Any business or startup is a daunting task. In order to succeed, entrepreneurs require perseverance, stubbornness and determination. Some businesses soar up beyond expectation and achieve great levels of success with time. Yet there are instances when sometimes they fail.
There is a multitude of reasons why a certain aspiring and promising startups don’t make it till the end. When it comes to businesses and their IP, young companies fail to understand the extent of their potential IT assets and their importance. Here are some common issues that can also lead to failure surprisingly.
Mistake 1: Lack of understanding the way to keep on pursuing a business structure
In certain startups, funding may be scarce that forces the owner or the founder to take onto tasks with the negligible capability to handle them. Intellectual property (IP) rights need a proper hand and desire guidance from qualified IP counsel. Experienced entrepreneurs easily understand the importance of such IP needs and guidance but for young and less experienced companies, it becomes quicksand. They need to engage themselves into qualified IP counsel to help them identify their needs and seeks solutions from it. Moreover, it is terribly expensive. Without IP rights, the startup may never understand its needs or plans and can suffer huge losses.
Mistake 2: Inability to implement proper control in confidentiality
This issue is not only risky but also a recurring one. In the absence of appropriate documentation and a failure to enforce proper control over confidentiality, any startup lands onto a bigger problem. Most startups use some form of a non-disclosure agreement (NDA). In certain cases, a startup may unknowingly disclose confidential information to a contract developer without a signed NDA in place. Also, it may fail to incorporate a resulting statement of work showing developmental requirements and other immunities as a part of the agreement under execution. Such ignorance can shape into reasonable losses that are often quite painful. The final thing a startup company needs in litigation. This could have been easily avoided by enforcing secured internal controls. Hence, litigation should be eminently avoided as it is a costly process too.
Mistake 3: Disparity in document foundation
For a number of reasons, this problem is almost like a plague. Failing to secure the company’s documents in order is dangerous, although the company receives forms from other colleagues or a natural extension of the DIY approach. When it comes to IP, it becomes a real danger. For instance, the founder of a tech startup may use an NDA with prospective investors and soon can start to give little or no consideration on how such NDA functions. Often the terms on which any confidential information is based gets excluded very easily. The provisions that prevent any implied license for an IP under the NDA and the destruction of such information in the recipient’s possession, comes under risk. Standard forms rarely work and the necessity of a qualified legal counsel becomes a priority.
Mistake 4: Inconsistency in creating and executing an IP strategy
The lack of being able to execute a well-planned IP strategy often proves fatal for any startup. Probably this is the biggest startup mistake. With all kinds of business plans starting from investments to marketing and recruitment and even SEO strategies, proper planning gets ignored. As a result, the company’s most valuable assets is left open in the air. In a rush to commercialize their product, many startups don’t feel the necessity to identify and protect their IP assets. A strong approach to IP protection for business sake is always a costly attempt than other necessary effective protection measures. Without engagement with a proper IP counsel and an executed IP plan, the IP assets can become big problems for the startup foundation.
Mistake 5: Ignorance of standard IP practices
It is one of the dangerous mistakes. IP rights protect different aspects and so they cannot be acquired unless necessary steps are taken. Both physical and technical measures are needed to protect valuable IP capital. Where trademarks are concerned, startups must ensure that they have performed a trademark search to check if their proposed mark is not being used by other companies. Such resemblances of IP assets is a risky proposition and ignoring such standard IP practice is never a good decision. Without being proactive in implementing standard IP practices can result in getting bullied of representation to accredited investors.