- The fact that CK stayed the course and made huge (relative to the size of the company) investments in its IP portfolio testifies to the value of having board members from a variety of backgrounds, independent of industry knowledge. It had been a long time (1878) since the basis of competition in the lighting industry had been IP. Had Noubar not been on the board, had he not been such a conceptually informed, steady advocate of the value of IP, CK would almost certainly have chosen a more traditional route of investing in applied product development and marketing rather than IP.

- IP investment is, to an uncomfortable extent, a faith-based strategy. When CK did its IPO, analysts wanted to hear about revenue and trophy installations, not IP. Direct IP driven revenues (licensing and OEM) were disappointing for years. It was not until cooperating companies with great depth of lighting expertise started looking at the SSL/LED industry that IP value could be monetized. So re: the posting above, there has to be board support for the strategy that is grounded in something other than current numbers…but a group of well-financed potential ‘informed buyers’ as well.

- IP is a “professional driver required” strategy. Without a president (Bill Sims) who drove very, very hard on the operating side, CK would not have had the time or the track record to attract the attention of major players in the lighting industry.
————
*To fill the time when I used to talk to Noubar about CK, I’m currently estimating a model that should give more quantitative insight into the relative contributions of company performance, projected industry and company growth, and the IP portfolio. First run looks like IP accounted for 40-45%.

What would be very useful to know in more detail is how CK management did the deft maneuvering of staying on course, pursuing patents in the hundreds and product line and manufacturing development at the same time.

By way of counter example, I was involved with a company which was innovating in a brand new space that could revolutionize the then booming photonics industry. The CTO was crazy about our (physicist’s) innovations while his partner in charge of manufacturing and process development looked at us with veiled hostility and extreme suspicion. It is the large scale manufacturing process challenges that brought the whole house down at the end. Should we (the physicists) have been thinking about that instead of coming up with multiple other designs for photonic transistors and their uses instead?

Eventually, the venture went belly up and the far reaching patents which were either filed or pending filing, were discarded or ignored by the established company that bought the innovative one which couldn’t deliver past fantastic prototypes (decades ahead of its time, as it turns out). The physics team was disbanded and silenced much before the manufacturing problems were seen to be unsurmountable. Instead, expert teams in the latter were hired in mid-course to come and save the day which abysmally failed.

So more facts on how to reconcile these trends would be helpful. What metric(s) can lead to the proper timing and resource allocation balance between clearing the path to the promised land (innovations, patents) and creating the thrust to propel one towards it in the first place (manufacturing and product engineering)?