Lesson #183: The Top 12 Reasons to Protect Your Trademarks

A trademark is that word, phrase, symbol, logo or design that sets your goods or services apart and distinguishes you from all the rest.  The “loud and proud” protection of goodwill being built in a mark serves many valuable purposes.  To help me detail these reasons, I reached out to Tim Engling, an intellectual property attorney at the lawfirm  Michael Best.

Below, Tim helps us to detail the Top 12 Reasons to Protect Your Trademarks:

1. A registration is an asset that delineates rights in a trademark by recording and securing exclusive rights to the registrant.  A federal registration can be licensed or sold as property, and assignments, liens, and security interests can be federally recorded.

2. The registration process reduces risk for use-based or intent-to-use applications in two stages: first with USPTO examination at about three months after filing and second after allowance with publication for public opposition.  There is less risk in using a registered mark than one with untested and limited common law rights.

3. Only federal registration permits use of the circled “R” symbol, ®, adding a professional appearance and showing that a mark is important enough to protect, enhancing your brand.  Without federal registration, only “TM” may be used, which is merely an assertion that the user believes it has trademark rights.

4. Constructive notice, whereby the public is deemed notified and aware that the trademark is in use, begins the date the mark is federally registered.  Constructive notice may hinder parties from challenging your registered mark by limiting excuses.

5. With actual knowledge, competitors may avoid adopting conflicting marks. When adopting their own marks, competitors should search federal records to avoid selecting confusingly similar marks or would adopt new marks at their peril with inferior rights.

6. A registration will block registration of confusingly similar marks.  The Trademark Office should reject confusingly similar marks from later registration, protecting your image.

7. Federal law allows for incontestability – the highest status of trademark protection.  After five years of registration with proper conditions, no one can assert prior use, nor can the registration be challenged on numerous other grounds.

8. Registration permits jurisdiction in U.S. federal court, where a judge may grant injunctions, award damages for infringement and – in some cases – recovery of legal fees and defendant’s profits.

9. A federal registration is presumed valid in legal proceedings with other evidentiary benefits.  It provides evidence of ownership and the owner’s exclusive right to use the mark on registered goods and services. It helps prevail in trademark disputes.

10. Beyond federal court, a registration recorded with U.S. Customs may protect you by preventing the importation of infringing or counterfeit goods.  Customs can seize counterfeit goods, impose fines and detain imported goods that infringe.

11. A federal trademark registration can also serve as a basis for obtaining priority and registrations in foreign countries.

12. Lastly, the cost is reasonable for these benefits.  Typically, the cost for preparing and filing a federal trademark application in one class is about $1,200, and trouble-free prosecution through registration is about half that amount.

Federal trademark registration is a value-added proposition for companies, and an area where investors evaluate risk, value, and prudent company procedures.  So, it is both a benefit for the company, and protection for its investors. 

For more information on how to select, protect, register or enforce your trademarks, feel free to reach out to Tim at  tjengling@michaelbest.com or 312-596-5839.

For future posts, please follow me on Twitter at: @georgedeeb.

Is Your Startup Building a "Vitamin" or a "Painkiller"?

I once heard a great entrepreneurial panel discussion, including Mahendra Vora, the founder of Intelliseek (sold to Nielsen) and now a Cincinnati-based venture capitalist. He was advising the entrepreneurs in the room to make sure their startups were building “pain killers, and not vitamins” for their clients, in order to get their attention and build a sizable business of scale. I thought that was very sound advice, worth detailing into an educational post on the difference between “vitamins” and “pain killers”.

Read the rest of this post in Forbes, which I guest authored this month.

For future posts, please follow m on Twitter at: @georgedeeb.

[NEWS] University of Chicago Booth School Now Accepting Applications for New Venture and Small Enterprise Lab

Client applications are now being accepted for the New Venture and Small Enterprise Lab at the University of Chicago Booth School of Business. The class places teams of four to six MBA students with Chicago-area startups and small businesses to work on a special project over a 10-week quarter. The class gives students exposure to the working environment and culture of smaller companies and the opportunity to work with owners and managers while earning academic credit towards their MBA.

Client companies get to tap the talent and expertise of Booth students through a structured, 10-week class after which they will receive a delivered project addressing their specific business challenge. Past projects have included marketing strategies, sales programs, client assessment tools, investor packages, pricing strategies, developing new markets and even customer-service dashboards.

