Dear entrepreneurs,

Remember when McDonald's was just a burger joint?

Today, their golden arches (the "M")  are worth more than their beef patties. That's the power of intellectual property – and if you're not maximizing yours, you're leaving money on the table. 

And I'm not going to let that happen! As your CFO, I must ensure you don’t miss out on the IP goldmine like countless other businesses.

It’s one of the most undervalued assets in a business. 

Most entrepreneurs treat their products and services as transactional sales, failing to realize they could create lifetime value and a significantly higher business valuation through IP monetization.

IP Monetization: The Hidden Revenue Engine

IP monetization is the process of turning intellectual assets into recurring revenue streams. Instead of making one-time sales, you can leverage IP to generate ongoing value.

This can be done through licensing, royalties, franchising, or joint ventures.

Let’s look at Gillette’s razor-and-blades model, for example:

• The razor is sold cheaply (sometimes at a loss), ensuring customer adoption.

• The real profit comes from selling the blades, which are needed repeatedly.

IP can be any creation; innovations, artistic works, designs, symbols, names, or inventions that can be legally protected and monetized.

Common examples include:

1/ Patents – Protect inventions (e.g., Dyson vacuum technology, pharmaceutical drugs)

2/ Trademarks – Protect brand identity (e.g., Nike’s swoosh logo, McDonald's golden arches)

3/ Copyrights – Protect creative works (e.g., books, movies, software)

4/ Trade Secrets – Protect confidential business information (e.g., Coca-Cola’s secret formula, Google’s search algorithm)

Each type of IP serves a different purpose, yet all can be monetized effectively if leveraged correctly.

But, this is just the beginning. The real magic happens when you transform these assets into revenue-generating machines.

Know how IP monetization is the key to building lasting wealth…

Why IP Monetization Should Be Your Priority

Monetizing your IP isn’t just about protection, it’s about unlocking financial potential. Here’s why it should be a priority:

1. Increases Business Valuation: Companies with strong IP portfolios have higher market valuations and attract better funding.
   

2. Creates Recurring Revenue Streams: Licensing and royalties can provide passive income.
   

3. Builds Competitive Moats: Owning exclusive rights keeps competitors at bay and strengthens market position.
   

4. Enhances Exit Strategies:  IP assets increase acquisition appeal and increase sale prices.

Businesses that understand this can create sustainable revenue without constantly chasing new customers.

Don’t treat your innovations like annual plants; go beyond just the plant, harvest, and repeat the process.

Your IP is a lifetime asset that’ll give you fruit long after you've planted the seeds.

How to Determine the Lifetime Value of Your IP?

Essentially, a business starts when the owner is passionate about a problem and the solution can deliver a positive Lifetime value (LTV) for the customer.

IP’s LTV=  Total economic benefit generated over time.

Take gaming companies, for example. They sell gaming consoles at a loss, but the various games and subscriptions they offer bring in billions of dollars every year.

Here’s how you can determine your IP’s value:

1. Identify the Economic Benefit: How much does your IP save or generate for your customers?

Example: A patented manufacturing process that reduces costs by 30%.

2. Estimate Adoption & Market Size: How many potential users or businesses can adopt your IP?

3. Consider Usage Frequency: Is it a one-time purchase or a recurring revenue model?

Example: Companies offer low-cost coffee machines but the daily coffee proprietary pods cost a lot.

4. Calculate Royalty Potential: How much can you charge in licensing fees or recurring payments?

5. Factor in Competitive Advantage: How long can your IP stay relevant before competitors catch up?

Your IP's value isn't what it's worth today,  it's about the future earning potential.

Let me share a story that’ll show you the power of IP monetization.

Turning Hospital Beds Into Million Dollar Opportunity

Picture this: A company invented a hospital bed that reduces patient hospitalization time.

Instead of being a standard asset purchase, they structured their monetization model around economic value creation.

The Problem: A hospital where patients stay for 5 extra days after surgery, each bed costing $1,000 per day.

That's $5,000 of unnecessary costs per patient, not to mention the emotional toll on families and the strain on hospital resources.

The Innovation: A revolutionary hospital bed that allowed patients to go home the same day as their operation.

The Economic Benefit: If a hospital stay costs $1,000 daily, reducing it by five days saves $5,000 per patient.

Monetization Model:

• Instead of selling the bed for $10,000, they charge hospitals $500 per day of use.

• Hospitals save $4,500 per patient while the company earns $500 per use.

Here’s a better way to understand this:

The Result:

The hospital saved $6 million over five years.

We captured $600,000 of that value through IP monetization. Everyone won:

• Patients: Faster recovery at home.

• Hospital: $5.4M net benefit.

• The Manufacturer: $600K revenue stream per bed.

So, even if a hospital bed costs $10,000 to manufacture, it generates an economic benefit of $100,000 per month and $1.2 million per annum.

After that, all we're charging is a royalty, of $620,000. 

It's fair. The customer has gained 6.6 million. You gain 600,000.

Interesting, right? Who would have thought hospital beds could make this much money? Well, that’s the power of IP monetization. 

Remember: In the business world, what matters most is not what you make but what you own.

Your IP isn’t just a shield against copycats—it’s a wealth-building machine that generates revenue long after the initial sale.

The difference between a good business and a great one often comes down to how well it leverages its intellectual property.

As Warren Buffett wisely said, "If you don't find a way to make money while you sleep, you will work until you die." IP monetization is your wake-up call to create lasting wealth

If you haven’t yet assessed your IP’s potential, now is the time.

If you have any questions or are interested in monetizing your IP, reply to this email, and I’ll get back to you soon.

In the next issue, I’ll share how I turned a failing business into million-dollar profits—with strategies you can apply today. You won’t want to miss this!

Stay tuned, see you next Wednesday, 

Matteo Turi, 
Your Personal CFO