Intellectual Property and China

I found an interesting question on Medium about how to protect your IP in China. Here is my longer answer:

DON’T even attempt to protect your idea in China — or anywhere for that matter.

The Chinese culture is about free access to knowledge and ideas and understands the fact that it’s all about execution very well. Just imagine we stop IP protection radically and just turn our ideas into reality as fast as possible. Imagine we no longer feel safe because of some highly expensive and questionable patents but instead focus all our energy on execution — competing with the copy cats for even better execution and win a market because of our skills not our 1 microsecond brain spark.

WHAT CUSTOMERS SAY

I applied for a patent once, had some of the best lawyer Silicon Valley has and got a rock solid IP protection nobody could circumvent. Guess what customers said: “Good for you but really want solutions where we have options and are not locked in.

THE VALUE OF NOT HAVING A PATENT

Having a patent protects only you. But without a patent you get something that everybody is actually seeking for lifetime: “Market Leadership”. You can only be a leader if you have followers. No follower — no leader. Competition is the best lubrication for well run machines. If you have no competition, you never know if you are really the best or not. Now look around and look for any product that is fully patent protected and you say ‘yes, this is the coolest product on earth’ — even if you find one it is just not really that cool.

RESEARCH & DEVELOPMENT PROTECTION

Ok ok ok — there are products that are extremely hard to develop, very hard and costly to test and if they don’t get protection, they won’t develop it. Well if it is so hard to develop, let followers find their way, have them do their own clinical tests and so forth. At the end even in those cases it broils down to execution.

KNOWLEDGE SHOULD BE FREE

I’m not Chinese and not a particular fan of China even though I very much admire their advances, but I definitely go with their philosophy: Knowledge should be free. And today China is on their way to top Silicon Valley because the communicate even faster, even wider and are even more open than good ol’ SV.

3 years of blog posts just gone

We all know the concept of backups. And I did a frequent backup of my blog. Some of us know the concept of disaster recovery. And I once in a while download the backups to my laptop. No we also know Murphy’s Law: When something goes wrong….

My Laptop got stolen two months ago. Bad but I recovered my data from my backup. Last week, some of our servers at our hosting provider blew up. It must have been a true disaster. But also for us because the second storage unit with our backups blew up too. And the archive data have not been put back after I setup my new laptop.

Nothing to recover – well from an older machine the data from 2013. Ok so I had also that experience – and now I know how it feels if documents from like the past 3 years like some hundred blog posts are gone for ever.

OK I know the CIA and NSA have copies of everything but they won’t help me – I guess….

Thanks for checking back here once in a while.

Axel

Dear Mr. President Obama

I’m concerned. With a defense budget of $690 Billion, the US spends more money on defense and armor than China ($129B), India ($44B), Russia ($64B), UK ($57B), France ($58B), Germany ($43B), Korea… all together. That means that every US family is paying $6,200 per year to defend – what?

In contrast, the US education budget is only $69B, infrastructure and everything else is even less.

If you restructure the budget, keep $250B for defense, you are still bigger than China, India, Russia combined, or bigger than all Europe and have $440B for making the US the nation with the biggest education budget, the biggest science budget, the biggest economic stimulation, the biggest traffic infrastructure development and make it the leading nation – again. And still have a few billion to revitalize a Space program.

I believe the most significant defense program for 2014 is to defend US internal poverty, under education and economic meltdown.

I wish you and all Americans a happy and prosperous 2014

Separation between state and capital

I’d like to expand further on an earlier post about the three priorities of a well run democratic government: Education, Infrastructure and Law. I made a short statement about separation of state and capital.

In recent year I saw quite some interesting posts about ‘separation between state and economics’ or ‘separation between state and economy’. Well first of all i see “economy’ as the mirror of how we conduct business and how business can flourish in a given society. Economy or the economics of a nation is a result of a carefully interwoven and networked interaction between capital or the business owning part of a society and the government with it’s responsibility to take care of ALL of its citizens. Hence I believe it is better to say “Separation of state and capital”. With this approach we will also see a major conflict right away in a political form that is called capitalism.  Capitalism basically fuses capital and state in one unit that has eventually the same problem than communism. In a capitalistic world less and less people control more and more assets to a point where there is no difference to communism from an economic point of view.

