I can’t think of a bigger red flag to a new business than an entrepreneur unwilling to share their idea. In our digital age of transparency and instant access to just about any kind of information, protection against copycat businesses is at an alltime low – so if someone can out-compete your startup simply from hearing about or seeing the idea on a crowdfunding profile, it’s time to head back to the drawing board.
While great companies can benefit from good ideas, they absolutely require superior execution to survive.
Execution is the best protection
It’s extremely uncommon for competitors to scale immensely and then sink a similar startup after simply copying the startup’s idea.
Take a company like Amazon.com for example. Jeff Bezos couldn’t be worried that someone else might begin to sell books online – in fact, there are many websites that sell books on the Internet. Bezos knew competition for this idea was inevitable and that Amazon (just like most other companies) would have to be successful at execution rather than nondisclosure agreements and secrecy.
There have been many fantastic ideas that failed due to poor execution – Napster, for example. Napster didn’t fail because they were unable to keep their idea a secret for long enough. Instead, they initially failed due to poor execution in the form of legal shortcomings.
Your idea will be copied
Bill Gross, founder of IdeaLab, had a brilliant idea in the late 90s. He developed the concept of pay-per-click advertising and founded Goto.com (later renamed Overture). Pay-per-click was a brilliant idea, and like any other brilliant idea, it was stolen – in this case by Google.
Google took the idea of pay-per-click advertising, applied it to its own quickly growing search engine, and grew at an even more exponential rate.
Gross did everything advisable to protect his idea, including filing a patent. Even after Google lost a patent dispute and paid Overture $300 million, the damage had already been done. Google had executed more effectively and garnered profits, reputation, and brand loyalty from Gross’ idea.
In short, your idea will be copied if it’s great – whether that’s during your crowdfunding campaign or after you’ve launched, it’s going to happen. It’s best to focus not on what could happen if someone likes your idea enough to copy it but rather on how you’re going to use your own unique advantages and abilities to execute your idea better than anyone else can.
Keep the secret sauce a secret
Some businesses legitimately have a secret sauce. They’ve discovered unique molecules for a new pharmaceutical drug or created an algorithm that provides more relevant results when searching the Internet.
While these circumstances are rare in practice, they do exist. In a large majority of these cases, I would recommend explaining what the product does rather than how it works.
Simply saying, “This product reduces the recovery time in half for patients with xyz disease,” in introductory discussions works for generating interest in a crowdfunding campaign. If investors are willing to spend more time on the idea and need to know the details of how it works, then a nondisclosure agreement may be in order.
Engage stealth mode
It makes sense to keep your intentions and plans to yourself if you’re interested in a first-mover advantage, though being the first to market may not translate into a sustainable position after you’re there.
Execution still plays a huge part in ideas that are first to market. You must be able to compete effectively when the market gains more competitors – and if there are no competitors, then perhaps the market you’re serving isn’t that great to begin with.
Good execution will speak for itself
Excellent entrepreneurs believe in both themselves and their ability to execute better than anyone else. By telling others that you cannot share your idea for fear of someone else stealing the idea and outperforming your company suggests that you don’t have confidence in your ability to execute.
Instead of fearing competition, welcome it. Through excellent execution, you should be able to beat anyone who steps up to take you on.
I don’t fear the entrepreneur that keeps their idea from me – I fear the entrepreneur who tells the world what she’s going to do and actually makes it happen. That’s the entrepreneur we should all want to be.