Intangible assets are the core assets of every company. They include the relationships and know-how of employees, brand, intellectual property and critical relationships with stakeholders. They are the most valuable assets for any startup company. Intangible assets account for eighty percent of the company’s total worth. Unfortunately, these assets are often overlooked and undervalued. It hurts a company through its potential and future growth.
Why are intangible assets so valuable?
To generate multiple revenue streams and growth, a company can sell its intangible assets. These assets help you gain a competitive advantage and increase customer value. In addition, these assets help you differentiate your brand and offers. These are just a few examples of how they can add value.
- The protection of patents for technological innovations developed by the company makes it valuable in the long run.
- To distinguish a company and its brand from other businesses can use trade secrets and internal proprietary procedures.
- The foundation for a startup’s recognition is its brand. It includes the name, logo, slogan, and other characteristics.
Employees can provide detailed information about the company’s products and services, plans and innovations, and internal processes. Your brand can benefit from their skills and knowledge. It increases the team’s value; hence this knowledge could make a startup an attractive investment.
Unlocking the Power of Brand Perception
Imagine your startup not just as a provider of products or services but as a storyteller. Your brand’s narrative, the feelings it evokes, and the experiences it promises are all intangible yet hugely impactful.
For instance, think about how a well-crafted brand story can make your startup the go-to choice over a competitor. It’s about creating a feeling that sticks with your customers long after they’ve closed the transaction.
This emotional connection can turn first-time users into lifelong advocates, exponentially increasing your brand’s reach.
Crafting a Compelling Brand Story
Every successful brand has a story. Your story is not just what you tell people but also what they believe about you based on the signals your brand sends. This story should weave through every aspect of your business—from your visual identity and marketing materials to how your customer service responds to inquiries.
The goal is to make every interaction with your brand reinforce this narrative. Think of your brand as a person—what values do they stand for? How do they communicate? Embed these traits consistently in your interactions.
Visual Consistency Across All Channels
A consistent visual identity reinforces brand recognition. Ensure that your logo, color scheme, and fonts are uniform across all platforms, from your website to your social media, and even your packaging.
This visual consistency helps cement your brand’s image in the minds of your audience, making it easier for them to recognize and recall your brand at the point of decision-making.
Emphasizing Emotional Connection
People connect more with brands that evoke emotions. Define the emotions you want your brand to evoke, whether it’s trust, excitement, happiness, or security. Use storytelling that highlights these emotions, showcasing real-life examples of how your product or service improves lives.
Testimonials, customer stories, and case studies are great ways to show the impact of your brand in a relatable and emotionally compelling way.
Leveraging Multi-Sensory Brand Experiences
Enhance brand perception by engaging more senses. If you have a physical product, consider the tactile experience of your packaging or the product itself. For services, the visual and auditory elements of your digital or in-person interactions can be tailored to reinforce your brand’s essence.
Even the scent of your stores or offices can contribute to the overall brand experience. Think about Apple’s clean, minimalist design or Starbucks’ signature coffee aroma—each element is a touchpoint that reinforces their brand narrative.
Building Brand Advocacy through Community Engagement
Create a community around your brand by engaging with customers beyond transactions. Use social media platforms to foster conversations, listen to customer feedback, and involve them in brand development processes, such as voting on new product features or choosing new services to introduce.
Engaging your community not only strengthens relationships but also transforms customers into brand advocates who share their positive experiences with others.
Monitoring and Adapting to Feedback
Finally, the perception of your brand is not static; it evolves with every interaction. Regularly monitor how your brand is perceived through social listening tools, customer feedback, and market research. Be prepared to adapt your strategies in response to this feedback to stay relevant and maintain a positive perception among your audience.
Leveraging Human Capital for Unmatched Innovation
The skills, creativity, and innovation your team brings to the table are priceless. Encouraging a culture of continuous innovation doesn’t just lead to the development of new products or services; it also cultivates a reputation for your startup as an industry leader and a hub of innovation.