When capitalism becomes an economic communism

Let’s look into the United States today, end of 2013. The largest part, approximately 80% of the population works in large global enterprises. They are all public companies. Public companies means the public participates in the economic success of those companies, very much like in communism. The company leadership including the ‘real investors’ however work very closely with the government and have a huge influence in the government’s decisions. When we look at the investor structure of the food industry which is still the most essential industry to mankind, the 350 ‘individual brands’ in the US are owned by approximately 10 large enterprises and only a few people like Warren Buffet have a large stake in those companies. At present time, less and less people control more and more assets and build and incomprehensible wealth – while an unhappiness 99% seeing the chances to become rich rapidly vanishing away.   Some predict that there will be the first Trillionaires in the next two generations.

Unlike the idea of free competition – as seen by Wesley Gant – and a well self balanced economy, capitalism allows an uncontrolled gravitational force that allows one company gets acquired by another until there is no competition left and we experience monopolies that are not only as bad as communism, it’s actually worst. AT&T, Comcast Cable, Microsoft, Ford and GM, General Electric, super market chains are only a few of those examples. The US had once 26 world class auto makers and have been considered the world leading auto industry. A sales pitch from GM telling other companies that ‘economy of scale’ will crush them and they better merge with GM worked well enough to buy most of the car makers, creating an unmanageable behemoth, that was eventually unable to compete on the world market. Ford and Chrysler did the same and the US ended up with three brands, so inflexible and lacking of innovation that international brands took over and crushed the US auto industry. In just 16 years the US lost all it’s leadership, no more the leading auto industry, no more the leading home appliance industry, no longer the leading aerospace industry, no longer the best education, no longer a self sufficient energy producer, no leadership in environmental technologies, renewable energy, health care….

The end of the american dream? The end of the land of opportunities? It is certainly just a few seconds before 12 and when you see billions of US$ flow into countries like Africa and revolutionize the African infrastructure, you know that a large portion of that gigantic wealth is leaving the country.

Is separation of economics and state an illusion?

One of the very related and controversial discussed movies is Atlas Shrugged from Ayn Rand. The story was written in 1953 and the third movie of that trilogy is currently in the making. Also Ayn is a big proponent for a free and uncontrolled capitalism and is mentioning the separation between economics and state – as she is migrating from Russia to the fast emerging US. But now – 60 years later, where are we? There is no separation between economics and state and capitalism is at risk to collapse. Replacing “economics” with “capital” isn’t just semantics but a significant difference.

I believe capitalism and communism are both idealistic and extreme forms of an ideal world, described by people who would like everybody adopts what is ideal for them. As such I trust neither one will ever work. All too often freedom for one is a limitation to another. We need to recognize and respect that a peaceful coexistence requires compromises. And compromises need to be democratically decided and then respected (one may not agree but will commit).

Separation of state and capital

The government of a society needs to look at the entire population and be not guided by the capital. That a company such as GM can buy and destroy public transportation in the interest to sell more cars, should never be possible in a democratic and capital independent government. That a government supports the weapons industry to a degree that the arsenal is able to destroy the plant 60 times and sell weapons to countries that are simply unpredictable just to fuel war for their own business interest should never be possible. Infrastructure that is part of the foundation of a society’s success should not be privatized unless it can be insured that there are at least three independent competitors. Patent laws should be in the interest of an inventor not in the interest of the capital. Trade laws should be in the interest of all independent trader and need to be predictable.

