This is pure nonsense. Please, please, please stop talking about ideas. What people steal --and the only thing with huge value-- are MARKET OPPORTUNITIES. Ideas are easy to generate. Everyone has loads of them. When an idea is combined with the work necessary to identify if a market opportunity exists it can become invaluable.
Ideas are not stolen because an idea, all by itself, does not identify whether or not anyone wants the thing or the service. If I told you that I had an idea to make a dish-washing sponge in the shape of a smiley face you, more than likely, would walk away laughing. So would I if someone came to me with that idea. How would you react if I actually manufactured them, sold a bunch and showed you that people want them? Right. You'd pay attention. You wouldn't laugh. And you certainly wouldn't walk away. Well, I saw exactly that happen at the Shark Tank show recently. I think the guy got a $300K investment.
$300K for the idea for a friggin smiley-face sponge?
Nope. $300K for the market opportunity he uncovered.
If you present someone with an idea and that idea is so good that it identifies the market opportunity without further work, well, it might get stolen. With most other ideas they'll listen and nod and possibly even think you are a moron and completely forget what you told them.
If, on the other hand, you show them an idea coupled with your work confirming that a good scalable market exists, hold on! The market opportunity will either be stolen or you'll have someone all over you wanting to become an investor or participate in some manner in the opportunity you identified.
"Ideas" and "market opportunities" sort of go hand in hand, don't you think? The market opportunity is assumed when someone talks about an idea for a business.
Yes, and validating the assumption of a market opportunity is called finding product-market fit. Failing to do so is a leading cause of death among startups. An actual market opportunity, not an assumed one, is certainly valuable - which is why a VC will invest in it where they wouldn't invest in just an idea.
> "Ideas" and "market opportunities" sort of go hand in hand
Only when the idea precedes the exploration of the opportunity space.
Have an idea -> Build a prototype -> Show it around -> Close some sales.
Here the idea is related to the market opportunity. It triggered a search for the opportunity when someone was interested or puzzled enough to do the work. Few will invest in an idea unless there's some kind of "sugar on top" that reveals really good potential for a market opportunity. Many will invest in a reasonably tested market opportunity.
When are an idea and a market opportunity not connected? When the idea does not precede the market opportunity.
I'll give you a couple of concrete examples from my own life.
A friend of mine came over one day many years ago and said that his contact at one of the local film studios told him that they were looking for a carpenter that would make them 100 sets of this specially designed piece of furniture for an expansion project. My friend knew that I, when not coding or designing products, liked to, among other things, do woodworking projects. I also had a pretty niche setup in my garage at the time.
So, here's an opportunity presented to me which had not originated with an idea.
What did we do? We spent that weekend making an unsolicited sample of the piece the studio needed. He delivered it on Monday to his contact along with pricing. By Wednesday we got the deal. By Saturday I had a pile of furniture-grade plywood in front of my house that was eight feet tall. We setup an assembly line and spent a week (with some help) cranking out the pieces. My neighbors were puzzled and probably somewhat concerned. A couple of them came over to help for a few bucks. Delivered on time and walked away with $60K profit. Sweet.
Any able carpenter would have taken that opportunity and run with it. We just ran faster and put a solution in front of the customer as painlessly and well-executed as possible.
Another time I had someone call me to tell me that there was a company in need of a box built to translate a communications protocol in real time. RS422 in and out. Status display. Power button. The conversations went something like this:
Me: "How many?"
Him: "Probably 25 per month"
Me: "How much are they willing to pay?"
Him: "They've been trying for months but it's a bunch of
Optics PhD's and this isn't their thing.
They are desperate for a solution".
Me: "Why?"
Him: "They have sold a bunch of these units at about $500K
a piece and this has been one of the only reasons
they can't deliver."
Me: "I can meet with them tomorrow AM"
End result: I sold them a protocol converter box for $3,000 a pop for the first 25 units, $2,000 each for the next 75 and $1,000 each thereafter in lots of 100 units.
I built it in a weekend: 1 RU enclosure. Off the shelf 8051 board. Small custom board with RS422 drivers and receivers. LCD display. Power supply. Connectors. I don't think the total cost exceeded $150. It would have been a sweet ride except that about six months later they got acquired by a large multinational and, effectively, shut down.
Again, a market opportunity that did not come from an idea.
Now, what if I said? "Let's build an RS422 protocol converter box and sell it for $3,000". And I did this in complete isolation of having identified a market need? Well, it'd be a flop. Sometimes fining opportunities is like finding a needle in a haystack. Someone almost has to sit on it for you to become aware it even exists.
I actually tried to convince them that this stuff was very simple and that they could do it. No interest whatsoever. I think what was going on behind the scenes is that they were in talks to be acquired (or planning to be in talks) and they really wanted their product to work. They probably also had a number of challenges of their own to deal with. In that context, it may have made sense to pay whatever was necessary to get going.
completely agree with this argument. I really like the authors argument that when the time is right many people will have the same idea at the same time. copying an idea is trivial, copying the execution, the stamina, the bravado to get shit done, and the balls to get other people to follow - significantly more difficult
The guy on shark tank with the smiley face sponge had one patent and two others pending. The idea wasn't the smiley face, it was a material which changed properties depending on temperature.
What you refer to as market opportunity is also commonly considered to be an idea. For example, lets say you find a group of folks willing to pay $1,000 for widgets that cost pennies because you discovered that (a) they don't know about these widgets and (b) it solves a major painpoint. Both are considered ideas.
> What you refer to as market opportunity is also commonly considered to be an idea.
Nope. Wrong.
The idea in your example is: "I want to make a widget that does x".
The opportunity is: "I made some widgets that do x and 100 people bought them at $1,000 each during the last 30 days".
