The Death of Privacy

Co-authored with Matthew Cahill

Navigating through our day-to-day in a world with information at our fingertips is a current reality that we all seem to enjoy. The ease with which we can access information allows us to look up lyrics, movie times, check company profiles and gain instant insights into the people that we meet. While we barely have time to reflect on this current phenomenon, let’s consider the next iteration/evolution of this all-to-easy-to-access information technology? When will real-time data continuously feed into our everyday activities with distilled insights that then shape decisions, relationships and, eventually, our institutions?

Imagine a world where Artificial Intelligence (AI) displays graphical information that not only shapes opinions but hacks our minds and becomes the message.

Technological advances in civilizations are best understood as extensions of some part of ourselves. Nature replicates itself in a wide variety of ways and humans are but the latest iterations of evolution. The wheel extends the foot. Hammers and guns extend our hands. Computers extend our brains. The internet extends our reach. With each come some unintended and intended consequences. We place different value judgments and often recategorize after the fact.

The pace of information delivered to us in real-time has increased over the years. Augmented reality glasses and individual augmentation with other devices has been limited by communication bandwidth capabilities. When we move from 4G to 5G wireless communication, we also enable all these devices and human augmented reality. This upgrade in network capabilities brings cloud server AI and decision support recommendation systems closer to us with the ability to influence our perceptions based on context such as location, the person or activity we are currently engaged with, and so on.

For example, the AI can act as a die detector service using biometrics to instantaneously determine if what you hear or see is true or not. It will fact-check in real-time and display colors that indicate true or false? Or, if when you walk into a room, you can scan and see a real-time reading of each person’s net worth? Whether or not they have a transmittable virus or disease? The entirety of an individual’s digital activity can be synthesized into singular graphics and icons for easy consumption. This new AI tool can help you make better decisions about who you choose to engage with and how you interact with each person.

Marshall McLuhan wrote in 1964 that the “Medium is the Message” when television (3 channels of sanitized, homogenized, formulaic content) started ushering in the Information Age. As an early intellectual pioneer, he sounded a bell-weather then that was largely ignored in favor of our unbridled bias for technological innovations. We’ve blindly embraced media, in all its glorious forms to watch producers continue to chase each other in creating content that is more and more emotionally provocative. Emotions are the hooks that shape and frame EVERY message we consume. Our brains have an almost insatiable demand for new data and record into our collective memory a string of binary stereotypes. The context is King. Context matters. It makes all the difference.

Consider the following:

  • What do you do when you know when someone is lying?
  • What do you do when you know how much money each person in the room makes?
  • Do you still choose to interact if you know a person has a life-threatening illness?
  • Do you still shake a person’s hand if you know they’ve watched porn earlier that day?
  • Did you automatically think the person in question was male? Does it make a difference if it’s a woman that’s watched porn earlier in the day?

Are you making the world “safer” if you know who in the room has a criminal record? Where sex offenders are? What about if someone was only accused? Can that “news” somehow be scrubbed from their digital profile? The assumption that we can effectively use distilled, filtered real-time data to assist us in deciding who to engage with is overlooking implicit bias. Even with a carefully curated filtered list of criteria, when our brain is presented with the distilled, graphic information, what do we do with it? If it makes us feel good, chances are we’ll still make decisions that fly in the face of reason. Humans have proven over and over again that we are not logical or rational.

How we adapt to this technology cannot be foretold. Our historical pattern has shown that we overvalue and blindly embrace technology that appear to make our lives easier. There will be unintended consequences and potentially irreversible changes. It’s a conversation worth having in the hopes of creating more thoughtful practices to mitigate our worst impulses and design policies to protect our public spaces and personal boundaries.

5G — Privacy Not Included

5G technology and infrastructure are being rapidly introduced across the globe, but that isn’t news. Starting as early as 2017, countries such as South Korea, Germany, the United Kingdom, and the United States have been rolling out some form of 5G. While the newly emerging business opportunities are rising, the anonymity and privacy we have become accustomed to are quickly fading. Even though most aspects of our privacy have been diminished by the internet and social media, 5G is going to bring bigger challenges that are not only concerning but potent.

To understand just how we will get ourselves into this privacy nightmare we must look at the Internet of Things (IoT), specifically new sensor technology, ‘smart’ glasses (e.g. Google Glasses), and the impacts of Machine Learning (ML) and Artificial Intelligence (AI).