This reputation can attract not only more customers but also top talent who want to work at the cutting edge of their fields. Remember, companies aren’t innovators—people are. And when people innovate, they drive your startup forward.
Fostering an Environment of Continuous Learning
Create an environment where continuous learning is not just encouraged but is a fundamental aspect of your company culture. This goes beyond traditional training; it involves curating opportunities for your team to engage with emerging trends and technologies in your industry.
Consider implementing a ‘learning lab’ concept, where team members can experiment with new ideas without the pressure of immediate results. This not only keeps your team at the cutting edge but also embeds a strong sense of curiosity and exploration, which is essential for innovation.
Embracing Diverse Perspectives
Innovation thrives on diversity. By assembling a team with varied backgrounds, experiences, and ways of thinking, you catalyze the creative process and uncover insights that might not emerge in a more homogenous group.
Encourage your team to voice unique perspectives and challenge the status quo. Facilitate regular brainstorming sessions where all ideas are welcomed and considered. This inclusivity can lead to breakthrough innovations that could redefine your business and its market.
Establishing Cross-Functional Innovation Teams
Break down the silos within your company by forming cross-functional teams specifically tasked with developing new solutions or improving existing ones.
These teams should pull members from various departments—from marketing and sales to R&D and customer service. This cross-pollination of ideas and expertise can lead to more holistic and innovative solutions that directly address customer needs and operational challenges.
Implementing Agile Methodologies
Agile methodologies aren’t just for software development. Applying these principles—such as iterative development and continuous improvement—to other areas of your business can enhance your team’s responsiveness and adaptability.
Teach your team to prototype rapidly, test new ideas with real-world data, and pivot based on feedback. This approach reduces the risk associated with innovation and allows your startup to be more agile in responding to market changes and opportunities.
Rewarding Innovation
Recognize and reward employees who contribute innovative ideas that lead to successful outcomes. This could be through formal recognition programs, profit sharing schemes, or even stock options. By aligning their success with the company’s success, you motivate your team to keep pushing the boundaries of what’s possible.
Building Partnerships with Academic Institutions
Forge relationships with universities and research institutions. These partnerships can provide access to cutting-edge research, high-caliber interns, and opportunities for collaborative projects.
They can also be a channel for tapping into the latest academic insights and technological advancements, which can be leveraged to maintain a competitive edge.
The Strategic Edge of Proprietary Knowledge
Your startup’s proprietary methodologies or systems, developed through trials and tribulations, are not just internal tools. They are invaluable assets that can set you apart from the pack. Consider how these proprietary processes can streamline operations or deliver your product or service more efficiently than anyone else.
This can be a major selling point in your marketing efforts, showcasing your efficiency and attention to detail, which in competitive markets, can be a game-changer.
Embedding Proprietary Knowledge in Every Aspect of Your Business
Proprietary knowledge should permeate every aspect of your operations, from product development to customer service. It’s about more than just safeguarding your secrets—it’s about building a framework where this knowledge translates into superior customer experiences and operational efficiencies.
For example, use your unique insights to customize your offerings more precisely to customer preferences or to streamline processes that enhance your service delivery speed and quality.
Innovating Continuously with Proprietary Knowledge
Innovation shouldn’t be a one-time thing. Use your proprietary knowledge as a springboard for ongoing innovation. Regularly review and analyze what you know about your technology, processes, and market trends.
Use this analysis to anticipate market needs and innovate ahead of demand. By staying ahead of the curve, you not only maintain your competitive edge but also establish your startup as a leader in innovation.
Training Your Team to Leverage Proprietary Knowledge
Your team’s ability to leverage proprietary knowledge can make a significant difference in your startup’s performance.
Conduct regular training sessions to ensure that every team member understands the core aspects of your proprietary knowledge and how it can be applied in their roles. Encourage a culture of knowledge sharing and collaboration, which amplifies the impact of your proprietary insights across the company.