An idea without an opportunity is: "I made some widgets that do x and I only found one person during the last 30 days who said they'd be willing to pay $50 for it".
Another idea is: "Let's make a website that allows employers to keep track of employee productivity"
The opportunity might be: "We built a prototype of a website that allows employers to keep track of employee productivity, showed it to ten companies and two of them bought licenses for $2,000 per month".
The lack of opportunity might look like this: "We built a prototype of a website that allows employers to keep track of employee productivity, showed it to ten companies and none of them saw enough value to even test it for free".
In other words, opportunities represent a very direct link to actually having a real business that can scale and grow.
Go ahead, quit your job and take idea number two above. Spend three months developing a prototype. No clue if there's a market opportunity there. It's probably worth millions. Maybe.
So, really, an opportunity is a tested idea. I completely agree.
It's hard to come up with an idea without at least some intuitive sense of what kind of need/desire its fulfilling. I think people deceive themselves here because they have a naturally inflated sense of how great their ideas are.
To use your phrasing: people think their idea is great enough to require very little testing to become an opportunity - their intuitive sense of how great their idea is is enough to begin immediately calling it an opportunity.
Well, another way to put it is that you come up with ideas and only others can validate them into opportunities. You can't turn an idea into an opportunity. The market, your customers, determine if there's an opportunity in it somewhere.
But I'll reiterate what I said about opportunities: The can and do exist in the complete absence of ideas.
The value is in opportunities. There are people who would love to steal your opportunities. They don't give a shit about your ideas. That's too much work. They want you to hand-feed them the juicy opportunities. It's almost like the difference between R&D and just "D". The first is hard. Once the "R" is done, the "D" tends to be a lot easier to execute brilliantly.
I have a database of probably about 600 ideas accumulated over time. Most are probably crap. No market opportunity. I am in the habit of logging ideas without passing any judgement at the time they are generated. Why? The Pet Rock. As my wife likes to remind me, I am to fucking smart to have ever considered the idea of selling rocks as pets in a little box. And she is right. So I try to not judge ideas until I really take the time to evaluate whether or not an opportunity exists.
As I navigate through my idea database and start testing them I start to discover the ones that might represent real opportunities and focus on them.
Sometimes opportunities require a lot of work to validate. An example of this are most iPhone apps today. You get two days, maybe three in the "New" list under your category and then it's a quick trip to page 253. Invisible. Gone.
Does that mean that there is no opportunity in application x based on idea y? Not necessarily. Having an app published on the app store is not validation, it just means that your app is now available for others to see, if you can get them there. In order to validate the idea you have to now do the legwork to create awareness and bring people to your app. Only after a real effort to get hundreds or thousands of people to have a look can you honestly say if your idea for an app that does x represents a real market opportunity. Some get lucky and take off on day one. Hardly the norm, of course.
This, BTW, as a developer, is one of the most frustrating aspects of dealing with people who approach you with app ideas. They don't understand that thinking that something is great doesn't mean that a million people are going to run to buy it.
A case in point is this guy who approached me about doing yet another storybook for kids. There's a million of them out there. Great idea right? The market opportunity is certainly validated. Right? Lots of people buying them. Right? Well, no. Not really.
The other element of this that hasn't been discussed is barrier to entry or barrier to market penetration. Sure, you can come up with a new series of children storybooks with great art, voicing, interactivity and music. The idea and the opportunity are identified and validated. The problem is that it will cost a bundle in marketing to unseat the top ten or top five sellers in that category. An absolute bundle. So, even though a market opportunity exists the idea and the opportunity are nearly worthless unless someone comes in with a truckload of money to make it happen.
When the guy asks me to do the dev work for 10% of the revenue...well, thankfully I can multiply by zero at blinding speed. No thanks. I told him that I'd do it for 25% and a non-refundable revenue advance payment of $50K upfront. He left. That was me using my Jedi powers to have him leave me alone.
We're probably just fighting over semantics. What you call opportunity sounds more like a proven idea versus your typical idea that needs proving.
Take the many instances when we say something like: "I have an idea: we could try selling blah to blah people." Is that an idea or a possible opportunity? I'd argue it is both.
Or "I have an idea: let's sell to blah people because I know they'd love this". Is that an idea or an opportunity? I'd argue it is both.
No where in the definition of an idea does it specfically exclude anything related to market opportunity.
"On July 20, 2006, Sheila Marcelo and Nick Beim flew from Boston to Chicago to visit a company called Sittercity. The business, which charged parents to access an online database of sitters and nannies, had been launched in Boston five years earlier.
“We took the meeting to talk about an investment,’’ says Genevieve Thiers, the Boston College alumnae who founded Sittercity. She’d met Beim, a partner at Waltham-based Matrix Partners, that year at a trade show. “Nick talked about how Matrix worked with companies and founders,’’ Thiers recalls.
Marcelo was serving as an entrepreneur-in-residence at Matrix, hoping to join or help start a business that Matrix would back. “I wanted to do family, health, or education - those areas were my passion,’’ Marcelo says.
Three months after the trip, Marcelo started a website, Care.com, to compete directly with Sittercity. Matrix Partners and several prominent investors poured capital into her new company - totaling more than $16 million so far. It wasn’t until late last year that Sittercity raised its first round of venture capital."
Is that a counterexample? Suppose they hadn't taken the meeting. What would have prevented Marcelo from starting Care.com?
As far as I can tell, nothing. Sittercity had been operating for 5 years in public view. Obvious idea, proven market, easy to find Sittercity users to interview.
(However, bringing an EIR to an investment meeting strikes me as incredibly dubious.)
Completely agree here, this is not a counter example of 'stealing' an idea but one of 'executing' on an idea.