EDUCATION
In today’s technological very demanding world education is not only a base right but a responsibility of the government to provide the best possible education to its society. That responsibility includes motivation why such education is so essential. Unlike in the US education system where higher education is almost in-affordable for an average family, the state need to ensure that all talented citizens are motivated and have access to the best possible education, including political education to grow a nation that is mentally able to execute their democratic rights and can contribute to the evolution of such a democracy. Political education also needed to ensure a society can maintain their democratic rights so that at least a large part of the society is able to comprehend the evolution of the law and rules and regulation the society is governed by. Since there will always be talents that come out of circumstances unable to afford first class education, it is the states responsibility to support those in the interest of the entire society.

INFRASTRUCTURE
From history we can learn that infrastructure has always been a keystone for prosperity. First cities in Egypt were build at the river Nile, where the river was a key transport medium. Harbors became the strategic infrastructure for prospering nations for thousands of years. Later on trading hubs emerged inland if good roads where available, expanded by trains and lately airports to be connected to air traffic. Public transportation systems are key in large cities to provide fast transportation within those cities. Phone connections, Internet, mobile phone infrastructure are the latest examples for key strategic infrastructure elements. Obviously handing those over to private businesses seemed to make a lot of sense, but the economic interest and the interest of a society as a whole are colliding also here. European countries for instance responded to those essentially just different monopolies with state regulations to ensure service needed for a prospering country. Germany, one of the most healthy economies, for instance took it even a step further and followed the principle to have communication managed by the department of traffic and infrastructure. Traffic, communication and energy are so critical to a nations success that it may make a lot of sense to make those carefully watched and co-managed by the state.

LAW
Obviously one of the most essential responsibilities of the sate is to create, maintain and enforce the law for its society. In particular maintenance of a law is a big challenge for most modern societies, that have still rules and regulations that are more than hundred years old and are completely outdated. Yet as one rule builds on previous ones it is very difficult to remove such outdated laws. More importantly is the need to create new rules for new behaviors, often triggered by new technologies. While the law is the foundation of today’s democratic society, all too often is the society not participating to execute their democratic rights by virtue of not even understanding what the law is for and what permutation it may have (see education).  I rising issue in the developed world is to understand and navigate business development. In today’s capitalistic societies it is easily possible that financially dominant groups can easily overpower less powerful groups for their own benefit but not for the benefit of the economy. For instance Microsoft was able to deliver Internet Explorer for free and killed innovator Netscape. This example is in particular valuable as one school of thought will suggest that any intervention of a government is negative for the economy and if the government would regulate at that level, where will it end? The other school of thought may argue that destroying innovation not in a competition of innovation but in a competition of capital is not in the interest of a thriving society and we need to find ways of fair competition in the base of the matter – in this case innovation. Obviously I’m not writing this to make a suggestion but to raise the issue and show the challenges that lay ahead of us.

In all of the above core elements, a well run government has deep connection between state and economy, yet not necessarily a need to have state and capital be as closely connected as it is today in many societies.

Economy, being “the wealth and resources of a country or region, esp. in terms of the production and consumption of goods and services” in accordance to Google, it would be hard to believe to decouple economy from state but separating state and capital as only one of the players of a nation seems to make a lot of sense.

 

References:
Market Watch, 11 Trillionaires in 2 generations
Currently richest people
Wesley Gant – separation of economy and state
Any Rand – principles of a free society
Recent theories of the capitalist state
What is economy

 

A democracy’s top priority

With the ongoing struggle of the US economy, the inner unhappiness and the many questions arising every day in the public web, I was thinking back and forth over the past 2 years about the essence of democracy and the top priorities of a democratic leader. The list is obviously almost with no end. But running a country is all about focus and complexity management.

 

I think there are three things a well run democracy provides for their citizens:

1) Education

Lowest cost possible education is essential. Education drives innovation and innovation drives the economy. Nobody can predict who are the next innovators. But one thing is for sure: limiting top education to a top class in the society is reducing the amount of possible innovation by order of magnitude. Most of the big tech leader and tech innovations in the US were essentially stemmed by people from middle class or lower families. If a country can’t support broad education it cripples its ability to innovate and as such it essentially reduces its competitiveness on a global scale.

