How to Convert intangible assets into tangible assets?
The business case presented in the second part of the Convert Intangible Assets 2 Tangible Assets “CIA2TA”, has nothing to do with a traditional business plan. First and foremost, its implementation allows one to plan a marketing strategy for the project.
Thanks to its multidiciplinary function, which allows the concession in an array of exploitation rights somewhat shaped like a star (hereafter referred to as the STAR SYSTEM), this business case includes a synoptic table which succintly and clearly describes the gross results over a period of three years. This table also allows one to verify whether the turnovers, gross margins and royalties are logical, all of which a priori is not necessarily feasible. Even before the work is finished, one can therefore immediately modify the figures until they are fully coherent.
Rather than focus on the privileges of one single partner, as often is the case, this business case takes into account the interest of each partner who collaborate in the commercial success of the entire consortium of complementary enterprises which exploit the innovation.
The client who purchases the “CIA2TA” is under no obligation to develop his project according to the business case. Nevertheless, this second part of the “CIA2TA” can convince prospects, investors and financiers that the author has seriously planned his project. It is therefore an excellent negotiation tool that enhances the author’s reputation by its high-quality presentation and by its exhaustive economic content.
This business case stems from the principle of the concession in an array of exploitation rights, (i.e. the “STAR SYSTEM”). Such a principle is based on the natural right of the author combined with the traditional exploitation rights that are specifically applied to the four chronological formulas: know-how, experienced skill, make-aware and professional ability. These four formulas represent the four basic economic functions which are distinctly related to the following trades: conception (creation-invention), production, publishing and marketing, to which each exploitation right intrinsic to the competence of their purchaser are assigned.
1 – Why must one concede exploitation rights according to the “Star System”?
Business plans have always ignored the human element while exclusively favoring material interests. Consequently, the “STAR SYSTEM” was originally conceived in order to make such business plans more humane, thus preventing permanent sources of conflict and bankruptcies which, until now, have plagued economies and which are inherent to usual juridical procedures.
By systematically giving more power to Capital Action and less to Moral Capital (i.e. Human Capital); by arbitrarily and constantly inverting natural order, this approach oppresses creators, restrict entrepreneurs and mislead consumers: the three main Actors of the economy. Ironically, this very approach is supposed to protect such individuals, each of whom plays a vital role in the economic development and in the promotion of Financial Capital… Thus, without noticing it, the most rigid minded and least progressive persons bring about the loss of values which they think they protect.
This explains why civilizations unexpectedly fall into decadence. Indeed, it is harder to innovate while immobilizing one’s property than to increase one’s wealth. By believing themselves invulnerable, the mighty ones reveal their ignorance and therefore their weakness. Since the dawn of civilization, the same causes produce the same effects and, when the time is ripe, mankind seems unable to learn from its mistakes. Above all, one needs to know what a generation must bequeath to the next one.
A) Make business plans more humane by promoting motivation capital
Financiers generally insist that industrial and commercial success depends on one’s industrial and/or commercial control of his enterprise… Many successful ventures prove the validity of this principle… Since no one holds the absolute truth, there are also many examples of unsuccessful ventures…
Right from the start, such a juridical system may distort the relationship between an inventor and a financier. Indeed, the former fears that if his project proves successful, the latter will reap more profit than himself, and may even steal his concept… Hence the inventor’s perennial and understandable paranoia… Sometimes, as a result of such paranoia, the inventor becomes a parasite for the financier and the entrepreneur, and thus impedes his own commercial project by always mingling in matters beyond his competence.
One may well wonder at the tremendous mass of useless problems and unsolved conflicts arising from the present economic situation. However, such a situation is hardly surprising. Indeed, within the best recognized juridical systems, services are always regrouped within a single enterprise, thus creating a pyramid on top of which one person rules over many subordinate services. Such services are performed by interchangeable individuals, who have limited responsilibity and little motivation. In reality, a project’s success is guaranteed by the motivation of its exploitants, even more than by their competence level or their financial support. This explains why great economic or political powers have stupidly entangled themselves in conflicts that were lost in advance.
“Enterprises that declare bankruptcy are full of competent persons who, gradually, have lost their motivation. On the contrary, young enterprises that are successful are made up of people who are less competent but have enormous motivation capital.” (Christian Lemoine, Author of motivational management). One must therefore methodically and juridically organize the conditions in which this immaterial capital can be stimulated in order to implement it afterwards.
