How/when to disclose business ideas?

Mike Shields Founder at Startup

March 31st, 2015

Per a previous thread (members.founderdating.com/discuss/2577/Learning-to-code-vs-finding-a-true-tech-cofounder?na) perhaps the first startup priority is outside validation of the business model.

To illustrate, among the ideas I am evaluating is a photo sharing app that will replace facebook . . . no, just joking ;) But it is a new take on an existing large web based industry -- which an attorney suggests might be patentable.

I contacted an FD listed advisor with sterling ethics/reputation & after he responded I asked if he could suggest legal representation knowledgeable about the industry. I've not heard back since (so might have blown the contact) but similarly don't think any of spilling the beans, asking for an NDA or wasting his time alluding to the opportunity would have been the "right" strategy.

Comments?

Robert Raisch Principal at Raisch Consulting

April 1st, 2015

The problem with most idea-preneurs is that all they have to offer is their idea and thus believe it must be protected at all costs. But ideas are literally a "dime a dozen". Only execution has value.

Samie Syed

March 31st, 2015

I wouldn't worry about somebody stealing your idea. Chances are that most people can't be bothered to execute it.

Sam McAfee Building better technology leaders and teams

April 5th, 2015

Attorneys always suggest an idea might be patentable. :-) Unless you've got the specs for cold fusion or the hover board, worrying about protecting your idea is probably a waste of time. Patents are extremely difficult and expensive to protect. The only value I can imagine is through a later acquisition by a company that strategically needs just the patent you have. You're better off trying your luck in Vegas.

That's your idea. Then, there is execution...

Here in the Bay Area, and I've heard this is in contrast to other places, we have a culture of extreme openness. Entrepreneurs go around blabbing about their latest ideas all the time. Nobody really signs NDAs anymore. But everyone is comfortable talking about what they are doing. Know why that is? Because we all know that what counts is execution. The best entrepreneurs build talented teams because they are able to sell the vision to those teams, and lead them to execute on that vision. Here, talk is cheap, and patents are a distraction and a waste of time (again, there are exceptions, I'll admit. But I don't run into them very often).

The other thing is passion. When I advise people, they typically end up telling me their whole idea in the first coffee. I have a decade and a half of engineering experience and I am very well connected to other designers and engineers. I could put a team together and execute their vision. But I don't, and they aren't worried that I will. Why? Because I don't care about it as much as they do. It's their vision! At the end of the day, they are going to have to slog day and night through building the company. It's not just "a good idea", it's how you feel about the idea, and whether you're willing to do what it takes to make it real.

The final piece is feedback. The sooner you have shared your idea with other people who know how to build products and companies, the sooner you'll learn about all kinds of dangers, pitfalls and risks in your idea. If you keep it closer to your chest, you have less of a chance of learning about how valid the idea is, earlier on.

Go ahead and disclose what you're doing early and often (again, there are technical exceptions, but I doubt you're sitting on one). What you get from sharing information early is nearly always more valuable that what you're keeping secret.

Samie Syed

March 31st, 2015

To add to Eric's point, if you are concerned about someone stealing your idea just tell it on a need to know bases.

Even if the complete idea won't be stolen, elements of it can by competitors.

Babalola Bakrin Business Development Executive at IMPRESSIT EXPERTISE LIMITED

April 1st, 2015

I've discovered over the years that "Ideaprenuers" or "intending entrepreneurs" find it hard to keep their mouth shut about their ideas (unfortunately, I'm included) because they are excited about.

But it would do us a lot of good to share our ideas on a need to know bases or get it to prototype phase before babbling about it.

Neil Gordon Board Member, Corporate Finance Advisor and Strategy Consultant

April 3rd, 2015

Discussions surrounding disclosure are risk management discussions. You give up a secret, you may adversely change your future. Get information or capital, you get the opposite effect. You just want to keep the balance in your favor.

Know the rules before you disclose an invention. That said, even if your idea is protected, a discussion with a third party might lead them to think of an even better way to solve the problem! Stay in your basement though, and you won't get market validation.

As I said, weigh the risks and act accordingly.

Michael Indrajana Patent Attorney, Law Offices of Michael Indrajana ESQ.

March 31st, 2015

Hi Mike,

If your idea is indeed patentable as the attorney suggests, I think you should conduct a professional patent search on your idea as soon as you can, and if everything looks clear, file a provisional patent application. Once you file the provisional, you are free to discuss and evaluate the business model of the idea.

As an entrepreneur myself, my best advice would be to build a prototype or a model as soon as you can, and test it to fail. You learn a lot more from a failure because you're getting real data why things don't work. Of course fail fast, and fail cheaply. Also, it is easier to discuss with a patent attorney when you have something tangible rather than an abstract concept.

Adam Sussman Managing Director at SourceDemand | Startup Advisor | Web Product & Marketing

April 1st, 2015

You should have a few “go-to” people in your life whom you genuinely respect, and that there is a sincere connection. For me, these are old business partners, colleagues and friends who’ve taken the time to dig in on the evolution of my businesses.

These unofficial advisors can be solid sounding boards to help you vet out the viability of your new concepts.

Before running around town promoting the “idea”, you should have a firm plan to execute and have a keen understanding behind the level of complexity it will take for someone to compete with you.

If the barrier to entry is low, then keep quite and build it until you’re well ahead

If the barrier to entry is high, (you’ve built a proprietary solution to something that that could have only been developed through years education and R&D), then you should feel more comfortable speaking with those in the public who can help you advance the business.

Maylia Tsen Business & Management Consultant, Facilitator for Peer Advisory Groups

March 31st, 2015

If you need a patent attorney, I can provide that information. I know a patent attorney that specializes in technology and have worked with major companies. You can email me at mtsen25291@aol.com or call me at (949) 637-2624.

Mike Shields Founder at Startup

March 31st, 2015

Fair enough, ironic thing is I inform techies pitching me that I have zero interest in stealing their ideas (based on both ethics and the hassle) but from my side had concerns about seeming unprofessional if I divulged proprietary details imprudently (i.e. contrary to the instructions of the aforementioned patent attorney).

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