And not surprisingly this is what folks worry about, that someone with more resources than them will hear about their idea and be able to execute on it before they get off the ground. That would be true, if the person who had the resources didn't have anything else to do, but as a rule that is very rare, people with the ability to execute and resources do.
The care.com example is an example of an entirely different situation. That situation is that a business concept is proven out but doesn't have the capital to scale and the owners aren't doing the scaling. There are a number of folks who look for this type of business and build it in a different market. There was even a story linked here about a German company that did this. Much less risk since the idea is already 'proven'.
But if nobody is doing your idea, many people will think it won't work because if it did then someone else would already be doing it, so they won't 'steal' it because obviously its not a viable idea :-)
Ok But I think you are missing the point. They reached out to a firm "Matrix Partners" to help them execute by financial means and that firms individuals chose to spin off an exact duplicate of their startup?! Sham! ~That firm should be frowned upon and ridiculed and avoided by all entrepreneurs.
That's not true. If the business has been running 5 years, that tells you quite a bit. You can mine all sorts of activity information from the site, and you can get more through user interviews.
Moreover, startup investors are completely happy to invest based on estimations of total available market. It's pretty easy math to look at the number of kids, the average cost of sitters and nannies, and typical consumption of caregiving services. If you can also say, "And these guys have been running for 5 years despite [flaws A-M]," that's just gravy, even if you don't know any of their internal numbers.
Do you really think "babysitters, online" is a novel, protectable idea?
And regardless, to start a company you have to let people know what your company does. You can't just say "give us money, we can't tell you why but it's totally worth it". So the idea has to be released eventually. What would you have had them do differently?
These guys were around for 5 years and somebody else beat them within 3 months? That's not a stolen idea, that's a failure of execution.
There was fare more discussed in that meeting than just "babysitters, online". They where in bushiness for 5 years and could easily answer things like 'What's the most useful way to do background checks?'. Which is not 'just an idea', but a validated and valuable one.
Heck, go back to when Steve Jobs visited the Xerox PARC labs in late 1979 and saw the mouse and windows-computing for the first time.[1] Not that PARC was doing anything commercial with it, but those ideas definitely got incorporated into Apple's products.
Jobs goes to PARC on a Thursday, and on Friday afternoon he is ordering one of his people to create a mouse for him. Now Xerox had invested in Apple and Apple got a tour of their research lab in exchange for that investment, but ideas do have value if you're not executing them efficiently and someone else can.
"...
Apple was already one of the hottest tech firms in the country. Everyone in the Valley wanted a piece of it. So Jobs proposed a deal: he would allow Xerox to buy a hundred thousand shares of his company for a million dollars—its highly anticipated I.P.O. was just a year away—if parc would “open its kimono.”
...
"
I don't think either party had any delusion about the purpose of the "meeting".
Perhaps it's interesting to think about what the actual 'idea' here was. Did Xerox ever have the understanding that using mouse-windows computing would usher in a new era of computing? If not, perhaps it would be more accurate to say that the real idea here was Jobs', and that it was built in part with building blocks created at Xerox, which is true for most progress - it's always built on previous progress by 3rd parties.
From what I can remember of the Steve Jobs biography (and assuming it's accurate) yes, many people at Xerox understood that they had developed something revolutionary.
I wish we could get the story from Xerox's side. If they understood they had something revolutionary on their hands, why did they not try to market it themselves? What resource were they missing?
The attitude that nobody's going to steal your idea might hold true for a certain audience, but having worked in environments where not only will people steal your idea, but often relationships are formed for that very purpose, I would take that advice with a few grains of salt.
As with everything, context is key -- if you're talking about building a new widget for platform_x, and you're in a conversation with your grandparents, you're probably in the clear (for a specific definition of grandparents).
If you're having that same conversation with the world's most prolific exporter of widgets for platform x, it might be better to listen than to talk.
In contracting environments, specifically in Federal government, the IT ecosystem is an adversarial one, all the work is bid upon, subsequently awarded to a Prime contractor who may or may not sub out some of the work to sub-contractors. It's not impossible for some of the subcontractors to have their wagons hitched to multiple ponies, on the assumption that they'll work with whomever wins.
Idea sharing and NDAs are critical in this sort of environment as the novelty / uniqueness / effectiveness of your particular solution to the problem being bid upon is your key differentiator. Otherwise, you likely end up in a price race, where either the largest contractor or the most ill-adept at bidding will win.
I actually did have someone steal my idea. I was interviewing for a technical co-founder and talked to a guy who seemed really interested. However, after a couple of conversations I got a weird vibe from him and went with someone else. (Oh, and I had $1M in funding at this point, & I was looking for a full partner, not someone to "just build my idea.")
A few months later I find that he has started a similar company, with a similar name, and is out raising money. He even said that he came up with the idea when he was 'inspired' by his young daughter. (Dragging your kids into your lie is always scummy.)
(This was for a very unusual startup idea, btw, not a game or social app, etc. I am also a recognized expert in this field, 15+ years of experience, national newspaper/magazine profiles, blah blah blah.)
He ended up getting money in Singapore and launching a pretty sucky site that got zero traction. It's been a couple years now and I haven't seen anything else from him (but I've been too busy with my company to really look).
At the time, I was LIVID but after I cooled off I realized that 1) it was pretty great external validation and 2) someone who would "steal" my idea (and make up a story about it!) would never be able to execute, and I was proven right about both things.
