Wednesday, January 21, 2009

Is modern industry heading back toward a distributed model?

There is a trend I have noticed over the past ten years or so that appears to be gaining momentum. Started with JIT (just in time) manufacturing and sales optimization, continued with the enhanced efficiency of shipping and material transport methods, accelerated with the Internet and the newly distributed nature of information resources, and aided by the rise of rapid manufacturing and prototyping technologies, this evolution is continuing. It really seems to me that in some ways the industrial revolution is beginning to come full circle - we appear to be moving away from centralized generation (goods, energy, etc) epitomized by large factories and power plants back to a more distributed model.

One important reason this change appears to be happening is that the technological basis for these activities is continuing to evolve. Solar, wind, hydro, geothermal, and other alternative energy generation methods combined with the decreased price, size, and increased functionality of various industrial equipment (mostly due to the evolution of CAD and CNC machining and advances in materials) allow very small scale manufacturing and power generation to work sufficiently well and cheaply enough on small unit manufacturing to compete with the economies of scale enjoyed by more traditional methods. A significant advantage is that general purpose tooling can be modified from unit to unit without the retooling costs associated with traditional manufacturing line methods.

So everytime i see prices decrease for rapid prototyping and CNC machines and the capabilities improve, or see cheaper and more efficient small scale power generation methods reach the marketplace, it really brings home the way the industrial landscape is changing. Decentralized manufacturing and power generation is starting to look like the next stage of the industrial revolution ...

Friday, January 16, 2009

The patent race in 2008

Looks like IBM is back on top in the patent wars. An article from Reuters says IBM was granted 4,168 patents in 2008, the most ever received by a single entity in a year. Samsung was second with 2,515.

Perhaps more interesting is the source that Reuters used to acquire this data - a company called IFI Claims Patent Services is trying to do something pretty interesting. They have a database of all patents, and are trying to automate the process of sorting and evaluating patents into groups related by subject area and other criteria. Not sure how good the system is, as I have yet to use it, but anything helps. Figuring out what the patent landscape looks like in a specific area can take quite a bit of time unless you have quite a bit of prior experience in the specific field *and* in the IP aspects of the specific field.

Friday, January 9, 2009

On the value of ideas and sweat equity

I want to address a fairly common meme that shows up quite often when you deal with inventors and entrepreneurs, especially young ones. The meme is basically "We need to play this one very close to the vest, encrypt all our discussions, get folks to sign NDA's or contracts before we talk to them in any detail, and be very careful who we talk to at all. Because if we are not careful, someone will steal our unique and highly profitable idea."

After the first few patents you file or companies you start you realize a couple of things:

1) The idea itself is at most 10-20% of the insight and sweat equity required to get something off the ground. More commonly 1-5%.
2) Once you start implementing or building something new, usually there are follow on insights developed as a result that are far more important than the original idea.
3) If the idea is easy enough to do that almost anyone could steal and implement it, you should probably try another idea.
4) The kinds of people who are going to put the sweat equity into developing an invention or company most likely will do so on one of *their* ideas, not get all excited about one of yours.
5) Most NDA's dont work. I usually get them signed, but more as part of the process than with the real expectation they will be useful. And only after the negotiations get serious - usually i have disclosed the core of the idea already.
6) Its really not that common to have a 'truly unique' idea. Most likely someone, somewhere has thought about it or something like it, even if it hasn't shown up in the prior art yet.
7) If you are the kind of person who comes up with original ideas, you will have more than you know what to do with. In my experience, folks either come up with 0 or hundreds of good ideas. Not too many come up with between 1 and 10 good ideas.
8) Learning to judge the 'profitability index' and 'effort index' of new ideas is the key to repeated success. If my experience is any guide, you will leave at least 10 good, original, and commercially viable ideas on the shelf for every one you actually pursue. Maybe more like 50 to one.

This blurb was stimulated by a discussion on Slashdot where I posted something fairly similar. Might be worth a full length article at some point, considering how often I hear some variant of this meme.

Contact me if you have any questions about this sort of thing. I am always willing to chat about new ideas and business plans. I even have a very nice bilateral non disclosure agreement that has stood the test of time and can be easily adapted to specific needs.