Safeguarding Your Information
While sharing knowledge within your team is crucial, it’s equally important to safeguard this information from external threats. Implement robust security measures such as encryption, secure access protocols, and regular security audits to protect your data.
Additionally, ensure that contracts and agreements with partners and vendors explicitly protect your proprietary information to prevent leaks.
Leveraging Proprietary Knowledge for Marketing Advantage
Turn your proprietary knowledge into a powerful marketing tool. When communicating with potential customers, highlight how your unique insights and capabilities solve problems more effectively than available alternatives. This not only helps in articulating the value of your offerings but also strengthens your brand’s position as an innovative leader.
Measuring the Impact of Proprietary Knowledge
To continuously improve and capitalize on your proprietary knowledge, you must measure its impact. Set up metrics to assess how this knowledge contributes to new product developments, customer satisfaction, operational efficiency, and overall business growth.
These metrics will help you fine-tune your strategies and make informed decisions about where to invest in expanding your knowledge base.
Capitalizing on Customer Relationships
The relationships you build with your customers go beyond mere transactions. These relationships are a treasure trove of insights and opportunities. Engaged customers provide valuable feedback and are more likely to participate in case studies or testimonials, which can boost your credibility immensely.
Moreover, a strong relationship can turn customers into brand ambassadors—people who will champion your startup to friends, family, and colleagues at no extra cost to you.
Creating a Customer-Centric Culture
Start by instilling a customer-centric culture within your team. This means every action and decision is evaluated not just by its impact on operations or profits, but on customer satisfaction and engagement.
Train your team to think from the customer’s perspective, encouraging them to address needs proactively and improve the customer experience continually. This alignment around customer needs will naturally lead to enhanced customer satisfaction, loyalty, and ultimately, advocacy.
Personalizing Customer Interactions
In the digital age, personalization is key. Use the data you gather from customer interactions to tailor your communications, offers, and services to meet individual customer needs.
This can range from personalized emails that address customers by name to offering customized recommendations based on past purchases or browsing behavior. Personalization shows that you value your customers as individuals, which can significantly boost their engagement and loyalty.
Leveraging Technology to Enhance Relationships
Technology can be a powerful tool in scaling your customer relationship efforts without losing a personal touch. CRM (Customer Relationship Management) systems can help you keep track of customer preferences, purchase history, and feedback, making it easier to provide a personalized experience at scale.
Additionally, utilize social media platforms not just for marketing, but as channels to connect and engage directly with your customers, responding to their queries and celebrating their milestones.
Building Trust Through Transparency
Trust is the foundation of any strong relationship, and this is especially true for customer relationships. Be transparent about your business practices, including sourcing, pricing, and privacy policies. Let customers behind the scenes with regular updates about your business and involve them in decisions when appropriate.
For example, you could use social media polls to let customers vote on new features or products. Transparency not only builds trust but also deepens customers’ emotional investment in your brand.
Developing a Feedback Loop
Establish a robust feedback loop that encourages and facilitates customer input into your business processes. This could be through regular surveys, suggestion boxes on your website, or direct outreach for feedback on recent purchases.
Actively show that you value customer feedback by implementing changes based on their suggestions and publicly acknowledging the role of customer input in shaping your business. This not only improves your offerings but also strengthens customer relationships by showing that you listen and adapt to their needs.
Celebrating Customer Milestones
Make your customers feel valued by celebrating their milestones, whether it’s a year since their first purchase, their birthday, or another personal achievement.
Simple gestures like sending a personalized congratulatory message or offering a special discount can make a significant impact. These celebrations reinforce the personal connection between your brand and your customers, boosting loyalty and enhancing the overall customer experience.
Making Your Startup a Magnet for Investment
Investors are always on the lookout for businesses that promise growth and stability, and a robust portfolio of intangible assets can signal just that.
