As Feld told ReadWriteWeb at the time, the Supreme Court had a change to address some of the serious issues with innovation, patenting, and software but "instead of taking a clear and forward looking position, they effectively punted on the hard stuff, surrounded it with ambiguity, and increased the mess we find ourselves in surrounding software and business method patents."

Early this week, Nature reported on a recent study that points to another way in which the current patent system impacts entrepreneurship - this time from within the university system.

Does University Research Spawn Businesses Based on Patents?

While businesses that are spun out of university-generated research is often assumed to be associated with inventions and patenting, the research done by Riccardo Fini, Nicola Lacetera, and Scott Shane from Case Western Reserve University and the University of Bozen, Italy, suggests that this isn't how the majority of companies founded by US academics are actually started. The study surveyed over 11,000 professors, and of the 1948 who responded who had started businesses, only 682 - about a third - had established them to exploit the patents obtained via the university intellectual-property systems. The remaining 1266 respondents had started businesses based on non-patentable knowledge.

The study notes that it's not merely social scientists and engineers who are forming businesses that aren't based on patents; this is the common practice for biomedical and physical scientists. "There is a lot of stuff that academics are realizing isn't patentable but they can commercialize for themselves by starting a company," says Shane, an economist at Case Western Reserve.. However as surveys of entrepreneurial activity - including most government assessments - typically focus on patent activity as the genesis of new businesses that grow from universities, they may be significantly underestimating academics' efforts, Shane notes.

Rethinking the Requirements for Commercializing Research

Furthermore, the emphasis on patents means that many universities' technology-transfer offices (TTOs) are "failing to help" a sizeable proportion of academic entrepreneurs, the study finds. Shane argues that, "All the policies and approaches focus on the formal intellectual-property system, which means we are missing a big part of the iceberg that is under the water."

The Nature article cites Ashley Stevens, president of the Association of University Technology Managers, who claims that TTOs do help academics who are engaging in entrepreneurship outside the IP system. But Stevens claims that businesses founded without patents are less likely to generate a financial return for universities.

This claim runs counter to the findings of Shane's research, that found no marked difference between the financial return of patent-oriented and non-patent oriented business.

The Office of Science and Technology Policy sought input earlier this year on how it might reshape some of the policies surrounding the commercialization of federally funded research. The way in which patents work - or don't work - for the technology sector may be further complicated by the ways in which the federal government privileges patented research.

Alongside the ongoing concerns about the messy state of patent law in the US, the research from Fini, Lacetera, and Shane points to the ways in which we need to rethink how innovation and entrepreneurship are actually coming out of the academy.

Amid all the attention that location-based services have been getting — particularly Foursquare, which recently crossed 2 million users and landed a substantial round of venture capital financing — it’s easy to lose sight of the fact that most people have never used them, and in many cases may not even realize that they exist. That’s the main takeaway from a Forrester Research report on the sector, which found that less than 5 percent of U.S. online users have ever used a location-based application on a mobile device. And not only were most respondents not using such services, but almost 85 percent said that they were not familiar with location-based apps at all.

 

The Forrester report also found that those who use apps such as Foursquare, Gowalla and Loopt are almost overwhelmingly young men: close to 80 percent of those who use such apps are male, and almost 70 percent are between the ages of 19 and 35. Only 5 percent of those over the age of 55 said they had ever used a location-based service, and zero percent over the age of 65. The average user of such an app was substantially younger than the U.S. average, with a higher income and more likely to be college educated.

 

The point for marketers, Forrester analyst Melissa Parrish said, is that location-based services are still highly niche applications, and they target a group that is overwhelmingly young and male – although the analyst also noted that this group tends to also be made up of “influencers,” or those whom others look to for recommendations on products and services. And Forrester said that the market for location is still fragmented into multiple segments, making it even less attractive as a marketing platform.

Interactive marketers see the potential of a technology that connects people with places and points of sale, but they also see the reality of a fragmented technology (and thus consumer) landscape. The social location world is littered with dozens of apps that connect people and places in unique ways but also segment users into app silos.

 

In another interesting data point from the survey, Forrester’s research found that even those who said they use location-based services don’t do so on a very active basis — only one percent of users post an update more than once a week. That suggests market leader Foursquare needs to work on the way it creates incentives for users to check in with the service, something Om discussed with co-founder and CEO Dennis Crowley in a recent interview. Crowley said that the startup was working on new features that it hoped would increase its appeal. Meanwhile, Facebook is also working on location features, which may include a partnership with Foursquare and other services.

Related content from GigaOM Pro (sub req’d): Is Geolocation a Real Business or Just a Feature?

Post and thumbnail photos courtesy of Flickr user schatz

As Cohen noted, it's a result of seeing so many pitches that investors can offer insights into what works and what doesn't work in a pitch. Here are a few of the most common mistakes that Cohen along with other investors list:

1. The pitch lacks clarity

You should be able to give a clear description of what your company does - what needs it meets and how it does so. This should be short and succinct - think "elevator pitch."

2. You don't talk about your team

As Chris Dixon suggests, you want to pitch yourself not your ideas. In other words, it's important to be able to describe what it is about you and your team that gives you the skills to accomplish your business's goals. Highlight what you've done in your past in order to demonstrate your abilities.

Two-thirds of the approximately 700 software entrepreneurs who participated in the 2008 Berkeley Patent Survey report that they neither have nor are seeking patents for innovations embodied in their products and services. These entrepreneurs rate patents as the least important mechanism among seven options for attaining competitive advantage in the marketplace. Even software startups that hold patents regard them as providing only a slight incentive to invest in innovation.

These are three of the most striking findings from our recently published article, "High Technology Entrepreneurs and the Patent System: Results of the 2008 Berkeley Patent Survey."

After providing some background about the survey, this column will discuss some key findings about how software startup firms perceive, use and are affected by the patent system.

While the three findings highlighted above might seem to support a software patent abolitionist position, it is significant that a third of the software entrepreneurs reported having or seeking patents, and that they perceive patents to be important to persons or firms from whom they hope to obtain financing.

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company.  Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed.  It was accept the terms or go into bankruptcy so we took the money.  Those were the dog days of entrepreneurship.

In the era of Skype, web conferencing tools and collaboration software conventional wisdom says that distributed startup teams can be just as effective as those that are in person.

Conventional wisdom is wrong.  Or more precisely the people espousing the benefits of distributed startups teams are often distributed and therefore self rationalizing it.  Been there.

The reality is that a certain magic that happens when you’re in person is critical in a startup.  You attend five customer meetings together over a two-week period and after each meeting you replay the results in the office about what it meant.  The CEO weighs in with his perspectives, the head of product management disputes his conclusions and the marketing VP has a different take.

We spend hours of seemingly “wasted” time just in these informal chats simply shooting the shit.  With all the recent obsessions about “pivots” most people don’t realize that the more powerful pivots are the unnoticeable ones we make every day through these exchanges.  The conversations bleed into the sales messages the next time, they wend their way into software designs and form the plan of attach against competition.