A Sensor Filled World

The Internet of Things started when we connected two or more machines together. Today, we have billions of machines connected by both wired and wireless technology. For the most part, it’s this connectivity that creates the World Wide Web that we all know and love. More specifically, part of this IoT world includes sensors and visual device connectivity that collect either real-time or close to real-time information and sends this information back to the cloud for processing. While this technology isn’t necessarily new, companies like Wiliot are finding new, better ways of managing and powering sensors by using inked, wireless BLE sensors that harvest energy for its use and communication without the use of batteries. These sensors can be dropped anywhere and survive independently, collecting and transmitting data to the cloud. Yet, what is missing for this technology to be adapted is the bandwidth.

The number of these devices capable of functioning within a network filled with sensors is limited to the bandwidth required to upload their data, this means we cannot have a high concentration of them in one single area or else we won’t be able to effectively communicate. While this is one major problem for companies like Wiliot, there is a relatively new solution on the horizon, 5G. With the 5G network, we can pack a large number of sensors in a small area and have the bandwidth to communicate continuously to the cloud. While yes, this is great, what does it mean for our privacy? How will these sensors be used and will they further impede our privacy? My guess is yes, it’s just a matter of when and who will be the first.

A New Smart Glasses

In April 2012, Google announced a new product, Google Glass. These glasses are a cool, augmented reality tool that can be used to support multiple business models. The need for data indoors and outdoors exists and the use cases are plenty. While the product exists and the capabilities and functions are ready, the product has never been fully adopted by consumers due to a lack of bandwidth. This, as we’ve discovered during our previous 5G discussions, is a huge barrier for new, emerging technologies.

To use smart glasses we need cloud-based AI systems to help us understand what we see and augment our reality with real-time information. While this is an available technology, the problem is just the same as with Wiliot; when we place many smart glasses in a small area we do not have enough wireless bandwidth to communicate back to the cloud. This is again where 5G comes to the rescue and enables all of these unique use cases. We say glasses, but some companies are developing contact lenses that will work just like the Google Glasses we all know. We can add other human augmentation devices that can communicate, collect data, and share information with us in real-time via 5G networks.

In Conclusion

Imagine yourself going to a restaurant, a coffee shop, or entering a conference room where every word you say or whisper is recorded and attributed to you. Every move you make is videotaped and analyzed in real-time. Your body posture, skin temperature, heart rate, pupil dilation, breathing level, gestures, tone of voice, the language you use are analyzed and conclusions and suggestions are communicated to those who come in contact with you via their smart glasses or other AR-like devices.

Even more so, imagine a world where every move you’ve made can be archived and viewed at a later date. Will you feel safe? How much of your everyday activities including your biometric state at every moment are you willing to share with everyone? Dying to know more and what exactly this means for our privacy as we know it, read my next piece, The Death of Privacy.

Also published on Medium.

5G — The Self-Driven Car

In this second installment about 5G technology, we will examine the exciting technology behind the “self-driving car” and future businesses in light of both Artificial Intelligence (AI) and 5G. 

What If

What would you give to avoid unproductive time in traffic, the risk of accidents, the stress and all the ill that comes from being stuck in a car? The premise of self-driving cars sounds like the correct solution for the problem, assuming that you must travel to work or to a meeting and you need a car to get there.

The basic assumption that drives the self-driving car business is that a car can mimic the human brain and act faster and better than a person in critical situations. We like to imagine the self-driving car as self-sufficient such that it can come to the door when requested pick us up and safely deliver us to our intended destination. This concept is driving new business models in which we (people) no longer own cars, truck delivery fleets, boats, or drones; rather, operating or service companies that provide us with these vehicles. New businesses that will negotiate the best services, fares and manage our complete transportation budget will emerge and this new economy around transportation will flourish. 

In this segment about potential 5G impacts, we will examine the economy around the self-driving car and suggest that 5G will excite a shift from “self-driving” to “self-driven” and some combination of the two will compete in the coming years.

We start with a casual problem, a split-second decision that we all may face at one time or another when driving.

