Sharing too much of your Business Plan?
Yesterday, I attended an event organized by StartX, Stanford’s accelerator program for startups by Stanford founders and came away much impressed by the quality of engineering talent and innovation concentrated on one campus. When I was researching some of these enterprises-of-tomorrow, I was struck by how secure their ideas and strategic information was, despite just having shared it with an auditorium full of people. This is certainly a culture and skill that will help Indian entrepreneurs and student startups share and learn to accelerate their growth.In a world where ideas and brands are increasing in importance (ref: Google acquires Motorola: http://tcrn.ch/niFYRE and Paying for domain names: http://bit.ly/fDTm0B), no matter what your scale, it’s worthwhile to think about how you are protecting your enterprise.
1. Who else is out there?
Depending on the nature of your business, find out who else is similar to you using any combination of the many tools available to you. If you are a product company (or planning to become one), work with a lawyer or legal service-outsourcing firm towards a global Intellectual Property search to identify what’s already out there and the implications on your own business. If you are building brands, look for trademarks and copyrights within your stated industry and first ensure you are not in violation while filing for protection yourself. For web-based companies, best practice would be to have consistent and unique names across key domains (like .in and .com) – this has proven to be more valuable in the long run than owning a more preferred name on a less common domain.
2. Document *everything*. And store securely
If you are in the startup stage or working on setting up R&D to expand your product suite, this applies to you. Firstly, build end-to-end prototypes instead of pieces of a solution. This will not only help you roll out solutions at scale but also protect your idea better since it’s complete. Secondly, document the prototype process extensively with as much rigor as possible – actual steps, results, observations, diagrams, people involved, and all of these with timestamps. Store the information securely and you can potentially use it as insurance in a future when our glorious country injects some efficiencies in its judicial system.
Till then, this will at least enhance your design through iterative learning!
3. Ask for non-disclosure
There are many levels to non-disclosure. It could be as simple as agreeing with your colleagues before hand on how to present your idea without revealing core IP, or asking for a signed NDA (Non Disclosure Agreement). If you are meeting a VC or any kind of active investor, ask for an NDA. (Also get references on the people you are meeting if you are planning to share a ot of information with them!) Investors trade in information and networks, so they will use the knowledge you share with them in whatever context it is useful. Make it clear beforehand what your expectations are – do not assume it is understood.
4. Share, but Smartly
Look at your pitch again. There are three parts to it –1.context 2.solution 3.impact. You should share as much of the context and impact as you need to convince your audience that your solution is very very important. Most entrepreneurs spend large amounts of time describing the solution which not only is less important in that first pitch to a stranger, but also gets you onto the dangerous territory of perhaps sharing too much of the mechanics.
You do not have to get into the details of how the solution till work other than in very select situations – for e.g. when you are meeting a client/investor. In those cases, you must convince the audience of the feasibility of your solution without sharing its process in entirety. Make it difficult for your pitch to propagate – ask for non-disclosure, don’t email easily shareable documents and try to answer as many critical questions in person or over the phone as possible. Always lay down the boundary of what information you strongly feel is sacred and must be inviolate. It’s important that this information not be necessary to visualize the impact.
Last but not the least, get some advice from lawyers and mentors on your specific situation. And next time you share your plans, you will leave an impressed audience dying to know more about HOW you are planning to execute and greatly interested in that second meeting you wanted.