Don’t Worry About Giving Your Idea Away. Validating Your Startup Is More Important
Market research is key to proving your concept. Yet many founders are afraid their ideas will be stolen in the process
Remember that beginning scene in “The Social Network” when, after getting dumped by his girlfriend, Mark Zuckerberg hurries back to his Harvard dorm room and instantly comes up with the idea for Facemash, soon to be Facebook.
Well, maybe this happens once in a blue moon. But for most entrepreneurs, life is not a movie.
The majority of founders that successfully launch a business do not arrive at an idea with instant traction.
Most successful startup founders are typically in one of two positions: Some happen to have years of experience in an industry, can clearly identify an industry-wide problem and are uniquely positioned to solve that problem.
And the majority of other successful founders — especially first-timers — do the necessary market research to find product-market fit.
You may not believe it, but most successful founders are doing months of market research before they actually launch their product or company.
If you don’t already know, market research means doing historical and cost/benefit analyses, gauging investor interest and excitement on social media, and of course, soliciting feedback from potential customers that provide a candid look at whether you are solving the problem you set out to solve.
It’s true, many startup founders avoid this type of research — and some do succeed — but skipping this important step might also explain why 42 percent of startups cite “no market needed” as the main reason they failed, according to Small Business Trends.
So, moral of the story, do your market research.
However, a lot of founders are scared to do market research for the sole purpose that they might accidentally give their idea away.
It is a reasonable fear considering that most of the time market research often involves interviews with other industry professionals and even potential customers, all of whom could have more money, more resources, more knowledge and just as much interest in the space.
Don’t Be Afraid Of Idea Thieves
It’s a scary thought: You’ve got this dynamite idea; you can see the market potential and someone hears your idea, jumps on it and doesn’t leave you with a pot to piss in.
But there are a few realities: Startups are risky business so be ready for a race, and honestly, you and your idea aren’t special.
“What could you possibly give away that others don’t always consider? Which is to say, trust me, your idea is neither original nor alone,” Paul O’Brien, the founder of MediaTech Ventures and Seobrien.com, said on Quora. “The first step is to get over the notion that anyone else having the idea is the concern to have because if anyone else can do it better, and wants to, they will. And you’ll lose. Your job is NOT hiding your idea, it’s figuring out as quickly as possible how to not fail.”
Don’t worry about others stealing your idea, or giving too much away, adds Bill Yu, an investor at the Employee Stock Option Fund.
“Instead, you should begin as soon as possible. You should want to keep your initial test group informed for better feedback,” he said. “You already have an idea, and are ready to begin research — that’s already a great head start.”
Besides, look at some of the companies with copycats — Uber, Lime, Facebook, etc. Some pretty big names in there.
Yes, I am sure some companies lose out to their copycats.
But a lot of times having someone copy your idea could also just be an indication that you have found an extremely huge market with tons of potential.
The Customer Is Key
Without your customers, you don’t have a company.
A lot of startups don’t start paying attention to the customer until they have already invested significant resources into their startup. But it’s best to get customer feedback early and often.
“I promise you… customer feedback is THE most important thing in starting up a business,” said Ben May, the founder of Collabed.com, a small business network that uses technology to connect like-minded small businesses and help them work together to reach more customers, reduce their costs and achieve mutual growth. “You will realize many of your assumptions were wrong, but you will gain huge insight to ensure a better chance of product-market fit.”
The days of stealth mode have passed, says Kim Davis, a consultant with more than 10 years experience in helping businesses scale.
“It is all about customer and market validation. The more thorough the more you know to proceed,” she said. “The feedback you receive will shape you moving forward. You should be market testing at every turn to ensure you are not only on track but to ensure you have a customer base.”
Davis refers back to the book “The Lean Startup”, which aims to shorten product development cycles.
The book’s methodology asserts that when startups spend their time building products or services to meet the needs of early customers, the company can reduce market risks and avoid the need for large amounts of initial project funding.
In plain English — listening to your customers equates to saving time and money.
The Idea Doesn’t Matter
Everyone has a great idea. Ninety percent of startups fail. At the end of the day, your idea does not matter.
“Remember that the idea is only 5 percent of the challenge,” said May. “The rest is all execution with a bit of luck thrown in.”
Most investors consider the founder(s) one of the most important pieces to evaluate when looking at a potential investment.
Are they willing to put it all on the line? Are they calm under pressure? Are they resourceful? Can they solve real-world problems? Do they have a vision for the company? Do they know how to work well with others?
Regardless of the idea, all of these questions will help determine whether your idea and company will succeed.
And the founder is their best self when they have done their homework.
In fact, market research is probably the best line of defense against others that might want to take your idea.
“The more time that you’ve spent exploring your idea and figuring out what works, the more of an advantage that you’ll have against copycats and followers,” said Yu. “The research itself will prove invaluable, like everyone else who is tackling the same problem as you will have to overcome the same obstacles. Go go go!”
Want more stories about venture capital and startups? Subscribe to my newsletter to get them all in your inbox.