Author: correllcoaching

Winners and Losers-Market Decides Best

Jim Correll, director Fab Lab ICC at Independence Community College, Independence Kansas

From the headline, you may think this column refers to the recent mid-term election. No, I wouldn’t touch that topic with a ten-foot pica pole. (Pica pole is a special kind of ruler, now obsolete, that was once an essential tool in printing and newspaper production.)

Some Reality Shows Improve Contestants’ Lives

Wife Susan and I really enjoy the segment of “reality” TV that celebrates and showcases talent and skill. “The Voice” in its fifteenth season puts much emphasis on coaching the contestants to help them each become better performers. Since music is an integral part of so many of their lives, win or lose, the whole “Voice” experience improves their lives. So, when we watch, we not only see and hear great performances, but we see the contestants grow in their skill and self-confidence each week. Since I make my living helping people improve their skills and self-confidence it’s a very enjoyable experience for me to watch the show and follow the contestants.

Not a Good Predictor of Winner and Loser

Still, it is a contest. America loves the contest where winners float to the top and “losers” go home. Every week, the contestants are pared down, the winners moving on and the losers going home. The implication is that the winners will make it big in the music industry; the losers may not. In reality, many of the losers can make it in the music business too. The marketplace of entertainment audiences will best decide. All contestants, making it to the TV shows regardless of whether or not they win have a great opportunity. The exposure to millions of viewers gives them a shot at the entertainment business, seeing if there are customers that will buy what they have to offer, a great performance. “The Voice” is great television and sells a lot of advertising, but it is not necessarily an accurate predictor of who is really a winner or loser.

So it is with various kinds of business or business plan contests and even TV shows like “Shark Tank.” Participation is a good experience, but whether or not a particular business or business idea is selected as a “winner” is not a good indicator of whether or not the business will actually work. The marketplace, with all its customers and all their various needs is really the ultimate judge. That’s why, in all the training and business coaching we do, we emphasize the need to start small and make some sales before trying to determine if a business idea is good or bad. All of us that are in the business of supporting businesses, teachers, coaches, economic developers, chambers of commerce, etc. are really not very good at knowing whether or not a business idea is good or bad. Only the market can determine that.

Marketplace Best Determines Winners and Losers

In a previous column, I pointed out the fallacy of the fundamentals of socialism. People don’t do their best work when they know they are getting the same reward regardless of results. In developed socialist models, the government ends up determining which business ideas are good in a centralized or managed economy. Thus, the government chooses the winning and losing business ideas. Governments will never be any good at choosing anything like that. Only a free marketplace can best choose the winners and losers.

Jim Correll is the director of Fab Lab ICC at the Center for Innovation and Entrepreneurship on the campus of Independence Community College. He can be reached at (620) 252-5349, by email at jcorrell@indycc.edu or Twitter @jimcorrellks.

To Patent or Not To Patent; It Depends.

Jim Correll, director Fab Lab ICC at Independence Community College, Independence Kansas

It’s been a while since we talked about patents here and yet inventors wanting to know how to take their creations to market, continue to contact us fairly regularly.

“Everything that Can Be Invented Has Been Invented”

This quote is generally attributed to Charles H. Duell, commissioner of US patent office in 1899 although the quote’s origin is unclear. One researcher found the quote in an 1899 issue of a comedy magazine, “Punch” in an article about the oncoming new century. According to a publication called “Government Technology” in August of 2011, the 8-millionth patent was issued; indeed, everything had not been invented.

A Patent is Not the “Gold Standard”

Being awarded a patent after coming up with a new idea or invention and navigating through a long and expensive process is often viewed at the “gold standard” of the legitimacy of the idea or invention. For many new inventors, the goal of patenting the idea or invention has been at the top of their list. The thinking is that the patent will both validate the idea and protect the inventor from the theft or copying of the idea. While there are no clear-cut guidelines pertaining to when or even if to patent a new idea or invention, the patent should almost never be at the top of the list.

A Patent Is Not Iron-Clad Protection

Contrary to many beliefs, from a practical standpoint, the patent does not offer iron-clad protection against theft and copying for several reasons. First, while the cost of getting the patent–$5,000 to $60,000—is very high, the cost of litigation to stop a patent infringement could be ten times that amount. Second, many times clever copiers can create a product that performs the same function, with just enough design changes to avoid infringement.

A Patent is Not Market Validation

At the same time, government employees at the patent office deeming the new idea worthy of a patent, does not always translate to market validation; that anyone wants to buy the new product. A local banker tells a story of an out-of-state inventor that spent his life savings and mortgaged his house to develop and patent a more accurate rain gage—it leaned into the wind to catch more of the drops. He had paid for scientific data proving his device was more accurate. The only problem was that no one cared enough to be willing to buy it.

Don’t Let Lack of Patent Stop You

I know of at least one and maybe two inventors that have put their projects on the shelf because they don’t have the money to apply for a patent. It’s too bad that they may never know whether their product would add value for anyone in the marketplace or not. Maybe it would be better to develop what we call a minimum viable product that would be functional enough to test market to see if anyone wants it even at a small risk of someone “stealing” the idea.

We have available an inventor who has brought dozens of products to market over the past thirty years. Some he has patented, some he has not. He’s defended one of his patents and successfully persuaded a large corporation to quit infringing. He can help with the process of bringing a new product to market, including answering the question “to patent or not to patent.” His help and coaching are available through our Growth Accelerator program.

