The Entrepreneurs, their products and the Law

Patent and registered designs are not issues many entrepreneurs and small businesses like you take serious, and for some, it is a case of complete ignorance of what the law expects from them, and how they can use it to protect themselves.

Over the past few days, I counselled a small business owner who is a casual Foot wear designer. He was worried that his product designs were being copied and reproduced at a cheaper rate by an unregistered business. He wants to take it up legally because those who could not afford his product of N4000 for a pair, goes to this other guy to reproduce it at N800.

It was enough reason to be worried especially when someone is feeding from your hard work however,  you have to ensure that legally, you have the right over the property you are claiming. So I ask him, 'How can you prove that this other guy is copying your designs?' he showed me a label of his registered business name on his product, and said, "I have registered this business, I was the first to come up this design."

At this point, I knew that he just like so many other entrepreneurs know much about business and their products but lack sufficient knowledge of the laws guiding as well as protecting their business or product.

When it comes to innovative products and designs, the law specified criterias that give you ownership or patent right.  Some are:

Your registered business doesn't cover your intellectual property

This entrepreneur believes that his registration of a business name automatically covers that of his designs, and that placing his label on the product was enough to indicate that he owes the design. The first lesson I brought to his notice was that there are different laws guiding each. Registering your business name is different from registering your company, as well as different from registering an intellectual property.

Patent right is given to the first person to file a claim, not the first to take it to the market

When the young man said that he was the first to come up with the idea, I laughed because the Nigerian law says, '...the right to a patent in respect of an invention is vested in the statutory inventor, that is to say, the person who, whether or not he is the true inventor, is the first to file, or validly to claim a foreign priority for, a patent application in respect of the invention...'  by implication, it doesn't matter who came up first with the idea or design, what the law recognises is the first person to file a claim of ownership. If you have not filed a claim of ownership of a design or invention, you can't call it yours.

Once it is made public before filing a claim, you can no longer lay claim to it.

By law, you are not expected to make an invention or design you wish to patent public before filing a claim. Making it public before filing, invalidates your claim. The man said he was going to file a claim for the designs, but unfortunately,  it was already late. The design has been in the market for the past three years, so nobody can claim to owe it again. The law only allows for a period of 6 months in case you want to exhibit it officially in an internationally recognised exhibition.

In business, there are laws to protect your creativity, however you must know when and where it applies. That you were the first to come up with an idea in business doesn't give you ownership or patent right over the product. Depending on the country or region where your business is located, it is your responsibility as a business owner to get acquainted with the law to help you protect your business as well as your products from pirates.

Business Lessons from Concorde Supersonic Aircraft

As a young man in 2003 during the last flight of Concorde aircraft from New York to London, I couldn’t wrap my head around the fuss about an aircraft that was retiring and why people were very emotional about it. “If it is retiring, why can’t they build another one?” I asked myself. While writing my last article, ‘3 Reasons Customers resist innovative product,’ Concorde Supersonic Airline was one of the failed ‘innovative products’ I considered, and I discovered that Concorde supersonic aircraft was so good that it wasn’t profitable to build another one.

Concorde Supersonic airline was designed to redefine luxurious air travel, indeed it did. It was the only commercial aircraft that was twice as fast as the speed of sound, and it was able to cut an 8 hours journey down to 3 hours. It was an engineering marvel and a delight to the eyes. Its innovative features were never in doubt, and it broke every market barrier in the aviation industry, and set a standard no other commercial airline could compete with. Its engineering feat was awesome, and technically, Concorde was ‘perfect’. By the time it was ready for the market, about 16 companies placed orders for over 70 aircrafts however, only 14 were eventually built for 2 companies.

So went wrong? Strategy wise, the business model adopted by developers of Concorde led to its resistance by potential buyers. The developers were so focused on the engineering and technical power that they neglected the business aspect of the aircraft. In fact, ‘the aircraft was built by engineers, not entrepreneurs.’ Just like the Concorde, so many businesses today have great products with bad business model. In developing the business model Concorde miss out on:

Customer Input

Customer input in the development of the Concorde was low or non existence. According to a group led by Matt Hooks, “....rather than focusing on the needs of the customers in the aviation market, the developers of the Concorde focused on creating the market itself thinking of the customers second.” The result was a total rejection by would-be customers and even the two airlines that had them in their fleet struggled to keep them profitable. Many entrepreneurs are so excited about the feat their product can perform that they believe, ‘once it is good, customers will buy.’ They are product driven, and care less about the need of the user of such product. Your customers should be an integral part of your product development process. Your business model is never complete without consideration for customers’ input.

Market Potential

The major implication of not including customers in your product design process is that you may likely misinterpret the potentials of your market. The Concorde developers believed that their innovative product will automatically translate into huge customer market. They only defined their market as those who want to fly ‘Supersonic’ without considering if those who could afford it are sufficient to capture value for the organisation. The Concorde’s market was narrowly defined, and its market potential was wrongly assessed, and this affected the value of its market. Entrepreneurs that wrongly assess their market potential will end up misinterpreting their market and losing value to less competitive businesses.

