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Asymmetric Partnerships

Postby DBayless » Sat Sep 08, 2007 9:29 am

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As I try to learn how to be more effective in the world of innovation, I make periodic posts to my weblog. It helps me think more clearly, and it's kind of therapeutic.

Lately, my colleagues and I have been wrestling with how to overcome the challenges that are inherent with asymmetric partnerships--a licensing agreement between a large company and a small firm or individual inventor, for example. I thought some of you in this forum might find <a href="http://swni.typepad.com/dispatches/2007/09/asymmetric-part.html">my summary of some relevant research</a> helpful. The basic ideas is that the chances of successful collaborations will increase if both parties have a better understanding of each other's objectives and limitations.

Here's the short version:

Large firms want access to prospective innovations in order to help them achieve their growth objectives. Small firms want access to large firms' manufacturing, marketing, and distribution capacities in order to maximize their chances for (and speed of) success.

However, the strategic objective of partnerships is viewed very differently by large firms and small firms. Small firms are seeking commitment. Large firms, on the other hand, seek flexibility--they are motivated to make commitment contingent.

Furthermore, the pace of decision-making is very, very different. Small firms and individuals can make decisions almost instantaneously. Decision-making at large firms is slow, complex, and <a href="http://swni.typepad.com/dispatches/2007/06/hunting-moby-di.html">unpredictable</a>.

The net result is a lack of trust (which is exacerbated by both parties' fear of losing control over their respective insights, learning, and intellectual property). Unfortunately, <a href="http://swni.typepad.com/dispatches/2007/09/the-trust-parad.html">building trust is the hardest when it is needed the most</a>.

Many inventors and entrepreneurs decide to wash their hands of large companies and conclude that it is better to go it alone. Sometimes, that is probably the right call. (My colleagues and I come to that conclusion, too, in some situations.) Even so, it strikes me that, while hard, collaboration between small and large firms is sometimes so compelling that it makes sense to figure out how to cultivate trust.

How have you been able to develop sufficient trust to enable a successful license deal with a large company?
Read my blog: <a href="http://swni.typepad.com/dispatches/">http://swni.typepad.com/dispatches/</a>

Postby minnesotainventor » Sat Sep 08, 2007 8:54 pm

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the collaborative capacity required to facilitate the social interfaces necessary for networked innovation


This is a quote from your blog...I thought if fits nicely with InventorSpot!

Your blogs are really deep...I feel more intelegent after reading them!

Thanks for the link, I want to spend more time there!

Steve

Postby DBayless » Sat Sep 08, 2007 9:19 pm

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Steve, I'm glad you find (at least some of) my ramblings useful. As I said, I find wrestling with ideas about innovation to be therapeutic :wink:

My colleagues and I are just one node in the network. It's nice to be able to connect with the broader inventor community through InventorSpot.
Read my blog: <a href="http://swni.typepad.com/dispatches/">http://swni.typepad.com/dispatches/</a>

Postby bottleslingguy » Sat Sep 08, 2007 9:35 pm

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Hey DB, "networked innovation"? No wonder you liked CH. Have you had a chance to read up on crowdsourcing? Check out the wikipedia link it's a good first impression. It has it's problems though, none of which couldn't be solved with the right people.

I hope folks around here get involved.

Postby DBayless » Sun Sep 09, 2007 8:32 am

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bottleslingguy wrote:Have you had a chance to read up on crowdsourcing?


I have done some reading on the idea. Tapscott's book, <a href="http://www.amazon.com/Wikinomics-Mass-Collaboration-Changes-Everything/dp/1591841380/ref=pd_bbs_sr_1/103-5056038-5661449?ie=UTF8&s=books&qid=1189351778&sr=8-1">Wikinomics</a>, is okay, but I find <a href="http://astore.amazon.com/swni-20/detail/0804748012/103-5056038-5661449">Collaborative Entrepreneurship</a> to be a more actionable blueprint.
Read my blog: <a href="http://swni.typepad.com/dispatches/">http://swni.typepad.com/dispatches/</a>

Re: Asymmetric Partnerships

Postby abhi » Thu Oct 01, 2009 12:57 am

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Re: Asymmetric Partnerships

Postby Derek Pater » Thu Oct 01, 2009 3:09 am

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Many inventors and entrepreneurs decide to wash their hands of large companies and conclude that it is better to go it alone. Sometimes, that is probably the right call. (My colleagues and I come to that conclusion, too, in some situations.) Even so, it strikes me that, while hard, collaboration between small and large firms is sometimes so compelling that it makes sense to figure out how to cultivate trust.


