Why idea’s (+NDA’s) are worth nothing

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Knowledge is not power. If that were true, then universities and libraries would rule the world. It is only the application of knowledge that leads to power – that is why businesses rule the world.” – Napoleon Hill, Think and grow rich.

It is one of my favourite quotes, and one that I find myself repeating more often than not. Every time someone tells me about this fantastic idea they have all worked out, but haven’t even got a paying customer (or sometimes even a minimum violable product worked out) yet.

I’ve chatted to a number of startups who think that their idea is so awesome and worth so much that they need me to sign a contract of secrecy or NDA with them. I find it ridiculous. If the economic definition of somthing’s worth is the value that someone else will pay for it, by definition, if no one is paying for it, the idea is worth nothing.  It also clearly means that you haven’t even started yet. That it’s still just in the idea stage and that you actually don’t have anything tagible yet. You may have it all planned out, you may know exactly how you think it will work. But, until you actually do something, it’s just wind. Action is the only thing that affects reality.

It’s not easy to start a company. Needing a NDA means that you haven’t crossed the huge chasm between planning a startup and doing it. If you had crossed it, you’d realise what an insane pile of work it is. What a huge mountain it is to climb and that anyone who hasn’t even attempted it, doesn’t stand a chance.

Don’t worry about others stealing your idea. If you’re a startup, the idea is worth nothing to another startup as they’ve got to be focussing on their own product. Without this insane focus they’ll fail anyway. The chances of them dropping what they’re doing and stealing your idea is incredibly low. If you’re working with corporates and they want your idea they’ll take it. You’ll never be able to sue them. Your only hope is to do it faster and better. (Generally not an impossible task) The only time when I’d be cautious is when talking to someone else who has a track record doing exactly what you want to do. But that is pretty obvious and if they don’t have a track record of doing stuff they don’t count. But if you’re just an idea and they have a product/service, you really should be doing something different.

I honestly believe that you gain far more by sharing your idea, by bouncing it off your networks, talking to people, let them open doors, give feedback and ask the critical questions. Justifying yourself in these conversations is what hones your sales pitch to your customers. It what helps you define your business in the market. And you don’t get that from just holding it all in your head.

Sharing your idea, when it is just that, is the surest way to make sure you’re on the right track, to identify your much needed support structure, and move you closer to customer validation and actually starting something. ‘Cause it’s all worth nothing till then.

8 thoughts on “Why idea’s (+NDA’s) are worth nothing

  1. hi Roger, have you read the comments in that NYTimes blog article? A lot of them make a lot of sense. It makes sense to me to protect an idea especially if its a new idea that has minimal or no competition. I have two such ideas which I am preparing to launch into a startup based in Cape Town, but before I can do any awareness campaigns I feel a real need to protect the ideas.

    It seems very naive to think we can simply dicuss our business ideas openly with the public. While it would be ideal to know that nobody is going to take your idea and run with it, it is a real concern and not something to brush off lightly.

    Do you have any advice on IP protection in SA? Is it sufficient to do it in SA, or would it be necessary to do the same in the US?

  2. Hey Chris, I’ve read some of the comments and there is merit in not sharing the ‘vital key’ to making your idea the best. However, to not talk about your idea at all is FAR more limiting than anything anyone else can do. Particularly in our small environment. Investors only invest in people they know. If you stay isolated you make your life very hard.

    Generally, if just telling someone else your idea is a threat to it then you don’t have a high enough barrier of entry. A patent is only one (rather ineffectual) way to protect your idea. Another is specific domain knowledge, another a phenomenal team. There are plenty more.

    Register for a provisional patent if you want – any IP lawyer can do it for you at a price. But you’d never be able to defend your idea against a really big player anyway. (the case of Ford vs the inventor of the intermittent wiper comes to mind.) And yes, you’d have to register it in every country separately.

    Note that my opinion is slanted towards IT and Web technology startups as I cannot speak for outside my domain knowledge. But unless you’re building a physical product, a pharmaceutical or such that has a massive R+D development time, patents aren’t worth the hassle. Just build your tech faster.

    Feel free to get in touch if you want to discuss this in person…

  3. Yeah that makes sense. We should all just share our ideas and not worry about patent trolls, dodgy investors etc etc. Im an idealist so would happily follow this route. I am keen to bounce some ideas around, maybe refine a few things…perhaps sometime soon when we are both free.

  4. @adilson: I’d tell you: “They are nothing and do nothing if not made a reality. It is not the idea that is the weapon it is the creation or action. Idea’s are an unrealised potential – nothing more. “

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