovating” more and more features to their product without ever trying to sell it.
A red flag for me is when I see entrepreneur insist that they need more features for their product before they go to market. They are inherently afraid that they will be rejected when they try to sell the product. This fear is very hard to overcome.
Countless accelerators, incubators, books, Business Model Canvases, and other tools push entrepreneurs to go through the product-market fit exercises. This is the point where entrepreneur is most reluctant and needs the most urging.
One way to overcome this deficiency is to the heavy lifting first, a la Tim Ferriss, by doing the marketing first, then do the rest of it.