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How do I protect my business idea? How can I find investors without giving it away? How can I get people to join me without telling them all about it? What if they steal my idea?
Here’s the hard truth about protecting your business ideas:
You don’t own your idea, and you can’t sell it.
You don’t own your idea. An idea is like a summer breeze—you can enjoy it, maybe use it to power your windmill or sailboat, but you can’t own it. And you can’t steal it. An idea is like a good joke—using somebody else’s joke is not stealing it. Yes, there are rare exceptions to this rule. The exceptions are that you can patent an invention, copyright a creative work (songs, movies, books, software), and trademark a commercial phrase, image, sound, or video. I’m not dealing with those exceptions in this article. That is all for some other time.
Important note: Sharing an idea is giving it away.
You can’t sell an idea; the first reason is because you don’t own it. The second reason is because you can’t find anybody who will buy it. If you don’t believe me, do a good web search. You’ll find thousands of people—no, probably millions—saying (or posting) that they have a great idea they want to sell to an existing company. And you’ll find nothing, not one example, of a company actually buying an idea. Companies buy companies, products, websites, software, start-ups with traction, and occasionally start-ups with just an idea and a team, but not ideas.
So, get this straight: What you are supposed to do with that idea is build a business with it. Add value. Gather a team, get going. Get customer commitments, early sales, and traction.
Daunting indeed…so what? Do nothing? Give up?
Seriously, if you’re thinking you can sell your idea as such, stop reading this post. I’m not writing this for you. You are wasting your time. Businesses and people that cater to that pipe dream are almost all plain scams. The only exceptions to that rule are a few legitimate businesses that help inventors apply for and market patents—and this article isn’t about patents. If, on the other hand, you’re ready to work to execute on your idea, then read on. I want to help you protect it as much as you can, while you build on it. That’s worth discussing.
Don’t let the cat out of the bag.
The first thing you do with your big idea is shut up. Borrow from all those spy movies, and adopt a “need to know” policy that covers who you share with, and how much you share. Remember, people who hear your idea and execute before you do didn’t steal your idea; they executed on it. They deserve to win. And if you did nothing but talk, you deserve to lose. The next thing to do is figure out who does need to know, and tell those people, but carefully, and appropriately. If you can execute on your idea all by yourself, do that. If you need a team to build it, gather your team carefully. Talk to people one at a time. Start with people you trust. Feel them out first, for their interest, before sharing the whole idea.
Who can you trust?
Don’t get paranoid—you’ll never gather a team if you can’t trust anybody with your idea. Legitimate investors won’t steal your idea; they need teams to execute, not naked ideas (remember, an idea has no value; the work gives it value, and sometimes a team gives it value). I’ve been in business more than 30 years now, and I’ve had a lot of success with the straight-in-the-eye moral and ethical commitment. Asking, “Can I trust you with this?” isn’t an iron-clad solution, for sure; so many people give secrets away without even having bad intentions. Moral and ethical commitments get broken, but so do legal and written commitments, especially around ideas and non-disclosure. And, sometimes I suspect the straight-in-the-eye method is more binding than legalese in letters (but that’s just me, and I’m not an attorney). Not to mention, is it possible that some people interpret an allegedly binding document as rules of a game, to be circumvented?
Use common sense with investors and investor groups.
I’m really serious that legitimate investors won’t steal your idea—but, on the other hand, when you pitch to a group of 30 or more investors, there can be leakage. Despite all good intentions, when there’s a group of people listening, responsibilities get diluted. At the very least, discuss it with a group, quickly, to bring up the possibility of conflicts of interest.
If the two paragraphs above sounds dicey, good. That’s why I say shut up, and deal on need-to-know only. There are risks, but it comes with the territory. You can’t keep an idea secret and execute on it at the same time, but you can be smart about how much you say.
Should you make it legal?
Some legitimate experts will insist on having people sign confidentiality and non-disclosure documents before you share anything with them. They are often attorneys, and I’m not; so maybe they know better. I say do what you can. Do the legal end when it’s practical, but don’t trust it. Don’t think it solves the problem. You’ll never get a legitimate investor to sign one of those documents before you pitch. If an investor signs off on a non-disclosure, she’s just ruled out a whole class of business she can never invest in without risking legal action. They just don’t do it. And, I think lots of people who you might want as team members would be put off with the idea of signing a legal document before talking about it. I would.
On the other hand, some kinds of situations, such as starting to work with a business ally doing co-promotion, or working with vendors, lead almost naturally to non-disclosure documents and confidentiality. In some situations, people expect to sign those documents before discussing a deal.
Work with an experienced small business or entrepreneurship attorney who gets it. Let your attorney tell you when to get signatures first and when not to. And if the attorney says you need potential investors to sign off before you pitch, then change attorneys.
Bottom line: Don’t talk about it. Do it.
In my decades of doing businesses, I’ve seen thousands of would-be start-ups get derailed from excess secrecy, and not one fail because its idea was stolen. Don’t get all balled up with idea constipation, worrying about who’s going to steal your idea. Get going and build a business. Be smart about protecting your idea, but understand that if you don’t risk sharing, your chances go way down.
Have you had a business idea that you were worried about protecting? How did you handle it?
Written by Tim Berry
Image credit: businessnewsdaily.com
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With money in your pocket and dreams of doubling, tripling or quadrupling whatever you have could be a dream that makes you walk around seeing only dollar signs everywhere you go. Reading stories about the likes of Warren Buffet, J. Paul Getty and others could heighten that state but here is a reality check; they have come a long way, you are just getting started. Investment is a game soaked in passion and obsession built on resilience, persistence and shrewdness. Amongst these three qualities, the vaguest of them – shrewdness; comes first. It would amaze you to learn how shrewd every successful investor has been to get to where they are today.
