Five ways to stay ahead of the copycats
Thursday, August 23, 2012/
It emerged this week that start-up retailer Lonely Kids Club deployed a novel method of combating what it perceived as a rival plagiarising its designs.
The business took to Facebook to protest over alleged rip-offs by Glue and JXcess, with founder Warwick Levy telling StartupSmart: “Overnight, I got nearly 100 people behind it, so Glue responded.”
Alas, a simple Facebook posting isn’t enough to ensure you keep one step ahead of larger rivals, who will attempt to snuff out the threat you pose by fair means or foul.
The growing trend of ‘acqui-hiring’ shows that established businesses are increasingly keen to strip talent and innovation out of start-ups, while tales of copycat behaviour and heavy-handed market domination are rife in the Australian market.
So how can you ensure that you keep your nose ahead of rivals keen to crowd you out of your niche?
We’ve spoken to the experts to come up with these top five tips:
1. Protect your IP
It may appear obvious, but the importance of protecting your intellectual property appears to have bypassed many Australian small businesses.
Recent research shows that almost 70% of Aussie firms have no IP protection, leaving their ideas and inventions ripe for the picking.
Start with your business’ name. A trademark is the only way that you will be able to prevent another business infringing upon your brand, even with a decent trading history behind you.
It may cost around $1,600 and take seven months to process, but that initial outlay will be more than worth it if you’re faced with the prospect of having to tear up all of your marketing material because someone else got there first.
“Most businesses think they don’t generate IP but they actually do,” explains an IP Australia spokesman.
“Tradesmen are always inventing things that solve little things. Unless they protect their IP, they’re not going to benefit from that.”
“A classic example is [appliances retailer] Kambrook – the guy developed a multiple power adaptor board. He invented that and didn’t patent it.”
“He lost millions of dollars of potential income. Other companies copied it because he didn’t realise the IP had value.”
Analyse your brand and product names, slogans, taglines and logos. Can you trademark these in Australia at least?
Also look at the reproduction and distribution of your product. You may be able to copyright it. In some cases, you may even be able to get a patent.
Don’t be in the dark about the IP you create. It’s the very essence of your business’ proposition. If you’re unsure where you stand, speak to an IP lawyer as soon as you can.
2. Don’t stop innovating
The initial bright spark that helped create your business really shouldn’t be the start and end of your innovation.
If you’re to not get swallowed up by the pack, creativity needs to be at the heart of your start-up. There is always a better way of doing things or a customer inconvenience that needs to be fixed, so don’t let the grey matter slack off.
Tom McKaskill, serial entrepreneur, angel investor and author, says: “To be successful in a sector you need to have some degree of competitive advantage. This doesn’t have to be across the whole sector but it should at least provide an advantage in the niche you target.”
“However, just having a competitive advantage is not sufficient to drive continuing profitability or growth.
“For that you need to create a sustainable competitive advantage. Even formal IP such as patents expire so you can’t sit back and rely on any form of competitive advantage over time.
“Basically, you need to create a culture, process or strategy which continually updates your competitive advantage over time.
“The answer lies in developing an innovation capability. Whether it is incremental innovation or radical innovation, the only certainty you have of survival, profitability and success is to ensure that your innovative capability continually updates your competitive position.
“Don’t wait until you are desperate to reclaim territory; take the initiative and ensure you stay in front. Innovation is the only sure way to do that.”