Proprietary Content in Business Ideas
While managers have "The Apprentice", married couples have "Wife Swap", and those on the dating scene have "Blind Date", the television show "Shark Tank" is the reality television show for entrepreneurs. If you've never seen it, it takes five successful entrepreneurs (the "sharks) who have lots of money to invest. The show contestants come into the room to present their own business startup ideas and product inventions, and ask the sharks for money in exchange for equity in their business.
Some of the ideas are laughably bad. Others have a lot of potential, and sometimes, the sharks will start competing with one another in an effort to get in on a new business idea.
In a recent episode, a young bother and sister duo presented their new product Grease Monkey Wipes, which are individually wrapped wet wipes designed to get industrial grease off of your hands. It's an excellent idea, and not only have they developed a great product, they've managed to design a logo and a package that look great. The branding is really terrific.
Of the sharks, the most "business-like" among them is Kevin O'Leary. In case you watch the show, he's this guy:
He's the Simon Cowell among the five sharks. If he doesn't like your idea or see any potential in it whatsoever, he won't be coy. He'll tell you exactly what he thinks is wrong about it, even as the other four try to gently turn the contestants down.
This past week, he turned down investing in Grease Monkey Wipes because of a lack of "proprietary content". The actually grease-cutting power of the wipes themselves is, according to the couple, attributable not to chemicals but to a natural citrus juice, which is probably difficult to patent. Because they lacked anything that couldn't be easily replicated by competition, Mr. O'Leary politely declined to invest in their business.
Proprietary content, that is, the stuff that's protected by patents, seem to make investors and venture capitalists feel more secure with a company, because it usually gives you a legally binding head-start over the competition in getting to market. I'm not going to call into question Mr. O'Leary's decision, because it's his money, and he's welcome to invest it wherever he feels comfortable. (He's probably smarter than me, anyway.) But I do wonder why he feels the need for proprietary content to exist in order to feel comfortable with a business.
Put another way: MP3 players existed long before the iPod came out. Despite this, they didn't garner widespread adoption among music listeners until the iPod was released. It was the lifestyle branding and ease of use. This interests me because, as a technology geek, I saw the potential for MP3s a long time ago, and felt that digital music was far more convenient than CDs. But the convenience or superiority of the technology wasn't enough to get MP3 players to win out.
Without Apple, would MP3 players have gone mainstream yet?
A few years later, the Zune came out from Microsoft. It still hasn't caught as much of the digital music-listening market as Apple has. The portable MP3 player wasn't invented by Apple, it was merely branded by Apple, and it's managed to hold up over time, even without the kind of proprietary content you'd think the sharks were looking for.
You could argue that the iPod did have proprietary content: its design. People loved talking about how great the iPod looked, and that helped it win out. And to that end, Grease Monkey Wipes do have a trademark: their logo. The crazy-looking monkey on the front package of every wipe is trademarked, and it is pretty eye-catching. I think they're sitting on top of something great, and even without the any patents, the branding and design should be enough to put them ahead...even when the Zune of the industrial grease wipe market inevitably emerges.
Incidentally, two of the other sharks ended up investing in Grease Monkey Wipes, which seems like a great move.
Some of the ideas are laughably bad. Others have a lot of potential, and sometimes, the sharks will start competing with one another in an effort to get in on a new business idea.
In a recent episode, a young bother and sister duo presented their new product Grease Monkey Wipes, which are individually wrapped wet wipes designed to get industrial grease off of your hands. It's an excellent idea, and not only have they developed a great product, they've managed to design a logo and a package that look great. The branding is really terrific.
Of the sharks, the most "business-like" among them is Kevin O'Leary. In case you watch the show, he's this guy:
He's the Simon Cowell among the five sharks. If he doesn't like your idea or see any potential in it whatsoever, he won't be coy. He'll tell you exactly what he thinks is wrong about it, even as the other four try to gently turn the contestants down.
This past week, he turned down investing in Grease Monkey Wipes because of a lack of "proprietary content". The actually grease-cutting power of the wipes themselves is, according to the couple, attributable not to chemicals but to a natural citrus juice, which is probably difficult to patent. Because they lacked anything that couldn't be easily replicated by competition, Mr. O'Leary politely declined to invest in their business.
Proprietary content, that is, the stuff that's protected by patents, seem to make investors and venture capitalists feel more secure with a company, because it usually gives you a legally binding head-start over the competition in getting to market. I'm not going to call into question Mr. O'Leary's decision, because it's his money, and he's welcome to invest it wherever he feels comfortable. (He's probably smarter than me, anyway.) But I do wonder why he feels the need for proprietary content to exist in order to feel comfortable with a business.
Put another way: MP3 players existed long before the iPod came out. Despite this, they didn't garner widespread adoption among music listeners until the iPod was released. It was the lifestyle branding and ease of use. This interests me because, as a technology geek, I saw the potential for MP3s a long time ago, and felt that digital music was far more convenient than CDs. But the convenience or superiority of the technology wasn't enough to get MP3 players to win out.
Without Apple, would MP3 players have gone mainstream yet?
A few years later, the Zune came out from Microsoft. It still hasn't caught as much of the digital music-listening market as Apple has. The portable MP3 player wasn't invented by Apple, it was merely branded by Apple, and it's managed to hold up over time, even without the kind of proprietary content you'd think the sharks were looking for.
You could argue that the iPod did have proprietary content: its design. People loved talking about how great the iPod looked, and that helped it win out. And to that end, Grease Monkey Wipes do have a trademark: their logo. The crazy-looking monkey on the front package of every wipe is trademarked, and it is pretty eye-catching. I think they're sitting on top of something great, and even without the any patents, the branding and design should be enough to put them ahead...even when the Zune of the industrial grease wipe market inevitably emerges.
Incidentally, two of the other sharks ended up investing in Grease Monkey Wipes, which seems like a great move.