Showcasing a strong brand, innovative team, proprietary knowledge, and solid customer relationships can make your startup a more attractive investment proposition. Investors see beyond the numbers; they look for a narrative of potential, and intangible assets build that narrative compellingly.
Cultivating a Scalable Business Model
Investors are drawn to scalable businesses. They look for startups that can grow exponentially without a corresponding increase in costs. This is where your intangible assets come into play. Your unique processes, proprietary technologies, and deep market insights allow you to scale at a pace that physical asset-heavy businesses cannot match.
When presenting your business to investors, highlight how your intangible assets contribute to a scalable model. Show them the roadmap of how you plan to leverage these assets for rapid growth.
Showcasing a Competitive Moat
Your intangible assets are your moat; they protect you from the competition. Whether it’s through patents, exclusive licenses, or simply the expert knowledge residing within your team, these assets can create barriers to entry that deter potential competitors.
Investors love a protective moat because it means your business has a better chance of sustaining its competitive edge. Illustrate to your investors how your intangible assets form this moat, providing you with a long-term competitive advantage.
Demonstrating Market Validation
Nothing speaks to investors quite like proven market validation. Use your intangible assets, such as customer data and engagement metrics, to demonstrate this validation. Show how these assets have helped you understand customer needs and carve out a niche in your market.
Highlight any traction you’ve gained, be it through rapid user acquisition, notable partnerships, or significant media attention. This not only proves that there’s a demand for your offering but also that you are capable of capturing and growing your market share.
Emphasizing Asset Agility
In the fast-paced startup ecosystem, agility is crucial. Investors are aware that market conditions can change dramatically and without warning. Show them how your intangible assets, such as your brand and proprietary knowledge, provide you with the agility to pivot as needed.
Whether it’s adapting your business model based on customer feedback or shifting market trends, your intangible assets allow you to respond quickly and effectively, reducing risks for your investors.
Communicating Long-Term Vision and Strategy
Investors are not just investing in your current business status; they are investing in your future vision. Use your intangible assets to paint a picture of this future. How will your innovative processes evolve? What new markets could your proprietary data help you break into?
How will your brand evolve as the industry changes? This vision of future potential, backed by solid intangible assets, makes your startup not just an investment but a part of an evolving narrative that investors can be excited to join.
Protection of intangible assets
Loss of intangible assets can have devastating effects on an organization. For example, Quartz reported an entrepreneur who spent one year designing the product that would make him rich—a smartphone case and found success with Kickstarter, but was surprised by clones who reached the market even before the Kickstarter project was fully funded.
In another case reported by Protocol, a now-defunct startup Phhhoto sued Facebook, now rebranded as Meta, and alleged that Facebook showed interest in partnering with the company, then proceeded to take its features as a “slavish clone” and introduced it on Instagram as Boomerang. Whether the start-up will prevail against Meta will take time, but it is clear that companies must have a coherent strategy to identify and protect their intangible assets.
Startups may decide to patent their inventions in many cases which protects IP and inventions from unauthorized use by others. Patents are legally authorized protection. Without permission, e.g. license to use the invention is considered as an infringement. Startups are allowed to explore their ideas and business plans without any restrictions. For long-term growth for a startup, patents are filed. Before filing a patent, businesses should research all of their target markets. These businesses should also aim to protect their assets in these jurisdictions. With technological advancements at an ever-increasing rate, patents are an essential tool to protect intangible assets.
Protecting intangible assets is expensive.
Many startups fear high costs and have to protect their intangible assets due to cash flow limitations. There are many ways to avoid filing a patent, even though it is costly. Startups can speak to their patent attorney about how they want to protect their IP.
One way to do patents cost-effectively is to use PowerPatent to create the first draft application. PowerPatent applies AI to help inventors quickly expand on their description for edit by the inventor and then by a patent attorney. In many cases, most inventors can quickly prepare a paragraph on the problem she is solving and the solution as input to PowerPatent. Then, with a few drawings and the part lists in the drawing, the software can expand to a 20-30 page first draft ready for review by the patent attorney.
