A frequent question entrepreneurs have when they are just starting their company is: how secretive should I be about my idea? My answer: you should talk about it to almost anyone who will listen. This includes investors, entrepreneurs, people who work in similar areas, friends, people on the street, the bartender, etc.
There are lots of benefits to talking to people. You’ll get suggestions for improvements. You’ll discover flaws and hopefully correct them. You’ll learn a lot more about the sector/industry. You’ll learn about competitive products that exist or are being built. You’ll gauge people’s excitement level for the product and for various features. You’ll refine your sales and investor pitch. You might even discover your idea is a bad idea and save yourself years of hitting your head against the wall.
In terms of the risk of someone stealing your idea, there are at best a handful of people in the world who might actually drop everything and copy your idea.
First of all, most people will probably think your idea is stupid. This does not mean your idea is stupid. In fact, if everyone loves your idea, I might be worried that it’s not forward thinking enough.
People at large related companies almost always think they have already built or are in the process of building all the good ideas – so your idea is either something they are already building (which is a good thing to discover early) or else they will dismiss it as a bad idea. (I have a personal diligence rule that when speaking to people at large companies, the facts that they tell you are very useful but their opinions about startup ideas no more valuable than any other smart person’s opinions).
In terms of speaking to other entrepreneurs, the vast majority are already working on something and are highly unlikely to drop everything and copy you. Even if they are in the idea generation phase, high integrity entrepreneurs wouldn’t copy your idea anyways.
VC’s will either not like your idea, or else like it and possibly want to fund you. They vastly prefer funding an existing team than taking an idea and building a team. The one risk is if they have entrepreneurs they are working with in a similar area (see next paragraph). Most VCs have enough integrity to disclose this and let you decide how much detail to go into.
The handful of people in the world who might copy your idea are entrepreneurs just starting up with a very similar idea. You can probably just explicitly avoid these people, although by talking to lots of people your ideas will likely seep through to them.
Even if your idea gets in the wrong hands, they will probably just get the high level “elevator pitch” which isn’t worth much anyways. Hopefully by that time you’ve developed the idea much further and in much greater detail – by talking to as many people as possible.
A note about NDAs: 1) almost no experienced entrepreneurs/VCs will sign them (in fact, you asking them too is widely considered a sign of inexperience), 2) It’s not clear they have any real value – are you really going to spend years suing someone who signed an NDA? I’ve personally never heard of it happening.
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Great tips, fully inline with “Four Steps to the Epiphany”.
Also reminds me of Dharmesh’s “Stealth Mode, Schmealth Mode” — http://bit.ly/hd1OR
Another benefit of talking freely, is that you may also find potential partners or future employees–other key components beyond investment money.
Somewhat related, I also tell people that if anyone was really *so* in love with your idea that they wanted to copy it, the first [smart] thing for them to do would be to get *you* involved somehow. By talking about an idea, you’re demonstrating deep thinking about the problem far beyond the pitch.
I agree completely. And I would add: even if they copy your idea exactly, so what? Very, very few markets have room for only one player. Quite early on, you will be able to differentiate yourself – and having competitors help you grow the market can actually be a good thing.
I couldn’t agree more. I’ve had so many difficulties explaining to people why they actually benefit from sharing much more than by keeping ideas secret. That is our concept at http://www.aleveo.com where we try to get people to share ideas, those that are needed and just latent, everyday.
Thanks for another great post. One wrinkle – what about more established companies in your space? I would think you would want to at least be cautious in discussing your virtualization idea with someone at VMware, your search idea with Google, etc. Given their greater resources, those companies could blow through your “deep thinking” advantage pretty quickly, potentially.
I agree. The only thing I wouldn’t do is to post it on the internet.
Greg – I suppose, but remember 99% at those companies don’t control resources to copy your project. I suppose there is some risk, if you happen to talk to the one person who does, and they love your idea and hadn’t thought of it etc.
[...] This post was Twitted by diego_s [...]
[...] just for hearing the basic idea of their business. This kind of secrecy is always a mistake. If you’ve got an idea for a business, you should tak about that idea with everyone. A frequent question entrepreneurs have when they are just starting their company is: how [...]
