You Succeed By Executing Well, Not By Gathering Patents

from the rembrants-in-the-garbage dept

Thu, Mar 6th 2008 6:38am — Mike Masnick

Patent attorney Joe Root sent us a link to an interesting essay on how companies became way too focused on intellectual property over executing sound business strategy in the late 90's, thanks in large part to the book, Rembrandts In The Attic. Root points out that the poster-children in that book were companies that focused too much on patents alone, and failed to execute in the marketplace, leading to failures. At the same time, the company that was held up in the book as missing out on the patent train was Amazon.com, which the book predicted would lead to Amazon's downfall. Amazingly, the authors of the book even focused in on Amazon's failure to patent its "one-click" ordering system:

"Amazon's commercial fortunes would have been far better served had it patented technologies truly strategic to its business, such as the one-click ordering system that the company pioneered and that is used widely by on-line retailers today. That was a real business method choke point... that Amazon could have controlled to no small advantage. But as it is, without that proprietary advantage and with its brand strength eroding, companies like Virgin Records and PetSmart are unafraid to compete directly against the giant on-line retailer. Don't be surprised if Amazon's stock market fortunes head south when investors realize this fact."

Of course, as most everyone probably already knows, and as Root highlights in the essay, Amazon actually was in the process of patenting the one-click feature. Yet, rather than helping the company, that one patent (to this day, actually!) has become a symbol of just how screwed up the patent system has become. It also created tremendous ill-will towards Amazon until the company was forced to back down from attempts to enforce it.

The key realization that comes from Root's essay (which also dips into military strategy) is that, in the big rush to focus on the value of "IP" and patents in particular, many companies out there forgot that patents are rather meaningless if you can't actually execute on a business strategy providing something that the market actually values at a price they can afford.

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Filed Under: execution, patents
Companies: amazon

20 Comments

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Ima Fish, 6 Mar 2008 @ 6:44am

Yeah, but you get rich quick by gathering questionable patents and collecting licensing fees for sitting on your a$$.
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Hellsvilla, 6 Mar 2008 @ 7:16am

This is not always true
You see, that all depends on who is running the company.

If the Chief Executive Officer is running the company, than it's success or failure is controlled completely through execution.

However, if the CEO has handed the reins of the company over to the Legal department, then it's success is pyrrhic at best, but will nonetheless be controlled by litigation, and the hoarding of patents.

Also, if the CEO has turned control of the company over to the Sales and Marketing departments, then performance be damned absolutely, the customer is now a victim; a tool with which to extract the most money. Execution is completely irrelevant.

So sure, success can depend on successful execution, if that's the officer in charge.
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- SomeGuy, 6 Mar 2008 @ 7:26am
  
  Re: This is not always true
  I think you're somehow missing the point... A company run by the legal department, who's success depends on collecting and enforcing patents, and who neglects an actual product to place on the market, will fail. A company run by marketting, who's success depends on hoodwinking the maximum number of victim-customers for the maximum price, and who neglects an actual product to place on the market, will fail.
  
  You CAN run a business through marketting or litigation. But we've already seen the PR fiasco that heavy-handed patent litigation can bring (and the market fallout that follows), and you will fail. A company who has violently aggressive marketting but fails to produce a product people want will die quietly at best, or dramatically at the hands of fraud claims.
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- Steve R. (profile), 6 Mar 2008 @ 7:41am
  
  Re: This is not always true
  Excellent summary. Unfortunately, your comments are quite true. One company where the Sales and Marketing Department has "destroyed" good products has been Intuit. Intuit is all about making the next sale. Even if you own the product you are barraged by pitches to buy buy buy. Meanwhile the product itself languishes.
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angry dude, 6 Mar 2008 @ 7:26am

Mike's retarded as usual
Heck, no, he is just shilling for his big corporate masters,
executing an assignment to create grassroot support for anti-patent agenda when patent "reform" is losing steam in US Senate...

Whatever shit he writes here about patents or tech immigration is just a paid corporate propaganda.
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- Anonymous Coward, 6 Mar 2008 @ 7:28am
  
  Re: Mike's retarded as usual
  I'm unclear as to the motivation you cast on Mike and his Corporate masters. What is it you think they really have to gain by encouraging patent reform?
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- Douglas Gresham, 6 Mar 2008 @ 7:47am
  
  Re: Mike's retarded as usual
  I don't see the problem AD. Mike argues eloquently, takes all sides into account and presents evidence to support his conclusions. Even if he was making points on behalf of others, that doesn't mean he isn't right.
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  - Anonymous Coward, 6 Mar 2008 @ 8:28am
    
    Re: Re: Mike's retarded as usual
    Doug, are you going to ask Mike out?
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  - angry dude, 6 Mar 2008 @ 8:37am
    
