5G – Here’s where the fuss should be

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

Synopsis

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 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.

Multi-Innovation’s 5-part series on the impacts and future of 5G.

Multi-Innovation CEO, Shmuel Silverman, discusses his take on how 5G is shaping the world around us as we know it and what this means for new business opportunities.

FOR IMMEDIATE RELEASE
For more information contact: 

Mia Powell, Project Manager
Phone: (415) 888-83870
Email: media@multi-innovation.com 

Mill Valley, CA, September 5th, 2019 Multi-Innovation, a boutique firm that focuses on developing strategic patent portfolios, is pleased to announce their participation in an extensive 5-part series on 5G and the game changing opportunities it brings.

5G is already rapidly shaping and changing the technology and communications industries as we know it. Companies will soon need to begin making decisions on how to approach this impending market reality and understand the infrastructure changes and impacts on hardware companies. Additionally, 5G will not only affect current industries and wireless communication but will also create new opportunities that have been blocked for many, many years and move us towards a new future with faster, better technology. 

Silverman says, “While the future of 5G doesn’t have one set path, companies can be proactive in their approach to its possibilities. 5G presents new and exciting opportunities for companies to adjust their focus towards new value propositions that will change the way consumers live, work, and play.”

In the 5-part series, Silverman will address several key concepts including a basic overview of why 5G matters, how it will change and mold life as we know it, and it’s influence on the future of transportation, privacy, and AI. 

Multi-Innovation is a team of inventors, business strategists and technology analysts who play a central role in developing strategic patent portfolios that protect and defend their client’s business while reducing their investments in intellectual property.

###

Screw the Naysayers Podcast: How to Use Patents to Protect Your Business

Shmuel Silverman speaks with Tim Alison on Screw the Naysayers about using patents as a way to protect your business.

” One thing that really stands out when you speak with Shmuel is his ability to discuss complex technological topics using words and examples that just about any business person would be able to understand. There are lessons in here for any entrepreneur, but in particular those that are driven by a desire to solve important problems. ”

– Tim Alison Founder and Host of Screw the Naysayers Productions

Multi-Innovation teams up with Advantary for a 6-part series on successfully entering the U.S. Market

Multi-Innovation leads a webinar on how to nail a niche and use IP to protect it. 

FOR IMMEDIATE RELEASE
For more information contact: 

Mia Powell, Project Manager
Phone: (415) 888-83870
Email: media@multi-innovation.com 

Mill Valley, CA, August 1, 2019: Multi-Innovation, a boutique firm that focuses on developing strategic patent portfolios, is pleased to team up with Advantary, a full-service Management Accelerator™ on a webinar series focused on how to successfully enter the U.S. market.

The U.S. market is expansive, therefore it’s important to find the beachhead that’ll help a company expand stateside first. Multi-Innovation CEO, Shmuel Silverman will lead a discussion on how to nail a niche and use IP to protect it.

Silverman says, “Patents approved by authorities outside of the U.S. have no legal binding in the States, therefore if you hope to grow your business in the U.S. you must have U.S. patents.” 

Silverman will address several key questions including freedom to operate and how to overcome barriers to entry by U.S companies. He will also detail how businesses can use IP as their own barriers to entry, allowing them to effectively compete and protect their value proposition.

“Patents that do not protect your value proposition are simply meaningless in this market,” says Silverman. “It’s important to control technology-based barriers to entry before your competitors do.” 

This webinar series is supported by New Zealand Trade and Enterprise and is free and open to the public.  

Multi-Innovation is a team of inventors, business strategists, technology analysts, and R&D experts who play a central role in developing strategic patent portfolios for Fortune 1000 companies that protect and expand their business while reducing their investments in intellectual property.

###

Multi-Innovation celebrates client Gooee in landing important IoT contract with Croonwolter&dros

Gooee will optimize both building and business performance for more than 5,000 buildings.

FOR IMMEDIATE RELEASE
For more information contact: 

Caitlin Fry, Media Relations
Phone: (630) 885-6717
Email: media@multi-innovation.com 

Mill Valley, CA, June 27, 2019: Multi-Innovation, a boutique firm that focuses on developing strategic patent portfolios, is pleased to celebrate the success of its client, Gooee, in signing a contract with Croonwolter&dros that will connect more than 5,000 buildings in the Netherlands, onto the Gooee Building Intelligence Platform. Gooee’s Building Operating System will take control of inefficient, existing building systems to optimize both building and business performance under this contract.

The benefits of the Gooee system include reducing energy consumption and operational costs with an overall lower cost of ownership.  A subscription-based model reduces upfront investment and aligns with short pay payback periods for landlords, managers, and tenants.

Neil Salt, the Managing Director & Co-Founder of Gooee, says, “The most critical element in a car is its software. Today, companies like Tesla can improve the performance and efficiency of your vehicle with remotely managed software. This is what Gooee can do for buildings systems that aren’t integrated and were originally designed for function vs. efficiency. Our investment in technology & IP across wireless communications, lighting, sensing, and cloud-based applications have now made this a reality at scale and Gooee is at the forefront of this innovation.”

Multi-Innovation and Gooee have worked together for two years to develop over 75 patents to increase their overall market space and business protection. 

Shmuel Silverman, CEO, and founder of Multi-Innovation says, “Gooee’s innovative team is capitalizing on a basic utility – lighting – to change the world of space and building management with superb ROI for their clients. We are thrilled to see such  impressive results from all of their hard work and dedication in creating and closing on this opportunity.”

Gooee is a team of experienced lighting, space, and building specialists focused on providing global building performance solutions using best in class software and hardware. 

Multi-Innovation is a team of inventors, business strategists, technology analysts, and R&D experts who play a central role in developing strategic patent portfolios for Fortune 1000 companies that protect and expand their business while reducing their investments in intellectual property.

###

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 dot.com 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.