The implication of focusing on performance at the expense of customers’ input and market potential in your business model is the likelihood of wrongly pricing your products. For Concorde, the price was too high that the customers were not ready for the cost that came with it. Innovative products must provide a tradeoff between value and price, product performance is not enough to keep you going in business for long.

3 Considerations Before You Push the Autopilot Button in Business

           

The ultimate aim of any small business owner is to get to a stage where the business becomes self sustaining or what I refer to it as ‘putting your business on auto pilot.’ That is allowing your business to run with little or no supervision from the owner. This is an error I have discovered recently from some small business owners who have a lot of ideas they want to explore. They are so enthusiastic about their ideas that they want to take all of them to the market at the same time.  While it is good to hands off, as it shows that the business has matured enough to do without you, an entrepreneur must get the timing right.

A friend recently launched a new business. The quality and features of his product was his major selling point and customers loved it. 6 months later, I was invited to assess the business performance and make recommendations. Amongst other things, I observed that my friend never stays around to monitor the activities going on in his business. When I asked, his response was that he wanted to allow the business to run on its own so that he can focus on establishing other things. Great as that may sound, I told him it was too early, and the move was wrong. As usual, he told me “I know what I am doing”

Recently, he told me he was not breaking even and cost was driving him out of business. He then said, “I am not losing customers, but I can’t explain why I am not making profit.”  He couldn’t explain ‘why?’

The early stage of your business is not a time for exploring other business activities, it’s a time to consolidate on what you have, identify the direction and learn more about your current business. Like my friend, you may not be losing customers, cost is going up, and you are not gaining new customers because you are yet to learn the uniqueness of your business. You are yet to identify means to efficiently and effectively satisfy both new and old customers.

The early years of your business is a time for

·         Building a system

There is no better time to put a structure in place than the early days of business. You have to build a structure that will distinguish you in the market and set you on the path of growth.

·         Strengthening strategy

As you grow daily in business, so does your strategy grow older. Handling the activities in your business helps you reinforce your strategies, and better define your business vision.

·         Knowing your customers better

If you are not losing customers, and it cost you more to service the same customers, then there is something about your customers/client that you are missing.

The airways of business are too rocky for you to put your business on auto pilot as a young start-up. The early days of your business are too important to be left under the care of someone else. It should be a time of learning and experimenting, testing strategies and bringing in of creative and innovative ideas into your operation. This cannot be achieved without continuous and systematic innovative activities by business owners.

3 Reasons Customers Resist Innovative Products (2)

Innovation in business is very important, but most important is developing a product/service consumers are willing to buy. Over the years, many products with innovative features have failed, not because they are not good, in fact, most times, they bring more to the market than existing products. Unfortunately, consumers end up avoiding them leading to over 70-90% of innovation failures and eventual withdrawal of such product from the market. Examples like Microsoft Windows Vista, Apple’s Newton PDA, the Concorde supersonic airplane etc reminds us that not everything innovative finds a market. Some of them actually came into the market when consumers were not ready for such innovation.

Entrepreneurs with new products or services want customers to adopt it and get maximum satisfaction from using them. However, entrepreneurs often face the challenge of convincing customers to move from an existing product where they derive satisfaction, to a new one which its utility is not certain.

Here are some reasons customers may resist your new offerings.

1.      Your products bring too much change

Change is good, but customers don’t always appreciate it when a product is bringing too much change to their lifestyle. For instance, Coca Cola’s attempt to change the original taste of coke was met with resistance. When consumers feel very comfortable with an existing product, they can go to any length to resist any attempt to change it especially when such a change will affect other areas of their lives. This resistance comes as a result of consumers being satisfied with their current situation, and see no reason to change. Habits that have been developed while using a particular product are difficult to do away with. Any product that requires a change in behaviour will likely experience resistance.

2.      Innovations with the wrong technology

Many businesses apply the wrong technology in their market. In Nigeria, when it comes to telecoms, GSM is the way to go. Over 90% of subscribers use it, and it is the preferred network in the world. For companies that came into Nigeria with CDMA technology - Starcomms, Multi-links etc, it wasn’t a favourable market for them. Technology has seasons and regions where they are most appreciated. E-retailers in Nigeria observed that insisting on shoppers buying and paying online alone may not give them the desired result; they decided to introduce ‘Pay-on-delivery.’ This act is building confidence in people to use the technology. The right technology must be one that fits into a people’s lifestyle, values and norms. Every technology introduced into a business must be compatible with the desires of the consumers.

3.      Innovations that are too complex

Keep it simple. Innovation is all about simplifying life. Innovative products are those that are useful to consumers, and are easy to use. Years back, the long process of registering on a website puts off many people, but today, with your social media accounts, it looks seamless. Consumers are always reluctant to go for innovative products that are complex to use, complicated and confusing. If you can’t keep it simple, it’s not good enough.

Consumers’ resistance of a product doesn’t mean a failure, but it points out the need for entrepreneurs to pay more attention to the needs of the market. Bringing a technology that consumers are not familiar with, and the risk level cannot easily be ascertained will create an air of doubt in the consumers. If the resistance is allowed to prolong, it leads to rejection and eventual product failure.