How to Pivot and Transform Your Digital Assets into Alternate Revenue Streams

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BakerHostetler’s new Digital Transformation and Data Economy (DTDE) Team presented a four-part webinar series in May that covered the legal implications surrounding COVID-19 for business leaders. Panelists, including in-house attorneys and industry experts, will discuss how companies can determine where opportunities and vulnerabilities lie in managing, protecting and leveraging digitization and data assets.

In the May 13, 2020 webinar, “How to Pivot and Transform Your Digital Assets into Alternate Revenue Streams,” the panelists discussed how their businesses made the transition from traditional tech-savvy and tech-enabled, the lessons learned along the way, and the legal and business considerations that affected these pivots.

Panelists

Digital transformation and data economy activities fit into three categories: pivot, accelerate, and exit.  In the first category, the DTDE Team helps our client pivot by finding new uses for their data, intellectual property (IP), and technology in response to industry disruption or other factors to stand up business lines or revenue streams they had not previously contemplated.

Pivoting from a traditional products- or services-based company to a technology- and data-enabled company is relevant regardless of the size of the enterprise or the industry and regardless of the complexity of the strategy.

Farmers & Fisherman Purveyors and American Water Works Company are two very different companies in unrelated industries, at different stages, and with different pivot triggers. Both businesses started where they were; made key decisions involving data, technology, and IP; and pivoted their businesses in unique ways.

Farmers & Fisherman Purveyors is an early-stage company in the meat and seafood industry that was founded in 2019 with the goal of supplying products to hotels and restaurants. Then, COVID-19 happened. Restaurants were not allowed to operate, and Founder and CEO Kirk Halpern foresaw 97% of his business drying up immediately.

Kirk asked himself how he could take care of people sheltering at home the same way his wife was providing meat and seafood to their friends. “I sat down for 13 hours, and in 13 hours I revamped the entire business from always being a traditional, paper [and] pen, relationship-driven to now we’re going to market directly to the consumers with home delivery.” “Now my company is a greater Atlanta home delivery company marketing through ecommerce and other manners that carries meat, seafood, produce, bakery, and other goods.”

Not all pivots happen overnight, nor do they need to. American Water Works Company is the largest and most geographically diverse, publicly traded U.S. water and wastewater utility company. American Water was uniquely positioned in accumulating data and started to think of that data as a commodity or as an asset for the enterprise. American Water was already a real innovator and thought leader when it came to water quality and wastewater treatment and making use of all the data they already had was a logical next step.

“We knew we had all of this information we were weren’t appropriately arming our reps with when they went out and made field calls, so there was a decision to build an application that would give field service reps real time information to prepare for a call at a customer’s home and give them an opportunity to interact with and share information back about customer preferences based on that interaction,” explains Rupali Patel Shah, Senior Director, Technology & Commercial Counsel of American Water. “The first app ended up being a runaway success. It had real, measurable impact on employee safety and customer experience.” Following that success, American Water looked for ways to scale its solution and continued to improve its business by relying on the data it was already collecting.

Both of these case studies illustrate that there were opportunities that were being left on the table that could be maximized if they figured out new and different ways to use data, IP, and technology. For Farmers & Fisherman, the transformation was critical to saving their employees’ jobs to survive an unprecedented global change. For American Water, the transformation meant breaking down silos across their various divisions to improve water quality and efficiency. American Water’s leadership was able to very concisely explain the vision and tie it back to American Water’s values.

Successful digital transformation requires finding good partners, both within and outside the company. Farmers & Fisherman could not use their tried-and-true methods of finding new customers—face-to-face networking—when they were looking to justify expanding delivery outside of Atlanta into Athens, Georgia. Kirk’s son utilized social media to add 25 customers to make the trip to Athens profitable. The ability to pick up technology skills as the need arises is keeping Farmers & Fisherman thriving.

Digital transformation requires a lot of decision making and a flexible approach. For example, the question of whether to build, buy, or integrate technology into the business arises over and over again. For some applications, it makes sense to build a custom solution, but other times its more practice to buy pre-existing technology and, as necessary, adapt it to specific business needs. Inevitably, the pivot will result in the creation of IP, and businesses need to decide the best approach for protecting (and possibly, disclosing) their IP. Finally, once you settle on a technology solution and an IP strategy, the issue of how to manage these approaches arises. During different stages of transformation, businesses often revisit each of these issues.

Digital transformation is not the solution to every problem. One pitfall to avoid is thinking that the same model can be applied to every business problem. It is important to keep the end user or customer—the ultimate purpose of the business—in mind when finding new solutions. The goal of digital transformation is not to become a technology company for the sake of technology; digital transformation means using technology to improve your business, not the other way around.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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