Where is the Intellectual Property ?

What is your IP ? is a typical question asked by any investor or VC to a startup venture.

If you are a platform provider, then it is imperative to have a solid IP of your own. Be it Amazon or Ebay or Cleartrip all of them come with some great back end technology and a neat looking GUI in the front.

But oflate there are many ventures (even some funded by VCs) who are just using some other’s technology to bring faster service to market. Though there is nothing wrong with the strategy but there is no differentiated value one offers. Also as the market changes, you are not able to deliver your customer’s expectations.

At the end of the day, a business thrives because it solves a business problem or a consumer pain. In the internet era most of it is done through the medium of technology. If the technology is outsourced then what you are doing is just Sales. For doing just Sales, you don’t expect valuation.

This is getting very common with Ad Networks. Companies like Right Media are lending their Ad exchange to prospective businesses for running an exchange service. Though it is great for Right Media but I wonder the value provided by the business which runs the service. And why should a VC invest, if it is not their IP ?