In this month’s Entrepreneur magazine, startup adviser and mentor Ed Hatton provides four tips for turning your idea for a tech startup into a business, without someone stealing it.
To develop an idea, founders need to approach service providers and investors. This may require divulging your secret recipe. Unlike offline businesses or products that can be protected by patent laws, internet-based businesses require a different approach.
#1 Deal with trustworthy suppliers
Check references carefully before picking financiers and advertising agencies. Opt for reputable and established suppliers who respect the confidentiality of their clients’ ideas.
#2 Use a Non-Disclosure Agreement
Although banks and financial institutions will generally not sign NDAs, developers, resellers and technical service providers are more likely to comply. Feel free to look around the internet for NDA templates, but make sure they are applicable to your country’s laws.
Before seeking assistance from financiers and investors, consider starting small and opting for family finance. Doing things yourself and managing the unknown can be a great learning experience — and in the age of the internet, resources are plentiful.
#4 The best idea: Launch with immediate benefit to consumers
Operating in stealth mode is difficult, especially in the age of CMSes and frameworks where ideas can quickly be copied the very moment they launch. Think Groupon, then LivingSocial, then literally, a hundred other copycat sites in a short amount of time.
Hatton advises to avoid worrying about stealth, and to invest most of your effort into launching with the maximum amount of benefit to consumers. For example, if your idea revolves around producing unique content, launch with a lot of it so that the innovation becomes immediately useful to consumers and develops a loyal following. This is what made customer service watchdog Hello Peter so successful, says Hatton.
“First mover advantage, if well used, is probably the very best form of protection. Consumers who love and respect the product or service are unlikely to switch.”
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