The Situation

I just took a right turn onto a narrow street driving 20 mph (or so I think). I noticed myself too close to a woman who was getting into a car on my right. My mind tells me that she is going to open the door to her car and I need to move to the left to give her some space when this kid came out of nowhere, chasing a ball in front of me. I panic – my heart is drumming in my throat and I get this strong sinking sensation in my stomach. I slam the breaks and veer hard to my left. The child running after the ball has now hit my car as I come to a halting stop.   The bicyclist, who came fast from my blind spot on my left hits the front left side of my car and is knocked down. The car is at a complete stop with chaos unfolding around us…. In this case, I was lucky, very lucky indeed, no one died yet a child and bicyclist left the scene with minor injuries.

What would I give to avoid this accident? How many nights will I stay awake trying to figure out what I could have done differently to avoid this accident and come up with nothing?

The premise of the self-driving car is that issues like this are avoided. The car will somehow solve this problem and will be safe, yet I know that this is hardly true. There are enough corner cases that we can not imagine or train a car to handle. Cases in which it will need to make life and death decisions. Do we rather have a car driven by an AI make this decision or a human?! I am not certain that we have a good answer. Instead, why not figure out a system that reduces the chances of problems in the first place?

I would stipulate that the solution is not a “self-driving car” but a “self-driven car”.  

A New Possibility

A self-driven car is a car with no brain, for example, a car without an AI inside. This type of car is operated by an AI outside of the car who can and will operate multiple cars at any given moment. This centralized or cloud-based AI will be connected with multiple input drones and sensors all around the city. Additionally, it will be able to calculate risks and move cars in the safest  possible way and safest speeds according to and depending on its risk assessments.

In the scenario of the self-driven car, we have now taken the AI out of the car  and placed it in a more centralized location where it can have access to more real-time data. By incorporating sensors, cameras, and drones to be present in and around the scene, the centralized AI will have advanced notice and enough information about the situation way ahead of the self-driving car which is supposed to make a right turn onto this street.

From an economic aspect, the self-driven car needs one AI for hundreds of cars. Cars will become a simple and low-cost device while easy to maintain and update.  These cost savings will translate to more efficient operations and better-operating companies.

Artificial Intelligence (AI) Market

The only problem that we are facing with the self-driven car is the need for split-second communication between the many sensors and the vehicles that it controls; this is where 5G comes to the rescue. 5G can support very high speeds of data with up to a 1-millisecond delay. The centralized AI will ‘see’ the woman parking her car, the child playing with a ball and the bicyclist on the way. This AI will significantly slow down my vehicle (eg. 1-5 mph) in anticipation of these unpredictable factors on the road to allow all participants to come out unscathed.

Moving away from ‘self-driving cars’ to ‘self-driven cars’ we also enable a new business model in which a transportation company owns cars and a dedicated 5G spectrum to handle the control and information dissemination to and from, cars, sensors, drones, and other infrastructure static and dynamic elements.

The reason I am suggesting that car fleet management companies will own spectrum is to make sure that they get enough bandwidth to handle their need with relying on the local cellular companies to handle it correctly. Unlike mobile communications, vehicle fleet management will become a utility and mission-critical. 

In Conclusion

While the future of 5G doesn’t have one set path, companies can be proactive in their approach to its possibilities. 5G presents an opportunity for companies to adjust their focus towards new value propositions that will change the way consumers live, work, and play. This is a very exciting and fruitful future for companies and users. The possibilities and the variable impacts provide an excuse for creatives and strategists to envision and devise new ways. 

Companies that effectively create and protect those innovative value propositions are the next unicorns. While they benefit the most from what 5G has to offer, others will show up and vanish quickly. Understanding the interplay between self-driving and self-driven and how the economy shifts are yet another subtle key to the future of transportation, spectrum control, federal laws, and local ordinance.

In all, 5G is just a vehicle that empowers new opportunities for those who can see it…and the clock is ticking. A brave new world is in the making… will today’s top companies maintain top status in the marketplace or bottom out? 


Also published on Medium.

5G – Here’s where the fuss should be

Starting the conversation about the broad business aspects of 5G.


There is more to 5G than meets the eye. Companies will soon need to make decisions on how to approach this impending market reality and find areas where they can seek new value propositions. Data communication speeds will move up to 20-50 Gbps versus todays 1 Gbps and 1-millisecond delay compared to the current 70-millisecond delay. 5G transcends physical boundaries and gives millions access to data speeds that were previously inaccessible. The move from wired to wireless outdoors will enable anyone to communicate at speeds which are available only to large corporations.

When data becomes a commodity, how does the economic model around it change? Which new business models are enabled and which one must be abandoned?

