Patented success Featured

8:00pm EDT September 20, 2006
 Paul Ryan knows that great companies either serve an otherwise unmet need in the marketplace or serve a need better than anybody else. The CEO of Acacia Technologies Group, which partners with companies to license out their patented technologies, is trying to do both.

“We’re serving a very large unmet need in the market because most technology companies, particularly smaller and mid-sized companies, simply don’t have the scale or expertise or experience to build their own in-house licensing companies,” Ryan says.

With the patent-licensing industry estimated to grow to $500 billion, there is a lot of opportunity for Acacia to grow. In the first half of fiscal year 2006, the company has already matched 2005 revenue of $19.7 million.

Smart Business spoke with Ryan about how he defines success and how he finds the right people to help him get there.

How have people played into your success?
You hire people much smarter than yourself at all levels. You can’t do everything yourself, so you have to surround yourself with very experienced, motivated and talented people.

The top management of the company is very much a believer in a horizontal company and giving the people the stake and the responsibility and the rewards. The key thing is to empower the people who are in charge ... but by the same token, incentivizing them very well for their performance and not trying to micromanage or overmanage.

Find the right people who want to take responsibility and grow the company, and give them the authority to do that.

Why do you do that?
The best people are ultimately what makes a company succeed. Many CEOs don’t want anybody in the company who’s going to upstage them or look better than them, so from a defensive standpoint, they tend to hire down as opposed to hire people that have more experience than they do in every area and listen to what they say.

The biggest failure I’ve found, particularly in small companies, is the originator of the company just wants to do everything and assumes that they know how to do everything better ... (or) you have a dominant person in charge and, really, the key people are intimidated from taking risk. And usually those companies don’t grow very well.

The key for a CEO is to be the catalyst, help identify the unmet need in the marketplace and make sure the company stays on its path of serving that market. You’ve got to empower highly motivated people to be willing to take some level of risk. Otherwise, your company is going to stagnate.

What else can prevent growth?
The biggest one in history has always been not being adaptable to change. Great companies are very adaptable to change. They see new market opportunities, and they’re willing to take risks and move quickly.

If you go back to the railroads, they thought they were in the railroad business. Well, they were really in the transportation business. You have to look at your business in a broader spectrum of the customer, not necessarily how you, at that moment in time, are serving the customer.

Your business is always serving the customer. And if you can do it better and at a more innovative basis than anyone else, then your company is going to sustain. Seek out the opportunities and modify your business accordingly.

How do you build a good reputation?
We pride ourselves, when we’re in discussions, on giving the other side all of the information they need, as opposed to trying to withhold the information. If you’re willing to be all-cards-up with somebody and lay everything out, we feel that’s building a great reputation as opposed to companies who act in their own best interest.

If you’re going to have a sustainable business ... it comes down to the real simple thing: Treat people like you’d want to be treated. That goes a long way, and it’s amazing how many companies can along the way forget that basic premise.

How do you define success?
A motivated group of people with a common goal. The energy that comes from that and the inspiration that comes from that is what really builds great companies. There are some companies that make money.

There are some companies that serve a market adequately, but I think there’s certain companies that just have an energy. They’re on a mission. Their mission is to simply serve customers better than anybody else.

A company like Starbucks, when you think about it, they weren’t really serving an unmet need — there were coffee shops around — but they did it in a way that made people want to go to Starbucks.

HOW TO REACH: Acacia Technologies Group, www.acaciatechnologies.com