Hearing bad startup ideas is an occupational hazard of working in startups or VC.
There are some ideas that sound crazy but end up being massive winners. There are other ideas that sound pretty good but end up being duds. And, sometimes, it’s not really about the idea but just one’s own execution and effort—after all, the idea might be changed quite a bit in the course of one’s startup journey.
However, there is one characteristic that pretty much universally signifies a terrible idea: “I can’t tell anyone about my idea, it’s so good that other people will steal it.”
Not being able to tell anyone signifies… many problems
I seem to have the deep misfortune of bumping into many people who go around with startup ideas in their head that are “surefire successes” but just “can’t tell anyone about it, or else they will steal it.”
There are some legitimate reasons why you might want to keep hush on your startup idea. Most of them involve IP and the process of filing a patent. There have been some reforms, but in general, the patent system does (basically) still reward the first person who gets their idea filed. However, “I need to wait for patents” is not a super common reason I’ve encountered with “can’t tell anyone about my startup” syndrome. After all, patentable inventions are quite specific in requirements—and a broad startup idea rarely meets them. Your patentable ideas are likely not the core concept of the startup itself.
Now, let’s get into exactly why not being able to tell anyone about your startup means your idea is terrible.
1. There’s a lot more to a startup than the idea
Now, I mostly see this in first-time founders (… or “about to be” founders when they start to work on their awesome idea). The extremes are people who seem to think an idea is worth 50% or more of a startup’s equity. The saner ones merely seem to think that someone else will suddenly wake up, bolt out of bed, quit their job, and decide to go execute on that brilliant idea a random stranger shared with them.
Founders who’ve done a startup before realize that the idea is generally the easy part. The sheer amount of time and effort required for a startup is the reason that an idea—or even invention—alone isn’t worth that much (which university professors demanding massive amounts of their graduates’ and postdocs’ companies should probably note…). It’s also why, for the most part, you won’t see talented people suddenly quit their jobs just to steal your idea.
2. “I have such a defensible idea that the moment someone else hears it, they’ll steal it”
Isn’t it a rather bad sign that merely hearing about your idea allows literally anyone to compete with you?
How will you launch your startup, which tends to require telling someone about it? You generally need investors and customers—and if you’re hoping to recruit each, individually, locking everyone down under bulletproof NDAs, good luck getting anyone. You’ve robbed yourself of word of mouth, virality, and refused to provide any information that establishes your credibility… You essentially will be trying to execute a startup with zero social proof, which tends to be fairly critical to successfully raising money and getting early adopters.
And what, if someone does leak it, you’ll instantly lose or will get competed into oblivion? That seems like the textbook definition of a startup idea with utterly no defensibility.
Let’s entertain some ridiculous hypotheticals
Let’s be a comically unrealistic for a moment. We’ll assume you have a science-fiction level cold fusion technology. Once you triumphantly unveil it, you can make ridiculous profits. Well, you’d still need money and people to build it—unless in this fictional example, you also happen to be comic book Batman. Meaning you seem to have infinite money and expertise to build stuff from advanced vehicles to dimension travel machines… by yourself, in a cave. In which case, sure, knock yourself out.
Now, to even further overstrain this idea, let us assume this cold fusion generator is so easy, cheap, and simple that literally anyone can build it in their garage. Well, wonderfully, this is the exact purpose of a patent. File your patent, build it in your garage, and triumphantly make monopoly-like profits. It might be rather difficult to defend the patent given the potential profits for working around it, but hey, your problem even in this ridiculous case is not that you can’t tell anyone about it.
Your team and technology should not be interchangeable parts
This is an important point, so I want to build on it. If you want to build a sustainable business, you need some defensibility.
I can already imagine hordes of people who’ve read random business books start yelling about “network effects” or “first mover advantage.”
As someone who looks at early-stage startups professionally, I can tell you that those are late-stage defensibility. At minimum, growth phase. To this overused list, I’ll also add on a perennial favorite that isn’t talked about as much outside of economist circles: economies of scale/natural monopolies. None of these differentiate you from literally everyone else on the planet who, like you, also do not yet have a rapidly growing juggernaut of a company built on that idea.
