The fear of having a startup idea stolen can inhibit new founders from doing what they must. If you don’t talk with people about your idea, it will fail. Fear will have a far greater negative impact on your startup than copycats. Let’s try to put things in perspective.
Who are you talking to?
When you’re building your startup, there are a few different kinds of people you may want to talk to. We’ll focus on three common types:
- customers who may buy your product or service
- investors who may give you money to build your thing
- developers you may want to hire to work on your project
Your customers very likely don’t have the skills to execute on your idea. Unless you’re serving developers or entrepreneurs, you generally don’t need to worry here. Even when you are serving developers or entrepreneurs, they likely have their own projects. For those who follow through and ship products, figuring out what to build isn’t the biggest challenge.
Investors make their living trading money for part ownership of startups. They have the money to build their own but often don’t want to be that closely involved which is why they invest instead. Otherwise, they would be off building their thing instead of talking to you about building yours.
Developers could run off and build your idea, but they usually won’t because, even though building an app or a web site is hard, there are still many other hard challenges remaining like sales, marketing, and fundraising that fall outside the skillset of the developer. Some founders have developers sign an NDA (a non-disclosure agreement) to bind them to keep quiet about your startup, but many highly skilled developers will turn away at this suggestion. (Many developers have written about why they do this.) You can use the NDA as a tool to protect you from your developers if you’re comfortable with that trade-off, but it must be very narrow and will require a high standard of proof to enforce.
What about companies who might acquire my startup?
Perhaps you’re worried about approaching companies who might acquire you. If you’re building a product or service that would be a natural fit for a larger company to acquire, how can you keep them from stealing your idea? Truth is, you can’t without patents, and, even then, they can often work around them to achieve the same result. If you’re worried about this, though, you’re probably missing the whole point of an acquisition.
Large companies used to have giant internal R&D departments that brought new ideas to life. This has largely gone away and been replaced by acquisitions. Now, rather than trying lots of things internally only to have a few succeed, companies can spend less money to buy up the experiments of others that have already succeeded. That means, if you’re thinking about approaching someone about an acquisition before you’ve built anything, you’re most likely too early.
How will the copycats find you?
I’ve talked with founders who are reluctant to even put a prototype or a lead generation page online because their idea might be stolen. Here’s the question I ask them: How would someone discover your page? If I search for “startup ideas,” it’s going to bring back pages with the words “startup ideas” on them or in the title. Unless you write an introduction on your site that says, “Welcome to my startup idea,” they’re not going to stumble upon you by searching.
The events that would have to transpire for your idea to be discovered and copied are extremely unlikely. Just to put this in concrete terms, let’s think about an imaginary on-demand lawn tool rental app. Users select a lawn tool which is delivered to their home for a small rental fee. They return it after a week. (Hey, I never said the example would be a good startup idea. 😉)
The people who are likely to come across you are those looking to rent lawn tools. So, before you can be copied, one of your users needs to also be a web developer or an entrepreneur with money to invest. (Aside: Is an entrepreneur with lots of cash likely to want to rent lawn tools?) Most of your visitors will not be one of these two kinds of people. A few of them will. Let’s focus on those.
What about visitors who could execute?
Not only does one of your visitors need to be able to execute your plan, but they need to want to do so. They should also have the free time to put this plan into action. If you divide a startup into two bits — the idea and the execution of that idea — which do you think is more difficult? If the idea is the most difficult, stop worrying and just execute since that’s the easy part! You’ll have no need to talk to anyone. (Don’t actually do this. I’m making a point here.)
On the other hand, if the execution is the difficult part, don’t you think all these people who are capable of doing the hard part — the execution — already have the easy part — the idea(s) — under control?
Let’s review. The person who will hit your web site to steal your startup idea will be: 1) an entrepreneur or web developer 2) wanting to rent tools 3) with no good ideas about which startup to build next. The likelihood of this person finding your site amongst the entire world wide web is extremely low. If they do find it, congratulations! You win at SEO! 💰
I don’t care how unlikely it is. How do I prevent people from stealing my idea?
(Note: I am not a lawyer and this is not meant as legal advice.) If you want to protect your idea at all costs, get out your checkbook. You’re going to need a lawyer to help you write up an NDA. You’re also going to want any intellectual property patented so it can’t be copied by others.
Once you have these protections in place, you’ll have a court case should anyone decide to steal your idea. Now, you’ll just need the money to take the infringing party to court to enforce your NDA and/or to protect your patent. It won’t always come to this as, for many, knowing you have the defense in place will be enough to deter them, but you’ll want to be sure you’re prepared to defend your property in the event someone calls your bluff. If you’re not prepared to enforce NDAs and patents, you’re wasting everyone’s time and money by bothering with them at all.
No One-Size-Fits-All Solution
I’m being a bit flippant here about protecting your startup idea because many people focus on this instead of executing. Protecting your idea will be more or less important depending on what you’re building. Keep your eyes and ears open. As with any advice you read, listen to your trusted advisors first and think about the particular needs of your business. Just don’t let fear of having your idea stolen keep you from realizing your startup dream. A launched startup that was beaten to market by a copycat is still far more likely to achieve your goals than the one that never shipped.