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Sharing New Business Ideas, Trust and NDAs

Sharing new business ideas can be a scary proposition for the idea originator. Here are the kinds of worries people typically ask me about when it comes to sharing their 'baby' with someone else for feedback and possible implementation help.

Do you feel corporations are fair?

I have an idea that could be worth millions to a company. Should I drop it in their suggestion box and hope they pay me?

Should I build a business around it and help them indirectly?

How about getting legal agreements in place and then meeting with the company under an NDA?

How would you protect you business concept/idea? Non-competition agreement? Joint venture contract? Trademark or registration?

[Originally published March 1, 2016]

Ethics In Sharing New Business Ideas

My answer begins with the statement that business is business, and that is a different world than personal relationships. Loyalty stands for very little, unfortunately. If you find a business associate who values loyalty, try to stay in touch with them.

An NDA/non-compete and a licensing agreement should keep you protected, if you're going the road of giving the idea to someone else to execute.

Let's talk about execution.

This is how an idea's value can really be measured when you bring it to someone else.

How interested are they in executing it?

You have to know this before you meet and disclose the idea.

And then you still have another factor to consider: honestly (or morality). We can do this with a 2x2 grid demonstrating four possibilities in a sort of "Idea Sharing Risk Table":

sharing new business ideas

They are interested and honest.

They are interested and dishonest.

They are uninterested and honest.

They are uninterested and dishonest.

Four Quadrants of Sharing New Business Ideas

Are you starting to see why it's important to know how they rank on these two factors before you reveal your idea?

We're in negotiation now. Which, by the way, is selling. I am not a lawyer and this is not legal advice. What I am sharing is selling advice.

You had better have your BATNA (Best Alternative to a Negotiated Agreement) figured out for each of these four possibilities.

Copyrights, trademarks, patents are all helpful, but they are not bulletproof protection.

Especially patents.

Utility patents, for something like a zipper on an article of clothing being termed as a "device pocket", are the kind of thing Mark Cuban goes berserk about the silliness of. They're the veneer of protection.

Regular patents only protect execution (see how we're back to that word again?) specifically the way you have explained it.

So 3M has a patent on Post-It (tm) Notes.

The patent is for a lightweight strip of glue running across the top of a small piece of paper.

If you can come up with another way of temporarily securing the note to other objects without using lightweight glue, 3M's patent is meaningless. You can just go do that.

That's why when you disclose your idea, the NDA is not really protection. If they can figure out another way of executing your idea, they're home free.

If they are interested and honest, they will tell you so. They are ready to get started, will play by the rules, and you can expect to be paid properly. [SAFE]

If they are interested and dishonest, they will tell you it's an airy-fairy idea, they don't like it, it won't work. But they were quick to agree to the meeting. And they kept asking you questions about how you planned to execute the idea. [DANGER]

If they are uninterested and honest, they again will tell you so. It may be hard to book the meeting. They keep bumping the date. This may be a good opportunity for a reality check, and possibly getting execution ideas from someone who knows how to do the work but isn't going to get involved in it. [SAFE]

If they are uninterested and dishonest, you are going to get the run-around. The meeting will take forever to get, or get booked and run so fast it's like poop through a goose. They may ask a lot of questions to "hedge their bets"...but they'll never execute. [SAFE]

As you can see, most of the time, you are safe when sharing new business ideas.

Risk and Execution When Sharing New Business Ideas

Remember, execution is rare.

You can be sharing new business ideas all you like. People are already busy with their own ideas, which they believe to be valuable. They are unlikely to remove resources from those to execute your new idea.

So overall, you are relatively safe from being ripped off...especially if you are careful who you share your idea with.

How long it takes you to book the meeting, the process they want to follow, how they ask and answer questions...all these will show you their level of honesty. Easy come, easy go. There should be some rigor involved in setting up an agreement like this. Honest people will probably want to see you put some skin in the game, too.

2021 Update On Sharing New Business Ideas

In the five years since this post was first published, I've continued to see a great deal of nervousness in sharing ideas between new connections. Especially with technical concepts, the new business owner or founder tends to believe someone is going to "steal their baby". But this is a sign of the founder being a newbie. It immediately shows the other party that you are inexperienced and they will probably avoid working with you.