My company is now nearly five years old and we're working on our third product extension off the original idea. :-)
I find that people who copy, or try to, didn't come up with the idea themselves - which means they didn't have the experience and knowledge, nor have the creativity in coming up with the solution on their own. This will limit their ability to pivot due to not necessarily having a full grasp of the important metrics, etc.. And really just their mind isn't structured to do that, and if it was they'd probably have their own ideas that could become successful - assuming they're able to learn how to execute well. Also, most stories that aren't genuine don't feel authentic - especially because they don't have the history to match it, like you mentioned with your 15+ years of experience, etc.. My own story and plans have evolved because of everything that's happened in my life, and I can talk about each important moment
It's very frustrating, and becoming livid has happened to me too.. It's even worse because many of the times they are people you're closer to than not, so there's a bigger element of trust broken there, too.
Congrats on being 5 years down the road, and continuing to evolve things further! Is the 5 years from initial MVP launch or when you came up with the idea? Your story is inspirational for me. In about 6 months I'm coming up on 3 years from when I decided to work on my projects full time, which have expanded tremendously, so at the moment it's still a lot of planning, organizing, preparing... lining up a lot of dominoes so then things will take off once ready.
Great example! Thanks for talking so frankly about your experience.
I think of that guy as the business equivalent of the "I could code that in a weekend" scoffers. A novice looks at something like Quora or AirBnB or Etsy, imagines the database tables, and says, "That's easy!"
In reality, they just have failed to appreciate all the subtleties that make the product work. It's the same sort of mindset that looks at a beautiful woman and says, "An inflatable vinyl blow-up doll is basically as good!"
Hey, would you be willing to be interviewed about this experience? Anonymously, if you like? I'm thinking about doing a book, and this would fit well into the sample chapter I'm writing right now.
So you agree with the OP that there is no danger in sharing your ideas before you have traction, etc.?
Also, I have seen plenty of posts talking about these types of situations and the person, just like you did, never explains their business or provides a link to it. I would be curious to see what the actual idea was to better understand your situation.
I think the danger is situational. If you're the kind of person who will give up when you see someone swiping your idea, there is danger. If it makes you work harder ... then it might be an asset. :-)
You have to have faith that it's not just your idea that's valuable, but your idea + you and your experience and what you bring to it.
I don't agree. Mainly because I don't agree with the premise that ideas are worthless - something that is echoed around all the time. Ideas being worthless is the lazy and easy way to explain to someone why they should get feedback on their idea.
The reality is ideas do have value. We've got a great idea for a new product, and we're not telling anyone about it. That's because our idea has value and we don't want anyone else to make it before we do. Come back to us in a year or two and I'll happily explain our reasoning behind this.
If an idea is worthless it means it literally has zero value. Value doesn't have to be a positive value, it can be negative as well. Given 2 ideas, which of these would you rather develop:
- A mobile phone for elephants
- A service which sends you an SMS when your website goes offline
If both ideas have zero value, it doesn't matter which one you pick when you set out. The reality is if you are going to set out and make mobile phones for elephants you are going to burn through your cash a lot quicker, and have a much lower chance of ever making money and succeeding (if you measure success through sustainability and profitability).
These two ideas are not equally worthless, therefore one has more value than another. Two things with differing value cannot both be worthless unless they both have negative expected value. Not all ideas have negative expected value and you easily build a case arguing that the SMS service idea has positive expected value. "All ideas are worthless" is not true as all ideas have varying levels of negative/positive expected value.
Sharing your idea is usually the right thing to do, but it does come with some potential downsides. Just because it's usually the right thing to do doesn't mean it's always the right thing to do.
Someone might steal/copy your idea. It's probably a lower chance than most people estimate especially in the very early stages of startups.
> Mainly because I don't agree with the premise that ideas are worthless - something that is echoed around all the time.
I don't know the genesis of this, but the first time I heard it was in an interview with John Doerr a number of years ago. And from a VC's perspective, that makes sense. They don't want to invest in an idea; they want to invest in something that has traction.
From a startup's perspective, though, ideas definitely have value. Startups just need to be cognizant of the tightrope between guarding the idea and getting early feedback and buzz.
Edit: I should add that I've had to sign NDA's that I thought were ridiculous, so the blog post isn't without merit. I just get tired of the ideas are worthless meme because I think it's over-applied.
It's always business people who say that ideas don't matter, without any indication of the conflict of interest involved in that statement. It shifts the balance of power if the opportunity can be transposed to a separate business, or to separate people. A businessperson knowing an idea commodifies the technology, which doesn't happen when they're tied to an implementation or black box.
Here's the thing: if your idea is not a controversial and potentially groundbreaking one, then you are not the only person who has it. Chances are, someone else has already thought of it and is working on it. The example you gave with the SMS service is like this: it's a decent idea, but not exactly difficult to come up with.
On the other hand, if your idea is controversial and potentially groundbreaking, then it will sound so insane that people will think you are crazy. So from the beginning you are firmly insured against people stealing it. This was basically Airbnb. They started out renting inflatable beds to conference attendees. Almost nobody thought they would succeed because the idea on its face sounds crazy. But the Airbnb guys kept going and their idea evolved and today they have a successful business.
That the other thing: ideas by themselves are not worth anything because there isn't a single idea out there that survives the execution phase unscathed. The vast majority of the time what happens is that people start with one idea, realize how shitty it is, and end up executing on something else to become successful. But that's just hindsight: if you had asked their pre-execution self what their idea was worth, they would probably throw out big numbers because they have not yet seen how worthless it is.
If the value of the idea is trivially obvious, then so is the idea itself.
There are ideas and there are ideas. If it is the paradigm shifting kind, it is probably controversial, non intuitive and may not even make sense within the context of the status quo (e.g., Information Theory, Earth is round, Quantum Mechanics). You really have to shove them down the people's throats to gain any support. You don't worry about these getting stolen, because, most likely, you are getting ridiculed for stating them anyway.
