This article is taken from the ‘Entrepreneurship Unlocked’ series that runs parallel on my Instagram, YouTube, Medium and blog. I hope you enjoy these teachings.– With my regards, Elliot Padfield
This question comes up all the time with new entrepreneurs, especially those who think they have an idea for ‘the next big thing’. I understand why people are concerned – you think that your idea is bound to be a success and your consumers will love it.
While I would be surprised if you have done the research to prove that statement, I respect your understanding that you can’t just create a fictional problem and then solve it.
Stealing ideas is a concern that comes up at every stage off business: investment, market research, or product development. Basically, anything that requires another human being is feared. If you are serious about succeeding, you will need to get over this fear because, at some point, someone will need to know about your business. All these fears are irrational because one of the following will apply:
- Nobody wants to steal your idea because they don’t care.
- Your idea is original and you own the IP.
- They don’t have the ability to steal it ‘well’.
The main point of this article is to discuss our third point because it extends to so much more than the theft of ideas but is instead an entire ideology for startups. We’ll get to that in a minute though.
1. Nobody cares
As much as I hate to say it, your startup idea probably isn’t that good. Before you start thinking about investors or the logistics of executing your plan, sit down and be aware of the value of your product. Is your startup actually solving a problem or did you just say ‘that would be cool’ after the idea popped into your head? While you are doing this, be careful of confirmation bias which is the idea that you will take note of the articles and surveys showing your idea is great and subconsciously dismiss anything that opposes you.
If your idea falls into this category, nobody wants to steal it because it is worth nothing. No need to be worried about theft or your idea at all.
2. Your idea is original
This category is the rarest but by far the coolest category. If your startup is as innovative and disruptive as you claim, it will fall into this category. If it does, ensure you own the IP for your brand and have a legal right to it. A lot of you will realise at this point that you are unable to reserve the IP as it is not as original and unique as you thought. This is still okay, most startups are built around taking existing solutions and improving them. These products can still disrupt the market but can’t be classed as truly original.
Sometimes, your solution is original but the key part is that the problem is not. If you believe you have the only solution to a problem, the problem probably does not exist as even if the solutions available are temporary and weak, they would still exist.
If your idea does fall into this category, there is no risk of your idea being stolen because it is protected by law. If anyone attempts to copy your idea after an investor pitch or focus group, a stern warning on fancy letterhead will put a stop to it.
3. Nobody can steal your idea ‘well’
I’m going to treat this idea as an ideology for innovation from the offset because as much as it is reassurance that your idea is not going to be stolen, it is also a reality check as to whether you are ready as an individual to run your startup.
To put it simply, your idea means nothing. We all come up with ideas and some are better than others but there are just that – ideas. This is why pre-seed and seed investors expect large equities for their investments; they are taking the most risk because you have no proof of success. As an investor, I have had people pitch ideas to me at valuations of $2 million for nothing more than a business plan and a domain. Anybody who believes their idea alone is worth this much money is delusional and needs to take some basic lessons in business before they try to build a startup.
Having a great team of industry leaders on your board or telling me that consumers have a real need for your product decreases the risk of my investment and my equity will decrease but until customers start handing money over, I have no facts to support the planned success of your business. That’s why I and so many other investors advise founders to try and convince consumers to hand money over before the product is even built. This is the best proof that there is a need in the market. That’s the power of crowdfunding: If there isn’t a market, a need, or a want, you will not have the means to continue on your path of failure.
Look at it like this, the idea provides a small multiplier to the value of your business but the execution is the massive deciding factor in that value. You can make a bad startup work with great execution but you can make a great startup work with average execution. That’s why the industry giants can create identical products to those on the market or launch terrible ideas and still succeed. They have the best people, the best brand, the most experience, and the most money.
I’d like to explain this further and then talk about why this means nobody will steal your idea. Use this simple calculation table to understand the differences in value between an idea and its execution.
This just proves how worthless an idea is. If you are in the right position to run this startup, you will have the execution nailed. The chances of you finding an investor, a consumer or a random person on Reddit with the same network, the same knowledge, the same skills, and the same vision as you are next to none.
If you are confident in your own execution, you could tell everyone about your idea and still succeed. As long as you can get to market quickly with a good product, you will be fine. If you can’t do this, there is an issue and you need to understand it before you even begin. This is why investors, designers, and potential cofounders won’t sign NDAs for non-proprietary ideas because its the sign of an inexperienced entrepreneur who thinks they have done half the work for their success because they generated an interesting idea.
I understand this article has been quite a negative one but when you are entering the high stakes world of startups, it’s better to be demotivated than out of $200,000. I hope that you’ve gained an understanding of the balance between ideas and execution while also realising that the theft of your idea is not a big concern for anyone.
I’m going to leave a few links for further reading around this topic below and I will be explaining this in more depth in the video and audio forms of this post which will be available on my website very soon.
If you need help with launching your startup, get in touch and I’ll work with you to make your next project a success.