The Challenge of Strategic Planning

Jim Correll, director Fab Lab ICC at Independence Community College, Independence Kansas

Within the last year, I’ve had several inquiries from community colleges around the United States that are working on plans to build a Fab Lab or maker space on their campus. One such inquiry was from a representative of a community college in Oregon. He said they wanted to put a maker space in their new strategic plan and were going to partner with their city to do a community needs assessment. Because he’d heard about the success of our Lab, he wanted to know if I had any related resources or information to help with the strategic planning or community needs assessment. I ended up telling him that I didn’t have much in the way or resources in these areas since we had neither included Fab Lab ICC in a strategic plan nor did we conduct a community needs assessment.

Two Big Challenges

This situation illustrates two of the biggest challenges with the strategic planning process. The first challenge is a matter of time frame. It is common to speak of a 5-year strategic plan and the implication is that the plan will indicate actions the institution should take over five years to accomplish the objective of the plan. In today’s world, we don’t even know what the world will look like in five months let alone five years.

The second challenge is related to the community needs assessment and asking people what they want. In 2012 a small group of us began discussing our desire to build a Fab Lab. Had we done a community needs assessment and asked people on the street if we needed a Fab Lab or maker space, we would have seen a lot of blank stares and question marks. People don’t see a need for a new innovation they don’t know about. A good example of this is the idea that if Henry Ford would have done market research asking people how they would like to see personal transportation improved, most would have said “faster horses.” Few could see the coming of the automobile.

Community Assessment for Innovation Hub

Back to the community college in Oregon, I met the president of the college at a recent conference and told her of my conversation with one of her people about a year ago. She told me that indeed, they now have a maker space on the college campus and that they were exploring a partnership with the city to open an “innovation hub”–i.e. Fab Lab or maker space– in the downtown district. That all sounded very good. Indeed, I’d like to see an “innovation hub” or branch Fab Lab in one or more of our downtown districts. With what she said next, I hope she didn’t see my jaw drop. “The city is going to hire a consultant to do a community needs assessment.” There are likely no consultants that have any in-depth knowledge about how the activities in a Fab Lab or maker space change people’s thinking for the better. Nor would a consultant understand how a Fab Lab or maker space can benefit a local economy by supporting entrepreneurs and small business owners. This city would be much better off spending the consultant money on a “starter” set of equipment in an existing place such as the local library. Sometimes the only way to realize the benefit of a new innovation is through first-hand knowledge.

The successful strategic planners must navigate a slippery slope, determining what their constituents and stake holders say they want while developing a broad vision, not a detailed plan, of how the institution might best serve those constituents and stake holders in an uncertain future.

The Problem with Socialism

Jim Correll, director Fab Lab ICC at Independence Community College, Independence Kansas

I grew up in a different land called Southwest Kansas in a small town at a time when kids played outside, even after dark. There was a neighborhood “gang” of us kids, age range 7 – 13 years that engaged in activities. The most illegal activity I can remember is taking over a half block of City Street and playing bicycle hockey. Many of our activities were entrepreneurial as we always were trying to figure out ways to acquire funds. As I look back, one activity on a crisp fall Saturday was an experiment, the results of which demonstrated to me problem with socialism.

The gang of 6 – 8 of us decided to hire ourselves out to rake leaves and clean up yards for people in the neighborhood. I was about eight years old so I didn’t really negotiate with our first customer, leaving that to one of the older ones, maybe 12 or 13. After our leader and the customer agreed to a price, we all went to work cleaning. Everyone started out working hard, but eventually some got tired and slowed down. Some of the younger ones didn’t do much at all. Eventually, the hardest workers finished the job and the leader took our payment from the customer. The proceeds were distributed evenly among all of us regardless of the fact that we had not all worked with the same vigor or quality. Most of us that worked harder than the others saw the inequity of a system for which everyone received the same pay even when all of us did not do the same amount of work.

Thus demonstrates the fundamental flaw in the concept. Socialism sounds good on the surface; everyone receives the same reward regardless of effort or ability. If I know I’m getting the same reward regardless of my effort, what incentive is there for me to innovate and figure out better ways to do the work? The theory goes that the government can best run the centralized economy and figure out the best solutions.

Today we are starting to hear from some youth and even political candidates in some states a call to implement socialism. While free ice cream for everyone sounds good, these people don’t understand that there is no incentive when the ice cream is free. Besides that, someone has to pay for the ice cream. These people must have never observed directly the flaw in the socialist model as I did when I was eight years old.

The most successful economic systems acknowledge the innate ability and need of people to create solutions and innovate. Entrepreneurship and capitalism offer the best promise of economic prosperity for all people. This is not to say that our current system is perfect, far from it. The current system of capitalism in the United States and much of the industrialized world, for 150 years, has been built upon a system that emphasizes profit above all else. The emphasis should be on providing good products and services for customers while being good stewards of Earth’s resources and receiving ample compensation to reward those doing the work and those that made the investments in the institutions providing the goods and services. Had this been the emphasis over the last 150 years, there would be much less graft and corruption in the large corporations and our government.

Throwing out the current system in exchange for one that does not encourage individual creativity and innovation but rather lends itself to greater graft and corruption, even tyranny is not the answer. Let’s change the message to youth, introducing entrepreneurship as a way of providing useful solutions to free markets while being amply compensated for our creativity and innovation. This is our best hope of a better economic future.