In this blog, we start the conversation and focus on infrastructure changes and impacts on hardware companies. This 5G series will further develop and cover multiple verticals starting with self-driving cars (which will no longer be needed), followed by AI and ML, and finally privacy and security challenges in this new world.

Reinventing Infrastructure

For 5G to become a reality, new costly infrastructure is necessary as today’s connections cannot handle the bandwidth of 5G. The Strategy Analytics Advanced Semiconductor Applications service report estimates the number of new base station sectors will double between 2018 and 2024 with 5G operators targeting 2020 – 2021 to begin rolling out their services. They are forecasting sector segments will experience a compound annual growth rate greater than 100%.

The sheer number of 5G base stations and their unprecedented impact on backhaul infrastructure is one aspect when considering 5G. Fiber or faster transmission technology is essential to meet the capacity and latency requirements of 5G and means replacing the existing infrastructure: cables, radio interfaces, antennas, switches, routers, gateways, relays… you name it, it needs upgrading.

Once created and operating, the theoretical range for 5G base stations is about 250 – 300 meters, while a 2/3/4G base station has a theoretical range between 50,000 – 150,000 meters. This means the number of base stations required to cover the same area is a factor of 200x to 600x for 5G base stations to cover the same area. By estimating the performance per 5G base station there needs to be a multiplier of at least 20x faster. This number is very large, yet telecom theory allows the assumption that only a small percentage of the backhaul is active at any given time. Using this model we can estimate a multiplier of a 1000x capacity increase in the transition from 4G to 5G. To support a 5G system with the same number of subscribers, the backhaul bandwidth must increase by a factor of 1000x. Furthermore, some applications will require diverse Quality of Service (QoS) that will drive for higher network and backhaul demands in certain areas. Some topological and physical issues related to the radio spectrum used in 5G will further exacerbate this issue. With the debut of 5G on the horizon, architects, engineers, cable providers, telecommunicators, and app developers need to think beyond their current value propositions and fast.

Caption: Backhaul relative to base stations (BTS) and the cloud.
Figure credit: Shmuel Silverman – Multi-Innovation

Further, new traffic models will dictate conceptual changes and force migrations of existing systems to a new paradigm. Some or all of the large network switching manufacturing giants will experience huge pressure to reduce costs and increase network efficiencies and capabilities. Network automation can no longer be nice to have, it becomes essential. The existing network management system will not be able to scale and new technologies and applications are required. Additionally, the high availability of 5G will be another point of contention between the existing switching manufacturer and cellular network operators. 

In the end, 5G creates an opportunity for fiber players such as Nokia, Huawei, Ciena, ECI Telecom, Coriant, Infinera, Fujitsu, Cisco, Aspire Technology, ExterNetworks, Accedian, ADVA Optical to change the game by introducing new and compelling value proposition(s) to make it simpler for 5G operators to install, deliver, and maintain value to clients. The challenge in the coming years will be in reassessing and identifying new value proposition(s) to be proactive with 5G, as well as maintaining their place in the market against competitors. 

The Flight Towards the Last Mile

When WiFi first debuted in 1997, its purpose was to replace existing residential ethernet cables by surpassing its speeds. Homes no longer needed to install cables between rooms. Cables, switches, and routers were replaced by a single unit – the WiFi router. 5G speeds can replace Interhome cabling in the same way that WiFi replaces Intrahome cabling. Existing cable providers like Comcast and AT&T need to reconsider their strategy in this regards. Each home would have the equivalent of a fiber connection for a small fraction of today’s costs delivered by the 5G cellular operator. Cable service providers already face disruptions in other areas of their market, but 5G will present them with additional challenges that could greatly influence their future. 

In Conclusion

While the future of 5G doesn’t have one set path, companies can be proactive in their approach to its possibilities. 5G presents an opportunity for companies to adjust their focus towards new value propositions that will change the way consumers live, work, and play. This is a very exciting and fruitful future for companies and users. The possibilities and the variable impacts provide an excuse for creatives and strategist to envision and devise in new ways. It will be the companies who effectively create and protect those innovative value propositions that will become the next unicorns and benefit the most from what 5G has to offer. 

In all, 5G is just a vehicle that empowers new opportunities for those who can see it…and the clock is ticking. A brave new world is in the making… will today’s top companies maintain top status in the marketplace or bottom out?

