Always Prioritize Your Technology Licensing Opportunities: The P in PRISM
Editor’s note: This is the second in a six-post series on how Fuentek views technology licensing through a new PRISM.
Whether your intellectual property (IP) portfolio is small or enormous, prioritizing your commercialization opportunities let’s you put your money and effort behind those patents that have the best chances for success and where the payback will be biggest.
In thinking about the technology commercialization process, this prioritization occurs all along the way to ensure that the evaluation criteria for commercializing the technology still holds over time (e.g., new technology developments, changes in the economy). For Fuentek, the prioritizing starts during our two-part technology evaluation. We do a quick screening to get rid of the chaff so that the wheat can get a more detailed assessment to identify specific opportunities and confirm the innovation’s commercial potential. (I wrote a paper called “Getting to the Best First” discussing this topic for the LES journal les Nouvelles back in 2004.)
Prioritizing—and reprioritizing—also happens during marketing. Before you even start, ask yourself: What is it going to take to get to a licensing deal and can you afford to fail? As marketing progresses, check in with yourself about how much you’ve spent and how it compares to the ever-shifting likely return. (Check out Jack Spain’s series about how marketing IP is an iterative process.)
One of the key factors to consider determining priority is: Who are the players in the target market and are they likely to want what you’re offering. If the #1 player is huge and not prone to in-licensing technology (think Microsoft), then the effort probably shouldn’t be at the top of your priority list. (Remember: Always do your homework on the target licensees.)
I’m not saying you shouldn’t put high-risk opportunities on the priority list, but do it purposely—be willing to write-off the cost to pursue without reaching the long-shot success or to walk away from the opportunity if the probability of success starts to drop. As they say, you can’t touch the stars if you don’t reach. But consider the Despair.com poster that “At some point, hanging in there just makes you look like an even bigger loser.”
So when you’re figuring out what should get priority in your portfolio, consider the risks. If risk is high but so is the potential payoff, be very transparent about this with your management, the innovator, and any other stakeholders. Instead of overpromising, be open and honest and tell them what the risks are and what factors may impact that risk. Explain what investment is truly needed in order to get on the path to success. And keep reiterating that success isn’t guaranteed. Such an approach helps ensure that everyone is in agreement about what should get priority.
Next post: Return on Investment. Until then, what techniques do you use to prioritize your technology licensing opportunities?
–By Laura A. Schoppe