Without much ado, I give you the fundamental do’s and don’ts of investing and I hope this would be the beginning of knowledge as you venture into investing or seek to turn around your fortunes if you are in the business already.
Carry out sufficient research
How much research is enough? There is hardly enough research that can be done on any field except what you’re supposed to be researching on is your original creation and has never been attempted. In investing, every stock has a company behind it, so in your own best interest, research the company with whatever (legal) means you have; to make sure you are putting your hard earned money in the right place. The same goes for getting a financial advisor. Do your research thoroughly.
Diversify your investments
Have you heard or read a quote from Warren Buffet claiming those who diversify obviously do not know what they are doing? To a novice investor, diversification of investments mean a large portfolio of investments but actually it means investing in different sectors so you don’t have a whole lot in one single sector. Diversification helps investors to not be over-dependent on one sector.
Pay very close attention to the costs
To prevent a meltdown especially while having high hopes and excitement, you have to pay close attention to the cost associated with every possible investment before making a decision. Commissions, expense ratios and advisor fees, all bite into your into profit earnings and if not checked could take up a large fraction of your earnings.
Have a savings account
While this might come with minute interests, investments are for a long period of time (ideally for over 10 years) so you would need something to fall back on. This is where a savings account comes in handy. You might need to have separate accounts for different needs but the bottomline is; have a separate account.
You must not be led by emotion
Investing should be done on ONE fact only; data. Emotions could be your bane; negative or positive. Negative emotions like fear could spell doom for an investor while positive emotions like love could be as fatal as fear. Keep both emotions at bay as you don’t need either in large doses. You only need the right data.
Do not wait
Simple. You can’t afford to give money up to procrastination.
Do not try to place the market on a stopwatch.
You can’t just time the market so don’t even try to. Any attempt to do so, would only amount to self-deceit.
Armed with these nuggets of investing wisdom, you will go from being a speculator to a seasoned investor.
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His story is one we all love to hear, one that millions maybe even billions dream about. A story of going from nothing to something, from the slum to the palace. That’s the story Ambarish Mitra; in 1997 he was a teenager from a middle class family who ran away from home. A heated situation with his father who wanted him to study engineering left him with an option of seeking refuge in the slums which he took. While struggling to survive, he noticed an advert that got his attention and today he is part of an elite few changing the world by the second and being recognised for their ingenious ideas and drive.
We have heard how some of the biggest companies today in the internet business started from the garage in a country like the United States but stories of Ambarish Mitras are fewer than the garages in New York.
Read more… http://read.bi/1E2GvxL
Image credit: blog.blippar.com
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In the last article, we discussed some qualities that separate successful investors from those that simply make up the numbers. Investment is a beloved game and it is also a way of life to some while to others it is a means to an end. While the latter group look and sound more serious, the few that make up the former are those that hold sway in the world of investment as it is a code they live by, not just means to an end. From the likes of Donald Trump to George Soros who both have different ideologies on investment but the same essence when the fundamentals are placed before them.
In this article, we will consider some other qualities that separate great investors from mere investors. These other qualities are:
Successful investors are persistent
There is no greater risk than putting your money in a dream and watching how it turns out even regardless of pre-calculations and strategy. Most times, events seem to turn out the very way you expect them not to and sticking to your investment strategy then becomes a thing of essence. Mere investors would most likely switch strategy but great ones would stick to theirs; win or lose. While this sounds almost stupid, most successful investors stick to their choice strategy no matter what.
They are disciplined
Hardly any success can be achieved on earth without this quality; discipline. Discipline is an essential component of successful men and to be a successful investor it is an essential commodity. Great investors have been known to be disciplined as it concerns investing rules and principles and they have also been known to place themselves under strict self imposed standards. Discipline is what makes them stick to their strategies and streamline their efforts and choices in spite of which lane the market is taking.
They understand leverage thoroughly
While this might scare an ordinary man or a mere investor, successful investors understand the meaning of leverage and utilize it to the fullest. They understand how to make money by using other people’s money while an average investor would want to use his personal money. Other forms of leverage used by successful financial investors include: creating a great professional team, investing experience or inside information. These make successful investors stand out from the mammoth crowd.
Successful investors thrive on risk
While investing itself is a risk as one delves into the dark expecting to find the light at the end of the tunnel, ignorance is a greater risk. Every experienced investor understands that the investment arena deals with 50-50 chances of success; no more and no less. It never changes; it is always a 50-50 probability of success or failure no matter how much inside scope you have. But while experienced investors invest in a strong risk management system (Hedge), the others go in naked and when it falls through, they are badly hit.
They learn from their mistakes, quickly
You can never become a successful investor without some very serious blunders and miscalculations. But while some get broken by their mistakes, successful investors realize that it is one of the things they need to get better, so they stand up and dust themselves clean. While mere investors perceive mistakes as a disaster, successful ones see it as an opportunity to learn and they do so quickly with no intentions of repeating them.
They create a team of experienced and savvy professional advisors
This is a form of leverage on its own. A very important one at that, and successful investors are known for this while others scurry around going by readings off the hands of pundits and other publications. Great investors have a network of friends who are also professional investors and they share ideas and brainstorm on investment challenges which gives them an edge over lone ranger investors.
The qualities listed in this two-part article help in distinguishing between average and exceptional investors. At PitchOffice, we aim to ensure that you don’t just invest but do so shrewdly.
Image credit : savvybuck.com
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