You Succeed By Executing Well, Not By Gathering Patents

from the rembrants-in-the-garbage dept

Patent attorney Joe Root sent us a link to an interesting essay on how companies became way too focused on intellectual property over executing sound business strategy in the late 90’s, thanks in large part to the book, Rembrandts In The Attic. Root points out that the poster-children in that book were companies that focused too much on patents alone, and failed to execute in the marketplace, leading to failures. At the same time, the company that was held up in the book as missing out on the patent train was Amazon.com, which the book predicted would lead to Amazon’s downfall. Amazingly, the authors of the book even focused in on Amazon’s failure to patent its “one-click” ordering system:

“Amazon’s commercial fortunes would have been far better served had it patented technologies truly strategic to its business, such as the one-click ordering system that the company pioneered and that is used widely by on-line retailers today. That was a real business method choke point… that Amazon could have controlled to no small advantage. But as it is, without that proprietary advantage and with its brand strength eroding, companies like Virgin Records and PetSmart are unafraid to compete directly against the giant on-line retailer. Don’t be surprised if Amazon’s stock market fortunes head south when investors realize this fact.”

Of course, as most everyone probably already knows, and as Root highlights in the essay, Amazon actually was in the process of patenting the one-click feature. Yet, rather than helping the company, that one patent (to this day, actually!) has become a symbol of just how screwed up the patent system has become. It also created tremendous ill-will towards Amazon until the company was forced to back down from attempts to enforce it.

The key realization that comes from Root’s essay (which also dips into military strategy) is that, in the big rush to focus on the value of “IP” and patents in particular, many companies out there forgot that patents are rather meaningless if you can’t actually execute on a business strategy providing something that the market actually values at a price they can afford.

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Companies: amazon

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Comments on “You Succeed By Executing Well, Not By Gathering Patents”

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20 Comments
Hellsvilla (user link) says:

This is not always true

You see, that all depends on who is running the company.

If the Chief Executive Officer is running the company, than it’s success or failure is controlled completely through execution.

However, if the CEO has handed the reins of the company over to the Legal department, then it’s success is pyrrhic at best, but will nonetheless be controlled by litigation, and the hoarding of patents.

Also, if the CEO has turned control of the company over to the Sales and Marketing departments, then performance be damned absolutely, the customer is now a victim; a tool with which to extract the most money. Execution is completely irrelevant.

So sure, success can depend on successful execution, if that’s the officer in charge.

SomeGuy says:

Re: This is not always true

I think you’re somehow missing the point… A company run by the legal department, who’s success depends on collecting and enforcing patents, and who neglects an actual product to place on the market, will fail. A company run by marketting, who’s success depends on hoodwinking the maximum number of victim-customers for the maximum price, and who neglects an actual product to place on the market, will fail.

You CAN run a business through marketting or litigation. But we’ve already seen the PR fiasco that heavy-handed patent litigation can bring (and the market fallout that follows), and you will fail. A company who has violently aggressive marketting but fails to produce a product people want will die quietly at best, or dramatically at the hands of fraud claims.

Steve R. (profile) says:

Re: This is not always true

Excellent summary. Unfortunately, your comments are quite true. One company where the Sales and Marketing Department has “destroyed” good products has been Intuit. Intuit is all about making the next sale. Even if you own the product you are barraged by pitches to buy buy buy. Meanwhile the product itself languishes.

angry dude says:

Mike's retarded as usual

Heck, no, he is just shilling for his big corporate masters,
executing an assignment to create grassroot support for anti-patent agenda when patent “reform” is losing steam in US Senate…

Whatever shit he writes here about patents or tech immigration is just a paid corporate propaganda.

Mike (profile) says:

Re: angry dude lying as usual

Heck, no, he is just shilling for his big corporate masters,

As angry dude well knows, my personal position is not supported by any of Techdirt’s customers. In fact, many of them actively and loudly disagree with my position on patents.

Furthermore, we do not, and never have, done any business having to do with public advocacy. Companies do not, have not, and will not, hire us to push any kind of message in the public. They hire us to give them insight for internal use, and much of that insight and analysis is in telling them that we disagree with their position and strategy.

So, the claim that any of these posts are for the sake of propping up someone’s position is a clear lie. Angry Dude has admitted that he’s just making stuff up about me in the past, but given that he has no actual evidence or reasoned argument to respond to my points, he resorts to repeated lying.

My statements are my own and that’s it. They have nothing to do with Techdirt’s customers. As far as I know, not a single customer believes in the same policy that I believe in — though I’m trying to convince them that they would be better off if they did recognize this.

executing an assignment to create grassroot support for anti-patent agenda when patent “reform” is losing steam in US Senate…

This part is the funniest, because I am publicly on the record as being very much against the patent reform plan as offered up. Angry Dude knows this, but still makes claims like this.

http://www.techdirt.com/articles/20070418/161925.shtml

Seriously, angry dude, if you’re going to lie and make up stuff about me, at least try to be creative in coming up with lies that aren’t so easily disproved.

angry dude says:

Re: Re: Re: angry dude lying as usual

Dude,

You can feel me for real
We can set up an appointment in some parking lot without security cameras and I promise you the unforgettable anal experience of an angry dude
But I must warn you: I am quite fit physically and really really angry…
Still want to meet me in person ?

Janet R. says:

Amazon

The reason customers buy lots of things at Amazon is because they find the products they want at prices they are happy to pay, and get consistently good service (in my experience) with things like people who answer the phone when you call and a simple method for returning items when necessary.

One-click is nice and all, but it isn’t what keeps customers coming back.

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