Gans & Stern: The product market and the market for ideas: Commercialization strategies for technology entrepreneurs.

* Evaluate the choices about entering the product market, a competitive strategy, or selling the innovation to an incumbent – a cooperation strategy. * Why technology entrepreneurs in some environments undermine established firms, while others cooperate with incumbents and reinforce existing market power. * The interaction between innovator and incumbent depends on the presence or absence of a “market for ideas”

The market for ideas: The options for commercialization, The ideas for how to commercialize your invention.

* Strong appropriability environment, transacting in the market for ideas will often undermine that secrecy and increase the potential for expropriation (exploit). In contrast, when the innovator controls formal IPR (Patent), the potential for expropriation will be reduced and the innovator is likely to find a cooperation strategy more attractive.

* A product market strategy requires that the technology entrepreneurs offers an integrated value proposition and avoids detection and a competitive reaction from established market players.

* The value of a cooperation strategy is determined by the price the start-up receives through negotiations in the market for ideas. The value derived from cooperation increases with the threat posed by the start-up innovators to the product market position of the established firm. * Disclosure (expose) of ideas shifts bargaining power from the seller to the buyer of knowledge, the severity of the disclosure problem reduces the return of technology entrepreneurs in the market for ideas relative (compared) to a product market competition strategy.

The attacker’s advantage * Environment with weak property protection and no control of necessary