To save time or money, or perhaps due to a lack of knowledge, smaller and mid-sized companies often skip competitive research. Acting without research can open the door to poorly executed innovation, expensive strategy missteps, unrecovered R&D costs, an unsupported or unknown level of risk, or legal entanglements.
Smaller innovators can benefit from competitive intelligence and analysis while easily staying on budget. Data from extensive resources (including international) are available to anyone who knows how to obtain this critical information.
Used strategically, pinpointed competitive intelligence can show paths for opportunities while minimizing risk by:
This critical information helps an organization continue to refine both innovation and strategy.
CEOs may not want to invest in every type of research for every project, but these five should be considered:
Snoop on the Competition
All companies leave a trail of publicized information, including patent applications, business activity, research, and related activity. Rooting out and analyzing this information can provide valuable insight beyond what the competition issues in a press release. Tedious and time consuming research is not required, as alerts can deliver highly relevant information to the decision-maker’s mailbox in near real-time.
Many CEOs believe sending employees to conferences and tradeshows, and paying for professional memberships and other expenses will help collect competitive intelligence.
This is correct, but only up to a point. A well-constructed alert about a competitor’s newest patent application for a widget that surpasses that great innovation under development down the hall could reveal critical information not available elsewhere until much later.
Other discoverable information about competitors includes:
Investigate the Firm’s Freedom to Operate
CEOs should consider this research as cheap insurance against unforeseen risks with new products or refinements to existing products. Also called a Clearance Search, the Freedom to Operate search is designed to keep innovative companies out of legal snarls.
There are so many regulations, laws and other rules that it can be difficult for CEOs and others to realize the extent of intellectual property laws. Non-compliance with patent laws (infringement) can mean a court judgment, attorney fees and the time and frustration of a lawsuit. Even for small controversies of $1 million or less, the discovery phase alone often costs $500,000 while creating a huge distraction on preferred business activities.
In the U.S. alone, 303,000 patents were granted in 2013. With patents enforceable for 20 years or so, that adds up to hundreds of thousands of potential legal hazards on the books.
Perhaps relatively inexpensive IP research could have helped head off Apple’s $533 million settlement to the Texas-based Smartflash. The case is a small patent-holder challenging the 800 pound gorilla and winning a judgment claiming Apple used its patented inventions in iTunes without paying proper licensing fees.
Verify Disruptive Technologies Before Investing Time and Money
The harsh truth is that disruptive technologies, such as 3-D printers, are rare.
Great ideas are often preceded by someone who had the same or a similar idea. This is not usually a show stopper but allows refinements to be made and, often, the future product morphs in a better direction and gains new opportunities.
External verification also helps R&D and legal teams balance legal risks, shorten timelines, and maximize the size of the pot of gold at the end of the product rainbow.
Not sitting on a disruptive brainstorm? It also pays to be on the lookout for innovations that may disrupt the current (or future) marketplace. Futurists often look for these disruptors so that they may be considered in long-term company strategy development or refinement.
Plan Stage Gate Methodology Before R&D
In the fast and furious world of innovations, many CEOs hear a neat idea and proceed with patenting shortly after having lunch with the inventor.
But using Stage Gate Innovation Methodology can minimize expenses and time. In brief, companies can refine the inventive process by having the inventor’s group do some quick initial vetting of the idea and submitting those that pass muster along for some initial research for patentability. Worthy ideas can then proceed to initial market research to confirm that today’s expenses will translate into future revenue.
If the idea merits, full speed ahead with investing in the detailed research on the potential of the market opportunity, generating a patent application, and sending to R&D.
This step allows leveraging the existing state-of-the-art to avoid reinventing the wheel.
Peek into IP License Filings
No one would buy real property or rent office space without knowing the market.
Buyers rely on agents to pull up comps for what others are asking or paying. This powerful information allows the buyer and agent to make informed, intelligent negotiations, or even walk away from a bad deal.
Similar resources can be dissected to uncover filings related to licenses, including those for intellectual property. Details might include the competition’s spending and future direction, rates, licensors/licensees, whether the licenses are inbound or outbound, and the details of their contracts.
What’s the catch? Most licenses are never announced, but the SEC requires publically traded companies that have IP critical to their business to file this information publically.
Other companies may be forced to share this information during the discovery phases of a lawsuit related to contracts disputes, fraud allegations or antitrust charges.
These are not the only approaches to competitive intelligence, but with innovation on the line, they may be the most efficient to consider first. After all, saving time and money should be the right approach for any size company.
Steve Pearson is the founder of the Pearson Strategy Group, helping companies accelerate innovation by providing custom-designed, on-demand competitive intelligence and IP research. He enjoys being an active player in Austin’s entrepreneurial community.