Patents Signal Inexperience
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Sam Parr and Shaan Puri share their skepticism about patents and NDAs in the tech industry, viewing them as potential red flags rather than valuable assets.
Key Points:
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Patent Claims in Tech:
- Patents usually "do nothing" in tech industry
- When founders emphasize patents, it suggests they don't understand the industry
- Having a patent is often meaningless for protecting tech innovations
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NDAs as Warning Signs:
- Being asked to sign an NDA to hear a pitch is seen as a "joke"
- Indicates founder inexperience or naivety about how the industry works
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Real-World Example:
- Shaan's experience buying a company called Beboe:
- Came with patents for social network whiteboard features
- Features were already being used on Facebook despite the patent
- Demonstrated how difficult/impossible it is to enforce such patents
- Shaan's experience buying a company called Beboe:
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Exception Case:
- Virtual Gaming Worlds case surprised them because its patent actually created a moat
- They speculated the effectiveness might be due to:
- Industry being gambling-related rather than pure tech
- Possible shadiness of the business model
- Regulatory complexity rather than technical innovation
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General Attitude:
- Skepticism towards legal protections in tech innovation
- Focus should be on execution rather than legal barriers
- Patents viewed as distraction rather than protection
Sam Parr
Host of MFM and fitness influencer
Sam Parr is a serial entrepreneur and business media pioneer.
In 2016, he founded The Hustle, a business news media company that started in his kitchen with just $12 and grew to eight figures in revenue.
Sam led the charge in making newsletters popular when few believed in their potential.
After four successful years, he sold The Hustle to HubSpot, a publicly traded company. Now operating as HubSpot Media, The Hustle reaches 3 million readers daily, employs a team of nearly 100, and has been the launchpad for dozens of its staff to found their own media companies and newsletters.
Sam remains the host of the popular business podcast, My First Million, and continues to start and sell companies. He also co-founded Hampton, a highly vetted community for entrepreneurs, founders, and CEOs, and teaches people to write better through his platform, Copy That.