    Re: Re: Mike's retarded as usual
    "Mike argues eloquently, takes all sides into account and presents evidence to support his conclusions"
    
    You can't be serious, dude
    
    Freaking shit... and this is called "journalism" nowadays...
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    - Chuck Norris' Enemy (deceased), 6 Mar 2008 @ 9:09am
      
      A challenge
      a.d., you have a link to the article and the book. Maybe you could make a similar post and actually rebut Mike's points. I do realize that it is so much easier to whine about your 'patent' and just start name calling but I would like to see your argument.
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    - Thad, 6 Mar 2008 @ 10:29am
      
      Re: Re: Re: Mike's retarded as usual
      Yes this is journalism and I'm pretty sure what you are doing is called trolling. If you can't actually make a point or support it in any way, why are you even posting? At least Mike supports his points, whether I agree or not.
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- Mike (profile), 6 Mar 2008 @ 12:57pm
  
  Re: angry dude lying as usual
  Heck, no, he is just shilling for his big corporate masters,
  
  As angry dude well knows, my personal position is not supported by any of Techdirt's customers. In fact, many of them actively and loudly disagree with my position on patents.
  
  Furthermore, we do not, and never have, done any business having to do with public advocacy. Companies do not, have not, and will not, hire us to push any kind of message in the public. They hire us to give them insight for internal use, and much of that insight and analysis is in telling them that we disagree with their position and strategy.
  
  So, the claim that any of these posts are for the sake of propping up someone's position is a clear lie. Angry Dude has admitted that he's just making stuff up about me in the past, but given that he has no actual evidence or reasoned argument to respond to my points, he resorts to repeated lying.
  
  My statements are my own and that's it. They have nothing to do with Techdirt's customers. As far as I know, not a single customer believes in the same policy that I believe in -- though I'm trying to convince them that they would be better off if they did recognize this.
  
  executing an assignment to create grassroot support for anti-patent agenda when patent "reform" is losing steam in US Senate...
  
  This part is the funniest, because I am publicly on the record as being very much against the patent reform plan as offered up. Angry Dude knows this, but still makes claims like this.
  
  http://www.techdirt.com/articles/20070418/161925.shtml
  
  Seriously, angry dude, if you're going to lie and make up stuff about me, at least try to be creative in coming up with lies that aren't so easily disproved.
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  - Anonymous Coward, 6 Mar 2008 @ 3:07pm
    
    Re: Re: angry dude lying as usual
    I'd bet angry dude is a fabricated persona the purpose of which is to make patent supporters look bad by association.
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    - angry dude, 6 Mar 2008 @ 5:14pm
      
      Re: Re: Re: angry dude lying as usual
      Dude,
      
      You can feel me for real
      We can set up an appointment in some parking lot without security cameras and I promise you the unforgettable anal experience of an angry dude
      But I must warn you: I am quite fit physically and really really angry...
      Still want to meet me in person ?
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      - Nick (profile), 6 Mar 2008 @ 6:01pm
        
        Re: Re: Re: Re: angry dude lying as usual
        This comment is delete-worthy. I think threats like this are or border on illegal. Clearly, you are some teenage boy looking for attention.
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        angry dude, 6 Mar 2008 @ 7:48pm
        
        Re: Re: Re: Re: Re: angry dude lying as usual
        Hey, dude
        
        I haven't even mentioned your mother, and you are already offended
        
        Go figure...
        
        What kind of soft pussy are you?
        
        "anal experience" is a threat to you??? well, for a lot of other folks it's really a pleasure...
        Broaden your horizons, little punk
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      - Anonymous Coward, 6 Mar 2008 @ 11:15pm
        
        Re: Re: Re: Re: angry dude lying as usual
        We can set up an appointment in some parking lot without security cameras and I promise you the unforgettable anal experience of an angry dude
        
        So, angry dude's gay too. Angry gay dude.
        Sorry dude, I don't swing that way (not that there's anything wrong with that).
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      - Anonymous Coward, 7 Mar 2008 @ 3:19pm
        
        Re: Re: Re: Re: angry dude lying as usual
        You post the time and place and see who shows up. Go ahead.
        
        Yeah, I didn't think so loud mouth.
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Janet R., 6 Mar 2008 @ 8:20am

Amazon
The reason customers buy lots of things at Amazon is because they find the products they want at prices they are happy to pay, and get consistently good service (in my experience) with things like people who answer the phone when you call and a simple method for returning items when necessary.

One-click is nice and all, but it isn't what keeps customers coming back.
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Nick (profile), 6 Mar 2008 @ 12:51pm

Where is your killer, money making blog and consultancy, angry dude? Oh, you don't have one? Why not? Because you can't compete in the market with your own creativity? Aw, thats is too bad. I mean, even a retard can execute on that idea! Right?
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