Simon Krystman, who has recently become an IOEE member, is the man behind IdeasPatch, an innovative route to funding the filing of patents for talented inventors, who often find themselves in a catch-22 situation of no-patent, no investment. We chatted to him about his unique business model and his own route to entrepreneurship.
Despite graduating with a degree in bio-chemistry in the early 1990s, Simon Krystman worked as an employee for just six months after leaving university. Like many people who are naturally inclined toward individual enterprise, he soon found himself on an unrelated career path as a ‘serial entrepreneur’, starting up several traditional technology companies. Remembering this time he says:
“I followed quite a standard entrepreneur’s path of coming up with what I thought would be good ideas for businesses. A few worked, and they compensated financially for the ones that didn’t.”
It was during that time that Simon realised his primary interest lay in the early stages of business start-up. His fledgling enterprises were concerned with data and data mining, reselling software, email marketing and related business-to-business support services. He says:
“It was the start-up stage of things that I really found exciting. When a business reached a stage when it started to look promising, began to develop reasonable cash flow and needed growth, I’d know it was time for me to put a management team in place and step back, perhaps to a role on the board.”
This passion for beginnings has remained with the entrepreneur, who explains why the start-up stage holds such appeal:
“I like looking at a new idea and trying to make it work. When a business gets to a certain size you start getting involved in procedure, you have to get into the detail. That requires a different sort of skillset from that of an entrepreneur.”
Most recently, Simon decided to focus his entrepreneurial abilities on local communities. He and his partners began to seek ‘pain points’ in an attempt to identify a problem that needed solving for businesses, searching for a gap in the market. Alongside a business partner, Simon noted the slow demise of local newspapers and how this negatively impacts local trade. This, in turn, revealed another deep-rooted economic issue for potential new businesses. Simon explains:
“Local newspapers have an ageing readership, their business model is moving online and we wondered if we could tackle the gap this was leaving for local businesses and social enterprise projects by creating online community hubs. However, while we were setting this up it became apparent that the real problem for business was a lack of local government funding and a lack of bank lending.”
Here, Simon realised, was where the real opportunity lay so he set up crowdfunding website CrowdPatch. Designed to fund social projects in local communities, CrowdPatch provides crowd-funding of around £3000 to, for example, projects raising cash for 3D printers in schools or community cafés. Essentially, when a project or social enterprise can’t borrow money anywhere else but it has a positive impact on the local community it can get going on CrowdPatch. CrowdPatch was a precursor to IdeasPatch and continues to thrive. Simon appreciated that while this model of crowdfunding was ideal for small community-based projects, it would require some re-design if private start-ups were to be the ultimate recipients of funding. Additionally, the entrepreneur had noticed that for many potential start-ups there was one large and costly barrier standing in the way. He says:
“People would approach me and say ‘I’ve got a great idea for a business. I can’t tell you about it because you’d have to sign a confidentiality agreement’, or ‘if I launch too early one of the big boys will steal it.’ Invariably these people would never start their businesses because they were scared someone would take their ideas.”
Simon set about deciphering how to remove this barrier to potential start-ups that had innovative inventions to sell. His first move was to consult with an Intellectual Property (IP) lawyer. This led to Simon learning about the proper way to protect IP via patenting, a costly process that few fresh-faced new start-ups can afford:
“Patent attorneys aren’t cheap, and if you’re going to start a business based on an invention you probably haven’t got the £30,000 or £40,000 it costs to protect it.”
IdeasPatch, which launched in late 2016, can solve this problem. Although the idea of filing a patent via an online platform may sound counterintuitive because the task is by its nature a highly secure and private one, in fact Simon’s model offers hope to those stuck in the catch-22 situation of not being able to afford a patent but not being able to pursue potential investors for fear of their idea being stolen. IdeasPatch is open only to professional investors who have paid a £50 membership fee. Meanwhile, individuals with innovative business ideas that they want to protect apply for free to IdeasPatch via an encrypted process, together with a non-disclosure agreement, to be considered for patent funding.
Simultaneously, they submit a business plan. Once each of these documents have been professionally assessed, IdeasPatch may offer
to ‘run a campaign’ on an idea and its corresponding enterprise, appealing to the Angel investors to put their cash behind them. It was essential for Simon to make IdeasPatch attractive to investors, specifically Angel investors who may be looking for fresh areas of enterprise in which to place funds, as he outlines:
“Our customers, the Angel investors, have told us what they’re looking to invest in and now we’re building stock, as it were. The sorts of inventions we’re working with here are in fields like advanced engineering and bio-technology. These are high-growth areas where if an invention works out well, the inventor can potentially enjoy a lucrative monopoly with their technology.”
Having set the scene for serious investors to connect to brilliant inventors, IdeasPatch also works towards giving inventions the best possible chance of success in the business world. However, as Simon explains, the skillset of an inventor is often very different from that of an entrepreneur:
“Most inventors don’t make good business people. They’re good at inventing, not commercialisation. So, in an ideal world an investor would want an inventor to either have a track record of commercialising their invention, or to be tied up with an entrepreneur or mentor to provide that skill.”
To answer this need, IdeasPatch provides a higher-grade investment application and, right now, the social enterprise is looking at ways of sign-posting inventors to the extra business expertise they’ll require to secure the very best investment opportunities.
Currently, Simon and his team are working hard to get news of IdeasPatch to the people who need it most:
“It’s important for individual inventors to know IdeasPatch is out there. For them, this is a completely new option and there isn’t anyone else yet offering them a solution where, if they haven’t got the money, someone may still be willing to take on the risk of their invention.”
It’s Simon’s hope that, as the years go by, IdeasPatch will become the catalyst for numerous ambitious inventions to come to market. He says:
“Particularly in these uncertain economic times, I foresee that people will come to regard companies like ours as instrumental in enabling future new inventions to emerge and rewarding economic activity to take place.”