Why not deal direct with small to mid sized Taiwan or China Manufactures who can OEM to large brands

Large firms want access to prospective innovations in order to help them achieve their growth objectives. Small firms want access to large firms' manufacturing, marketing, and distribution capacities in order to maximize their chances for (and speed of) success.


This is not always true, Many Taiwan and China Manufactures work close with small to mid distributor's and supply to those distributors own brand and do very well cutting into the large manufactures market.

How have you been able to develop sufficient trust to enable a successful license deal with a large company?


Some Inventors have great success with Large Companies, but personaly only bad news from the big Companies I steer away from them!

Re: Asymmetric Partnerships

Postby DBayless » Thu Oct 01, 2009 6:29 am

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Derek, you wrote:
Many Taiwan and China Manufactures work close with small to mid distributor's and supply to those distributors own brand and do very well cutting into the large manufactures market.

Quite right. TrashCo is a spin-out of our work at Evergreen Innovation Partners. With the help of mid-sized manufacturing companies in China, we're marketing a new recycle and trash container under the Flings(R) brand in competition with established U.S. BigCos. Going it alone is rarely literal--you always need partners. We, too, have found that China-based manufacturers can be more collaborative than their U.S. counterparts.

Re: Asymmetric Partnerships

Postby jackbnimble56 » Thu Oct 01, 2009 12:18 pm

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DB

Just wanted to echo your sentiments about China based manufacturers. I have cultivated good relationships with two different manufacturers in China and thus far (knock on wood) they have worked out very well. The Chinese have received a lot of negative press about their products lately but I think it's bad policy to try and paint an entire race of people with a broad brush. It's true that it's a bit like the Wild West over there with many companies scrambling for their piece of the capitalist pie. However, if one exercises good business sense and a "caveat emptor" approach, there's little reason to think you can't forge good relationships that will yield good quality products. I have found both of my Chinese contacts to be extremely accommodating and responsive to my needs. I imagine that every time a news story breaks about a defective product from China there must be scores of reliable manufacturers over there that just want to scream in frustration!

Competition there is quite fierce and most manufacturers seem downright obsessed with how they're perceived by Americans. They seem to intuitively grasp the notion that they only get one chance to make a good first impression. Of course counterfeiting is always a risk but that's just another fact of life in the global marketplace in which we all live. You can take measures to limit it but the fact of the matter is, successful products will get copied no matter they are made. Any product that draws a crowd at a tradeshow is just a few cell phones pics and less than 30 days away from showing up in counterfeit form on American shores.

Jack
Nimble Jack Enterprises - Innovative Solutions to Everyday Problems
To purchase the Magic Toob product visit: http://www.magictoob.com/

Re: Asymmetric Partnerships

Postby Derek Pater » Thu Oct 01, 2009 2:30 pm

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Jack,
It's great you are posting about your experiances with China, it helps the other Inventors get a picture on the process and like me we are both walking and talking about what we are doing, we are both in the moment.

That is very important for Inventors and thats why I have also put a big effort posting now because as it is all happening now.

The Window of opertinity is here and now for Asia, jump in before it closes, Companies have the time now to talk to Inventors, due to the slow down in bussiness, once they are busy if you do not already have a established relationship with these companies forget it, not so easy!

The next 2 years are the golden years for Inventors dealing with Manufactures!

I know there are lots of Inventors on the Fence and that's good because they are all reading our post's, I have had some e-mails from Inventors who are watching this site closely.

Keep up the good work

Derek Pater
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