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The Golden rule of Invention

After years of inventing and developing high technology a growing trend is becoming more prevalent in my thinking, namely;

Always use professional investors funds and professionals to run your business if you possibly can.

Why? Because the personal investment made by an inventor during the conception and prototyping stages invariably skews their thinking. This makes it hard for them to be realistic about the market opportunity, the cost to get the product made and into the market, and the development of a business plan that has a realistic expectation and exit.

For example, if I used Uniloc proceeds to fund another project, I would hire a market entry CEO and go for broke. Since the CEO would be working for me, being also the financier, it would be very hard for him to tell me that the project is failing. Whereas if I have to convince professional investors to be involved, the interaction and push-back that happens between founders, management and investors is all very healthy and good for the success of the project.

The bottom line is to get successfully to market, with minimum cost, in the minimum time.

So everything done from conception of the idea to prototyping and market entry planning must have the benefit of all the experience, know-how and careful funds handling available.

Unfortunately, at least in my experience, self funding leads to a "yes-man" environment. There is an old joke that goes like this: that the golden rule of business is "Whoever has the gold makes the rules." In real life I find this way too simplistic. In real-life you need people that have bought-in on their own terms. It's the difference between hired-guns and operating shareholders, there is a lot more on the line.

Practically, in getting an invention to market, this means experienced investors who know the market you are going into and can invest confidently in the opportunity and not only on their assessment of you as a likable guy. And secondly the market entry team, and more specifically the CEO, who has already taken a product or technology like yours to market.

See how this works?
  • If your CEO has taken a product like yours to market before, then you are not paying for all the mistakes he made getting to market the first time. Also if he thinks the project is a goer, then this is a basis for additional confidence by investors.
  • Ideally the investors you use should at least know the CEO you plan to use or at least have had experience in investing in the field or industry that your business plan is headed.
This way you set yourself up for the maximum chance of success. Two teams of experienced people have bought in on your idea. Two teams have pulled your project apart and made you think out every major problem and issue... and the three groups "founders, investors and management" can move forward with confidence for a quick and decisive market entry execution.
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