Then there is the iterative kind of ideas (e.g., service which sends you an SMS when your website goes offline). Marginally innovative, just the organic next step from where we are. They are worth something, but probably much less than what people think. Surely you can make a lot of money with these kind of ideas, but the chances are that many other people have come up with this "idea" as well, and it will be up to luck (and execution) to determine who makes the bank.
Think of the idea as a multiplier for how well you execute on ideas.
if you idea sucks, it's a zero, and no matter how well you execute, you arent going to end up with a successful product.
If you have a great idea, let's say it's a 1, your execution is poor, you don't fully realize the potential of the idea.
The problem is that you don't know whether the idea is good until you execute it (since the end result is a zero until you do something). And while you can weed out some really bad ideas by executing them a little bit, it's a lot of investment to determine if an idea is actually no good or you just haven't worked on it hard enough.
There are so many ideas out there, it would just be too much work for people to start working on every idea they've heard to see if there is something to it. Plus, people are usually biased in that they have their own ideas they are interested in executing on, and so yours aren't as attractive since they haven't thought about them as much as you have
I am not buying your idea valuation logic. "Worthless" means lacking significant positive value.
If business ideas had significant value, you'd see people buying them. They don't, though. They might by a proven opportunity, or they might buy knowledge. But ideas on their own? As unsaleable as used chewing gum.
I really don't believe people should worry about business ideas being stolen. If your idea is so simple that J. Random Hustler can steal it from a description, a) the idea's probably too simple to matter, and b) many other people will have thought of it.
To successfully execute on a startup idea, you need solid knowledge of the domain, and the ability to keep having great ideas. There is a ton of iteration before product/market fit, and I think copycats just don't have the depth to successfully iterate there.
It is true that for people to buy ideas they must have value. But the transaction must also be feasible. The trouble with ideas is that I can't easily prove to you the idea is valuable without having already given it to you, thus destroying your incentive to complete your end of the transaction.
It may be that there isn't a market in ideas because they have no value. But it may also be that there isn't a market in ideas because it's too difficult to facilitate the transaction.
I suspect that's not particularly difficult to solve. Escrow is one solution. Profit sharing is another. Independent valuators would be a third. I imagine any energetic business lawyer could come up with a number of other approaches.
The problem is that nobody wants to buy raw ideas. Any decent entrepreneur has ideas coming out the wazoo. People who aren't decent entrepreneurs could probably use ideas, but they'll very rarely recognize that they need them.
There is a great market for proven ideas. That's why a major route for startup exit is acquisition. Once you've achieved product-market fit, plenty of people can see the value of your idea.
I think we can put it another way: An idea is worthless until someone is willing to pay for it.
Worth is in the eye of the beholder. To me, both of your ideas really are worthless (no offence). I wouldn't be inclined to pay for either of them, and do not really have an interest in working on either. That said, the market is vast. If you can find someone to pay you for the idea then I will agree that the idea may have value.
The problem at this stage is that without any execution on those ideas, both are equally likely to fail. For all we know the market for pachyderm telephones is large and nobody wants SMS downtime messages. There has been no market research done at the point of idea conception. Doing so leads into execution, where the value is generally thought to be created.
The other problem is that everyone with skills to build such ideas already have a million of their own. Most wouldn't even consider buying an idea from someone else. If the chances of failure is high, at least you are working on your own failure and not someone else's. That is why ideas are generally considered worthless.
The real problem is that it's REALLY hard to tell which is the better idea when things are just at an idea stage.
I bet that when they were first proposed (before building anything or seeing adoption numbers) WebTV seemed like a MUCH better idea than Twitter. (not that they're comparable services just that if I told you that I wanted to let people use the internet from their living room, that would sound more exciting and useful than creating a service where people write 140 character blog posts).
Quality of idea just might not be a valuable metric.
Mainly because I don't agree with the premise that ideas are worthless - something that is echoed around all the time.
Really? If there's anything the current IP litigious climate signals to me, it's that people are far overvaluing ideas. Sure, ideas aren't worthless - but they are useless without hard work and luck (what some people like to call "execution"). Ideas are a dime a dozen; good ideas are probably worth about $1.50. But ideas + execution? Now there's the real value proposition.
The idea is that an idea does has a worth, but it's small, and it behaves as a multiplier to the execution, which is orders of magnitude larger. For example a good idea is a "3" but a good execution is worth $1,000,000.
A good idea with a mediocre execution is worth a whole lot less than a mediocre idea with a good execution.
Yes. Every idea has some kind of value to it, but it's hard to estimate this value. And it should be obvious that not every idea has the same value. Most ideas are common-sense things that many people thought of, but nobody invested anything in. But it should also be clear that some ideas have extremely high value. If you plot monetary values to number of ideas with that value, it'd follow something like an inverse square law. There aren't many ideas with high value, but they exist. Out of hundreds of thousands of ideas that people think are brilliant, there will be a few that actually have value.
They have to be sufficiently advanced (technologically) that nobody would have thought of it, solve a problem that almost nobody realizes is a problem, and have very clear, easy paths of implementation to making lots of money.
While elephants already chat while miles apart using subsonics, they're smart and I'll bet neat things would happen if you gave a bunch of them mobile phones that they could work. I'll chip in if anyone does a kickstarter.
(I'm not really arguing, ideas have value, I'm just rather tickled by that idea.)
I would say, your point is right too that "better be safe than sorry". On the other hand I agree with author too that - Today in the world, almost everybody has some idea. It's the execution and in fact smart execution that matters. That doesn't mean that we start shouting our ideas but the thing is smart execution and time to market have so fearsome competition today that "ideas" in itself have lesser value these days.
