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Patents are Like Love: The More You Give, the More You Get

By Shlomo Maital

 Elon Musk

Elon Musk

   Some innovations change the way people think about doing business.  Elon Musk, a great innovator (co-founder of Paypal, founder of Tessla,  Space-X….etc.) has just announced that he is “opening the books” for all the patents related to Tessla and his electric car technology.  Meaning?   Anyone who wishes can use the technology he and his company created, free of charge.

   What in the world? What happened to the assumption that if you create IP, intellectual property, then you have the right, nay the duty, to make huge profits from it? 

    And is this philanthropy?  Or shrewd business strategy?

    It is the latter.   Musk wants to build Tessla.  To do so, he wants the established big car companies, the ones who proved unable to develop truly great electric cars,  to adopt his technology.

   If they do, then Tessla becomes the first, the authentic, the real thing.   And the way to make that happen is to offer the technology free of charge, and – reap the benefits indirectly.   And I am convinced, the indirect benefits to Musk and Tessla will be enormous, far bigger than any royalties.

     We learn from Elon Musk that innovation is breaking the rules intelligently. Find a rule, e.g. patent everything that breathes,  and see if you can break it, for your own advantage and the advantage of the world. 

    Are patents indeed like love – the more you give it away, the more you have?   

Big Disrupters of 2014

By Shlomo Maital  


Disruptive technology is technology that completely changes the ‘game’ for established players in an industry – changes the nature of business, products, services, marketing or other key aspects of doing business and creating value.  Harvard Business School Prof. Clayton Christensen drew our attention to disrupters many years ago.  Established companies that ignore disrupters do so at their peril.

   Here is  part of the Financial Times list of the major disrupters of 2014.   According to Financial Times reporters, “the range and number of individuals and companies that are upending business models around the world” is on the rise.  … “the disrupters are everywhere”.

  1. Uber: Tim Bradshaw and Murad Ahmed has become “the poster child of Silicon Valley for disruption”; the 5-year-old company revolutionised the taxi business in 230 cities and 51 countries without owning a single car, through its smartphone app.
  2. Alibaba: This online retailer, with $300 b. worth of online sales has transformed retail in China. It is now “snapping up low hanging fruit in overly state regulated markets” for everything. 
  3. Bob Diamond in Africa: He quit Barclays, and has now shown you can make money by inveting in sub-Saharan Africa. He raised $352 m. through an IPO in London in Dec. 2013, and has done deals in Botswana, Mozambique and Tanzania. 
  4. Aldi and Lidl: They are disrupting the grocery market around the world, and Aldi is even exploring China.  They have doubled their market share in the UK in the past four years.  Aldi has opened 1,350 stores in the U.S. and aims at 2,000 by 2018. Lidl too will soon invade the U.S. market.
  5. Ford:   Hard to think of Henry Ford’s moribund car company as a disrupter, but the new F-150 pickup truck, with an aluminium body, never used before on a high-volume vehicle, is indeed a disrupter. To do this Ford had to replace arc-welders with new machines to screw, rivet glue and laser panels together.   I remember another disrupter – Subaru, which made aluminium engines in 1973; I bought one, it was great, but was warned it would fail. Soon everyone was using aluminium for engines.
  6. Tesla: last June founder Elon Munk offered to open up its patent book, which is very large, to rivals, “in the spirit of open source movement, for the advancement of electric vehicle technology”. This was a clever move, not just PR. Munk wants the big car makers to adopt Tesla technology and boost the market for electric cars. Imagine if other large companies (Intel, IBM, Hitachi, Samsung, Apple) opened THEIR patent books so that everyone could use them free of charge.  

Blog entries written by Prof. Shlomo Maital

Shlomo Maital