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Worry less about the idea, more about the execution
As reported in The 10 rules of entrepreneurship, the best products don’t always win. Compelling ideas can and do fail after launch: before the iPod and Facebook there were MPMan and Mirror Worlds, and Pets.com enjoyed no shortage of funding or publicity. (Although selling below cost and making it up on volume might not qualify as a great idea…)
Wil Schroter, writing in Forbes, advises entrepreneurs to fret a little less about confidentiality in “Why Investors Don’t Sign NDAs.”
Investors want entrepreneurs, not ideas. Anyone can come up with a great idea, but very few can actually pull them off…
If your idea is so easily stolen that just hearing the concept is enough to allow anyone to replicate it and launch it better than you, then you’ve already lost.
There is little protection in just a concept, so unless you’ve got a secret recipe behind it, signing a NDA doesn’t do you much good anyway… since as soon as you launch everyone will have a taste of it anyhow. [Therefore] you’re more likely to be explaining why you can defend this concept once it’s launched.
We made a similar point last year on Columbus Day: he was not the first to think the earth was round, but he was the one willing to act on it. An earlier Forbes piece had made clear that the King & Queen were more interested in the entrepreneur than the idea:
The second time Christopher Columbus pitched Ferdinand and Isabella (two years after his initial presentation – raising money has always taken patience and persistence), he did not need to convince them that locating a shortcut to the spice routes of India was a good idea. Rather, he had to belie their primary concerns: was he honest, tenacious and competent enough to execute the journey? [N.B. – Furthermore, he failed and had to go to market with a different idea altogether.]
While we do retain some interest in hearing about the idea – the details in the pitch reveal important things about the entrepreneur – we agree about the primacy of some of the intangibles: integrity, transparency, trustworthiness, enthusiasm and tenacity, self-awareness, and flexible persistence.
The issue of NDAs ripples throughout the entire entrepreneurial ecosystem: angels will tell you they waste limited resources and never get used in anger, and code jockeys won’t sign “the poor man’s patent.” As one software developer puts it:
If someone’s out to screw you, they’ll screw you with or without an NDA… In short, don’t waste your time building straw houses, just stay away from wolves.
Given the ubiquity and overlap of ideas, asking for an NDA is a rookie mistake that only slows the process and undermines your pitch – unless you have patented IP and not just a legally un-protectable thought.
Growing the acorn into a mighty oak is a long-term project that will eventually include adding partners who share the vision and can bring additional resources – financial, expert, and network – to bear. Choosing partners who best fit requires as much rigor and thoughtfulness as any decision an entrepreneur makes.
So forget the NDA, and instead just conduct a little due diligence before trusting us with your idea.
(For additional illustrations of how today’s trendy idea can become tomorrow’s punchline, you can check out our Vintage Future series.)