Can I use my government work in my startup?

Q: I am considering starting a company.

Mar 1st, 2006

Milton Chang

Q: I am considering starting a company. How can I take advantage of the work I did in a national laboratory, some of which is published?

A: This is a dilemma; you want to publish and you also want to keep a secret. Technically, as a government employee, your work is in the public domain. There are legal ways for you to gain access to the IP (intellectual property) even if it is your own invention. Nonexclusive licenses are usually granted at very reasonable royalty rates; but government labs grant exclusive licenses only under very special circumstances and usually after a due process. The policy varies, so you need to discuss the matter with your licensing office. Regardless, as a practical matter, not all the details are disclosed in either patent or publications. Even with full disclosure there are nuances that are in essence trade secrets; the insights you gained from working on this specific project are likely to put you ahead of other licensees. Since technology marches on, you can also develop additional patents after you start your company to “circle the wagon” to make it less interesting, or even difficult, for other companies to use the technology.

Q: What do you think of my ad?

A: Your question brings back fond memories of the days when I actively participated in producing ads at Newport and New Focus. It was always a challenge, took an untold number of hours batting ideas around, but it was always a great exercise to gain new insights into the marketplace.

Let me first focus on the ad itself. I would call this an informational ad. Like most ads in our industry, it pretty much describes product features and specifications. You did a nice clean job and it pretty much met the ten criteria for a good ad from Business Marketing magazine that I always kept handy as a reminder: It is visually attractive, addressing the right audience, inviting, promotes a reward, backs up the promise, logical, easy to read, emphasizes the benefits, and reflects the company character. On the other hand, there is nothing memorable or compelling about it to make me not feel the need to make an Internet search when I am ready to buy what you make. So you may want to spice up the ad to make it stand out.

Extrapolating the discussion to a bigger marketing issue, we have to include branding. Asking me to critique a single ad, in fact, points to a problem-not thinking of the ad as part of an overall market strategy to build a brand. Putting my marketing cap on, I would like to share a few thoughts with you about marketing and advertising.

You begin defining your brand by developing a clear understanding of your core competencies to provide benefits that matter to customers. Brand can only be built over time because it takes time for the message to be picked up and internalized. Everything the company does, including positioning of its products down to the message of each ad, must be consistent with the brand to reinforce that image.

An important mindset in marketing is to be detached from sales to avoid taking shortcuts to generate sales at the expense of eroding the brand. So, the purpose of marketing is to generate interest to facilitate sales; everything you do in marketing is to provide a “hook” for customers to remain interested enough to find out more about what you have to offer. This is especially true for ads. Most ads are packed with information with the impossible hope of convincing customers to buy. You may be better off with the realistic goal of generating enough interest for the customer to pick up the phone or visit your website, for example. Being detached enables you to see the bigger picture from a customer’s standpoint-make it easy for customers to find out what they want to know. Give them what they want and they may just give you an order somewhere down the road!

MILTON CHANG is managing director of Incubic Venture Fund, which invests in photonics and in businesses related to core technologies. He was CEO/president of Newport and New Focus and currently serves on the boards of several companies, including Arcturus Bioscience, OpVista, Rockwell Scientific, and YesVideo. He holds a Ph.D. from the California Institute of Technology. He is a Fellow of the Optical Society of America and the Laser Institute of America (LIA), is a past president of the IEEE Laser Electro-Optical Society and LIA, and is a member of the Board of Trustees of Caltech. Visit www.incubic.com for other articles.

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