2011 Patent Buying Areas of Interest report

February 16, 2011

We’ve been buying and selling patents at yet2.com for over 11 years now. Over those years we have seen the areas of patent interest change quite substantially.  Today we released our 2011 Patent Buying Areas of Interest report. This years’ report breaks patents sales into four areas; Consumer Electronics, Wireless, Healthcare and Lighting.  Contact us for the full report, but below is a summary.

Most patent transactions are in industries where there are a high number of patents per product.  Consumer electronics leads the pack.  We are seeing an increase in interest in patents around the edges of consumer electronics, like hardware casing and metal bending. The patent market is coming back to a ‘new normal’, after the 2008 market disruption.  While transaction activity has picked back up, it’s still at 50% of pre 2008.

Patent Buying Interest Areas (2011)

1. Consumer Electronics

a) Image Capture / Image processing

b) Audio/Video

c) Memory

d) Compression / Decompression (“codec”)

e) Displays

f) Battery / Portable Power

g) Sensors Read the rest of this entry »

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The next killer app – How Open Innovation Will Change Drug Developement

January 29, 2011

This is an interesting article available here in Sunday’s Boston Globe. I wrote a very similar article on how digital exhaust will cure cancer. I think people will have the ability to opt out/in of large scale medical studies on each of our collective digital exhaust to better understand the cause and effect of various ailments. Add to this, transparency in the food supply (so that we will know what came from where), and we will have some very interesting data on which to develop new therapies. This is a fascinating topic – Ben

Online communal wisdom should be harnessed for drug development

NEW DRUGS are subject to exhaustive critical scrutiny, yet there has never been a corresponding effort to collect reports of drugs delivering unexpected benefits. If open innovation can lead to the creation of the world’s most complete encyclopedia, a top-selling cleaning duster, and the game Angry Birds, it’s time to ask whether this approach might be used to capture the exceptional untapped value associated with existing drugs, and to power the discovery of important new medicines.

Half a century ago, astute clinicians noticed that patients receiving the new anti-tuberculosis drug iproniazid experienced an enhanced sense of well-being, a chance observation that led directly to the development of antidepressants and the birth of psychopharmacology. More recently, an unexpected side effect reported by patients in a clinical trial of a drug for chest pain led to the development of Viagra.

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BMW’s New Open Innovation Program – The Future of Mobility

January 22, 2011

BMW is reaching out for new ideas, in an interesting program called the Future of Mobility.  The future is not what it used to be, it will be better.

If every company has open innovation programs like this, and I believe they will, it will empower engineers and innovators – to do what they do best.  Another example of the increasing liquidity of technology.

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$3 Million Open Innovation Prize for an Algorithm

December 14, 2010

This is a very interesting prize, and a great example of Open Innovation at work – Ben.  Reprint from here: https://www.theheritagehealthprize.com/Page/Home

More than 71 Million individuals in the United States are admitted to hospitals each year, according to the latest survey from the American Hospital Association.  Studies have concluded that in 2006 well over $30 billion was spent on unnecessary hospital admissions.  How many of those hospital admissions could have been avoided if only we had real-time information as to which patients were at risk for future hospitalization?  This is more than just an academic question:  every unnecessary admission to the hospital places the patient at risk and uses scarce medical resources unwisely.

The Heritage Provider Network (HPN) launched the $3 million Heritage Health Prize with one goal in mind: to develop a breakthrough algorithm that uses available patient data, including health records and claims data, to predict and prevent unnecessary hospitalizations.  Heritage believes that incentivized competition – one that includes the involvement of those with passionate minds that don’t know what can’t be done – is the best way to achieve the radical breakthroughs and innovations necessary to reform our health care system.  Sponsoring this prize is simply one way that Heritage believes it can help solve a societal problem.

