Developing valuable IP

Philip Morgan

Show and tell time.

In our world, there are three words that mean really different things to different people: retainer, passion, and intellectual property.

Is a retainer a deposit against future services that will be billed hourly, a monthly fee for a block of hours, or a fee paid to access your thinking? It's all three, depending on whether you ask an attorney, an agency doing mostly implementation work, or a consultant.

HR departments and companies with abusive work environments have committed multiple crimes against the English language with their usage of "passion" to mean "say yes to crazy demands from us."

Intellectual property (IP) is a similarly muddy term. Most of us are going to think of how it's defined in the world of big tech companies. We're going to think about that guy who stole a bunch of autonomous vehicle IP from Waymo as a prime example. We're going to think of "patent portfolios" and patent trolls and lawsuits. We're going to think IP is something we'd never use in our own business.

There's another kind of IP that you and I can cultivate and use to our benefit, and it has nothing to do with the kind of IP that big tech companies own.

For us, here's what IP is not: It's not:

  • Worth patenting, or even something that could be patented
  • Something you'd ever willingly go to court to protect

I'm going to give you some real examples of consultant-level IP in a moment, so if my definition doesn't make sense just keep going to see the examples:

Intellectual property is your thinking made systematic and usable by a non-expert audience.

That's a broad definition, but a good one. These two real-life examples may help add some specificity:


ReactiveOps open-sourced some tooling they created. Pentagon is "a framework for building repeatable, containerized, cloud-based infrastructure as code with Kubernetes." -

This is their thinking made systematic and usable by a non-expert audience. It's proprietary but not secret. IP doesn't have to be secret unless there's a good reason, and in this case it's better when made public. In public it can demonstrate expertise, build trust, and attract leads.

In my interview with him, you can hear founder Matt Rogish describe how Pentagon and other open source projects have generated leads for ReactiveOps:

The Dalai Lama's Personal Physician

Before I get to the second specific example of IP, let me tell you a story.

I once heard this story about the Dalai Lama's personal physician. He poured a patient’s urine sample into a bowl, used one of those matcha green tea whisks to whisk the urine into a merengue-like froth, and then took a long, slow sniff and used the odor to diagnose the patient’s illness. (Source:

Most of you are going to say, "That sounds like malpractice! There's no science at all behind that diagnosis!" Or alternately, some will simply say, "Gross!"

And to that, I put on my tough love cap and say, "Not so fast! What about your diagnostic phase! In what way is it an actual improvement over 'sniffing the patient's urine'? Where's the data you use to establish a broader context or back up the prescription? Where's the systematic diagnostic method you use to reduce bias? And how do you defend that data or method under client scrutiny?"

If you read the Washington Post piece linked above, you saw that the Dalai Lama's personal physician correctly diagnosed the patient's condition from the very "unscientific" diagnostic process he used. And you too may not need much in the way of scientific process to help improve your clients' condition.

But... consider what a defensible, rigorous process could do for you in terms of helping your clients get better results and increasing your status with them. The next example shows you how IP can move diagnosis out of "urine-sniffing" and into a more systematic, defensible place.

Science + Story

A bit of context here since my client here is not a software developer. He helps research-driven organizations become thought leaders.

What is a thought leader?

Ask 100 people and you'll get close to 100 different answers.

Imagine if you asked 100 potential clients what intuitive software is.

You would probably get close to 100 different answers as well.

What if you had a systematic, defensible way to describe and understand what intuitive software actually is? What if you could assess any piece of software and define how intuitive it is, and define how to make it more intuitive?

How might this help your clients make better decisions during the software design and build phases?

We can do this kind of thing with the human language. It's called the The Flesch–Kincaid readability test. Some text editing software will compute it for you. If you've ever seen something that says something like "this content is at a 9th grade reading level", you've seen the result of the Flesch-Kincaid readability test (or one of several similar alternatives) applied to that content.

Bob Lalasz is a client who worked with me to formalize a diagnostic framework he developed on his own. This is the result:

To save you the time of taking it (and to save Bob from generating leads that aren't relevant for his business), the survey asks about 10 questions, scores you using a proprietary scoring algorithm, tells you which of 5 well-defined levels of thought leadership you fit into, and then emails you a customized white paper that describes how to move to the next higher level of thought leadership.

Bob's IP currently has a lead generation function, and he's also developing a version of this same framework that will allow him to more quickly deliver an assessment to clients. This establishes objectivity during the diagnostic phase and gets him into the more valuable prescriptive part of his engagements more quickly.

Where 99 people are saying "I'm not sure but I think thought leadership is $THING", Bob is able to say "I know exactly what thought leadership is and I can help you understand where in a clearly defined hierarchy of thought leadership you are now and exactly what you need to do to grow as a thought leader and I can make a business case for why that growth is a worthwhile investment." (He probably wouldn't use a run-on sentence like that :) )

Powerful stuff!

Your IP

What about you? Are you sitting on an asset you could develop into IP? Is there a way you could make at least the diagnosis phase of your engagements more systematic and defensible?

