Startups · Product Development

What do you do when an Inventor is holding back the launch of a new startup business?

Gary Ross President | CEO | Founder

April 19th, 2016

Scenario: There is an exciting new healthcare technology product and a new company and launch team formed, and potential customers are asking for demo's, and overall excellent progress in just 4 months.  However, the inventor of the product is holding his product and source code so close to the vest that we can not effectively perform due diligence on the software - so that we can conduct our review, determine our MVP, and go get investor capital to take this product to market.  We are licensing the software from a University.  Would love to get my followers and experts on startups, to provide their perspectives on how to address this inventor in the short run, and what kind of role the company should have with this inventor going forward.

David Austin Relentless problem solver and innovator.

April 19th, 2016

just an idea ...

If he's holding his cards that close it's probably something that could warrant a patent - and getting protection there can help him loosen up.  Recommend that he quickly file a provisional patent application.  Should cost him $65 if he does it himself (as a "microentity").  Lots of guides online to help him out.  Ideally he should have a patent expert go over it, but not for the first one so he can just start talking.  He can file as many as he wants, each adding successive strength to the ultimate patent.

The purpose for doing so, of course, is for his own comfort level, so he can feel comfortable about letting the information out there.  Provisionals don't really offer any protection but they do provide a time-stamp placeholder for protection of the IP that is mentioned, which gets it's legal teeth when he finally files a patent application (within 1 year).

He doesn't need to get it perfect on the first provi.  Just file something ... a page describing it briefly, then add to it over the next couple weeks with additional provis (also called PPAs).  In fact he needs to understand though that if he wants to do this then he can keep submitting addendums at roughly the same cost (as many has he wants) up to the point when he files a true (non-provisional) patent application ... which must be done within 1 year of the first provi.

Joseph Wang Chief Science Officer at Bitquant Research Laboratories

April 19th, 2016

Having worked with universities and inventors before, one has to understand that not everyone *does* have the agenda of getting a product to market. In particular, the university is often interested in getting good press and publications and in increasing their research rankings. The inventor may have side agendas of getting more grant money, job security, and ego, and getting the product to market may not be important (and if you are particularly unlucky, someone may be interested in making sure that the product never sees the market).

A good university industry liasion programme can help a lot, but something that people in industry have to realize is that a university has almost no leverage to force a person to do something. Tenured faculty have job security, whereas graduate students know that they aren't going to be staying around. Even non-tenured people have far more job security than in industry, so you'll find that a university it is pretty much impossible for fire anyone.

Because universities don't work via a cash economy, ego and reputation becomes a huge factor, and it's not uncommon for people in universities to be annoying just to prove that they can get away with it (and they often can). Also, you'll find that because it's not a cash economy, people who wouldn't last five minutes in industry can stick around in universities for years, and you'll find that the most brilliant people are sometimes the people with personalities that make them difficult to work with.

Figuring out someone's real agenda becomes important in these situations. If you are lucky you can work out some deal by which their agenda works with yours. However, you just have to be prepared for the possibility that the agendas don't match, and walk away.

Arshad Syed CTO & co-Founder at iEHR Online Inc.

April 19th, 2016

Hello Gary, Clearly the inventor is concerned about losing control of the IP - this is a natural reflex. Objective reasoning etc. alone will not convince such inventors - as smart folks, they must see that the venture needs to expose granularity of invention to potential customers. In my past startups, I have brought along such inventors to meetings with our potential clients. There must be prior understanding with the inventor that he/she must remain a silent observer during the meeting. After a couple of such meetings, the inventor will see the need and benefit of relaxing the grip. I have learned a lot from the book "Crossing the chasm" to handle similar situations. Perhaps your inventor should read the book. Hope it helps, --arshad

Ken Anderson Director, Entrepreneurial and Small Business Development, Delaware Economic Development Office

April 19th, 2016

LOL...this is not an uncommon occurrence.

Inventor's have read the archives of the experiences of inventors, who have created disruptive technologies, only to be usurped by the firms for whom they worked, or by others with deeper pockets and powerful contacts. The Ford inventor who invented the modern day windshield wiper is a notable example.

But those days, with few exceptions, are long gone.

I tell inventors to protect your tech as much as you can and in every way that you can. But at some point, your idea dies on the vine until you share it with critical advisors who can actually assist you to bring that idea/tech to full manifestation.

You really don't have to worry about anyone, to whom you should really be concerned, about stealing your idea until you are wildly successful!! Wildly successful!

The entities that you should worry about will not dedicate the time, money and resources to intrude in your space until there is a clear, validated reason to do so. By that time, you have had protected yourself, had an aggressive launch, branded yourself in the marketplace, and all copycats are just that...copycats.

At that point, just focus on innovating and being true to your market...and frankly, just be willing to compete.

Matt Harrigan President & CEO at PacketSled

April 19th, 2016

Sounds like you probably need to review your license agreement from the university. Is it a source license or a runtime license? If he/she won't comply with simple requests to review the product under NDA then this will be the first of many problems you will encounter with this person. If that happens, I would walk from the deal before your headaches get bigger. Perhaps when your inventor realizes that there is no business rationale to work with them, they may change their tune.  

Brian McConnell

April 19th, 2016

The question to ask is _why_ he is reticent to share information. Two possibilities come to mind. 1) he has something to hide or is not confident the invention will stand up to scrutiny, or 2) something about your team has set off his spider sense.

R. Singh Entrepreneur, Advisor, Get things done

April 19th, 2016

If you are licensing software from a university it most likely has enough public information. 
Many inventors have the issue of feeling insecure thinking someone is going to steal their stuff even if everything is clean. So your challenge is in first ensuring this person feels that no one is going to be able to copy his/her idea easily. 

Also write a patent application before talking with anyone else if it is patentable. 

If the idea is so simple and easy that it can be copied by anyone once they know then you do have a problem with the value of the IP itself. 

Gary Ross President | CEO | Founder

April 20th, 2016

I want to thank you all for excellent insights!  This is very helpful.  I will be contacting some of you individually.  I purposely did not mention names or institutions to keep this confidential.  Thank you for your feedback - this network is very valuable.

Georgia Reash Growth and Improvement Consultant, Sustainable Community Developer, Artist and Minister

April 19th, 2016

It All comes down to trust and trust cannot always be earned by inventors who have been burned in the past.   NDA's aside, it sounds like the relationship needs nurturing and assurance.  Most of the inventors I have worked with are generally isolated highly intellectural people and relationship can be difficult.  Line up all of the assurance articulated above, but more importantly, create "family" for the hesitant inventor; he/she probably needs it.

Andrew Whitaker Managing Partner, Kings Highway Media

April 19th, 2016

Why is right.
That said the inventor may not wish to answer that question if he isn't secure about the proper ownership registration of his IP/invention.