nakamaDemo

Ideas aren't worth much...

Recently I've had two friends of mine begin the process of starting companies... and while I'm thrilled that they're doing this, I'm more than a little wary about the perceived value of their ideas...

So, one friend is working with a sibling on a startup. The friend's thought a lot about building a startup in the past (and has her own consultancy) so is definitely ready to give this a world. Her sibling, though, has a bit of a confused view of the value of the idea. Basically, the company is YouTube for a particular vertical, with an e-learning spin on it. It's a pretty cool idea, and I'm pretty eager to see what happens with it.

The problem? The founder here is so paranoid about his idea that he's refused to show it off to potential customers to get feedback on this. I think my friend's managed to get him past this recently... but you get the idea.

The other friend is working on a cool Internet service for the healthcare space. It's a cool idea, and he's got it in trials already, and the feedback so far seems fantastic.

The problem here? He's worried that VCs might copy his idea and is bothered that they don't sign NDAs. Now, while I can think of one particular Canadian VC that DOES copy people's ideas and build companies around these ideas... they're NOT a good VC. Good VCs have lots of deals to choose from : They don't want to build your idea. If they like the space, they'll invest in it... and while that means they may invest in one of your competitors, they're unlikely to steal your idea to start and build a new company: they're better off using the time to go and find other companies they want to invest in.

Guy Kawasaki's got a great quote (I hope I don't misquote him too badly): If you've got a good idea, five people are already working on it. If you've got a great idea, ten people are already working on it.

Let's think about this : we all read the same papers, blogs, and magazines. We all go to the same conferences and talk to the same people. Do you really think that the core idea is something someone else hasn't? It's pretty unlikely.

So what differentiates? Team. Business model. Structurally unfair advantages (i.e. "my entrenched competitors can't do this, and here's why..."... and it's got to be a business reason, not a technical one).

I've felt this way for a while, but recently I've been working on starting a new company. Many friends keep asking "can you talk about what you're doing, or is it all hush-hush?" Most are pretty surprised when I reply by telling them all about it, or just forwarding a slide deck that goes pretty deep into what we're doing.

Most are even more surprised when I talk to people that work for potential competitors and tell them what we're up to.

Why would I do that? Well, for the first part, the feedback we can get to make the company stronger is worth more than any risk of someone "stealing the idea"... and as far as competitors? They're not stupid. They'll see what we're doing soon enough, if they're not already thinking about it ... I'd rather tell someone there why I think we'll win... and maybe they'll decide to come and join us!

So there you go... my quick thoughts on ideas and their value. Don't get me wrong, a fleshed out business plan, team, customer validation, partnerships, etc. All this stuff has real value... but the paragraph pitch? Worthless.

I'd love to hear what other people think about this. It's not just me ... right? :)