January 29th, 2020 | By: Wil Schroter
The myth of the "stolen startup idea" somehow continues to live on, despite an insane lack of proof to the contrary. The thinking goes that if someone else hears our idea, they will simply take it and create a billion dollar business from it.
On paper (and in movies) that can happen. In reality, it's basically a Sasquatch myth.
Just having an "idea" for something accounts for nothing. Great companies aren't built because someone had an idea for something that no one else thought of — we all have novel ideas.
Great companies are built through an insane amount of dedication and execution that (rarely) leads to a big outcome.
By the way, plenty of people had the idea for a social network — and built them — before Facebook was ever "stolen."
Yes, she sure did. But did she mention how we would ever enforce that NDA? Did she explain that 99% of investors won't sign them?
That's because a lawyer's job is to legally protect us, not necessarily guide us into a practical path that may have a perceived risk. That's like our doctor saying that vodka gimlets are healthy (they are, right?)
There are times when an idea should be kept secret, like when it becomes protectable intellectual property, such as a secret recipe or patent.
Telling people we have a delicious soft drink called "Coca Cola" isn't what we're trying to protect. Telling them how we make it is what we should keep secret — if we have to.
What smart Founders do is separate the high level idea, such as the problem and solution, from the detailed blueprints of how it works or what the go to market strategy might be.
If our idea is so easy to copy and replicate that simply hearing it is enough to unseat us — we're already screwed.
Our defensibility in our idea lies specifically in how we are going to execute the idea, and more importantly whether as a team we’re the most qualified to execute it at all.
There's no need to shout our idea from the rooftops, but there's also no need to pretend we're guarding state secrets. Let's focus on how we build the company, not how we hide the idea.
Why Investors Don’t Sign NDAs. It’s hard enough to get an investor to pick you among hundreds of other deals. Don’t make your life harder by insisting on them signing a document that they don’t need to.
How Much is an Idea Alone Worth? There's some bizarre mythology that's been created in the startup realm that ideas themselves have an incredible monetary value. Spoiler alert: they don’t.
4 Legal Questions Every Startup Should Ask. You will likely invest your heart and soul into your company to make it successful. Don’t undermine all of that hard work by failing to ask the right legal questions from the start.
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.