Woolies lost the Twitter war and the keyboard warriors are triumphant … unfortunately another entrepreneur lost in the real world.
While branding and marketing experts are celebrating the power of social media and that “Woolies were taught a lesson” but the harsh economic reality are that:
• Woolies turns over R75bn and makes a net profit of around R4.8bn every year
• CEO Ian Moir took home R30.5m in salary and performance bonuses last year
Both the above highlight that Woolies was “taught” nothing, bearing in mind that this is not the first time that the retailer has been accused of appropriating ideas from South African SMEs and entrepreneurs.
Legal experts who have been interviewed in the business media make the point that there are no laws preventing Woolies from doing what they did. In terms of the letter of the law and the rules of capitalism, they have done everything according to the text book.
So here is a challenge: go into a Woolies store, pick a Woolies product and go and copy it and start selling it under your own brand name… what do you think will happen? After all, they did it.
I can almost guarantee that you’re going to find a lawyers letter in your inbox threatening you for infringing on everything from patents, to trademarks to every other piece of intellectual property law they can throw at you.
Woolies won’t try and send their social media team after you. They will send lawyers after you and they will win.
“Corporate bully” you might say but there are lessons to be learnt from Woolies that entrepreneurs should take to heart.
– They will invest a lot of time and process into protecting their Intellectual Property
– Each new product process is documented and recorded and where applicable, they will have applied for either a patent or provisional patent
– They will look to apply for trademarks in sectors where they operate and they will regularly invest in these to build a “moat” to keep out potential competitors
Things like patents, provisional patents, trademarks and copyright protection are the kind of things that create enormous value for a business and are often the things that are ignored by SMEs who go in with the best intentions.
“But lawyers are too expensive” I hear you say as the entrepreneur. What was more expensive: Being undercut by Woolies or paying the R20 000 for a provisional patent application?
“But I would never have the money to enforce my intellectual property rights!” – perhaps. But often it doesn’t come down to going to court to enforce it. Turn the problem around and realise that you could find yourself being acquired so that a bigger business can exploit IP that you have generated.
If you are trying to build value in your business, you need to have an Intellectual Property strategy. It doesn’t have to be a complicated one, but it does need to be a deliberate one and there are many boutique law firms who can assist you at very reasonable rates.
Many entrepreneurs forget that the real “value” that is created in a business, very rarely comes from the day-to-day transactional elements of the business which are covering costs. Rather the value is created when you have an asset that somebody else wants and is prepared to pay a premium for.
It’s important that you focus on the asset building side of your business and find ways to protect what you have created.
We can celebrate “wins for the little guy” because a corporate got some bad publicity on social media for a few days, but these are not the wins that help entrepreneurs in the long run. The story would have had a far happier ending if the entrepreneur had been able to celebrate a pay-day because they had paid attention to protecting what they had built.