Presentation before the International Intellectual Property Society (IIPS), New York October 30, 2020 By Martin Schweiger

1. The 4x4 Innovation Strategy
Avoid going Bankrupt with Your New Invention
Presentation before
the International Intellectual Property Society (IIPS), New York
October 30, 2020
By Martin Schweiger

2. Topics
• Warnings from a patent attorney
• Example: Google Lawyer filed a patent
• Warnings from a Patent Attorney
• Common Myths When It Comes to Innovation
• The one and only Definition of “Innovation”
• How a typical failure story of a start-up looks like
• Why start-ups and new products usually fail
• A New Coordinate System: the „4x4 Innovation Matrix“
• Questions & Answers

3. A Google/Axiom Lawyer Filed a Patent Application
Systems and Methods for performing
Data Aggregation in Wide Area Networks

4. Warnings from a Patent Attorney
• Most people in this world have at some point had an idea for a novel product. Often further thoughts result in a
technical product concept which embodies a patentable invention.
• A common misconception among inventors is that a raw idea or even a product concept is highly valuable.
• A patent can be a useful element of a plan for developing and commercializing a product; however, it is not a
central element of that activity.
• A patent by itself rarely has any commercial value. And an idea by itself – without any technical implementation -
has even less value.
• Don´t jump the formal steps of getting IP protection, doing the FTO and market validation, for early stages of the
product development cycle, even if you believe that you don´t need them.
• Stop product development at an early stage if the market validation of the product is not successful. Consider
this a “success”, and not a “failure”. Statistics tell that you need many failures for one single success.

5. Common Myths When It Comes To Innovation
Myth #1: Innovation and Intellectual Property (IP) Correlate
Myth #2: More IP means more innovation
Myth #3: Innovation must be novel
Myth #4: Innovation starts with IP

6. The One and Only Definition of „Innovation“
Innovation is the process of developing
an idea into a product or a service for
which people are paying money, such
that a profit is generated.

7. Typical R&D evolvement
product
perfection
100%
idea functional
model
prototype product 1.0 product 2.0
+
+
+
A
B
C
D
+
+
A
B
C
+
A
B
A

8. Typical R&D evolvement
product
perfection
100%
idea functional
model
prototype product 1.0 product 2.0
+
+
+
A
B
C
D
+
+
A
B
C
+
A
B
A
Check out my „Intellectual Property Boot Camp“ course, lesson #2: „Product Development Cycle“!

9. Typical R&D evolvement
product
perfection
100%
idea functional
model
prototype product 1.0 product 2.0
+
+
+
A
B
C
D
+
+
A
B
C
+
A
B
A
?marketing

10. How a typical failure story of a start-up
looks like

11. Typical product development and marketing cycle (phase 1-4 of 6)
Phase 1: Idea
Phase 2: Functional Model
Phase 3: Prototype
Phase 4: Product
marketing
Success? never happens
yes
no
solar flower pot heater

12. Typical product development and marketing cycle (phase 5 of 6)
Phase 1: Idea
Phase 2: Functional Model
Phase 3: Prototype
Phase 4: Product
Phase 5: Product 2.0
marketing
Success? never happens
yes
no
solar flower pot heater

13. Typical product development and marketing cycle (phase 6 of 6)
Phase 1: Idea
Phase 2: Functional Model
Phase 3: Prototype
Phase 4: Product
Phase 5: Product 2.0
marketing
Success? never happens
yes
no
investor enters
Phase 6: Product 3.0
product dies
solar flower pot heater

14. Please guess!
What are the three main reasons why start-ups fail?

15. WHY DO START-
UPS AND NEW
PRODUCTS
FAIL?

16. How can we improve this for new products?
Start with Marketing at an early stage of the new product development.
Right after conceiving the product idea and way before having a product!
This is how it works:

17. Product development cycle (phase 1 of 4), done the right way
Phase 1: Idea
Market validation #
Success? STOP
no
yes
A
# = use NDAs and Common Sense
where appropriate
FTO + IP
FTO = Freedom-to-Operate
IP = secure your own IP
„Success“ in this stage can mean:
three (3) letters of intent obtained
from serious targetted buyers

18. Phase 1: Idea
Success? STOP
no
yes
Phase 2: Functional Model
A
+A BFTO + IP
Product development cycle (phase 2 of 4), done the right way
„Success“ in this stage can mean:
three (3) paid product
reservations obtained from
serious targetted buyers
Market validation #

19. Success? STOP
no
yes
Phase 1: Idea
Phase 2: Functional Model
A
Phase 3: Prototype
+A B
+ +A B CFTO + IP
Product development cycle (phase 3 of 4), done the right way
„Success“ in this stage can mean:
three (3) paid pre-sales obtained
from serious targetted buyers
Market validation #

20. + + +A B C D
+ +A B C
+A B
≤ 1 year
Phase 1: Idea
Phase 2: Functional Model
Phase 3: Prototype
Phase 4: Product
A
FTO + IP
Product development cycle (phase 4 of 4), done the right way
„Success“ in this stage can mean:
three (3) paid sales obtained
Market validation #

21. How does a Patent Strategy match with this typical product development cycle?
+ + +A B C D
+ +A B C
+A B
≤ 1 year
Phase 1: Idea
Phase 2: Functional Model
Phase 3: Prototype
Phase 4: Product
A
100
%
+
+
+
A
B
C
D+
+
A
B
C
+
A
B
A
FTO + IP
Market validation #

22. How does a Patent Strategy match with this typical product development cycle?
+ + +A B C D
+ +A B C
+A B
≤ 1 year
Phase 1: Idea
Phase 2: Functional Model
Phase 3: Prototype
Phase 4: Product
A
100
%
+
+
+
A
B
C
D+
+
A
B
C
+
A
B
A
FTO + IP
Market validation #
Check out my „Patent Strategy Basics“ course!

23. A New Coordinate System: „4x4 Innovation Matrix“

24. Conventional Product Innovation Cycle
idea conceptual model prototype product V1.0
technical
implementation
freedom-to-
operate (FTO)
protect your IP
market
validation
5,000 $ 25,000 $ 125,000 $ 1.25 Mio $
15,000 $
15,000 $
100,000 $
Result: zero orders
Sub-Total 5,000 $ Sub-Total 25,000 $ Sub-Total 125,000 $ Sub-Total 1.45 Mio $
Total
1.605 Mio $
and no early IP

25. Recommended Product Innovation Cycle
idea conceptual model prototype product V1.0
technical
implementation
freedom-to-
operate (FTO)
protect your IP
market
validation
5,000 $
5,000 $
5,000 $
5,000 $
Sub-Total 25,000 $
Result: 3 Letters of Intent
25,000 $
5,000 $
5,000 $
15,000 $
Sub-Total 55,000 $
Result: 3 paid
reservations
125,000 $
10,000 $
5,000 $
45,000 $
Sub-Total 185,000 $
Result: 3 paid
pre-orders
1.25 Mio $
15,000 $
15,000 $
170,000 $
Sub-Total 1.45 Mio $
Result: 3 paid orders
Total
1.715 Mio $
thorough FTO
+
early patents

26. Comparison:
Conventional vs. Recommended Product Innovation Cycle
Conventional Recommended
total costs 1,605 Mio $ 1,715 Mio $
total time > 3 years < 1.5 years
success rate Low high
IP weak strong
FTO weak strong

27. Check out my website
www.IP-Lawyer-Tools.com
And my book:
“The 4X4 Innovation Strategy:
How to Turbocharge your
Inventions (And Make a Successful
Product)”