IP conundrum #3
We are all familiar with the term “reverse engineering”. It conjures images of taking apart a product to understand how it works, and to copy or improve on it…often for unfair advantage. This is fostered by news reports of examples such as:
- a former employee of hedge fund Citadel stealing data to reverse engineer Citadel’s trade secret computer-driven trading algorithms;
- Chinese military using a downed US fighter jet to reverse engineer and build its own radar-evading stealth jet fighter;
- European hackers reverse engineering a trojan used by German police to reveal that it extends beyond its authorised use for intercepting Skype communications.
But reverse engineering is not only about subterfuge.
While attending the startup / entrepreneurial event sydstart last month, I heard entrepreneur Mitchell Harper give start-ups seven tips for success. The ones that resonated for me:
- #1: business plan – start with an exit
- #2: model your business – adopt a mentor and copy them – no, not to imitate them but to compress your learning by learning from their mistakes.
Sounds a bit like going backwards through the development cycle to get your end result –i.e. a process of “reverse engineering”:
- first, identify your desired outcome (start with an exit)
- then identify a mentor (someone whose business success you admire), study what they have done, find out how they have done it (importantly, understand the mistakes they made along the way) and use this information to avoid the same mistakes.
Mitch Harper illustrated this approach with an example: a new franchise that springboarded off the learning of franchises listed in BRW’s list of top franchises…to top that list only a short time later.
The take-away message? Reverse engineering your entire business model can help map a path to business success.