Note to readers: Stay tuned for my next 5G piece, the democratization of the self-driving car.

Kodak film square

What Apple needs to learn from Kodak’s missteps

Kodak’s value proposition

Kodak was founded by George Eastman and Henry Strong in 1888. During the 20th century, Kodak transformed the photography industry to become a creative outlet available to the masses. By reducing the film processing cost, it enabled every person the opportunity to own a camera and capture memories on film. By the 1970s Kodak owned over 85 percent of the market. But by the early 2000s, Kodak’s net income had declined and the company is still struggling even today to stay ahead of the game.

Kodak identified their value proposition as “capturing memories” or, “Kodak Moments,” and that the real value is in sharing those captured memories.

While Kodak’s innovative minds knew that digital would be the future, even creating a digital camera in 1975, they couldn’t break away from their foundational belief that traditional film would be everlasting. Despite owning many patents in the digital tech space, Kodak didn’t anticipate the rapid growth and enthusiasm from consumers for the digital camera. In addition to smaller profit margins compared to their traditional film revenue, Kodak failed to stay relevant in the market.

What is interesting is that Kodak’s decline happened long after the Ethernet revolution, and the boom. The writing was on the wall and yet Kodak still did not see it.

Photo by Olia Nayda on Unsplash

Apple’s value proposition

While Apple doesn’t have the same longevity as Kodak, they still established itself as a household name and worldwide brand. Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, it would be the Steves that would develop the Apple personal computers and grow the company. Wayne left the company after only 12 days, while the Steves would leave to pursue other ventures as the competition in the personal computer market grew by 1985.

By the end of September 1997, Apple’s sales had declined to $1.6 billion and the company was desperate for a revival. Steve Jobs was asked to return to Apple that July after CEO Gil Amelio was ousted. He spoke at Apple’s Worldwide Developers Conference (WWDC) where he declared Apple’s value proposition is in addressing the following questions:

  • “What incredible benefits can we give to the customer?”
  • “Where can we take the customer?” which translated into “Is there a magical user interface that will enable a broad base market?”

Later that year when the iPhone was introduced, Jobs called it, “Magic!” The iPhone changed how the world uses a smartphone and moved the customer base (SAM) from a few million users to billions. It was this value proposition that helped Apple become the dominant market leader in the smartphone business.

Kodak and Apple’s common threads

Both Apple and Kodak created unique value propositions that changed their respective worlds. Kodak figured out how to reduce the price of the film which allowed cameras to be used by anyone for any occasion. Apple figured out a magical user interface that enables people of all ages and skill level to use a smartphone and be enchanted by its features.

But, Kodak failed to change their value proposition along with the market and to their detriment. So, how can Apple avoid this same issue? The answer is hidden within Steve Jobs words from the 1997 WWDC.

“What incredible benefits can we give to the customer? Where can we take the customer?”

This a very broad statement and can not be taken as the value proposition, but an intention, or company vision. When it comes to the value proposition, Apple needs to do better than that.

Kodak was a giant in technology and in research — they once owned over 75,000 patents! Currently, Apple is a giant in technology and in research— owning over 75,000 patents, as well.

Remember, Kodak was one of the first companies to develop a digital camera. There is a reason to believe that amongst the patents that Apple owns today there are some that will be part of the “next big thing.” Yet, will Apple be able to recognize these patents and technology, as well as continue its market leadership?

Understanding that value proposition shifts over time and capturing the shifts correctly, are the key to any company’s future. Apple not only needs to clearly identify the correct value proposition, but it will also need to reposition itself as a leader in the market and the technology. An example: after the world learned that smartphones are useful and great, the next value proposition is about communication and the magical interfaces that no longer depends on touchscreens…if this is true, the days of the smartphone as we know it are numbered.

How long do you think Apple has before they will need to come up with new and exciting technology in order to maintain their market position?

Tech devices

Why Apple v. Qualcomm was just a game of “chicken”

Apple and Qualcomm just played the most watched game of chicken probably ever.

Just as we all got settled in to watch Apple and Qualcomm convene in court this week, it just ended.

The decision: Both parties agreed to end all ongoing litigation, including Apple’s contract manufacturers. Apple will also cough up a settlement to Qualcomm and according to mutual press releases, “The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement.”

So much was leading up to this war, and yet there was no epic battle fought. What happened!?