In order to create a complete business plan, the only link missing in the chain has always been the capital motivation of people without which no one can objectively expect, confirm, develop and maintain success…
Ever in search of a method that respects natural order, “CIA2TA” decided to help solve these deficiencies by developing a system of concession of exploitation rights in an array of contracts, presently referred to as the “STAR SYSTEM”… Modeled after the cosmic system, whether at the atomic or the galactic level, this interactive principle is a tangible image of the natural order which gave birth to life.
Notice: The “STAR SYSTEM” of exploitation rights explained hereafter does not physically apply to individuals, but rather applies to the interacting enterprises with complementary competences within the same consortium, each of them being chosen to perform in its specific field of specialty. Its survival as a social entity as well as its trademark depend on such interaction. Each leader of enterprise contractually hired to take part in this kind organization, behaves like the captain of a ship whose mutual solidarity with his crew can lead to a successful mission or to shipwreck. There is no comparison between the personal motivation of each crew member to succeed under these conditions, and the motivation of employees within the internal service of an enterprise. Capital motivation is the first value which the implementation of the “Star System” adds to a business plan… It is also its first guaranty of success…
B) Making sure one takes the market by surprise
Reminder: Selling a handmade innovation for the time on a local market does not guarantee its future success as an industrial product on the international market, in spite of its worldwide potential. Moreover, such a venture on a local market prematurely discloses the secrets of one’s technical and commercial project to predatorial competitors who lie in wait. Only by ensuring production in large quantities can one guarantee at a minimum risk an innovation’s best quality-price ratio as soon as it is launched on the market this formula is the one chosen by multinationals since it is the best…This can only be done by preliminarily setting up a sales network.
Begin by selling prior to manufacturing: It is therefore essential that a large sales network be structured as soon as one exploits the product, and even before setting up the final production tool… In order to do this, one must develop an originally adequate tool that can be made more productive as demand increases… Right from the start, one must also organize a consortium of enterprises where marketing costs are not assumed by the production company. Under these conditions, operations and management responsibilities can safely be assumed by each enterprise. Prior to launching the consortium, one must therefore have already prepared every contract for its global exploitation.
C) The need for the consortium to extend exploitation rights in an array of contracts of concession
In order to meet the needs of this innovating and human-oriented juridical system, one had to create “an array of interactive contracts of interprofessional and international concessions”, with its related “multipartite charter of ethics”. Such contracts (STAR SYSTEM), as well as the charter of ethics, are specially adapted to the exploitation of copyright in the industrial and commercial world: their main purpose is to preserve moral right when it is exploited in a material environment. Based on international commercial law, these contracts are aimed at creating a lasting bond between the moral and financial interests of the Author and the material interests of the financiers and of the investors who industrially exploit or market the innovation.
These original contracts based on the “STAR SYSTEM“ are the opposite of franchise, since the exploitation rights are extended by concession in exchange of the concessionary’s or licence holder’s previously recognized professional ability. In the case of franchise, the reverse occurs. Thus, the “STAR SYSTEM” prevents any kind of system based on assistance. This new concept is also contrary to any kind of exploitation in an unlimited pyramidal network, thus allowing for the creation of a new kind of economy that one might call generalized interprofessionality. The creative capital (Work of the Mind) is the central component of this system, around which the financial, administrative, industrial and commercial members of the consortium gravitate like the planets of a solar system. Each enterprise remains autonomous, thus promoting new relationships within the consortium which, by a constantly evolving intercourse, inevitably lead to exchanges between enterprises, in a spirit of contractual harmony and without perverse effects. This new kind of relation results from the “STAR SYSTEM”‘s method, governed by an appropriate code of ethics recognized by every adherant.
This “Symboltype Charter of Ethics” efficiently prevents future extortions and dissuades economy’s most powerful predatorial exploitants. In case of conflict, such predatorial exploitants will face not one enterprise but an entire army made up of information networks against copiers and battalions trained to dissuade thieves. The “STAR SYSTEM” which results from the “CIA2TA” is a preventive force against unfair competition, counterfeit, plagiarism, the selling of secrets and industrial espionage. Thus organized, the consortium offers greater contractual power to its members, each of whom is bound by strict contractual undertakings. As a result, the inventor too (a physical person) must extend his exploitation rights by consession to his own enterprise (a moral person) which in turn, must transfer to third parties who contract with the consortium…
First benefit: should the inventor temporarily or permanently become disabled, his heirs, legatees, trustees or others are bound by the same obligations towards every partners of the consortium, without exception.
Second benefit: having extended his rights by concession rather than by cession, the author and his heirs (or other such people) can preserve these rights in case their enteprise declares bankruptcy. Thus, their obligations towards third parties remain the same as when they founded the consortium. After their enterprise has declared bankruptcy they can, as owners, extend their rights by a new concession and according to the same conditions, to the person who takes over the bankrupt company.