People copy success, not ideas.
But it’s probably wise to be more secretive in some vertical markets: http://venturehacks.com/articles/vertical-markets
Also, you never know who people you’re talking to may know- I’ve made some of my best and most key connections when I told a random friend my idea and they just happened to know someone in the same industry.
[...] This post was Twitted by QRCE [...]
Fully agree! If by just talking about the idea, someone else can go ahead and fully implement it, that idea is probably not worthy pursuing anyway.
A successful startup takes a lot more than just brilliant ideas. The key is in persistent tuning of the initial idea after a lot of rounds of feedback.
If you want some ideas, you may start looking here: http://windwil.com
[...] First Tweet 2 days ago cdixon chris dixon Highly Influential why you shouldn’t keep your startup idea secret http://www.cdixon.org/?p=338 view retweet [...]
One additional advantage of openly discussing your project is that you are actively marketing your company. You are building awareness around your product and, presumably, persuading others of its value.
If you wait until your product is launched before building awareness, you are already playing catch up. Ideally, there should exist a group that is anticipating your product’s release. The greater that group’s understanding of the level of effort involved with building the product, the greater their rate of adoption.
If you’re innovating discontinuously, those parties with whom you have early discussions are also likely to make up the ‘innovator’ class of the adoption life cycle. Winning their approval is critical before you can expect mainstream success.
Chris – this piece is validating. We talked about our idea incessantly to hundreds of people – from napkin to beta. We fine tuned the idea throughout, even got letters of intent and partner contracts before we had a powerpoint.
Interesting you also say, most initial reviewers will think the idea is “stupid” (thankfully we had that happen in fewer occasions). During an informal discussion, one VC encouraged us with some wild ass suggestions. 6 months later and after having executed none of his bloody suggestions, we sat down for another casual discussion – he said to my amusement, something along the lines of “Last time we met, I thought your idea was stupid, but you seem to have fine tuned it and built it out well”. Now that is Stupid!!
Ideas are worthless!!! What entrepreneurs can learn from hip hop artists….
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[...] and an investor, has a great blog on entrepreneurship and venture capital. He has a really nice blog post on “why you shouldn’t keep your starup idea [...]
[...] From cdixon.org [...]
Interesting idea, but what happens when you share your idea with, say, a candidate for head of all your back-end and technology, don’t bring him in as part of the team, and then he goes out, takes the entire idea (including pitch details), and starts a competitor? It’s happening to us now.
Darnell – If a back-end tech guy can copy it, you probably need to build the business idea more.
Great points, though your bio does read “Personal investor in early-stage technology companies, including … a handful of other startups that are still in stealth mode!”
bruce – i’m not saying you should publish your idea on the web (which is what my describing them on my site would amount to). that might be a bit much.
I know, Chris. I was being a bit tongue-in-cheek!
Then again, there’s a difference between publishing a description of the idea on your website and simply announcing a name and perhaps a tag line.
Completely agree with the post. You can read more on the topic here http://www.yanivnizan.com/2009/08/signing-nda-with-an-investor-good-idea-or-a-bad-one.html
[...] 4:32 pm on September 3, 2009 Reply Tags: business (100) Why you shouldn’t keep your startup idea secret. § [...]
Тематика подобрана неплохо. контент тоже подходящий и читабельный. Будем пользоваться.
[...] that we would have received. Should startups keep their ideas secret? Entrepreneur Chris Dixon posts on why its really not that dangerous to share your super-stealth idea with other people: There are [...]
[...] Why you shouldn’t keep your startup idea secret (cdixon.org) [...]
Great advice Chris, at your 12th popular post suggested today, and I give it a 9/10.
I not only told everyone that would listen about an idea I had over the summer. I blogged about, commented about, and eventually bumped into a fellow web programming who loved the idea and ran with it (Tyler Gillies).
For all the reasons above, and for the most important I highly suggest all would be entrepreneurs share their startup concept with whoever will listen.
Finding cofounders is a biggy, and because 99.9% of the effort will come in refining the concept into a product or service. The idea has value, but the implementation and design model you follow (customer feedback loop) is where the traction will come from.