That is why we started putting our ideas (for free : ) on - http://syncfin.com
There's lots of reasons for NDAs besides stealing ideas. I doubt Apple is afraid I'd steal the next design for their new phone (although they may worry Samsung might), but they still probably don't want me blogging about it. There's marketing impact.
Also companies often don't like to commit to product before it's committed. I learned an important lesson at one of my first startups that customers will try to hold you to your "proposed" roadmap. Even though we say, "We're just trying to be transparent. This WILL change. We don't know of this we can do." -- people will tend to find things they like and essentially view what you showed them as a promise to deliver. You suddenly have customers who claim you not only didn't deliver a feature, but that you broke a promise. Until I know I can ship, I really prefer not to talk about it publicly -- even with tons of caveats.
Not always true. We were working on a smartphone game with an original concept and kept blogging about it. Including telling about the idea and showing early gameplay video. It might have been a coincidence, but a virtually identical game appeared before we were finished and became quite successful on Android. So next time I'll be a little bit more careful.
So many times I've had an idea and not long later someone has come out with that exact product - not because they stole it from me but because they come up with it themselves. The ability to execute on that idea is much more important.
>So many times I've had an idea and not long later someone has come out with that exact product - not because they stole it from me but because they come up with it themselves.
Right.
I believe that as we collectively walk toward the horizon of what's possible, new things become visible to lots of us at roughly the same time.
>The ability to execute on that idea is much more important.
Sort of.
Thing is, patents seem to reward not the ability to execute, so much as the ability to execute first on what is rapidly being revealed as obvious due to the advancing horizon.
Executing fastest seems to be equated to the result being non-obvious and ignores the reality that parallel development towards the same end is likely.
First of all, one cannot 'steal' your idea. You still have it...
Actually I have taken an idea from the company I was working at. They kicked me out and I started my own company developing a very similar software, but I believe it is more successful, not because of technical superiority or so, but more due to customer empathy. Most people love to work with me, because I deliver quality and on time, in contrast to my former company. So I have a slightly bad feeling, but a) hey, they kicked me out and b) I treat customers much better than they did.
Ideas are indeed cheap and not particularly scarce.
Yet, when you're implementing that idea or talking to a business about buying your implementation of an idea, it is no longer a run of the mill idea. If your or your client's competitor gets wind of what you're doing, they may try to use that knowledge in their role as competitive antagonist. After all, business is war.
Further, ideas can eventually become methods honed by experience. I worked for a company that discovered attempts to sell their system had the unintended consequence of providing valuable consultation to the prospective client. The prospective client could then use hard-won information on how to roll an in-house implementation. They would do this even if the costs were higher, to avoid relying on an external service. In the end, the company ended up charging for consultation, for some reason, bit their tongue when national news credited the client for the innovation.
Not true, not even metaphorically as with team sports. War is about literal destruction whereas business is a competition in production and creativity.
War is about much more than literal destruction, even aside from the easy example of a cold war. War has long been a concern of the appropriation of wealth and power and the destructiveness varies. Sometimes a city was sacked with all its men killed and women taken as property. Sometimes a city would be left largely intact but held under a different banner. Sometimes cities or countries are blockaded and sieged in order to starve them into submission. Then there are sneakier and more covert operations intended to destabilize from within.
Creativity, ingenuity and perseverance can provide success in either war and business, but it's never a guarantee. Consider Edwin Howard Armstrong, who experienced the destruction of his life after he invented FM radio.
Those who wage wars are not necessarily those who actually fight in them. Though it would be distasteful and wrong to equate the plight of an embattled soldier with that of a corporate employee, their metaphorical role as chess pieces to occasionally sacrifice is not without convention.
There is definitely a great divide on whether to keep an idea secret or not. Locations and the social circles you are apart of matter quite a bit; I live in SF and work in PA and I'm surrounded by very capable people. I have had ideas stolen that I was in mid process of building, particularly by an EIR's (entrepreneur in residence) who had better resources than I and were able to execute much faster. And it turned out to be a success in the app store.<br/>
For those who say its ridiculous to keep things secret--I think they aren't surrounded by very capable people who are willing to do anything to be successful. Apple, (a pretty successful company), is highly known for keeping their ideas secret. You know why? Because they have burned in the past, just like I have and others around me. Product test as secretly as you can, build a capable product, not an MVP, and hit the market hard!
I'm not sure Apple's a great example. They keep their ideas secret for marketing reasons: they get immense amounts of free advertising by being dramatic about new product launches. And because they burnish their brand by maximizing their number of public hit products. (They also keep some details of incremental improvements secret because it's a highly competitive market, but that's different than stealing ideas for new products.)
In fact, I'm having trouble thinking of a "big new idea" product they did recently. They were years late to the MP3 player and smartphone markets, for example.
Since the idea's out, would you mind saying more about the idea that was stolen?
I don't think Apple is a great analog for most startups, who don't have the time or cash to test and iterate in secret for months. And many of their products that needed real world validation (Ping, Siri) have not turned out great.
I deal with this every day when I meet founders. They tell me that they're keeping their idea under-wraps because they don't want anyone to steal it or pass it on to someone who could.
Not once has any of these people succeeded with this approach. On the other hand, Joel at Bufferapp who I've been watching since the early days was very public. Got out there to find out if people wanted the product pre-MVP and when there was an MVP he let people use it. Today they're based in SF, have strong revenue, a team, venture funding and hundreds of thousands of users.
The people with "stealth companies" that succeed are serial founders with money behind them. Most of the time they don't keep it under-wraps, they just don't share it online. If you ask them what they're doing they'll tell you and they're constantly getting out there talking to partners, investors, etc. Many of these companies fail such as Color.
Unless you're starting a new national airline that could be stopped if a competitor found out what you are doing and went to congress or partners to block you from entering the market.