2) Infrastructure

An omnipresent basic infrastructure for clean water, energy, public transportation and communication (i.e. mobile networks and Internet) is essential for a society to work and deliver a high value to the society. Communication, knowledge transfer and interaction via the Internet and mobile communication is in today’s world as important as air traffic was in the 60’s and 70’s. If you can’t go there easily you decouple yourself from the rest of the business world. If you don’t make it easy and encourage people to leverage the global Internet you disconnect yourself from the global business flow.

3) Common sense law

A law is helping citizen to collaborate and live with each other, keep freedom and prosperity. However like education models and infrastructure if it is not well maintained, there is a high risk of permutation that makes the law not the law for the people but against the people. The Headline in Wire Magazine a year or so ago: “Need cash – sue Google” is a funny yet devastating testimony for a law that is out of control.

All the other key needs including Jobs, Healthcare, Freedom…. will fall into its place if the above is a top priority. To the contrary if any one of the above responsibilities are a low priority, there is a high risk a society is at jeopardy.

Separation of state and capital

Very much like the separation of state and church back in the 1700’s a modern society need to care about the separation between state and capital. Societies in capitalistic nations are particularly at risk to outbalance democracy in a way where poor get ever poorer and less and less people get ever richer to a degree that the capital eventually controls what happens in a country and not an elected government.

 

Plausibility check

Jobs & Innovation

If we have many well educated kids from all kinds of levels of our society we will see a lot of creativity and start-ups driving the creativity to new business and new jobs. Jobs can’t be “created” for people to have a job. Jobs can only be created by demand to do things we haven’t done before. Innovation means developing the ability on a global scale and build more than we can consume ourselves.

Health Care

If we have jobs we can pay for healthcare and if we have agile and creative people, they find new ways to make health care more affordable, less complicated, more variety and more option. We can’t “generate” healthcare unless we put it back to a government function.

Prosperity

If the laws of a country help keeping the balance between a young generations innovation and mature capital we alleviate the risk of monopolies and support the growth of a middle class – which is essential for a stable and well balanced economy. If like in some countries over 80% of the food supply is concentrated in 350 brands that are essentially owned by 10 companies who have all one major shareholder in common, we live in a very dangerous system that allowed the prosperity development to get out of synch. It doesn’t make sense to finger point to people and call the greedy – when the system is build to make it happen.

Well – is our democratic model no longer working? No – our world and it’s needs and haves have evolved dramatically and our democratic answers need to evolve as well. Public companies for instance were a great innovation about 100 years ago to let the public participate in the gains of larger companies. Today public companies ruin more individuals than other investment opportunities, or no longer even give access to many citizens and investments have grown to a level of complication that it just doesn’t make sense any longer. Neither the laws to protect investors or businesses nor the laws and rules to run businesses kept up with the evolution of our globally connected business world.

Summary

While this is all very complex, if we distill it down to Education, Infrastructure and Law we can start working on it and get out of trouble easily within a few years.  Just thinking

Axel
http://XeeMe.com/AxelS

 

10 Years Social Media — Anniversary

My LinkedIn account states: Member since: June 12, 2003
My LinkedIn ID is 8573

2003 – In My 2003 Konstantin Guerke, one of the LinkedIn co-founders asked me to join the network and give some feedback. His primary interest: Get some executives into the network, which so far was primarily consisting of engineers. To be honest, back then I had absolutely no idea what value it provided and where this could go.

2004 -I was searching for a VP Marketing and looking for candidates. Konstantin asked me to try LinkedIn to find what I’m looking for. I did. After some tips and modeling I got a pretty good search model and found the perfect candidate. Kathrine Hayes was VP Marketing, not looking and in most of the recruiters databases listed as VP Sales, her previous position. I would have never found here and  neither would our recruiters. We agreed to work together and not only I saved $30,000 recruiting cost, I got a perfect match. That was one of the key events when I realized that social networking would change everything. Not only the way we look for candidates but the way we sell, market, engage, service, promote, learn – simply every aspect of our business world.

