In Four Steps to the Epiphany, Steven Blank argues that technology startups need to find their “earlyvangelist” customers before their product is finished. Earlyvangelists are people who have a problem, know they have the problem, and have taken steps to address the problem. When they see what the startup is doing, they don’t need to be persuaded–they want access.
Amar Bhidé in The Venturesome Economy (excerpted in Steven Johnson’s Innovator’s Cookbook):
According to many of our interviewees [venture-backed businesses], many things learned from interactions with customers were incorporated into their products rather than their core idea (or patent), and this was the most valuable source of their intellectual property.
Bhidé concludes:
Therefore, contrary to the high-level research-centric view, the willingness and ability of users to undertake a venturesome part plays a critical role in determining the ultimate value of innovations.
In this line of reasoning one can see how a monopoly licensing regime for new technology ideas may greatly increase the cost to develop a product by suppressing early adoption and use–even to the point of making the product that could be impossible.
The diligence requirement that many universities use–to develop products under the licensed patent–may be a profound barrier to the development of products that customers actually want. In about half of the startups that I have been around, the company developed a product outside of the patent rights that it licensed at the start. From one perspective, this is an “end run” around payment obligations and perhaps a failure to write stiff enough diligence clauses. From another perspective, however, this is not only success, but it is in line with the natural history of such success.
Universities would do well to drop the default monopoly licensing approach and allow, even encourage, a much greater circulation of research technology prior to patenting and outside of any exclusive license for the sale of products. For this, a make-use commons works well–allow anyone who can read publications to practice the invention (make / use), and reserve only the sell right (and import right, perhaps) for “commercial” purposes. In this way, one creates a robust environment for venturesome and earlyvangelist adopters of the technology. That is, adoption and community development comes *before* there’s a product, not afterwards. In fact, in many cases, if there is no such adoption and community development, there is no chance that there will be later products.