On the other hand if you are experienced and really feel you have reason to be nervous in sharing your ideas with another person, that's a sign you shouldn't be doing business with them. Should you have to "lock things down" and try to protect your intellectual property in a relationship as you go into it, would you truly be surprised later on if the other party found a way to wriggle out of those terms? How things begin is likely how they're going to continue.

Remember that most of the time you're safe to share. In those cases where it feels unsafe, trust your impressions.

>>Jason Kanigan is a business strategist concentrating on operations improvement, entering new markets, and sales training. Book a consultation with Jason here to discuss your specific situation.<<

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Tell Me Your Price: How To Stop People from Asking and Disappearing

Tell me your price! Perhaps the most common question salespeople get from prospects. And why? The answer is simple: the prospect does not know what else to ask.

What often happens in the real world is this: people ask, "So, what's your price?" If you tell them, the conversation is frequently over, isn't it. They disappear. They got what they thought they were looking for, and went away with your information. You never hear from them again.

Afraid to raise prices tell me your price

What were they doing? Every buyer, whether they consciously, deliberately do this or not, is making a spreadsheet. This spreadsheet is to compare the various options and see what the buyer can get for the lowest price.

Sounds okay, doesn't it? Where's the problem?

Tell Me Your Price and the Vanishing Prospect

In this video, I explain what the critical problem is with the all-too-common "Tell me your price" buying method:

 

Especially in RFP (Request for Proposal) situations, where there's zero dialogue between buyer and seller, and the seller has to respond to RFP documents with bid documents of their own, there's a lot of guessing going on.

Early in my career I worked for a firm in the power generation field that made control panels. RFPs would arrive and I, in my sales engineer role, would respond by preparing a bid document. The RFP would say something like, "The panel shall measure voltage." Okay. I can do that in several ways, each with its own plusses and minuses. An analog dial will do the job: it's cheap, but it is not incredibly accurate. A digital readout on a PLC unit (kind of a precursor to the computers we're familiar with today) could also do the job: more expensive, but more accurate. Those are just two of the options, and it's up to me as the salesperson to figure out which is best for that client. And maybe best for my bid! Maybe I want to position us as the lowest cost provider, and to accomplish that I pick all the cheapest ways to meet the feature requirements.

Sounds good, right up to the point where the buyer engineer reads my bid documents and says to themselves, "Aww what a bunch of junk! I don't want analog gauges! I want a high level of accuracy in our readouts."

But that is something I will never hear.

The RFP process is the same thing as a caller asking, "So, what's your price?" and then vanishing.

Without dialogue between buyer and seller you never get a clear idea of what everyone wants out of the transaction. You never hear preferences. You never get the chance to discover how you as the seller could really delight the buyer, with some feature they didn't know you had and you didn't think was important enough to mention.

2021 Update:

Thanks to the global situation over the past year or so, buyers are more willing to invest time and energy getting on a phone or video call to share their requirements. This is your opportunity to learn directly from the customer what their actual needs are...instead of guessing. Take advantage of it.

Go out of your way to make use of this renewed interest in personal contact, and use the opportunity to not only develop trust but also discover what your potential customer really wants and means. Ask them, "Would you like to get on a quick call to discuss, so I can be clear and make sure I'm offering you on the right things?" Respect their time. Keep the discussion to 20-30 minutes maximum—you can always have another call later when they find they enjoy speaking with you.

Don't let these easy opportunities slip by, and don't quote based on guesswork.

>> To book a call with Jason Kanigan and change your sales process to give you the edge in price-sensitive situations, click here. <<

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How Will You Go Into 2021 As A New Business Owner?

Blind or with Vision?

The new business owner often flies blind.

You see this in the questions. "What's working?" "What tool should I use?" "How do I do this?"

These are the wrong questions.

Oh, it's likely that someone will be nice enough to offer you a suggestion in answer. But even if you apply what they say, it probably won't work for you as a new business owner.

Q: "What's working?"
A: They probably spent a lot of time and effort focusing on making their recommendation work. But you think the thing is going to make you money right out of the box. Nope. You'll give up fast and never get there.

