William A Tanenbaum David with Goliath: How Big Companies Do Business with Small Cloud and Social Media Companies; How do overcome the mismatch in contracts and approval processes; how to overcome obstacles;
The Future Legal Marketplace: Innovation, Extrapreneurship, and a Law Withou...
Similar to William A Tanenbaum David with Goliath: How Big Companies Do Business with Small Cloud and Social Media Companies; How do overcome the mismatch in contracts and approval processes; how to overcome obstacles;
William A. Tanenbaum Association of Benefit Administrators April 2015William Tanenbaum
Similar to William A Tanenbaum David with Goliath: How Big Companies Do Business with Small Cloud and Social Media Companies; How do overcome the mismatch in contracts and approval processes; how to overcome obstacles; (20)
William A Tanenbaum David with Goliath: How Big Companies Do Business with Small Cloud and Social Media Companies; How do overcome the mismatch in contracts and approval processes; how to overcome obstacles;
1. David with Goliath: How Big
Companies Do Deals With
Small Cloud and Social
Media Companies
William A. Tanenbaum
Head, IP &Technology Transactions
Group, Kaye Scholer LLP
2. Kaye Scholer LLP
• The law firm’s IP & Tech Transaction Group is ranked in the
“First Tier” Nationally by US News & World Report and is “one
of New York City’s most outstanding transactional IT
practices.” (Chambers).
• 14 other Practice Groups also ranked in First Tier
• 14 Practice Groups and 48 Lawyers are Ranked in Chambers
USA and others in Chambers ina Europe and China where
firm has offices
• Practice Head Bill Tanenbaum named “Lawyer of the Year
2013” in IT In New York
• Our offices are in New York, Palo Alto, Chicago, Washington,
D.C., London, Los Angeles, Florida, Frankfurt and Shanghai
2
4. Are You Picking a Winner or a Loser?
• How strong is the external foundation for your Cloud or Social
Media strategy, your commercial success, and your business
reputation?
• Gaining advantage and avoiding harm
• Ease of working with specific Cloud and Social Media
companies
• Factors also apply to other small companies
• Silicon Valley vs. New York = tech company vs. “x/tech
company”
• Would you invest in the company?
4
5. To Due Diligence the Company, You
Have to Due Diligence the Investors
• How financially committed are the investors?
– Are they committed to providing continued funding, or are they taking a
flyer and ready to walk away quickly?
– What is their track record with other companies?
• Do they understand the space?
• Are they a cohesive team with a shared strategy?
• Are they providing management guidance?
• Are they responsive to due diligence?
5
6. Management Team
• How experienced and well is it in running the business?
• What is the burn-rate?
• Attracting and keeping talent?
• Prior success?
• Know the space? Strategic plan?
• Attention to IP
– Offensive IP
– Defensive IP
– Strategic alliances
– Upstream licenses
6
7. Customer Support
• Can the Cloud or Social Media company provide the customer
support the big company needs?
• Can it provide 24/7 support?
• Is 24/7 actually needed?
• Can small company provide support in languages other than
English for multinationals?
– Help desk requirements are often from users who do not speak English
well
7
8. Cyber-Security Risks
• Unappreciated risk in doing business with Cloud and Social
Media companies
• They often build a user base without baking in security
features
• Data breach and theft of PII will harm big company’s
relationship with its customers
• Big company exposure to monetary damages
• Have you bought a reputational risk?
8
10. What are the Business and Legal Hurdles?
• Mismatch between contract processes
– Length of documents
– Resources
– Speed to closing
• Misunderstanding of regulatory requirements
• Internal business/legal approval processes internally at big
company
• Small company lawyer is often the investor’s lawyer not an
IT/IP/social media lawyer
10
12. Surmounting the Hurdles
• Big companies: consider shorter agreement than standard
agreement
• Recommend attorney to the small company to get quality on
other side
• Publish guide to applicable regulatory requirements that small
company needs to know are unavoidable
• Explain big company’s internal process to small company
12
13. Surmounting the Hurdles (cont’d)
• Big company can re-engineer internal and external processes
– Digital business layer atop vertical business units
• Adopt shorter contracts, rely on SOW and SOWs
– Involve legal department early regarding core legal terms
– Risk, warning, remediation, relationship/partnership
– Avoid avoiding legal department
• Success is reputation not just price
• Assume big company cannot negotiate changes to the
contract: then need due diligence equivalent to buying the
company
13
15. Business Requires IP Focus
• IP is important
– Big companies need IP ownership or license rights
– Rights should be based on business drivers
• Are there custom software or configurations?
– Competitive advantage requiring proprietary rights?
• Address need to data and tech across different or successive
social media/digital business initiatives
– Including Big Data, analytics software, derivative data sets
• When to use contracts to modify default statutory IP rules, and
avoid unexpected business problems
15
17. Do Not Let Lack of Training Trump
Digital Business Success
• Training sessions for both small and big companies
• For big companies, internal social media training
– Avoid inadvertent but expensive regulatory violations
– Avoid missing customer expectations
• Outsourcing as a firewall
17
18. Questions and Answers
William A. Tanenbaum
Head IP & Technology Transactions Group
Kaye Scholer LLP, New York and Palo Alto Offices (not admitted
in California)
wtanenbaum@kayescholer.com
18
19. William A. Tanenbaum, Kaye Scholer LLP
wtanenbaum@kayescholer.com
• Bill Tanenbaum is the Head of the law firm Kaye Scholer’s multidisciplinary, multi-office IP &
Technology Transactions Group, which is ranked in the First Tier at the National Level by US
News & World Report/Best Lawyers. His practice areas include outsourcing, IT, offensive and
defensive IP strategies, vendor management, data security and data flows, IT and IP aspects of
corporate transactions, technology agreements and licensing, Big Data in procurement and
supply chain management, and sustainability. Bill was named “Lawyer of the Year 2013” in IT in
NY by Best Lawyers in America. He is ranked in Band One in Technology & Outsourcing in NY
by Chambers, America’s Leading Lawyers for Business, which found that he “built one of New
York City’s most outstanding transactional IT practices.” IP Law Experts Guide named Bill as
“The Recommended IT Lawyer in New York.” (Only one attorney is designated in each state.)
He is past President of the International Technology Law Association and currently a VP of the
Society for Information Management (NY), a CIO industry association where he serves as the
only lawyer on the Board. He is: “one of the best IP attorneys I have worked with” (LMG
CleanTech Guide), “smart, practical, tactical and highly strategic,” “an effective
negotiator” (Chambers), “intellectual yet pragmatic” and “among the foremost IT licensing
experts and a leading authority on related issues such as data security, privacy and social
media” (World’s 250 Leading Patent and Technology Lawyers).
• Bill is a graduate of Brown University, Cornell Law School and the Bondurant School of High
Performance Driving.
19