2005 – I started my own blog and was considered one of the first executives blogging. I remember it was a bit of a debate in one of the board meetings as nobody could imagine what a blog is and why one would do that. I didn’t care. More so I tried to incorporate social media and social technology into our products. It was pretty clear to me that social technologies are the future life blood of any business application. Little did I know that it will still take years to get there.

2006 – Social networking was growing very fast within those early adopters and it proved helpful once one kind of understood how to use it to maintain existing contacts, develop new connections, get business introductions and even generate new leads. We all developed different techniques and had different opinion. And we all knew, that this is going to make a huge difference to sales and marketing. Yet we realized that most executives are still far away from recognizing the potential and the impact that social media already has on their businesses.

2007 – I heard about Twitter and the opinion that this is dumb and a total wast of time. In early 2007 I tried it out and agreed. This was really stupid. There was no way to form a meaningful sentence with 140 characters, let a lone a message for the public. But when I read in Wired Magazine that being forced to cram your thoughts into 140 characters and as a result we all will be less wordy, I looked at it again and signed up with a new account in June. I was surprised that the network has grown from roughly 50,000 just a few month ago to some hundred thousand users. I made new friends and began to really like it.

2008 – With the presidential campaign here in the US being massively using social media, many business executives woke up and were looking to explore its potential for their respective companies. A few business friends of mine, mostly CEOs from other Silicon Valley companies asked me to share my thoughts and experience about social media or just hired my as a consultant helping them develop a social media strategy. I have never been a consultant and didn’t really want to become one – but that was a lot of fun. The biggest problem was that nobody within those companies actually understood what I’m talking about.  I decided to provide executive level training to help managers not only make sense of Social Media but being able to create a strategy, create initiatives, define resource and budget plans and everything a corporate executive needs to make a decision. And of 2008 we started the Social Media Academy.

2009 – I continued to consult a few large enterprises to develop their social media engagement. What we did however was very different from what most social media agencies suggested. We did not run any fancy Facebook campaigns or moved the old coupon business to the new media. Instead we developed customer engagement strategies where parts of the sales teams or parts of the service teams strategically engaged with customers or even with customers of the company’s competitors. We couldn’t hope for more success. By now some executives realized that social media was no longer “just another arrow in the marketing quiver” it was a business strategy that focused on “Customer Experience Improvement”, “Near Real Time Market Research”, or “Online Reference Selling” and other similar business topics with either an objective to cut cost, create a competitive advantage or expand on certain markets. But the number of businesses who understood to benefit from those advantages is microscopic small.

2010 – One of the challenges we were facing by engaging with a large number of contacts was the lack of capabilities to get quickly and proactively to those accounts. Keeping them in a spreadsheet was not an option. And so we built an application on top of XeeMe a tool that we created for internal use. To us and our clients, 2010 was the year where social selling made some major turns. We were engaging with clients using this new tool we called “Flights!”. While still in an infant stage, we came to realization that sales people are the most social  beings in any business and giving them tools to engage online in addition to phone, email and face to face will make a significant difference in the future. The downside of the new social selling possibilities is that sales teams will want to re-structure their sales strategy, become socially engaged in a much grander way, which in turn requires to restructure sales processes and eventually the commission structure. We knew this will be a long, long way to go. Rather than exhausting us with a decade long evangelizing battle we decided to help one company at a time – whenever they are ready to make a change.

2011 – This year the first partner channel organization thought about using social media to improve partner relationships, drive more partner engagement and help partners engage with their clients more than in the past. In particular in the tech space, VARs, Resellers, System Integrator are not exactly marketing machines. But they keep relationships with their existing clients. And the social web will not change this. But partner channels have a huge influence in the market and can be engaged perfectly to amplify a brand message. Also partners can leverage the social web to get grander exposure for their competencies and technical skills and capabilities. We are seeing the fist vendors including SAP to make a big step forward.