Supreme guaranty for every exploitant of the consortium
Having created his consortium according to the “STAR SYSTEM”, the Author is also subject to this charter of ethics. This charter contains a clause concerning the adaptation of the consortium to the development of the market’s economic realities; this clause leads once a year to a debate on the results of each enterprise. Such debates allow for further development of contracts, if necessary. The charter is multipartite whereas each contract is exclusive to the two contracting parties. Moreover, if, for a major reason, one of the enterprises convokes an assembly of the entire consortium, it has the right to do so, and the other enterprises are contractually bound to attend the meeting, either personally or by proxy.
Creating a consortium according to the “STAR SYSTEM” is similar to setting up a squadron of patrol boats (information networks) and of battle cruisers (for dissuasion). Such a system is stronger than a group of frogmen and more flexible than the TITANIC.
D) Super-control by the financier
The foregoing notwithstanding, the financier is entitled to sit on the administrative counsel of several enterprises of the consortium. Thus he divides his risks and controls the situation, whatever his original reasons for investing in the consortium. His various interventions are guided by the interest of each enterprise, thus allowing him to view in a global perspective the innovation’s success. He can also better understand the basic reasons for his investment.
E) Five additional sources of profit and security for the financier:
1) A more efficient and less expensive strategy. The commercial and/or industrial and/or tactical projects that are developed by the various enterprises of the consortium are publically revealed only once the innovation has been effectively launched.
2) An additional financial guaranty. By eventually keeping under sequestration the payments of the first royalties, the Holder (the Author’s contractual substitute) is able to acquire within a short delay an amount equal to the loans granted to him. Once the royalties equal the amount of capital loaned, they can be used as guaranty with interests until the entire loan is reimbursed.
3) A means of defense both simpler and less expensive. Thanks to the original contractual bonds of solidarity between each enterprise of the consortium, juridical costs are jointly assumed by every member.
4) Reinforced dynamics for commercial and industrial exploitation. Failure by one member of the consortium in no way affects the other enterprises. Governed by their multipartite charter of ethics, they continue to join forces and share the same motivation to succeed.
5) Selling the product at a more competitive price. Each specialist being assigned a specific right, redundant service and subcontracting fees are thereby eliminated. Financial risks are also reduced, while wastes which inevitably occur in the usual juridical systems are eliminated. Once put into practice, this basic information can reduce the cost price by 10 to 30 %, as the case may be, thus providing the client who seeks a given technology, to buy at a price lower than the competition, while ensuring a greater percentage of profit for each enterprise of the consortium.
Comment: The same principles of extending by concession an array of exploitation rights (the “STAR SYSTEM”) also apply to a large enterprise that wishes to exploit by itself an innovation, and thus must perform several actitivies… It will then sign as many contracts as there are rights assigned, thus allowing the other contracts to remain valid even after a particular one has failed. In such a case, the contract that was resiliated can be assigned to a new contracting party without hindering the marketing process of the innovation…
Countless marketing networks experienced difficulties, and even declared bankruptcies, because of some abusive and expensive procedure or judiciary and administrative costs and delays… Sometimes such destructive proceedings indirectly come from a ruthless competitor with a harmful influence or an unseen partner who aims at controling and manipulating his rivals…
F) The philosophical principles upon which the star system is based
The end of an ampybolic myth: Just as he did with the word “protection”, the author was compelled, in order to develop the STAR SYSTEM, to once and for all demystify, demythify and clarify this much abused and ambiguous expression: Know-how. Used in random fashion, either out of sheer laziness or negligence, this expression must be replaced by the four dynamic formulas which chronologically occur: Know-how, Experienced skill, Make-Aware and Professional Ability, each of which defines one of the four basic economic functions which are distinctly related to conception (creation and invention), production, publishing and marketing. To each of these four activities the following rights are assigned: to invent, innovate, inform and sell, which are extended through concession contracts as exploitation rights, transfer of technology, providing clientele, supplying material, etc.
Having thus replaced the four economic functions in their natural order, one can therefore, within well-defined contractual guidelines, use the author’s information and procedure guidebook, to examine the technical, commercial, financial and industrial feasibility of the innovation. Given its educational virtues, this operating code allows the practitioner to analyze and synthesize from a juridical, technical, commercial, financial, industrial and human standpoint, the intervention of specialists who, in the future, will develop and exploit the innovation.
