Remember the dot-com bubble ? Or the real estate bubble ? Remember when it exploded, wrecking so many companies, lives and wealth ?
We must face it, we’re in a middle (may be at the beginning — that would be worse) of a patent bubble. The first patent bubble.
What’s a bubble ?
A bubble exists when everybody (well, many people) starts to believe that Something is worth much more than it really is, and to pay much too high for that Something. Generally, the very first ones get insanely rich. The Something was worth less, and some morning some idiot thinks the Something amounts to truckload of money. And suddenly, everybody’s an idiot. Everybody goes crazy. Everybody wants to be in, and the price goes up, and up and up. But everybody wants to be in at any price. There’s never enough of the Something, and the price keeps going stratospheric. Everybody believes in the new Eldorado. There always are some lucid ones to tell about the craziness, but who listen to them ? Everybody rushes to the bubble to get her share.
But one day, one day, Cassandra gets her revenge. The bubble explodes, sinking the whole world economy with it. These are the armageddon days. Everybody’s get crushed. YOU gets crushed.
Today, too many people believe in the monetary value of patents. The reality is a patent isn’t worth much:
- You don’t pay much to get it, whatever you think
- Until you’ve successfully fought in court, you can’t tell if your patent stands
- If you really want to get something out of it, you’d better have a few millions in cash.
- They depend on regulations, and regulations change (this is especially true for drugs).
Some startups pile up tons and tons of patents, hoping to prove they’re worth the money they’re trying to raise with investors. However experienced venture capitalists like Guy Kawasaki can tell you, patents are just good to impress your parents. If you’ve many of them, it means you aren’t focused enough, and you can’t tell what exactly is your company doing (and you’re wasting your money).