
To avoid IP contamination, some companies maintain a "clean room" approach, keeping the people receiving confidential information from talking to their R&D groups, and segregating new hires possessing proprietary information from people working in similar areas. Companies can also minimize their exposure by limiting the number of NDA's they sign, by listening to nonproprietary information and deciding it's worth continuing to the next step before signing. Some big companies will even go so far as to have the disclosing party sign an agreement that in effect says "anything disclosed will not be treated as proprietary." Signing a well-written NDA may be appropriate; but perhaps most important is understanding the ramifications of exchanging confidential information.*
Q: As a marketing consultant, I am shocked that some company founders have the attitude that a technically superior product will sell itself enough to get the company acquired. I hope you'll point out the importance of marketing.A: This approach has actually worked in some cases because technology plays such an important role in our industry and therefore some founders assume that's the way it works. The truth is a business can go so much further if it has both good technology and good marketing.Not paying attention to marketing is a very risky approach. People won't be buying your product if they don't know about it. It also means that there is no close interaction with potential customers, resulting in products that are only "almost right"—interesting, but not something anyone would buy. And it is usually companies with products that are successful in the marketplace that get acquired. Since being acquired is not within one's own control, it is naïve to trust one's future to luck and then end up with a company that goes nowhere.
*I gratefully acknowledge Paul Davis ([email protected]) for his input. You can find his article on patent strategy at: http://www.ljx.com/practice/intellectualproperty/express/031898/fence.htm.

Milton Chang
MILTON CHANG of Incubic Management was president of Newport and New Focus. He is currently director of mBio Diagnostics and Aurrion; a trustee of Caltech; a member of the SEC Advisory Committee on Small and Emerging Companies; and serves on advisory boards and mentors entrepreneurs. Chang is a Fellow of IEEE, OSA, and LIA. Direct your business, management, and career questions to him at [email protected], and check out his book Toward Entrepreneurship at www.miltonchang.com.