This course offers a blend of theoretical constructs and practical experience as they relate to emerging businesses through classroom lectures and on-site client experiences. It is taught twice during the 2014-2015 academic year. Once in the Fall quarter starting in late September and once in the Winter quarter starting in January.

If you are interested in learning more about becoming a client company for the University of Chicago New Venture and Small Enterprise Lab please visit www.34701.org and complete a client application.

[VIDEO] George Deeb Presents "The Birth of the Startup Excubator" at Techweek Chicago 2014

In case you missed it, here is the presentation made by Red Rocket's George Deeb at Techweek Chicago on June 27, 2014.  On behalf of the Ensemble alliance members, George presents "The Birth of the Startup Excubator Model", and compares its strengths and weaknesses versus other startup accelerator programs.

Here is the video from Techweek's YouTube Channel:



Here is the matching powerpoint presentation from SlideShare.

Hope this helps you to better understand Ensemble's "startup excubator" model.  If interested in learning more, feel free to reach out to Ensemble via their website.


For future posts, please follow Red Rocket on Twitter at: @RedRocketVC.

Create an "Everyone Sells" Culture

The common fault in the thinking of many entrepreneurs is that revenues will only be driven by the sales team, and the sales team alone. They put a lot of energy into hiring the best salespeople they can afford, training them up on their product or service, and them letting them loose and hoping for the best. The problem with that thinking is salespeople are only one part of the equation.

Read the rest of this post in Forbes, which I guest authored this week.

For future posts, please follow me on Twitter at:  @georgedeeb.

Lesson #182: Doing the "Smoke and Mirrors" Dance

Oftentimes, a magician uses "smoke and mirrors" to make something disappear, right before your eyes.  With early-stage entrepreneurs, "smoke and mirrors" often means making it appear that a product or startup success exists, before it actually does, in an effort to close a client sale or get a cash deposit with which to fund your development. 

This could include things like: (i) demo-ing static screenshots of a product, as if it were completed, that actually hasn't been fully coded to work yet; (ii) saying you have several brand-name customers up and running on the platform, to instill confidence, when you actually don't; (iii) saying you are venture capital backed, also to instill confidence, when your cash account is actually running on fumes; and (iv) saying you have a 10 person team, when in reality you may only be a one man show, as just a few examples. 

My immediate advice is: don't do it, as the risks often outweigh the benefits.  It can often backfire on you if the client finds out, after you over promise and under deliver, and then your reputation is immediately tarnished.  And, you certainly don't want those rumors starting to flood the market just as you are trying to get your business off the ground, when trust matters more than anything.

However, most entrepreneurs have done "the dance" at one point or another during their development.  If you are going to do it, my recommendations would be: (i) only pretend to have a working product during the sales process, if the actual working product is not that far away, and can easily be completed before the client is expecting to receive a working product (e.g., in a long lead-time sales cycle); (ii) it is much safer to try this for low ticket sales, than rolling the dice on big ticket sales (where the client due diligence will be less); and (iii) if you are going to "bend the truth" (notice I did not say tell a lie), make sure you say it in a way that it can't backfire on you.  As an example, instead of saying you are "venture capital backed in a million dollar round", say "you just closed a financing", which could be a $1,000 check from your grandmother.  Say it in just the right way that it is technically not a lie, but can be interpretted in whatever more-favorable way you are trying to suggest.

Let's face it, most companies don't want to partner with a brand new startup.  They don't want the risk of putting in all the effort, if the startup is going to run out of money or the product doesn't work as advertised during roll-out.  So, I appreciate the tenuous "chicken and egg" problem you all are dealing with in trying to close those precious first couple sales.  But, if you decide to go down the "smoke and mirrors" road, proceed with caution.  As the next thing that could disappear, may be your business.

For future posts, please follow me on Twitter at: @georgedeeb.