2012 – No question, businesses are moving fast now to leverage social media in their ongoing quest to create a competitive advantage and widen their gap to the competition. But the number of businesses doing so successfully remains to be small. Unlike any previous technology inception where a few leaders started and the followers came in with a year or two delay, the social media adoption is a slow process. Mainly because it is NOT a technology but a mind set and a way of doing business. Main topics remain to be “Customer Experience Improvements”, “”Widen Market Reach”, Improve Channel Partner Engagement” and so forth. Initiatives in those areas make the successful companies even more successful and the struggling companies remain struggling and focus on their business survival instead of customer happiness. In 2012 it was clearer than ever before: ignoring customer engagement opportunities will bring struggling businesses even further in trouble.

At the same time we were experimenting more and more with large scale social media buzz marketing. The largest initiative was for the annual tech conference of the European Commission, where we created a buzz campaign wit nearly 100 Million in reach.

2013 – We decided to focus our future business on the B2B space in here on three areas: High Impact Marketing, Customer Experience Management, Partner & Alliance Management. The launch of our Buzz product is a major milestone and goes hand in hand with the new Buzz Master Training.

Today the gap between online savvy and online illiteracy has widened to a frighting level. When I work with European customers I see the same behavior we saw her in the US in 2007 / 2008  – that means a six year gap between the US and Europe. Australia on the other hand is so close to the US it almost feels they are even a bit further developed in using the social web than in many regions in the US.

“It’s an age thing” – I hear this over and over again. Well – there is a correlation between age and online savvy but it isn’t the age – it is the inability to learn new things and evolve. We had people in its late 60’s in our classes delivering excellent results and others in their early 40’s just couldn’t let go what they learned and were almost incapable to adopt the new behavior.

Well – there is so much more to talk about but, I want to keep it at a Blog level – not a book :)

At this point I want to thank all the wonderful people who I met and made friends with in those extremely exciting 10 years. I’d love to list them all but since you will find them on my friends list on Twitter, Facebook or LinkedIn – I think it is much easier. THANK YOU my friends.

Axel
http://XeeMe.com/AxelS

A thought provoking interview about capitalism

I learned from my grandmother: “At one point in time capitalism is identically to communism. It is at the time when a tiny group of people control most of the assets of that society.” Are we there?

I think raising minimum wage is only one more action where the small group takes control. The free flow of economic forces has stopped. And now the worst thing is that the 99% point fingers to the 1% as the bad guys. In my opinion the real problem is a system that just have seen its days. To fix that it actually takes the 99% and not the 1%. But here is the real problem: zero political education for generations. The 99% does only know little to nothing about macroeconomic, economy dynamics…

Sorry I wasted $700,000 of yours

I love my yahoo mail account, which I use for spam and never have to worry it. Yahoo is so incredibly strict that most email doesn’t pass anyway. So I can actually find a response if I signup for a site I don’t know. Also I have set it up that all email older than 30 days gets automatically deleted. So I don’t have to sift through age old spam.

I use it primarily when I want to comment on a post from a traditional publisher such as magazines who are online now or the old news papers. Sure enough I get inundated with spam a few days after I registered. But who cares.

Nowadays approximately 96% of all email world wide is useless spam – up from 83% just a few years ago. On our corporate mail server we have strong spam filter, filtering roughly 90% of the companies inbound emails. My own spam setting filters an additional 75% and from the 30 email that finally make it each day, only 5 or 6 are actually really relevant. Out of – believe it or not 36,000 emails sent to my account every month. Plus the spam to my Yahoo account.

Now – if you are telling me email marketing makes sense, I just have a hard time to believe it. And the irony of all is that marketers trying to tell me email marketing is more popular than ever and the usage is constantly growing – ha ha ha – yes I absolutely believe it is.

If you pay $1 for an executive email address, and I get 36,000 emails a month, people paying over $700,000 a year just to send me their spam that I don’t even get into my inbox – let alone reading it. I’m sorry for the loss, so I thought at least I let you know.

Axel
http://XeeMe.com/AxelS