Know-how

Know-how is technical or business knowledge with commercial value, usually protected as trade secret against competition. Unlike patents or trademarks needing registration, know-how protected only by keeping secret.

Examples of know-how: (1) Recipes—Coca-Cola keeps Coca recipe as know-how; (2) Algorithms—Netflix uses proprietary recommendation algorithms; (3) Processes—how product made, what steps, which most critical; (4) Business tactics—how decisions made, how clients handled; (5) Source code—internal software architecture.

Practical example: Startup has algorithm predicting whether user will be skeptical or satisfied with product. Instead of patenting algorithm (taking 2-3 years and money), they keep as know-how—only few key engineers know how it works.

Know-how advantages: (1) Speed—knowledge used immediately, no patent wait; (2) Forever—while secret, protected forever; (3) Simplicity—no registration needed; (4) Competitive advantage—if competitor doesn’t know secret, can’t copy.

However, know-how has problems: (1) No legal protection—if someone discloses secret, legal protection weak; (2) Leak risk—just one employee going to competitor can ruin everything; (3) Hard to transfer—if startup wants exit, know-how hard sell; (4) Doesn’t protect name—knowledge can be stolen without knowing who did it.

For startups: Guard know-how under strict NDA. Limit access to only key people.