Let’s begin with what started this war:

GSM, EDGE, UMTS, 4G, 3GPP…does any of it ring a bell? These are all standards and air interface telecom-based technologies. The companies who created those standards have been receiving up to a total of 15% of every mobile which includes the set of patents that are essential for the standard to work (SEPs). Those companies include Nokia, Motorola, Ericsson and more. Qualcomm, on the other hand, manufactures IP in the form of chips that include its technology and patents which are part of the 3GPP licensing program.

Now Apple does not provide any SEPs. For every mobile sold by Apple, the company must pay for the standard SEPs, which opens the door for double dipping by Qualcomm. On the other end, Apple is not a radio or a telecom company. Qualcomm believes that without its technology, Apple would have never gotten to its current leading position in the industry and thus feels betrayed after years of close partnership with Apple.

Apple can and should be able to choose who they choose to partner with when developing products. Qualcomm should be able to sell chips and ask for licensing fees since the two seem to be independent. And Qualcomm can also complain about a loss of business based on its contracts. Now, if Apple did not buy chipsets from Qualcomm then they would still need to pay royalties for its 3GPP patents that they use, therefore Qualcomm is within its right to ask for royalties.

Apple had nothing to lose while Qualcomm had everything to lose. Taking this to the courts, was a giant game of chicken — and both sides bailed.

I believe that the purpose for Apple going to court, wasn’t because the company was hoping to win financially but instead they were hoping to leave with some extra IP in its pockets. Apple believed it deserved a better deal from Qualcomm, but that doesn’t mean they were right. If the court had ruled in favor of Apple, Qualcomm would have had difficulty staying in the game. Why? Last year Qualcomm’s revenue slipped, which weakened the company. If Qualcomm had lost, it’s market value would have dropped so much, it would have never been able to recover.

Despite coming to a mutual decision, Apple weakened themselves by opening another front in the courts instead of focusing on what its next magical product should be in order to maintain its market leadership, while Qualcomm has had its name tarnished.

Less than 24 hours after the decision to drop the case, Intel announced that they will stop developing mobile chips due to the declaration by Apple and Qualcomm.

Now the big question is: how will licensing activities for 5G be informed? Stay tuned, this story is only just beginning.

Steve Jobs

Think BIG like Steve Jobs

“You can’t start with the technology and try to figure out where you’re going to try to sell it.” — Steve Jobs, Apple’s Worldwide Developers Conference, 1997.

Over 20 years ago, Steve Jobs stepped on stage at Apple’s Worldwide Developer Conference after Gil Amelio was ousted as CEO of the company by the board of directors. Jobs was taking on the crucial task of rebuilding the company’s product line as well as the public’s faith in the company.

But, not everyone in attendance was thrilled with Job’s return to Apple. In fact, one particular audience member shared his skepticism and disappointment with him. I highly recommend you watch the entire clip for yourself. I was completely captivated by Jobs’s response to the man’s questions and feel that his answer is one that can help business leaders grow today.

Audience member“It’s sad and clear that on several counts you’ve discussed, you don’t know what you’re talking about. I would like, for example, for you to express in clear terms how, say, Java and any of its incarnations addresses the ideas embodied in OpenDoc. And when you’re finished with that, perhaps you can tell us what you personally have been doing for the last seven years.”

Jobs“You know, you can please some of the people some of the time, but one of the hardest things, when you’re trying to effect change, is that people like this gentleman are right in some areas.

The hardest thing is: how does that fit into a cohesive, larger vision, that’s going to allow you to sell 8 billion dollars, 10 billion dollars of product a year? And, one of the things I’ve always found is that you’ve got to start with the customer experience and work backward for the technology. You can’t start with the technology and try to figure out where you’re going to try to sell it. And I made this mistake probably more than anybody else in this room. And I got the scar tissue to prove it. And I know that it’s the case.

And as we have tried to come up with a strategy and a vision for Apple, it started with ‘What incredible benefits can we give to the customer? Where can we take the customer?’ Not starting with ‘Let’s sit down with the engineers and figure out what awesome technology we have and then how are we going to market that?’ And I think that’s the right path to take.

Apple embodies this philosophy throughout the customer lifecycle, including being exposed to the product, buying the product, implementing the product, upgrading the product, and getting help with the product. It is Apple’s competitive advantage.”

Can you pick out what Jobs identifies as Apple’s value proposition?