Read the rest of this entry »

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25 iPhone Apps I Love

December 8, 2010
A colleague at yet2.com asked me, what are the iPhone apps I use.  I thought I’d share the list more broadly.
  1. News – I love, WSJ, NYT, Bloomberg, and The Drudge Report.  Of all, Bloomberg is best.
  2. Twitter – I’m not sure what it is, but I feed the beast.
  3. Open Table – The fastest way to get a table at Brasserie in NY.  Only good restaurants use Open Table, so it replaces for me it replaces Zagots.
  4. ScanR – Take photo of a business card, receipts or a signed contract and ScanR, PDFs it to anyone, via FAX or email.  It’s neat.
  5. Flight Track Pro – This the best way to know if your flight is on time as you are rushing to the airport.
  6. Chess – Caissa chess and Chess online allow me to play 5 minute games with other people in real time.  Neat.  I get beat by Japanese school kids.  How do you say ‘your toast’ in Japanese?
  7. iNetwork Test – I can test the spead of my WiFi internet connection speed, making sure Comcast delivers. Read the rest of this entry »

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Why VC and Clean Energy Might Not Mix

November 4, 2010

There has been a lot of speculation that clean energy might be the next Biotechnology or Internet revolution.  While I think this would be great, lets’ explore some of the hurdles- that VC and clean energy business models might not mesh well – that we might need other funding sources.  Here are a few observations:

1) The Amount of Capital Needed

Starting a clean energy company can be extremely expensive and out of reach of the normal $300M VC fund. For example, Solyndra, a photovoltaic company has raised close to $1.5B in equity and debt financing.

2) The Payback does not justify the Risk.

Most clean energy companies require the construction of commercial plants for energy production, which may or may not be successful. This can be extremely capital intensive, as mention above, and have not defined exits strategy

3) Lack of Exit Options

Investments in clean energy companies are extremely illiquid.  Most VC Funds are set up on a 5 to 7-year model.  It could take longer than that to build and test the commercial viability of most new clean energy plants.  Additionally clearly developed eco-system where incumbents buy promising startups has yet to develop in the sector (think Apple, Microsoft, & Cisco).

4)Managerial Experience.

The three important factors for determining an investment in VC are 1) Management 2) Management and 3) Management.  In the clean energy sector most of the entrepreneurs come from large companies, primarily utilities.  They lack the experience in starting an early stage company, thus adding to the risk.

5) Energy is a Regulated Commodity

The price of energy is regulated in some markets. As the cost of inputs rises, the profit margins shrink adding one more risk to commercializing a new technology.

So if Venture Capital cant fund clean energy, who will?  Will VC’s change their model like Element Partners and the Potomac Energy Fund ?  Will large strategics step in like DuPont’s bet in bio-fuels?  Will the governments provide financing or incentives?

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Incentives Don’t Work?

October 30, 2010

Just watched a great TED video by Daniel Pink. Mr. Pink makes a compelling argument that incentives (primarily monetary ones) don’t work for businesses and reduce the performance of employees.  I highly recommend this video

Here is a summary of his argument:

There is a mismatch between what science knows and what business does

1) Incentives do work but for a surprisingly small band of circumstances, (primarily mechanical in nature not cognitive).

2) Rewards force people to focus exclusively on the task ahead, destroying creativity.

3) The secret to high performance isn’t rewards and punishment – but intrinsic drive

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Entrepreneur Enthusiasm & Trustworthiness

October 16, 2010

Richard Sudek wrote an interesting article in 2007 on  “How Entrepreneur Enthusiasm, Trustworthiness and Venture Attributes Affect Angel Investment Decision Processes”. Dissertation – Claremont Graduate University

This is an interesting topic for me, because I believe trust is the currency of business. I wrote a blog on the topic. A key learning for me after 11 years at yet2.com is people are more important than technology in deal-making.   This study supports that view.

This article is a dissertation of 121 pages including survey results from other scholars. The author points out that entrepreneur’s enthusiasm and trustworthiness are placed as top criteria used by angels in their funding decision. Sudek emphasizes the importance of trustworthiness for the success of the entrepreneur. Whether an angel likes the entrepreneur is also very important. Sudek comments that the entrepreneur is the most significant factor that influences angels and VC’s to finance the new venture.

The author also considered age, gender and experience of the entrepreneur as potential factors that can influence finding decisions, but he didn’t find significant trends and correlations.