The attorney can advise on the best route to take. Understanding the costs associated with patent applications makes it possible to align funding rounds and upcoming expenses. Trade secrets could be an alternative to patent protection. It is up to the business, however, to keep them secret. Nevertheless, most businesses will have a portfolio that includes trademarks, secrets, and know-how in practice. It is also essential to keep in mind that investing in your intangible assets will benefit your business over the long term. It reduces future costs. Startup differentiation and sustainable value creation are dependent on intangible assets. Therefore, a company should address it at an early stage and throughout the company’s life.
Crafting a Robust Legal Framework
First off, get your legal ducks in a row. This isn’t as daunting as it sounds. Begin by identifying all your intangible assets. What makes your startup unique? Is it a proprietary process, a secret recipe, or perhaps a unique software algorithm? Once identified, determine the appropriate legal protection for each asset.
Patents, copyrights, trademarks, and trade secrets each serve different types of protection. Consult with a patent attorney to understand which is right for your specific assets. They can guide you through the complexities of intellectual property law, ensuring you’re fully protected.
Simplifying Intellectual Property Protection
Start by demystifying the process of intellectual property protection for your team. It’s crucial that everyone understands what intellectual property (IP) is and its importance to your business.
Organize workshops with IP professionals who can explain the nuances of patents, copyrights, trademarks, and trade secrets in layman’s terms. This knowledge will empower your team to recognize IP assets and understand the procedures to protect them.
Customizing Legal Strategies to Business Goals
Align your legal strategies with your business objectives. Whether you aim to disrupt markets, forge partnerships, or prepare for international expansion, your legal framework should support these goals.
For instance, if your startup is looking to expand overseas, ensure your IP protection extends internationally through the Patent Cooperation Treaty (PCT) or through specific regional IP offices.
Proactive Legal Health Checks
Regularly conduct legal audits to identify and mitigate risks before they become problems. This includes reviewing your contracts, ensuring compliance with data protection regulations, and checking that all your IP is properly documented and up to date. These health checks can prevent costly legal disputes and ensure your business operations run smoothly.
Integrating IP with Business Processes
Integrate IP considerations into your business processes. Make IP a standard agenda item in product development meetings and strategic planning sessions. This integration ensures that IP protection is not an afterthought but a fundamental aspect of your business planning and execution.
Establishing Clear Guidelines for IP Usage
Develop clear guidelines on how intellectual property is handled within your company. This includes who can access certain pieces of IP, how it can be used, and the steps employees should take if they develop something potentially patentable. Clear guidelines help prevent internal misunderstandings and protect against external threats.
Developing a Response Plan for IP Infringements
Have a well-defined action plan for dealing with IP infringements. This plan should outline the steps to take when your IP rights are violated, including how to approach negotiations, when to seek a cease and desist, and the circumstances under which to pursue litigation. Quick and decisive action can deter further infringement and signal to the market that you are serious about protecting your assets.
Leveraging Legal Expertise for Growth
Utilize legal expertise not just for protection but as a strategic tool for growth. Lawyers can provide valuable insights into market entry, regulatory compliance, and risk management, which can be crucial for scaling your business effectively and sustainably. Consider having a legal expert as part of your advisory board.
Implementing Non-Disclosure Agreements (NDAs)
When sharing information with anyone outside your core team—think potential investors, business partners, or even new employees—have them sign a non-disclosure agreement (NDA).
It sounds simple, but NDAs are a powerful tool for safeguarding your sensitive information. They ensure that the people you engage with understand the confidentiality of the information shared and are legally bound to respect it.
Tailoring NDAs to Fit Your Needs
Every startup has unique needs, and NDAs should be customized to address those specifics. Avoid using generic templates. Instead, work with legal professionals to craft agreements that cover all bases relevant to your particular business.
This might include clauses specific to your industry, technology, or even the phase of your startup. For example, if your startup is in the tech field, your NDA should include provisions that cover beta testing and software development.
