Scissors – these were invented to cut with more accuracy than a knife.  Sharp, small and large scissors will cut through just about anything.  So scissors have an intrinsic value that no matter how you color them, package them, sell them, they still cut.  A patent protects the invention, the license creates the money.

So why do inventors give away the patent?

I worked with a company owner 4 years ago to help her raise money for her start-up.  Her  patent was the “unique value proposition” of her business.  Fast forward 4 years, $10 million raised in Venture Capital, a languishing economy and less revenue coming in.  The VC’s (Vulture Capitalists) stepped in and ousted her and her top management team.

And now they own her patent!

Her patent had intrinsic value with a wide application across a variety of business segments outside her own company that it resembled a permit to print money.

Her buyout included options, stock and a cash buyout.  But not her patent. The company holds the patent and the venture capitalists own the company.

Should the company fail, she will lose the value of all her options and stock, which means she will be left with – NOTHING.  The VC’s own the patent and they will make the money by licensing it out.

May I mention that she is a brilliant experienced serial entrepreneur and had created her most recent company to help WOMEN?

I would like to opt on the side of success.  That the VC’s will appoint a new CEO with the passion and focus to make the company successful.

But the lesson remains the same:

If you thought of it, if you invented it, file a patent for it.  As Jane Wurwand, founder of Dermalogica says “I own it all and thank god for that!”

Those we love (the good), those that drag their fee to pay, but pay big (the bad) and those that drive you straight into the arms of the shrink!

So what is an entrepreneur supposed to do?  Keeping a consistent revenue stream is so important to the small business and entrepreneur market segments. Let’s look at ideas on how to deal.

The Bad – Large Health Care Organization

Problem:

Client had not paid their bill in 8 months.  They did not return calls, ignored dunning notices and trashed the emails.  The bill was up to $15K! Outstanding invoices created a additional $641 in interest accrued.  Our services had saved this client 50K in operational costs.

Solution:

Did a bit of research and found out the objectives of the CFO.  What does he stand for?  What is he measured on? He had been PROMOTED because of his cost-cutting measures.

Letter:  We wrote an old-fashioned letter, sent via registered mail, to the CFO letting him know that 1) his company had saved 50K by using our services and 2) his company had accrued an extra $641.00 in interest COSTS due to ignoring the bill.

The client called the next day (after having his butt chewed out by the CFO), apologized with some excuse (ok by us) and said the bill would be paid immediately.

The check arrived the next week – All 15K of it!  AND……

We got a call to come back in and help them save once again.

What are you doing to turn your bad into good! Future blogs on the good and the ugly.

Take a toy away from any two year old and they’ll tell you firmly, ‘Mine!’ Let’s take a page from their playbook shall we?