Deciding what features to incorporate into a product is always a difficult undertaking. Researchers at M.I.T. are researching new ways of quickly and accurately making those decisions and have produced an "IPO for Ideas" of sorts. A fascinating read. Registration Required

To Learn What People Want, Trade 'Idea Stocks'. Professor Dahan and colleagues at M.I.T. set out to prove that simulated trading could answer that most basic of all product development questions: What do consumers want? [The New York Times: Business] 

11:28:24 AM   

"Better late than never" seems to be the thinking of the convicted monopolist, which has shifted tactics in its fight to makes its settlement with the DOJ stick. Registration Required

Microsoft's Top Officials May Testify to Help Fight Sanctions. Microsoft, shifting its previous strategy, has named both Bill Gates and Steven A. Ballmer as witnesses in a trial on remedies in the antitrust case it lost. [The New York Times: Business] 

10:07:06 AM   

Personally, I'm of the view that in this day and age, if your reputation is so far gone you need to buy ads to explain your "position," full-page, text-heavy ads in serious newspapers is probably not the way to go. There are a number of other approaches - and media - that can more forcefully and rapidly spread your message. But this piece from the Post offers some interesting insights into the tactics of those who find they're getting more publicity than they really want.

Firms on the Spot Roll Out the Spots. Your company is in turmoil. Rocked by accusations of wrongdoing. Linked to corruption. Losing clients. Shedding stock value. Every day, your firm is in the headlines, for all the wrong reasons. What do you do? [The Washington Post : Business] 

10:01:22 AM   

It's bad enough, I suppose, when a competitor beats you to the punch - appropriating an idea or technology before you have the opportunity to fully exploit it. But that's the nature of competition in the high tech industry where operational excellence often trumps intellectual expertise. But what happens when it's a trusted partner who helps themselves to your intellectual property? It's a risk you'll increasingly face, according to this CNET analysis of a paper by Eric K. Clemons and Lorin M. Hitt, professors of Operations and Information Management at Wharton.

In "Poaching and the Loss of Intellectual Property: An Increasingly Important Form of Opportunism," Clemons and Hitt define poaching as "the risk that in any contractual relationship, information that is transferred between parties for purposes specified in the contract will deliberately be used by the receiving party for purposes outside the contract, to its own economic benefit and to the detriment of the party that provided the information." Unlike other assets - that are used up or wear out - information can be readily duplicated. That makes it relatively easy for a partner to misappropriate information or knowledge gained in a relationship to your disadvantage.

The article cites two reasons for the increase in theft. The first is the use of contractors for consulting, technology management, application services and systems development - the more partners, the more opportunities for theft. Second, the nature of the relationships requires the disclosure of significant amounts of confidential or sensitive data - information about customers provided to call centers, proprietary processes and procedures, and the like. Even trustworthy partners face a great temptation to poach since, as Clemons and Hitt warn, the data gained may "...have significant resale value, possibly exceeding the value of the contract."

Clemons and Hitt define two types of poaching:

Shirking: found in cases where you employ an agent to perform certain tasks. "In cases where effort is costly to the agent and the outcome of the effort is difficult to measure, the agent will exert less effort than is optimal for the principal, thus increasing his or her own benefit at the expense of the principal," Clemons and Hitt point out.

Hold-up: changing the terms of an agreement due to changes in bargaining power after a contract is signed. For example, once a project has begun a vendor may try to change the deal--knowing that the client is unlikely to change boats in midstream.

What to do? The authors suggest a variety of techniques to counter the risk:

* Sensitive information could be embedded in software or systems rather than being shared with vendors or potential strategic partners.

* "Confidential data could be encrypted or kept separate from the information that is necessary to reveal to a vendor to perform a service or build a product."

* Developing modular products or processes could help prevent reverse engineering.

* When large bodies of information (that have potential resale value) are shared with a vendor, they could be seeded with dummy data that might help expose a poacher. (A common tactic used in mailing list rentals.)

Partners today, rivals tomorrow. Poachers are out to plunder your intellectual property--and in the IT field, that's happening a lot, caution experts from Wharton. Want to learn how to protect yourself? Read on. [CNET News.com] 

9:49:36 AM