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Your business idea is worthless

  1. Worthless idea
    iStock_patpitchaya
    Kat Haylock

    Kat Haylock Community Editor Staff Member

    Posts: 322 Likes: 136
    7 |

    In his twenty one years of experience, Silicon Valley entrepreneur Steve Blank has had his business ideas stolen twice. One was a benign case of a borrowed slide. The other, he reflects on as a nightmare: a competitor had raised funding using Blank’s ideas and slide deck.

    Blank and his co-founders went through stages of disbelief, anger and resignation. They talked lawsuits and ugly press releases. For an established entrepreneur who had thrived in the dot com bubble – Blank had seven tech startups under his belt by 1996 – the theft was a frustrating loss of a vision.

    But for the entrepreneurs who frequent UK Business Forums, the threat of a stolen idea is altogether more serious. With the pressure of a nine to five job, long commute or family commitments, a secret business idea becomes a golden mirage – unflawed and, most notably, untested.

    Many arrive on the forums tangled in an inevitable catch-22: any attempt to validate or gain investment for a business idea immediately exposes it to risk of theft or ruin. “I'm certain most people will agree it’s a great idea and will really take off, once I’ve disclosed the full details to them,” one user wrote in a recent thread. “The issue I have is how to attract funding without giving the idea away?”

    The short answer is that you don’t. Pursuing an idea means exposing it to the sharp sunlight of the free market or the prying eyes of an investor, and that’s a frightening prospect for many. But here’s the good news:

    Your idea is worthless

    An idea, as Clinton wrote in this thread, is worth nothing. Regardless of how good you think your idea is, it makes up less than 1% of the deal; the other 99% is skill, knowledge, capital, contacts, time, blood, sweat and tears.

    I hate to break it to you, but: you’re probably not a Steve Jobs-esque product visionary. Fact is, there are only about three or four businesses in the world that have a USP. You probably don’t have a USP. Most likely, you have what they call in the marketing world ‘points of differentiation’.

    Ideas are one-a-penny. The hard part of an idea is converting it into money, which is far more difficult than coming up with the idea in the first place. As Obscure explained to a worried UKBFer: “Your idea probably isn’t as good as you think”.

    And even if it is “as good as you think” other people won't think it is. And he adds, even if they do think it’s a great idea, they probably don't have the skills or money to make it happen.

    So, this is all sounding very negative, isn’t it? Well, no. It’s actually incredibly liberating. Once you stop fetishisizing your idea, you can focus on the reality: “Business is as much, if not more, about the execution as the idea,” says Clinton.

    So instead of cloistering your idea out of fear of ‘losing’ it:

    Don’t worry about the competition

    You were always going to face competition one way or another. “If you don't already have a plan to beat that competition then you really shouldn't be bothering at all,” writes Obscure.

    “If you do have a plan to beat the competition then excluding sources of financing makes no sense as it just reduces your chances of getting the idea off the ground at all.”

    Once you let go of your fears, you can approach a potential investor with a new mindset. But the psychological battle isn’t over.

    The reality is, again, that your idea isn’t worth much. As Clinton explains: “Just thought I'd say that again because entrepreneurs who think highly of their idea hardly ever consider this or appreciate how investors think. Many pitches make absolutely no mention of what the barrier to entry is and/or how they'll establish early market dominance to prevent or frustrate competitors from getting off the ground.

    “I don't know why wannabe entrepreneurs struggle to understand this. The idea is worth diddly squat. If ideas are worth even a quid each, come on over one day and bring a million quid with you because that's how many ideas I have.”

    Cherish your head start

    Have faith in yourself. If your idea is really that good then chase it as hard as you can. As Steve Blank wrote, reflecting on having his idea stolen: “Our competitor was executing on hypotheses we had developed nine months ago, and their strategy remained static.

    “We on the other hand, had moved on. We had discovered detailed information about what customers really needed and wanted and turned our original hypotheses into facts. We had validated our new assumptions by a set of orders, and we had pivoted on our business model. Our original idea had been nothing more than an untested set of hypotheses.

