From time to time I find myself in discussions with entrepreneurs and startups about the value of (protected) intellectual property (IP).

The argument often goes something like this: Entrepreneur thinks that the IP she created, is the core of her company and thus needs to be private and protected. Yours truly argues that under certain conditions (and probably more often than not) it might make sense to open up the code with an open source license and work on building a community around it. Entrepreneur reacts in shock and continues to argue that her IP is a precious stone, not to be shared with anyone (though the lure of a community co-developing the product sounds mightily tempting). Yours truly makes his main argument: More often than not your IP is not the important bit. It’s your ability to execute. Entrepreneur is confused.

Let me explain my position: Very broadly speaking I see three classes of innovation (in software) – truly new inventions, innovative combination of existing building blocks and customization.

To make these three categories clearer, let me use a couple of pictures: New inventions are something which didn’t exist before. Sometimes these innovations are complete buildings, sometimes they are more like individual lego bricks.

Which brings us to group two - the people who combine existing lego bricks into new forms & shapes. Sometimes they need to invent their own glue - but the heavy lifting is done by stacking lego bricks in new and innovative ways.

Lastly you have people who customize - they arrange furniture in a barbie doll house to create an innovative arrangement which delivers value. These people tend to use mostly complete solutions, put a little veneer on or make some minor changes and deliver value through content and other areas.

Now - all three models are valid and valuable. But mostly only the first one might require strong IP protection (note that this is all very broadly speaking and thus a vast generalization) – as only in the first case the founder actually created something new and unique which truly didn’t exist before. In the other cases I would argue the “protection” for the startup is much more execution based. If you execute well, you’re golden. If you don’t, your IP isn’t strong enough to make it properly defensible.

Again - this is a sweeping generalization. But I find it helpful to think in these categories and seriously consider using open licenses for your IP to reap the benefits of innovating in the open and with a community.