Q: "What tool should I use?"
A: Not relevant to your situation. A fit for theirs, perhaps. And they spent the time getting through the learning curve, which I'll call syntax. You won't. Your eyes will cross seeing the thing on the screen, and you'll leave.

Q: "How do I do this?" (eg. How do I use the forum?)
A: Its an experiential thing. You have to invest time and develop your 'ear'. Discernment. My market is not your market. Your market is not their market. Those other, more experienced business owners, have skills, interests and opportunities you do not: what works for them probably won't work for you.

new business owner focus clarity idea picture

What To Expect As A New Business Owner

So what should you be doing as a newbie, then? As we go into 2021, what perspective will best serve you?

1. Be in it for the long haul.

Expect that this is going to be a journey. You are going to have to develop several different skills and learn many things. There are no magic bullets or push button wonders. This is a job like any other, and you are going to have to learn how to do it.

2. Focus on an audience.

Your audience. Who are these people? Know them in detail. What do they want? What do they hate? What do they watch?

If you don't know, or what you offer is 'for everyone', you're sunk.

And most importantly: where are they? Where is your audience, where can you find them? You need to encounter them somewhere, and then work to bring them from there to your own turf.

If you don't understand what I mean... consider the possibility that your audience is on Facebook, in a large group. You have to get your target audience members out of there. Otherwise, you'll eventually (or sooner rather than later) get banned by the group owner. So your job is to make an initial connection in a non-sleazy way, and then interest them into connecting with you personally... and from there, get onto your email list so you can continue to market to them.

3. Have a picture of your business.

So many newbies go blank when they think about a picture of their business. If you can't imagine it, or can't draw it, it doesn't exist. You don't have anything.

A business, every business, has only three main pieces. Draw these out. Fill them in for your situation. Expect that it will take a little time to get clarity on these things (see point #1), but have doing so as a target.

Traffic

Conversion

Fulfillment.

Key Focus Points For You When You're New In Business

Just those three things. If you spend the first few months of 2021 focused on figuring out and being able to clearly draw a picture of your business with those three things, I guarantee you'll be much better off than if you just try to float through and magically get somewhere.

Who's your audience? Where do they come from? That's Traffic.

How will you turn some of your audience into Buyers? That's Conversion.

Conversion can be a sales letter, a video sales letter (VSL), a sales conversation on Zoom or by phone, or any other thing that helps turn an audience member into a buyer.

How do you deliver the result you've promised? That's Fulfillment.

For some people, this is a downloadable .zip file.

For others, it's a membership site.

Some do it by personal or group coaching.

Others go away and design or copywrite or do some other task that has a deliverable at the end.

If you don't have clarity on these, and a resulting picture of your business, you're in deep trouble. You won't know how to focus, and on to what. Everything will seem of equal importance to you, and that is the kiss of death my friend.

If you're planning to be an affiliate marketer, consider the picture:

Traffic is your problem. That's what you're bringing to the table. Where's the audience?

Conversion is the sales letter of your Clickbank seller you've affliated with. Probably a good idea to warm the audience up with an email sequence prior to sending them to that sales page, but there's the main Conversion tool.

Fulfillment is their problem. That's the thing you affiliated with to offer. Up to you to vett that this seller provides what they say they'll provide.

Note that Conversion and Fulfillment are not enough. They are not a business. Yet we see people every day who have set up a Clickfunnels account and page, or got approved for an affliate offer, and think they have a business. No. They have next to nothing. The AUDIENCE (Traffic) is key and that's why I've stressed it here.

Keep these three things in mind, keep striving to learn more and get greater clarity on them, and you'll build a great business going into 2021.

It's not about "what's working"--because what works for you is something you'll figure out as you go, and it'll be a combination just for you.

It's not about "what tools should I use"--because what's relevant to them is probably not relevant to you. And there are no magic bullets.

It's not about "how do you do this"--because, again, you're going to have to figure out your own way. There's no such thing as a Business In A Box. The map is definitely NOT the territory. Get your mucking boots on and get into the marsh yourself. You can't go there by only looking at the map.

Get started on developing that picture. Questions?

>> Jason Kanigan is a business strategist and process improvement expert. Book a time to consult with him here <<