    “Truth be told, we were no longer the company in those stolen slides.”

     

    #0
  2. Clinton

    Clinton UKBF Ace Full Member

    Posts: 2,537 Likes: 805
    Thanks for all the mentions, Kat.

    Great post. I shall link to it the next time we have one of those threads! :)
     
    Posted: Aug 10, 2017 By: Clinton Member since: Jan 17, 2010
    #2
    Kat Haylock likes this.
  3. Kat Haylock

    Kat Haylock Community Editor Staff Member

    Posts: 322 Likes: 136
    Thanks for writing so many brilliant posts on the subject - they inspired this article!
     
    Posted: Aug 11, 2017 By: Kat Haylock Member since: Jul 11, 2016
    #3
  4. Kelly Drewett

    Kelly Drewett UKBF Newcomer Full Member

    Posts: 23 Likes: 8
    You've just inspired me to go for it!

    I think you are right, the world is so big, and my idea so small.
     
    Posted: Aug 11, 2017 By: Kelly Drewett Member since: Dec 10, 2016
    #5
  5. MDJCM

    MDJCM UKBF Newcomer Free Member

    Posts: 28 Likes: 2
    This didn't really solve the scariest part:

    "The other, he reflects on as a nightmare: a competitor had raised funding using Blank’s ideas and slide deck."

    "Blank had seven tech startups under his belt by 1996 – the theft was a frustrating loss of a vision."

    Ok, so what if he had his first tech startup idea stolen instead of his 8th? Would he have gotten to the second startup? I'd say be careful who you pitch to, and have a version of the pitch that doesn't give everything away. If it has legs, then you have the option to reveal more to those who can see it.
     
    Posted: Aug 11, 2017 By: MDJCM Member since: Oct 22, 2011
    #6
  6. Ibrahim S

    Ibrahim S UKBF Newcomer Free Member

    Posts: 8 Likes: 0
    Good point of view.

    I would say if you have a dream/idea you better do it yourself, don't wait for investors or anybody to push you forward, just do what you have to do by investing your time into it and take it to the limit.

    It's okay to start from nothing, this what keeps the fire in you.

    This is what I believe.
     
    Posted: Aug 11, 2017 By: Ibrahim S Member since: May 1, 2017
    #7
  7. Clinton

    Clinton UKBF Ace Full Member

    Posts: 2,537 Likes: 805
    This whole notion of one's idea having a lot of worth is a sad by-product of an education system where everybody has to "win", everybody's opinions (on everything!) are equally worthy and kids grow up thinking the sun shines out of their backsides.

    The good news is that I know a lot of young adults who have, despite modern schools, grown up with a more realistic view of the world ... and their place in it. So, it's possible, and that's good news.

    You need to put some work in to add value to an idea. The more work you put in, the more your idea is worth. So your idea starts at a worth of £0 and then as you build a prototype of your invention and prove it works, collect neutral third party feedback, do market research to test the size of the market etc., you are adding value to your idea.

    But your idea may still suffer from several problems. For example, it may be unpatentable because it's very similar to something someone else has invented. If so then your idea doesn't have commercial value (because it cannot get the legal protection needed to exploit it for a profit). It may be that it violates some arcane EU directive. It may even just be so not politically correct as to cause a public outcry (like that recent app to blackface your image! How quickly did that get pulled?!) and therefore not something that can ever generate a profit.

    You can add value by demonstrating that your idea is patentable i.e. filing a provisional patent application and add further value by actually getting a patent.

    So what about those ideas that don't involve the development of something that can get some form of intellectual property rights protection?

    Well, they will always be worthless because there is no IP barrier to entry and as soon as you launch your business one of the big boys - Microsoft, Amazon, Tesco, whoever - can simply step in and use their commercial might to wipe your business off the face of the earth.
     
    Last edited: Aug 14, 2017 at 11:24 AM
    Posted: Aug 14, 2017 at 11:20 AM By: Clinton Member since: Jan 17, 2010
    #8