By Peter Ackerman
President & CEO
Innovation Asset Group
I’ll take some license to sew a stitch between this blog’s topic, “Financial Aspects of Intellectual Property” and a more macro issue. It was around Q4 2008 when the vortex of the global economic downturn kicked up so much dust that “uncertainty” became the word of the day. It’s a word you still hear a lot. An overly simplistic and unscientific search on Google of the string “uncertainty in the economy” – adding 2008 and subtracting January through August yields almost 45,000 results, and more than 10,000 year to date in 2009. Lots of uncertainty.
So what were companies to do? There were plenty of prescriptions. I don’t think many people you’d expect to “get it” actually got it – that the aftermath is a new day requiring a new way; there’s no going back. The game is changing and new rules are being written. All you can really do is stay calm and focused; execute with clarity and courage. Let the winds go around you.
I want to pay forward the “random thoughts” of one of the best thinkers and human beings I know – Dave Chen. I could show the broad bio, but just take his own description from his Twitter page: “dad, investor, vintner, sustainability focused, plate-spinner .” I will tell you he’s also co-founder of Equilibrium Capital. These are excerpts from Dave’s message to his team at Equilibrium at the tail end of 2008:
In 2008 Equilibrium Capital went out into the market, formed its personality, worked through its strategy, and established its market position. I wanted to celebrate 2008 and the team’s great work.
Looking ahead, we are about to jump from the frying pan into the fire below…there is no question that 2009 will be a challenge in so many visceral respects. We will see the impact in our families, our friends, our businesses and our nerves.
Unlike 2002, this will be a long recovery. we do not have the fuel of appreciating home prices ballooning consumer wealth-effects and driving GDP growth. This time around, recovery is hampered by both system changes and a re-building of inter-institutional trust.
The credit crunch is as much about:
(1) Structural changes in the financial services system
- i-banks becoming banks,
- leverage ratios cut by an order of magnitude,
- entire portions of the global capital base no longer in existence. More than merely a re-pricing…ie, the global economy is smaller. This is not re-valuation; this is destruction and evaporation.
(2) Entities not trusting each other
each layering in their respective risk management & fudge factor.
Pop culture, hi-tech, and the media often throw around the term paradigm. paradigm is about how you view the world. the framework or rules deep in your “reasoning” that you use to view and interpret the world. I’m still pondering if there is a “rule” change taking place. I think there is.
This all translates to time…decisions get elongated…don’t bet on it getting done quickly. throughout 2009, time only favors the buyer. Decisions that are simple (involving as few moving parts as needed) will get done. Control and trust is everything. simple benefits get understood and bought. Simple ideas win.
2009 is the year where clarity of objectives will drive everything…the system noise is going to be intense. The resulting distraction will be huge…confidence in your clarity is the only tactic.
Great fortunes will be made & there is huge oppty to lead in the “re-rule making” (defining the paradigm) —> defining a way-of-operating wherein conscience and commerce link to consequence.
In good times, many people and many teams are able to create great results. In bad times, only the good teams can get you through. All the more reason that I cannot imagine a better team to go into that fire with than you.
See ya next year.
I checked in with him recently – halfway through 2009. They’ve stayed in that zone and so their summit is that much closer.
So what’s the stitch between this and IP value? Well…seems to me that in the midst of uncertainty, decisions still have to be made. Focus & execution to your core aren’t theories anymore. Adapt to the new world and innovate to the new beginning. That’s where the value will be.