I don't know without talking to you, but here's how I'd help you explore that possibility:

  1. What causes or increases risk for your clients?
  2. What causes or increases uncertainty for your clients?
  3. What repeatable 80/20 opportunities exist for your clients? Said differently, what are the top 20% of your client's cohort doing that the rest aren't? What are top performers in other fields doing that your clients could learn from?

There are certainly other ways you could identify potential IP, but those three are great starting points. As you ponder those questions, do not limit your answers to ones that require code or deep technical expertise. Let me sketch out some hypotheticals that should help you think more broadly:

**You build mobile apps.**You've always been curious why some calorie tracking apps have done well over the long term in the marketplace and others seem to flourish and then die very quickly. You suspect this is because the successful apps make tracking easy and fun, but you're not sure.

You decide to do a UX audit and teardown on 5 successful and 5 unsuccessful apps, survey 1000 people on the role of apps in their weight loss journey using Google's survey tool (, and then write a white paper on your results where you present a "pattern library" of successful design and UX patterns for calorie tracking apps. With this, you are following #2 on the list above and trying to reduce uncertainty about how to build a good calorie tracking app.

**You build workflow automation applications for businesses that handle regulated data.**In sales conversations, you see clients get kind of freaked out when you talk about security. You suspect there's a pattern to the kinds of security breaches that cost a lot in terms of fines or bad press.

You decide to research 10 of the most costly security breaches in your clients' industry and see what patterns you find. You enjoy the research and it spreads a bit to include interviews with a few security experts.

You hate writing but don't mind speaking, so you spend some time organizing your notes and record a 10-episode podcast that you publish, along with your interviewers with the security experts (you get their permission). With this, you are tackling #1 on the list above and trying to reduce risk for your clients (and others in the industry who may never hire you but can benefit from the podcast you've published.)

**You are passionate about open source.**Like, you just can’t understand why more companies don’t embrace open source. You come across a study that suggest that companies that do fully embrace open source gain a competitive advantage from doing so.

You work to build on this study by interviewing more people in more companies. You’re looking for clues about that link between usage of open source software and competitive advantage. You interview some people at big enterprise companies about why they don’t embrace open source more fully.

With this data, you publish a white paper on how open source enables competitive advantage and the systemic barriers to embracing open source in more conservative organizations. In the paper you propose a simple framework that more conservative organizations can use to incrementally embrace open source. With this, you are looking for repeatable 80/20 opportunities that you can model and make more accessible to under-performing companies.

Final example; this comes from my business. Not a hypothetical. I was very interested in how generalist software developers can specialize but without the indecision and stress that normally accompanies this decision. I noticed that risk-tolerance seemed correlated with many aspects of business decision-making, and so I thought my recommendations to clients should reflect a more nuanced view of their risk tolerance.

I dug around for who else thought systematically about risk tolerance, and found that financial advisors have already figured some of this out. I borrow from their best practices to create a risk tolerance survey that I send my clients to asses their comfort with risk and ability to handle loss as a result of risk-taking.

This creates a mostly algorithmic tool that I can use with clients to help them calibrate their specialization decision-making against their risk tolerance. As my data set grows with each new client I can expect to have incrementally better data to use in advising my clients.

OK, hopefully those examples help you see a few things.

First, none of those examples of IP are what you think of when you read about big tech companies suing each other about their IP and patents and so forth. I’m talking about a whole different category of IP.

I’m talking about you using data to increase the value of what you do for clients by reducing risk, reducing uncertainty, or infusing fresh thinking. And doing it systematically if at all possible.

This might seem really simplistic, but it’s powerful because it reinforces your expertise and objectivity. It shifts the balance of power in the sales conversation because there’s additional rigor to your recommendations and a dramatically reduced supply of alternatives to hiring you. It helps you deliver more value which may reflect in your prices.

And it helps with your confidence. There’s a big difference between how confidently you would say the following to a client:

“I think you should invest in a user onboarding experience because it’s the right thing to do for your users.”


“I surveyed the 10 best-performing apps in this category and all 10 of them have a well-developed user onboarding experience. Your app will compete better if we match or improve on that.”

The difference between those two statements is a bit of data, and a bit of proactive work on your behalf gathering and analyzing that data. But it’s going to be way easier to project confidence when saying the second version. You can do something like this whether you have 1 or 100 projects in your portfolio.

All you have to do is pick a question that your clients crave answers to and do some research to start answering that question.

There are other kinds of IP that can only come out of deep experience with clients over years or longer, but I wanted to make sure you understand how much opportunity there is to start small with your IP.

How about some homework? (This is for folks who have already specialized and understand the unique challenges of their clients. If you haven’t specialized yet, that’s step #1.)

Just make notes on your answers to the following questions:

  1. What causes or increases risk for your clients?
  2. What causes or increases uncertainty for your clients?
  3. What repeatable 80/20 opportunities exist for your clients?

I’ll be back at you tomorrow with 1 more email where I’ll try to put a bow on the whole framework.

Until then,-P