At this point I know I have helped to construct a tool that I find fascinating and with great potential. But it’s ultimately users who will determine if the market is ready for social media driven two way search and advertising.
[...] This post was mentioned on Twitter by Chris , Yavor Ivanov. Yavor Ivanov said: RT @sensing: http://icio.us/jnvkkj [...]
[...] Aside from market conditions, you should try to answer the question: what is the biggest risk your startup is facing in the upcoming year and how can you eliminate that risk? You should come up with your own answer but you should also talk to lots of smart people to get their take (yet another reason not to keep your idea secret). [...]
[...] If you have a great idea, share it. It will improve the idea. I think this is really a good idea. That is why I have an idealog (not exactly startup ideas but product/tools ideas). And plan to move more of my ideas from my personal ideas to the idealog. So, if you have a startup idea, don’t be shy about sharing it. It will refine and improve your thinking (either in terms of making the idea stronger or confirming that it is a bad idea). It also creates some momentum around your project. Finally, I think that the spreading your idea and intention creates some positive social karma out there. People start rooting for you. Put you in touch with people that can help. It’s all good. [...]
Chris, I have some questions about execution.
I have an idea years ago, and now it has became a business plan, I shall share my plan instead of original idea right?
I’ve designed a pattern to extract a user’s preference from posts in my social networking site, then I shall share this to others. But, if an idea is not worth much, why companies such as facebook applying patents for design?
[...] on new ideas, here’s how I’ve always done it and how I recommend you do it. Be the opposite of secretive. Create a Google spreadsheet where you list every idea you can think, even really half-baked [...]
[...] new ideas, here’s how I’ve always done it and how I recommend you do it. Be the opposite of secretive. Create a Google spreadsheet where you list every idea you can think, even really half-baked [...]
[...] new ideas, here’s how I’ve always done it and how I recommend you do it. Be the opposite of secretive. Create a Google spreadsheet where you list every idea you can think, even really half-baked [...]
What should you do if you want competitors to run off and start with your idea? I already have my main thing.
Great post. Also reminds me of this article “share to make ideas happen.” — http://the99percent.com/tips/5549/share-to-make-ideas-happen
It’s kind of like telling someone that you’re going to quit smoking, drinking, etc. The more people that know about it, the more likely you’ll follow through and do it.
[...] are working on new ideas, here’s how I’ve always done it and how I recommend you do it. Be the opposite of secretive. Create a Google spreadsheet where you list every idea you can think, even really half-baked ones. [...]
[...] Fast forward to yesterday and Dan Frommer (@fromedome) of Silicon Alley Insider declares, “Stealth Mode is Back.” He noted that Chris Dixon (@cdixon) of Hunch tweeted, “New early-stage start up [...]
Hello Chris. I’ve just found this little gem of an article.
I agree with you. I think it makes far more sense to tell people what you are up to as this inevitably makes it easier to get advice (good and bad!), funding and business contacts who can end up helping you along.
The other thing I would say is that there is a good chance you are not inventing anything “unique” per-say. It is more likely to be a new way of doing things. (yes – there are exceptions). For this reason, people won’t try an copy you because it’s already being done and they won’t know your approach until after you launch your thing.
Thanks for sharing.
Best regards
Barney
[...] Dan Frommer over at the Silicon Alley Insider wrote about the reemergence of “stealth mode”. While I’d argue that it never really went away in the first place, it seems that more people [...]
[...] cercanos para que no me la roben”. Pues no teman más, compañeros emprendedores, pues hay un montón de razones por las que no deberíamos mantener nuestras ideas secretas (en [...]
[...] sign of a good entrepreneur. You can’t tell if you have a good idea until you tell people. Let others poke holes in your ideas. All ideas have holes in them. The trick with starting a business is telling enough people the idea [...]
[...] people like Chris Dixon tell you to tell everyone about your idea. My interpretation of Chris’ post here is “ideas are cheap, it’s execution that [...]
Well, I'd put it this way: It's one thing to say, “I want to start a chain of fried chicken take away restaurants, featuring my secret spice mix,” and another thing to disclose the ingredients in your secret spice mix. In the same vein, I'm happy to say that I have some new angles on biodegrading plastic, but don't care to describe the process in detail.
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