Age is Just a Number When It Comes to Entrepreneurial Success

For years, people have tried to correlate an entrepreneur’s age when they launched their startup, with the ultimate success of that startup. Many studies have been done on the topic, including reports by the Kauffman Foundation, Duke University and the Founder Institute, to name a few. The collective summary of their learnings is: the average entrepreneur is 40 when they launch their startup. People over 55 are twice as likely as people under 35 to launch a high-growth startup. The average age of a successful startup with over $1 million in revenues was 39. Age was less of a driver to entrepreneurial success than previous startup and industry experience.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

The Top 5 Considerations When Trading Equity for Services

Giving up equity in your business, as an alternative to paying cash, often sounds like a great idea to cash starved startups. But, giving up equity in your business is often a very big decision, and can come at a long term price, both financially and operationally. This post will help you figure out when it is appropriate to trade equity for services, and when you should avoid it. As well as, certain potential pitfalls along the way.

Read the rest of this post in Forbes, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #181: Should You Quit Your Full-Time Job Before Launching a Startup

Many entrepreneurs today work on their startups at night, while they are still working their full-time day jobs.  The question is: should entrepreneurs launch businesses with this part-time focus?  The answer is: not typically, but it all depends on your specific situation.

Here is the case for keeping your day job:

• Startups require capital, and your day job can be that source of capital.
• Startups are risky, and having a day job is your "safety net", until you are sure your startup has gained enough traction to feel comfortable quitting your day job.

Here is the case for quitting your day job:

• Startups require focus and a lot of hard work, and working on it part-time is not doing it any justice.
• Startups require speed and an all-out sprint to stay ahead of potential competitors.
• Investors are not interested in backing a "part-time" team
• Prospective employees are not interested in working for a "part-time" CEO 

So, as you can see, there are clear and material pros and cons on this subject.  But, the rationale for quitting your day job outweigh keeping your day job, where you can. 

My recommendation to entrepreneurs is as follows:

• If you can afford to quit your day job, you should.  Anything less than full-time focus is disadvantaging the startup's focus, efficiency, speed, hiring and financeability.
• If you cannot afford to quit your day job, you need to understand you are materially handicapping your odds of success.
• You should only keep your day job in startups where you are not worried about keeping a first-mover advantage, up against current or potential future competitors.
• That all said, if you are risk-averse (which questions whether or not you should even be an entrepreneur in the first place), getting your business to proof-of-concept first, before quitting your day-job, can certainly be an appealing option for you. 

Hopefully, this helps all of you entrepreneurs sitting on the fence on this decision, to make your leap, one way or the other.

For future posts, please follow me on Twitter at: @georgedeeb.

Try to Kill Your Startup Before You Start

I had the pleasure of sitting on an investor panel with Joe Dwyer, a partner at Founder Equity Fund and good colleague of mine. He made a very interesting comment – he was counseling the startups in the room to “try to kill your startup!”  My initial reaction was that is rather strange advice to make to a room full of aspiring entrepreneurs trying to successfully get their businesses off the ground. But, as Joe went on to explain, he said “if you have done everything you could have done to kill your startup, and were unsuccessful in doing so, then you are truly on to something that is defensible and worth building.”

Read the rest of this post in The Next Web, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

Growth Hacking: Marketing for Startups

The term “growth hacker” was first introduced in a blog post by Sean Ellis in 2010. He summarized a growth hacker as “a person whose true north is growth”, and is disciplined in prioritizing and testing marketing ideas, and religiously analyzing such results to see which tactics worked the best and should be scaled out further. To me, that is a pretty basic premise which be incorporated into most any marketing programs, defined as growth hacking or not. Frankly, if you are not a growth hacker today, you are not being a good marketer period, in today’s tech space. Perhaps the term growth hacker should be renamed Marketer 2.0 to better emphasize its importance for all organizations, startups or otherwise.

Read the rest of this post in Forbes, which I guest authored this week.

For future posts, please follow me on Twitter at:  @georgedeeb.

[VIDEO] George Deeb Discusses How VC's Evaluate Startups with Nick Moran

Red Rocket's George Deeb recently had the pleasure of sitting down with Nick Moran at the Full Rachet to talk about how venture capitalists evaluate startup investments.  This is a must-watch for any entrepreneurs wanting to raise outside capital, to make sure they address the key investor concerns in their presentations.

Here is the video of the the interview:


How Venture Capitalists Evaluate Startups (Nick Moran Interviews George Deeb) from Red Rocket Ventures on Vimeo.

The audio podcast and Full Rachet blog post can be seen at this link.

For future posts, please follow us on Twitter at: @RedRocketVC