Resulting from an original concept and its resulting copyright, the aforementioned interactive “basic functions” of the economy start working together, like a wheelwork, as soon as they follow their natural development in its chronological order. Thus they proceed from the intuition of the original idea until they reach their cerebral, material, sociological and economic development which, in turn, generates the following four “driving elements”: research, development, communication and actualization.
Combined with these four “driving elements” and four “basic functions”, the “properties” and/or “legal titles” and/or their related “contracts of concession or license” can, if judiciously used, provide new strategies which efficiently protect the author of an invention (and not the invention), while contributing to the successful economic development of the innovating project. Enterprises that adhere to this new kind of interprofessional relationship can work on all continents, under the same rules of ethics.
Since it is proven by experience that the concession of rights in an array of contracts generates freedom and solidarity, thereby greatly reducing risks of theft, it seems that its practical application, unlike franchise, should provide each co-exploitant with a true guaranty of juridical independance while performinng in his specific field of specialty. Such a system would, according to the author’s personal experience in the field, provide a real source of motivation to each member of the consortium, liberating the latter’s cultural behavior and allowing profitable interaction between different but complementary “professional abilities”.
By their synchronized, simultaneous and complementary actions, the members of such an organization produce the will, synergetic force and power required to economically develop the entire structure, without any obligatory assistance from one part of the consortium to another. Such is Capital Motivation.
From creation to innovation: a chronological table
|(1) Author||(2) Inventor||(3) Innovator|
|(4) Intuition||(5) Creation||(6) Invention (Discovery)||(7) Innovation (Exploitation)|
|(8) Know-how: The Process||(9) Experienced skill||(10) Make-aware and professional ability|
|(11) Research and development||(12) Production||(13) Marketing|
|(14) Industrializable or
|(15) Unpatentable and industrializable concept
industrial designs and models
((16) Patentable and industrializable concept Patent
|(18) Literary and artistic property
Work of the mind
|(19) Titles delivered by State granting the holder an exclusive right to develop the invention|
|(20) Exploitation rights|
|(21) Owner||(22) Holder of Title (19)||(23) Holder|
|(24) Copyright||(25) Trade-marks||(26) Commercial Sign|
|(27) Work of the Mind which is not published and that can be used against third parties||(28) In order to become an anteriority the invention must be published||(29) In order to become an anteriority, an innovation must be disclosed|
|(30) Plagiarism||(31) Unfair competition|
Principle of extending by concession exploitation rights
in an array of contracts (STAR SYSTEM)
“AUTHOR” = Literary and/or artistic property belonging to the creator of the concept.
“HOLDER” = Know-how: every right of intellectual property: The Financier or the S.R.E. (Study and Research Enterprise): which holds all transferable rights to exploit from the author.
“PRO” = Experienced skill: Right of industrial exploitation held by the Producer.
“NSB” (Network Sign Bearer) = Make-Aware: Right of commercial exploitation for the network: (Project director) Independant Commercial Management.
“DIS” = Professional ability: right of technico-commercial exploitation of clientele: The DISTRIBUTORS or VENDORS master the technico-commercial professional ability.
The principle of contractual starring of rights is based on natural law combined with the rights of exploitation applied specifically to each of the four formulas listed chronologically: know- how, experienced skill, make-aware and professional ability which embody the economy’s four basic functions related to conception, production, publication and marketing and the practioners’ rights intrinsically assigned thereto.
Mutual insurance of good working order
Based on the principle of the “STAR SYSTEM”, which limits responsibility and risks of each enterprise to the field of its specific specialty, this simplified triennal business case explains the project of the author in a perspective of international development and strategy. Its basic principles: Freedom ~ Complementarity ~ Loyalty ~ Solidarity are guaranteed by the high quality of its intrinsic original contracts. Thus organized, this document is especially intended for moral or physical persons who are interested in conquering a market that is large enough to guarantee the best quality-price ratio as sson as the product is launched. Such a ratio reads as follows:
1) Any person able to find investors and/or private and/or institutional financing at every level of development (research ~ development ~ promotion ~ marketing ~ production ~ industrialization ~ commercial exploitation ~ distribution etc…)
2) Any person able to invest personally in one or several fields of exploitation.
3) Any producer, industrialist or distributor interested in the exploitation of one of these fields or in creating an enterprise related to such exploitation.
Four reasons to succeed for each exploitant
The concession of exploitation rights in an array of contracts (STAR SYSTEM) included in the present document (i.e. the “CIA2TA”), guarantees each of his exploitants juridical independance while limiting individual responsibility to the field of his declared competence.
· The Inventor develops his concept and continues to invent
· The Industrialist produces in his specific specialty
· The Sales Person distributes the product that he has selected
· The Financier invests in a safe and profitable system
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