I recommend talking to competitors if you're put in a situation with one. This is something I've done and they've been very helpful, on one occasion one helped me out without intending to by talking about why one feature probably wouldn't work without a tweak because they found out it doesn't work without X.
In the end it's about execution. Get as much as you can out of the door as you can and learn as much about the market as you can.
"one helped me out without intending to by talking about why one feature probably wouldn't work without a tweak because they found out it doesn't work without X."
Didn't you just disprove your whole point there. Your competitor revealed his/her ideas about how to solve a problem (that you hadn't even foreseen yet going by your description) and in the process hurt him/herself in the marketplace. Your advice of meeting and talking openly with your competitors didn't really work out for that person.
No because they also received value from me explaining what we're building and he was very interested by it. They are a much bigger market-leading competitor so it's not a case that people will deal with every day.
I can understand why someone wouldn't want to talk to a competitor but not when dealing with normal founders, users, etc. As you pointed out it can be risky but overall being open usually leads to a net positive.
I feel like one point that is missing in this conversation is that sometimes when you don't talk to people about your ideas you miss out on a lot!
I frequent a lot of technical mixers in the region and I talk to a lot of people about their ideas (and sometimes about my ideas). Not to mention validation (how many people get excited about your idea), but there are a lot of helpful criticism or leads to be found by telling people your idea.
There were a ton of folks that, after having heard what they were doing, I was able to point them to similar entries in the field ("your idea sounds really similar to this existing site, but they're different because of X") or to tools that could help them ("hey, have you heard of twilio/stripe/etc, because that could help you bootstrapped quickly", or "hey, you should talk to X, he's actually working on related topic and could give you some insight").
If you're some huge company (Apple, Facebook, Google) you already have a huge pool of internal brains to pick. If you're one lone entrepreneur on a mission, I'd say you benefit a lot more from telling good people about your idea than it is to stay mum about it.
If the person you're talking to is really capable of executing your idea (chances of that are small to begin with), he/she is probably also smart enough that they have their own ideas they're more interested in than yours.
That depends. I know that HN is more focused on ideas that boil down to making a website, the concept isn't true in the general case. For example, if you're doing ASIC/FPGA optimization, coming up with an idea is hard, and implementing one is (relatively) easy.
I used to be an IC designer - ICs are an exception. There are some exceptions of course - medical drugs are another that come to mind.
Most business ideas are pretty simple though, even outside the internet world. Eg. Sam Walton -> just wanted to build a better retail store, turned into Walmart. Howard Schulz -> better coffee shop -> Starbucks. Warren Buffett -> stockpicking -> BRK. And so on. Execution on these was the hard part.
This is def. not true in general in my experience. There tends to be a huge gap between people who can implement an idea, and people that can come up with an original idea (even if they can not implement it themselves).
I really wish we could stop having this semantics debate over the word "worthless." When one side says "ideas are worthless," they're saying that they have no quantifiable monetary value until executed. When the other side responds with "ideas aren't worthless," they're arguing against the notion that ideas are of no use at all.
We've been arguing over two definitions of the same word for years, and both sides have been correct all along.
I had an idea stolen. It was pure philosophy... a means to help a woman understand how her man is motivated. Not a male / female thing, but that was a very marketable aspect, and (thus) the way I communicated the idea. It was butchered, but still sold $4m in books. The butchery got worse over two sequels. I seriously doubt that I will ever be able to communicate said idea (much less sell it) unless I can completely reconstruct its presentation.
Not saying that I disagree with the idea vs execution rhetoric here in the comments, I do agree... execution is more important. Execution in plant growing is more important than the seeds themselves... unless you lack the seeds.
Some here have said that at the right moment any arbitrary number of people will discover idea X. I would agree if the subtlety of the idea is not arbitrary, however the best ideas are unexpectedly early, and therefore subtle.
Do not mistake any of this as an argument for patents, or even fairness in a general sense. I know business is war. One's only recourse is carefulness, caution, the sacred texts called it wisdom.
The author has little to no idea how many trade secret cases are brought each year in the U.S., and the conviction rate stemming from thos cases. The staggering number is simply too overwhelming to simply write such an igonrant article.
The fact is that ideas are stolen at a rate more common than anyone's guess. Most companies have a NDA/non-compete agreement for a reason. While the know-hows might not be readily apparent, reverse engineering is not far from outcry. While a good idea requires flawless execution to make a successful business, the majority of the population fails to understand that the idea, or the conception, is all that is needed to take that freedom of operation from you...just ask any patent attorney.
Ideas don't succeed by themselves. Different people will build differently and therefor succeed accordingly. Hire talented people so that you can reduce the risk of failure by solving your problem better than anyone else. If you can execute better than anyone then you shouldn't be worried about people chasing your idea.
You only realize how much commitment is required when you get around working on a project. People don't really have the time to build your dream. even If someone steals your idea, they will only get to the first version of your product, you have the vision for the later versions and updates (you'll always be ahead of the game).
Note that there is a difference between trade secret and a cool idea you have. If you have an idea that has been implemented, it's a really smart plan to keep it secret: if the idea's found out, your competition will also likely know how valuable it is. They'll know it's worth implementing. But unimplemented ideas are only as useful as their implementation. And getting people to go along with your ideas? Well, that's where ramming it down their throats comes in. And if your idea is obvious, well, it's not really a trade secret either.
And a trade secret's valuable because it has at least some protection legally.
A local startup raised over $300k after stealing my work and trying to pass it off as their own but they had no idea how to execute on it after they raised. They're now grasping at how to find product-market fit and they've pivoted thrice because they can't pull-off what they ripped-off. We've found companies in Europe that came up with the same idea because the verticals we work in are more evolved there. Seeing others conjuring similar ideas validates that we're on the right track in a new market ripe with opportunity.