In general, ideas don’t tend to be unique. As brilliant as you think you might be, it’s almost certain that someone else has had a similar idea before. The interesting part of an early-stage startup team is why the team is uniquely positioned to execute on an idea. Why you/your team?
Occasionally, it’s incredibly obvious: maybe that core idea/invention is the subject of your PhD dissertation that you’ve spent 7 years on, and you’re the only person who holds the exclusive license to the patent on it from your university. That’s a pretty good reason why you. But, if that’s your situation, you also literally have no fear that someone else is coming after you from merely hearing about your idea.
In other cases, it’s more subtle. Maybe it’s a unique mixture of team expertise and experience. Maybe it’s decades of relationships within an industry. Maybe it’s literally just the ability to raise money from having credibility with investors—at least, more than other people. Or maybe it’s literally just that your team pivots faster or works harder than anyone else.
Regardless of what it is… your team, your IP, your disposition… your place in executing the startup idea shouldn’t be merely a “drop-in” human that breathes (who happens to have the idea). If it is, you likely don’t have a viable idea.
The moment anyone does hear about it, you’re endlessly fending off competitors. Alternatively, much more likely, you’ve missed a key, fundamental reason why tackling the market isn’t as easy as you think—and why other people either haven’t pursued it or (again, more likely) they have… and they failed.
3. “My idea is perfect and a surefire win, so I need no feedback”
In many cases, if you think your idea will get stolen the moment you share it, you’re wrong. As said, the work beyond the idea does matter, and ideally, you aren’t literally a perfectly replaceable living cog for your startup.
With those said, the last factor here is related to the chance of success. If you never get any feedback, you’ll never refine your idea or business. That will make your learning curve, once you actually start working on it, much steeper (and more expensive). And if you still don’t talk to anyone while working on your idea, you may never avoid certain deadly traps or speed bumps that conversations with other smart minds would have made obvious.
Without feedback, you’re likely going to struggle much more. This inherently leaves your idea much worse than if it had actually run the gauntlet with smart people or experts in the market. Will people have bad advice/opinions? Sure. But a part of a startup founder’s job is to find what works and discard the rest.
You massively cripple your inbound information intake and learning velocity, by hiding what you’re doing from everyone—including your market.
Talk about your startup idea
Startup ideas vary in terms of how much detail you might want to share. Don’t share patentable ideas (before you file). Don’t share trade secrets (obviously). Don’t necessarily share every single detail of your meticulously tested and hard-earned/learned customer acquisition funnel.
Always share the concept. It’s a good “sense check” on whether you actually have anything there. If you are terrified about sharing the broad outlines and key insights about your startup, you’ll want to think hard about whether you have any defensibility whatsoever. A startup, if it gets off the ground, is generally not a “couple months” kind of thing. It’s a fairly long-term commitment. That’s plenty of time to accumulate competitors—and it’s a pretty tragic waste of years if your struggle merely results in everyone just copying you once they see what works.
Obviously, this particular post comes from long years of hearing terrible ideas that were usually closely guarded as “can’t be shared” startup concepts. I have some personal prejudice against this attitude (and people who have it) since it’s never turned out to be a great idea. Nor do I see these folks (who didn’t tell me) later go on to build huge, successful companies years later.
Do this for yourself. It raises your chances of success and—if your startup was that easy to copy for someone else—someone stealing your idea will save you the heartburn of spending years building a company that others will emulate in a fraction of the time. (Exhibit: the direct-to-consumer space, where I’ve lost track of how many “delivered to your door” mattress companies there are now).
But hey, if you disagree with me, feel free to let me know or prove me wrong. Of course, if you do have that kind of counterexample of a startup idea, all you can tell me is it’s too good of a startup idea to share, right?
This post was originally posted on Weighty Thoughts on October 9, 2021.