Clear Communication of Terms
An effective NDA is not only legally enforceable but also clear to all parties involved. When you bring on a new partner, employee, or contractor, take the time to walk them through the NDA.
Ensure they understand what is considered confidential, their obligations, and the consequences of breaching the agreement. This clarity not only reinforces the seriousness with which you treat intellectual property but also reduces the chances of accidental breaches.
Integrating NDAs into Business Processes
Make the signing of NDAs a standard step in your business processes, especially when starting new partnerships or entering into discussions with potential investors. This should be as routine as setting up a new employee on payroll.
By making NDAs a regular part of business engagements, you embed a culture of confidentiality and protect your business without slowing down the pace of new initiatives.
Monitoring and Enforcement
Implementing an NDA is just the beginning. Monitoring compliance is essential for them to be effective. Establish protocols to periodically check that the terms of your NDAs are being followed and that confidential information is being handled properly across all departments.
If a breach occurs, act quickly to mitigate any potential damage. This might involve legal action or a more mediated approach, depending on the situation and the nature of the breach.
Training Your Team
Regular training sessions about the importance of NDAs and the handling of sensitive information can reinforce their importance. New hires should receive training as part of their onboarding process, and refresher sessions can be useful for existing employees.
These sessions can cover not just the legal aspects but also practical tips for maintaining confidentiality, such as securing physical and digital copies of sensitive information.
Building Relationships with Transparency
While NDAs are crucial for protecting your startup, they should not be a tool for creating a barrier of mistrust. Frame NDAs as a means of building a trustful relationship where both parties feel secure sharing ideas.
Communicate openly about your need to protect your intellectual property while also respecting and protecting the confidential information of others. This approach can strengthen relationships with stakeholders, who will appreciate your professionalism and your respect for mutual interests.
Building an IP-Conscious Culture
Foster a culture that respects and protects intellectual property within your team. Educate your employees about the importance of IP and how they can help safeguard it.
This includes secure handling of sensitive information, understanding the basics of IP rights, and recognizing potential breaches. An IP-conscious team is your first line of defense against leaks and thefts of ideas.
Leveraging Technology for Protection
Use technology to your advantage. Digital rights management (DRM) and encryption can protect your digital creations from unauthorized access and use.
If your startup is technology-oriented, consider implementing advanced security protocols to shield your software or digital products from piracy and copying. Regular audits of your IT infrastructure can also help identify and mitigate vulnerabilities before they are exploited.
Continual Monitoring and Enforcement
Protection doesn’t stop after you’ve secured your assets legally and culturally. Continual monitoring of the market to spot potential infringements is essential.
If you discover that someone is infringing on your rights, act swiftly. Enforcement can range from sending cease and desist letters to pursuing litigation if necessary. Swift action not only stops the immediate threat but also signals to others that you are serious about protecting your assets.
Strategic Public Disclosure
Sometimes, the best way to protect an idea is to keep it a secret, but in other instances, making an idea public can deter others from trying to patent the same concept.
Public disclosure can be strategic, such as publishing a detailed white paper or blog post about your innovative method or technology. This establishes you as the originator of the idea, which can be instrumental in protecting against patent infringement claims.
wrapping it up
In conclusion, effectively managing and protecting intangible assets through strategic use of Non-Disclosure Agreements (NDAs) and other legal frameworks is not merely a precaution—it’s a pivotal strategy for any startup aiming to thrive in a competitive business environment. By crafting tailored NDAs, integrating them seamlessly into business operations, and fostering a culture of confidentiality and respect, startups can secure their innovations and business secrets effectively.
Moreover, by training teams, monitoring compliance, and enforcing these agreements decisively, startups not only safeguard their own future but also build robust relationships with employees, partners, and investors based on mutual trust and professional integrity. These practices ensure that the business not only protects its intellectual assets but also positions itself as a credible and trustworthy entity in the industry.
