Too Big to Think

When I was a kid, I loved dinosaurs because, among other things, dinosaurs were SO Big. Big is very cool to the young and relatively small. But the other amazing thing about the really big dinosaurs was that their brains were so small- way smaller than my kid’s brain. Big dinosaurs’ brains were so small that they needed a ‘helper brain’ near their hind quarters so their back end could keep up with the front end. When I was older I sometimes wondered what happened when the two brains disagreed with each other. Was it the equivalent of a Jurassic brain freeze? Well, no matter- dinosaurs went extinct. Maybe they just got too big to think.

Watching the US Congress debate and momentarily jump off the 2012 ‘Fiscal Cliff’ on New Year’s Eve brought back those dinosaur memories. Tomorrow (March 1), it appears they are going to take the leap. I couldn’t help thinking that the Federal Government was just too big for the two brains- Republican and Democrat- that were trying to control the beast. The choices- cut spending or increase taxes to save the government and the economy- now constitute the entirety of a binary decision conflict for an organization comprising around a fifth of the US economy. Apparently there are no other solutions that can solve this pending extinction.

Innovation is about problem solving with new solutions. When these emergent solutions are sufficiently unique, without precedent and useful, they can be turned into intellectual property. And intellectual property can be a valuable asset when it solves recurring problems that have economic dimensions. Increasing revenues or decreasing expenses are just the sort of economic dimensions I am thinking of.

The way to get these unique solutions also involves using binary logic. To see if a proposed solution is true, we use a scientific method that starts with the problem that is also a testable hypothesis. Computer geeks will recognize this method in the familiar IF THEN algorithm (IF such and such is true, THEN this or that will result). In business or academia or government this is the function of R&D. The proposal either does what we propose or it doesn’t- that’s the ‘binary’ part of the process. The key is to make the problem small enough to test in a laboratory or an environment that’s much smaller than place we intend to use the solution in the event it’s true. The Federal government knows how to do this- it has dozens of laboratories doing it every day. So do big businesses and big universities.

The thing about a big problem is that usually it is a collection of smaller problems which themselves are sometimes collections of even smaller problems. The smaller the problem, the easier it is to solve. But solving small problems is boring and tedious and not very glamorous. No one holds a press conference to announce the solutions of a portfolio of very small problems. There is no Nobel Prize for the guy who solves the biggest number of small scale experiments. The CEO doesn’t get the corner office with a hundred small deals as often as with the One Big Score- even if there are a thousand losses on the way. This is often true of intellectual property as well. But, as it turns outs, these small innovations are the sure thing solutions that actually work and have actual value.

This year I resolve is to think smaller and smarter. Dinosaurs may be big and cool but they are also extinct. I think maybe it’s a good time to be something else. Like a smaller mammal. With patents.

Send Lawyers, Guns and Money- and IP

In yesterday’s Wall Street Journal, I read the following in an article by Jennifer Smith and Ashby Jones:

The embattled New York law firm Dewey & LeBoeuf LLP has filed for bankruptcy protection, a move that effectively ends what had been at its height a 1,300-lawyer global enterprise and marks one of the largest law-firm failures in U.S. history.

Should we be surprised? America produces more lawyers than the rest of the world combined. In fact our recurring bumper crop of barristers is leading some institutions to offer subsidies for law students to not complete their legal education. And sadly, it’s led other US law firms besides Dewey & LeBoeuf to liquidate their partnerships. In the current soft economy the over-supply of billable hours is depressing the price per billable hour. The free market is at work in the business of law.

So what’s a lawyer to do? Perhaps emigration could work for some of the surplus. After all, the rule of law is essential for the orderly creation, preservation and transfer of wealth and property in free markets. Places like Brazil, Russia, Indonesia and China really could use more law and order to protect their burgeoning capitalist class from the predations of criminals, swindlers and politicians (but bring a gun just in case). It would certainly pave the way to more amicable dealings with the USA via the common language of law. Much of the greatness of America today was built by past generations of immigrants. Perhaps American lawyers are the vanguard of the next emigration cycle. But I doubt that many American lawyers will find solace in this option.

That leaves two other choices- quit lawyering or find something that is under-lawyered. There are many that would applaud the former option but I am not one of them. Instead what this army of disenfranchised lawyers can do is help to turn the universe of intellectual property assets (IP) into new investments.  This is the mission of Carthage Intellectual Capital Management. We can show lawyers through the principles of contracts and licensing how to turn IP- patents trademarks and copyrights- into cash for IP owners and royalty revenues for investors, bankers and financial institutions. There’s a real shortage of knowledgeable lawyers for IP based transactions. The money will be quite good and much safer than guns.