“What incredible benefits can we [Apple] give to the customer? Where can we take the customer?”

That is Apple’s value proposition. These questions are what helped Apple develop and create the magical user interface of the iPhone. This device would go on to change how the world uses a smartphone. It would also grow a customer base (SAM) from a few million users to BILLIONS of users.

The success of Apple revolves around their philosophy and strategy: Start with the value proposition and then develop the technology to deliver, NOT the other way around.

As a company, the most important IP asset that you own is your value proposition. Why not develop a strategy to protect this IP as opposed to trying to just protect your technology?

Before Apple debuted the first iPhone in 2007, the company went ahead and protected their value proposition — iPhone user experience using less than 10 US patents:

These patents have also been instrumental in the infringement litigation between Apple and Samsung.

Apple generates over 4,000 patents per year but they only needed these 7 to protect their company’s value proposition and therefore become the masters of their market. By protecting their use case, they were solidifying the Apple brand into the minds of technology and electronic consumers around the world.

Now, do you know how many patents you need to have in your portfolio to protect your value proposition?

Digital caterpillar to butterfly

Businessᴵᴾ Score: A new way to assess business potential using IP

The quality of a technology company’s intellectual property (IP) is an important consideration in funding, investment and acquisition decisions. However, existing valuation methods fail to deliver true insight into the value of a company’s IP. This is largely due to the fact most IP is created and valued around protecting specific technologies rather than capturing the overall value proposition of the business. Existing methods for IP valuation simply miss the point: they fail to focus on the extent to which a company’s IP enables them to leverage the opportunity within their overall business space, or value proposition (VP).

While it is hard to believe that companies would invest in creating patents that do not protect them, it happens all the time. The fact is most patents are relatively worthless. Why? Because they do very little to protect a company from the competition because they are very easy to circumvent. Where the game changes are when companies invest in IP as a strategic asset. That’s when their own position takes hold and their multiplier should improve significantly! But, there is currently no known method to assess the quality of IP relative to the VP in a common rubric.

I am proposing a new scale to measure IP — Business to the power of IP, also known as Bᴵᴾ. Given a well-defined value proposition, the Bᴵᴾ scores an IP portfolio’s ability to protect the VP by answering the question: “What percent of the solution space that is given a value proposition is actually protected by this portfolio?” The score is between 0 to 100, where 0 is no protection and 100 is ideal protection.

The Bᴵᴾ is a rating scale that can be used to evaluate and influence the multiplier of a company at any stage. It will also inform the risk level associated with an investment in a technology-based company. Bᴵᴾ makes it is easier to compare and contrast multiple companies in the same space. It also informs early-stage investment decisions by answering the question: “Can this VP be protected and to what level?” This can offer powerful insights into the overall strategic direction of the company.

While this scale is still new and in development, I am very excited to see the impacts it will have on businesses and strategies. Since this scale is still in alpha, there will be more to share as we move through testing over the next few months. If you are curious about learning more about Bᴵᴾ, don’t be shy! I would love to connect and share more about it with you!

Castle surrounded by moat

How to use patents as a barrier to entry

“In business, I look for economic castles protected by unbreachable ‘moats.’” — Warren Buffet

The United States Patent and Trademark Office was established to protect inventors and give them the freedom to operate without influence from larger corporations. This freedom to operate enables businesses to operate in a truly competitive environment, but it does very little to actually protect them from competitors. A typical patent is a way to guarantee that no one will be able to copy the specific technology claimed in it for a limited time, but that’s about all it guarantees. There is no legal business monopoly. So, how can we protect the business value?

Any problem that is worth solving, and any business opportunity worth pursuing, has plenty of viable competing solutions. Protecting just one solution is virtually worthless.

The trick is to figure out which patent portfolio is going to become a barrier-to-entry to all possible solutions in the space. The first step to accomplish this is to focus and clarify the value proposition. Let’s use an example to help visualize this: Dyson created a technology that solved many mechanical challenges in vacuum cleaners. Those mechanical issues had a direct impact on the value that consumers associated with vacuum cleaners, which was to maintain high suction over years of service. By solving the problem, Dyson delivered a clear value proposition. Dyson created a patent portfolio protecting the key elements of their solution and then promoted their vacuum as a patented technology. Another well-known example is Apple’s iPhone. The iPhone was not the first to market, but it was the first to provide a user interface that anyone can use with ease. Apple patented this interface before the phone was marketed, therefore protecting its value proposition.

