When I tell people that I work at a company that makes apps, they often reply by telling me that they have a few app ideas of their own. If I ask what they are, I frequently receive a response along the lines of “sorry, but I don’t want anyone to steal my idea!”. While I do believe that a moderate dose of cynicism is healthy, the truth is that people aren’t interested in stealing your idea. On the contrary, they are probably going to hear your idea and think of ten reasons that it sucks.
If Uber had been pitched to me; an app that was illegal in most countries and relies upon a highly-active two-sided market - I would have thought they were crazy and I certainly wouldn’t have stolen the idea. In 2016, Uber is valued at over $60 billion USD and is one of the most recognisable unicorn startups in the world.
If someone does steal your idea, it’s not the end of the world, if anything, you might want to thank them. Facebook wasn’t the first social network, Google wasn’t the first search engine, Tesla didn’t make the first consumer electric car, and Apple didn’t make the first personal computer, mp3 player or smartphone. Not a single one of these giants were first-movers, however, today they are all undisputed market leaders in their respective industries. While they didn’t do it first - they did it better than any of their competitors, and that is what set them apart. I believe that this is best captured in the words of author Adam Grant:
“It’s much easier to improve on somebody else’s idea, than it is to create something new from scratch… To be original, you don’t have to be first, you just have to be different and better.”.
In mid-2014, Tesla CEO, Elon Musk announced that Tesla’s patents would be available to the public domain, meaning anyone could use them. While this may seem crazy, it is a clear manifestation of Musk’s confidence in Tesla. You can copy his ideas, but no matter what, Tesla is always going to execute their ideas better than you. Musk also knows that if he allows other companies to use his technologies, there will be more innovation and growth in the electric car industry - something that will hugely benefit Tesla.
As an app development company, we have the resources and capabilities to build mobile apps, because of this, people believe that we will hear their idea, take it and build it overnight. Frankly, the people that are capable of executing your idea are already busy working on their own stuff. And just because a company has the resources to execute on an idea, it does not mean that doing so is risk-free.
According to a 2016 report by NYU’s Stern School of Business, the average net profit margin for software and services companies in the US was 11.84% (after tax). In simple terms, this means that if a software company charged a client $100,000 for a project, the companies gross profit would be $11,840. Consequentially, if a software company were to build that same product without the client, they would have to fund the $88,000 in operating costs.
While it would undoubtedly be less expensive for a software company to develop an internal project, they would still be taking on a huge risk for something that might not make them any profit.
If you are seriously worried about someone stealing your idea, you can ask them to sign a non-disclosure agreement. However, according to Sydney law firm, Marque Lawyers:
“If your NDA doesn’t properly identify the information that you want to protect, it’s worthless. Don’t assume your template NDA covers everything.”.
While you could consider getting lawyers to draft up an NDA tailored to your idea, it is fairly common for businesses that work in innovative and entrepreneurial industries to not sign NDAs. This is because of a myriad of reasons, one of the most common being that the business has already been pitched your idea, or at least an overlapping idea 10 times before. Venture capitalist and author, Guy Kawasaki explains why he refuses to sign NDAs;
“Never ask a venture capitalist to sign a non-disclosure agreement … This is because at any given moment, they are looking at three or four similar deals. They’re not about to create legal issues because they sign a NDA and then fund another, similar company … If you even ask them to sign one, you might as well tattoo “I’m clueless!” on your forehead.”
Not only should you stop worrying about people taking your ideas, but you should talk about them as much as possible - especially to those in relevant industries. If people do want to steal your idea, that’s good news - it probably means that there is a market for it. And beyond that, the people excited by your idea are probably more interested in becoming partners than competitors - I know we are.
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