Since we don't manufacture much in the US anymore it's becoming unpatriotic to not worship intellectual "property." It's almost all we've got. But still, some very successful people have chimed in to the contrary:
Napolean Hill (Think and Grow Rich): Ideas without action are impotent
Thomas Edison: Genius is one percent inspiration, ninety-nine percent perspiration (he became a litigious bastard anyway)
If you're in business to make money, almost without exception it's going to be all about making and keeping people happy. That takes ongoing work, it only starts with an idea.
If you have visible success, you have a target on your back. If you don't, your risk of getting ripped off is small, and as the author puts it, you have to force your ideas down people's throats.
Look at what happens when something like Twitter or Ebay takes off. The idea isn't difficult to clone at all, and quickly you see competitors of all sorts show up -- often very experienced and well capitalized.
Those two companies got protection not from patents and other paperwork, but from network effects and the first mover advantage.
It's quite conceivable that someone will steal your idea, if it's a good one. The question is the degree to which they can impact your ultimate execution of the idea--and that depends on a range of factors, from market dynamics to your own ingenuity.
Whenever I hear a common refrain in an industry that something doesn't happen, I know immediately that it absolutely does happen, but that acknowledging it doesn't fit with the existing culture for some reason.
I think this notion varies depending on whether one is discussing B2C or B2B.
I would love for some smart folks to "steal" my idea, and build a real marketplace for spot-freight, but nobody with talent seems interested. I believe this has to do with a lack of knowledge about the specific industry. As a result, I've been building a solution myself, slowly but surely.
If you're just at the "idea stage", then no one is going to steal your idea.
If you've progressed further and have some traction, some lessons learned in customer acquisition channels, etc., then you should be cautious about what you share because your information has real value.
You may want to avoid sharing your ideas with anyone who has a keen understanding of the patent system.
If you get out-executed, its your fault for not executing. If someone steals your execution because they patented your idea, then it might have been better to keep your mouth shut.
I would think there is value in the NDA for the legal side of VC/Funding. Isn't protecting one's Intellectual Property seen as prudent, and one of the checkboxes to check in evaluating a business plan?
On related note, I let fear of plagiarism be an excuse not to publish content to blogs. I've since found free tools (i.e. Copyscape) that help protect content creators.
Sharing your ideas with the right people helps make them better. The more feedback I get on an idea, the better I am able to nurture it and execute it in a useful way.
I disagree what the article is talking about.
I believe the ideas matter! but most of them just don't work,
we need to try them out and get the right one.
ideas that are easy to reproduce and implement can be easily stolen. for example, you buy a Groupon clone for a few hundred bucks, in some countries these clones are more dominant than Groupon itself.
I'd respectfully disagree -- it depends who you are. Many entrepreneurs, rightly or wrongly, will treat that NDA as their own provisional patent/trademark/copyright. What if you sign that NDA and start working on a related project? (Or an unrelated project that becomes related, or a project that independently comes up with similar ideas/tech?).
The problem with signing an NDA is that by definition you're not sure what you're about to see. If you sign one and then the entrepreneur says "so my idea is to send a rocket to Mars" and you later take a job a SpaceX, get ready to be pursued (again, rightly or wrongly.)
In general, it's not good advice to take a "whatever" attitude with legal documents. The fewer you're bound to, the better.
good point. I guess where I would have a legal objection to that line of thought is that an NDA != patent/trademark/copyright - and if it does then it is not strictly an NDA. Certainly maintaining independence of legal bindings is a nice freedom, but knowing what you sign (or choose not to sign) is probably the smart thing to do for any legal document.
"The problem with signing an NDA is that by definition you're not sure what you're about to see." - I am not sure I agree with this (sorry for being picky). To me an NDA means you won't share some material with another party. Whether you already know what that material is or not doesn't really have much to do with what an NDA is. That being said, odds are you won't know beforehand...
Does Zynga rip off ideas? I thought they ripped off finished games with proven profit potential. And then used their superior marketing power.
Gaming strikes me as one of those areas where it's most clear that ideas are worthless. Gaming is all about the experience. Which, from the creator side, means it's all about the execution. There are so many popular and fun games that aren't particularly novel ideas. And novel ideas aren't enough to carry a game that is otherwise meh.
1) double check your idea. I have not come to any unique idea of my own that is not implemented yet or not in implementation stage. In some cases implementations are really poor but still they exist.
2) You have some know-how what makes implementation of your idea successful. They can steal your idea but they will fail to implement it successfully (some comments in this discussion give example of this).
Let's say your idea is really big and you implement it first. So what? If it is really good to be copied they will copy it faster than you will get your first paying customers.
Ideas are not stolen because an idea, all by itself, does not identify whether or not anyone wants the thing or the service. If I told you that I had an idea to make a dish-washing sponge in the shape of a smiley face you, more than likely, would walk away laughing. So would I if someone came to me with that idea. How would you react if I actually manufactured them, sold a bunch and showed you that people want them? Right. You'd pay attention. You wouldn't laugh. And you certainly wouldn't walk away. Well, I saw exactly that happen at the Shark Tank show recently. I think the guy got a $300K investment.
$300K for the idea for a friggin smiley-face sponge? Nope. $300K for the market opportunity he uncovered.
If you present someone with an idea and that idea is so good that it identifies the market opportunity without further work, well, it might get stolen. With most other ideas they'll listen and nod and possibly even think you are a moron and completely forget what you told them.
If, on the other hand, you show them an idea coupled with your work confirming that a good scalable market exists, hold on! The market opportunity will either be stolen or you'll have someone all over you wanting to become an investor or participate in some manner in the opportunity you identified.