In principle, value proposition is directly correlated to market share. In turn, protecting the value proposition is a way of protecting the market share.

Now, let’s return to patents: The atypical patent is tantamount to having a lock on the front door of your castle when there are still access points through side doors or backdoors. The right patent, or in many cases patent portfolios, can serve more as a moat, making it very difficult for an intruder to get outside of your castle, let alone enter it. It forces them to overcome hurdles to even enter your space. While having that moat doesn’t necessarily stop competitors from trying to enter your space, it gives you the benefit of time and distance to see them coming and to do something to protect yourself.

Dyson and Apple thought differently in how they approach patents. They started with the value proposition and then asked themselves, “How can I protect it?”. Apple generated a small patent portfolio (less than 10 patents) to protect the user interface. Dyson identified the key elements of their cyclon technology and protected it. Both companies demonstrate a healthy bottom line as result.

Any tech company can churn out endless IP to protect their inventions. But when a company focuses on protecting the value proposition of their business, it truly changes the game. So, here the questions that need to answer:

  1. What is your value proposition?
  2. Can this value proposition be protected with patents?
  3. What is the IP portfolio strategy that will protect your value proposition?
  4. How does your existing patent portfolio protect this value proposition?

It might be a good time to evaluate just how well protected your business is, and whether you need to change your game when it comes to your intellectual property.

DIgital lock

3 Questions to Answer Before You Develop a Patent

Most CEOs that I meet believe that IP protection is important in protecting their business. But when they’re faced with questions like, “Why are there so many competitors if your business is well protected?” and “Do you believe your competition is infringing on your patents?” They commonly answer with, “We are in a high-value market,” and “I don’t believe so.”

Are you sure that you aren’t developing IP that can be easily circumvented by your competition?

If you aren’t protecting your IP properly, then your IP can be easily circumvented by the competition and therefore brings no value to your business! What a devastating reality! Let’s pause that nightmare for a moment and review what circumvention means in a bit more context.

The value of your IP changes with your target audience. If you plan to sell or exit with a large S&P500 company then you need to consider their strength and ability to work around you.

Graphic by Multi-Innovation

For example, if you plan to sell or exit with a mid-market company, then adjust the cost number in the above figure by a factor of 10, e.g. $20M is $2M and so on. However, you cannot change the time associated with circumvention. Time and cost are two independent factors that need to be considered while you review your patent portfolio. Anything that can be circumvented in less than 2 years is considered to be easy to circumvent. So what you are looking for is to create patents that are hard and/or difficult to circumvent by your competitors. Now, to create a hard and/or difficult to circumvent patent must be valued within the context of your business. Thus, we arrive at the next question:

How well does your IP protect your value proposition?

Your value proposition is an innovation, service or feature or a combination, which you intend to use to make your company or product attractive to your customers. The value proposition is used to differentiate between a company and its competition in the same Serviceable Obtainable Market (SOM). So, are any of your patents unrelated to or add directly to the overall protection of your value proposition? If not, then you should consider them as a liability and you may even consider abandoning those patents.

This begs the question, “How do I know that a patent is protecting my value proposition?” This is a good question and the answer is actually pretty simple: If a patent or a portfolio of patents prevents a competitor from delivering your Value Proposition or a subset thereof to your clients, then you have created a valuable patent and/or portfolio.

Once you have identified how easily your patents can be circumvented and what your business’ value proposition is, you can begin thinking differently about your patent portfolio. Now, you must answer the 3 key questionsbefore developing your patent strategy:

  1. What is your business objectives context? This will help you define your circumvention criteria.
  2. Can your value proposition be protected? It isn’t always obvious that any business value proposition can be protected, in fact, based on my experience, some can and some cannot be protected.
  3. If you answered ‘yes’ to question #2, then: Is this patent that I am about to draft part of a cohesive and clear strategy that will protect my value proposition?

If you cannot yet answer these questions, then you should stop spending your time and money on patents that are most likely going to be circumvented by your competition and therefore worthless in protecting you and your business.

But never fear! If you think that you ready to develop a patent and are just unsure of your strategy, there are resources available that can support you. So when you are asked next, “Do you believe your competition is infringing on your patents?” you will answer with a confident, “Nothing is breaking through my patent strategy!”