Renewed Focus on Intellectual Property

As commoditization flattens the business world, ideas become increasingly important landmarks.

Infrastructure is commoditized, customer service is commoditized, and distribution is commoditized. Even user experience has limits in the long tail economy. So what now? Focus on your intellectual property. What is it that you can do or produce that no one else can?

Do you have an intellectual property pipeline? You better. Build a base of solid intellectual property – be it content, a design, a book, or a new product. Originality is key, but so is connection with your markets.

It’s safe to assume that shortly after you come up with some nifty business concept, someone else will figure out how to do it better. Even small, incremental improvements get to market quickly and easily these days, then spread like wildfire. That means it’s absolutely critical to focus on creating more value in your products and services themselves, in ways that are essential to the lifestyle of your products/services.

A combination of factors has led to intellectual property – ideas themselves – becoming more critical than ever. These factors, as mentioned throughout the preceding chapters, include the commoditization of infrastructure, nimble manufacturing that can create small runs of unique products, fulfillment houses that will ship tiny quantities of only one or two items, and, most importantly, the ability of consumers to connect directly to the products they want. Something they can now do from many different platforms, including the web, phone and mobile device.

A lot comes down to the fact that it’s getting harder to get margins just by finding faster or cheaper ways to run your business, but there’s still market opportunity for smarter (better vetted, better aligned, problem-solving) ideas.

At the end of the day, all of these technological innovations are leading people toward products in a way that lowers acquisition cost to the point where the long tail economy really can ensue. A product can now more closely resemble that unique fingerprint of the individual. And we’re not only talking about personalized product here, but niche products. While these niche products appeal to smaller markets and account for less volume overall, they can yield better margins since the web provides a cheaper avenue to markets.

We’re also seeing the inevitable flattening of the supply chain as the web lets consumers access manufacturers directly, often completely cutting out retailers and distributors. Companies don’t have to go through the process of coming up with a distribution infrastructure and a channel for it, because the overall infrastructure’s already commoditized and available.

Because of collapsing supply chains, intellectual property itself is becoming even more critical. To find value, you need to focus on developing intellectual property that solves a problem and is needed in the marketplace (or partnering closely with those who do.) Ultimately that promises more longevity, because regardless of what happens as your supply chain flattens, you have the ability to at least own the primary value to the user.

As we get more direct access to these products, the value of sales and marketing itself is also getting flattened. People can now get connected with product in a fashion that gives them more value with less messaging.

Maybe right now there’s still some way that your company can bring goods and services to market more efficiently than your competitors can through automation. The best hedge against losing that advantage is to leverage your core differentiator. Develop your own intellectual property and be the best so you can be the only.

The one sure way to thrive in the midst of this marketing shift is simply to provide more and more value.