Factors for successful business pitches:

 Enthusiasm and passion of the entrepreneur (coupled with extraversion)

 Trustworthiness of the entrepreneur

 Entrepreneurs demonstrate ability to manage the new venture

 Entrepreneurs demonstrate that there is a market need for their product

 The entrepreneur demonstrates expertise

 Entrepreneurs are skillful in ingratiating themselves during meetings with VC’s

 Entrepreneur conveys honesty in his/her presentation

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Do Deal-makers Evaluate ‘Live’ Presentations Like They Evaluate Written Ones?

October 9, 2010

On my long flights I get a chance to do some interesting reading – this time on the subect of the clarity of a presentation and how this might impact a technology deal or venture capital funding.  I came across Some very interesting research on this subject done by: Denis Gregoire, Alice Koning and Ben Oviatt on the impact of an in person pitch vs a submitted business plan or technology brief.

The research presents a study on the venture capitalists’ real-time opinions on entrepreneurs’ presentations. The authors base their analysis on real time responses submitted by 25 venture capitalists using dynamic response devices while the VC’s are evaluating 18 presentations at a real venture financing event. The authors compare the submitted responses with the particular moment in the entrepreneur’s presentation and identify what information venture capitalists considered influential for their decision to fund the venture.

The study revealed that presenters who were casually dressed and yet talked about their high experience, received negative ratings from the venture capitalists. In all other cases, highlighting of the entrepreneurs’ experience did not have any major impact on the VC’s.

Factors for Successful Business Pitches:

  • Entrepreneurs are dressed formally and look professional
  • The presentation is well organized and consistent – there are few leaps from one category to the other
  • Clearly articulated purpose of the venture – how the venture will address the problems of the customers
  • Entrepreneur focuses on a narrow and niche markets/industries
  • Entrepreneurs have patents for their products
  • The presentation is not longer than the time limit

Factors that have little impact on VC’s funding decisions (all entrepreneurs highlight these– so there is no differentiation)

  • Entrepreneurs have long experience in the industry
  • Highlighting of the capacity and abilities of the management team
  • Size of the market and potential growth of the venture
  • The position of the presenter (whether he/she is the founder, a hired executive or technology specialist)

Gregoire, Denis. Koning, Alice. Oviatt, Benjamin. 2008. “Do VC’s Evaluate ‘Live’ Presentations Like They Evaluate Business Plans?”. Frontiers of Entrepreneurship Research. Vol (28), No (3), Pp 1-15

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yet2.com Portfolio Company to Put More Clean Energy on the Grid

October 7, 2010

Portland, Oregon – Iberdrola Renewables, the Bonneville Power Administration (BPA), Constellation Energy Control & Dispatch and software provider Versify Solutions today announced the launch of a new pilot program that could significantly expand cost-effective use of Pacific Northwest wind energy. The project also holds promise for lowering costs while increasing the environmental benefits of wind energy in the region.

The initiative, called Customer Supplied Generation Imbalance or “self supply,” brings together hydro, wind and natural gas-fired energy to reliably and cost-effectively integrate wind generation into the electricity grid and reduce use of coal-fired generation.

Wind power is the fastest-growing form of energy in the world, and the U.S. is the fastest-growing market. The Pacific Northwest has been at the forefront of that growth, zooming from zero megawatts to more than 5,000 megawatts in operation in 12 years. Currently, more than 3,000 megawatts – almost three times Seattle’s average power use – are connected to the BPA transmission system. Since the wind doesn’t blow continuously, the actual energy output of regional wind farms is about 30 percent.

Because wind is an intermittent resource, it must be backed up by reserves. Currently, wind generation is backed exclusively with energy from federal hydropower marketed by BPA. Wind power’s significant growth in the Northwest threatens to exhaust the federal dams’ capacity to alone provide wind balancing services and meet its other obligations.

The self-supply pilot enables wind generators to procure their own balancing resources, freeing up federal hydropower. This will increase hydro-system flexibility, which would help add more renewable resources to the electricity grid.

Read the rest of this entry »

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