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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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The Danger of the Two Sales

The Danger of the Two Sales is a straightforward but not well-known marketing and sales problem that kills many new businesses.

Here's what happens to produce it:

Someone has a brainwave and makes a new product or service.

You see this all the time in the Software-as-a-Service world...but you'll also see it in products, such as a condiment.

Then the creator goes out and tries to sell the thing, and discovers nobody wants it.

"Why don't they understand how great this is?" they shout. After all, it's clear as day to them why people need whatever it is.

But the public, the target market, other people... everyone else just doesn't get it.

The now-frustrated creator gives up.

the danger of the two sales, unable to sell, positioning problem, marketing problem

Image by Steve Buissinne from Pixabay

Understanding What Causes The Danger Of The Two Sales

What happened here?

The new business owner, fired up with the enthusiasm for their innovative idea, has dangerously bypassed the first problem in sales and marketing...

...identifying a problem people admit they'll pay to have solved.

This is the first of The Two Sales. You must make this first sale, and it is best if that sale is implicitly understood by your prospective customer before you begin talking to them.

In other words, the first sale is that your prospect admits there is a serious problem to be solved: one that they will pay money to fix.

If you haven't achieved this, you run a great risk of having your "solution" sound unnecessary or, even worse, nonsense. You'll ever make a sale in this situation.

The second of The Two Sales is that YOU are the best provider of solutions for this problem.

Can you see how if you blindly try to rush past the first of The Two Sales, that your target market agrees there's an issue here worth solving in the first place, your prospect will blink at you in confusion when you try to show off "your baby"?

Making Use Of The Two Sales

You might be astonished how often this situation comes up. If you keep the Danger of the Two Sales in mind as you begin, though, you'll be able to make use of it.

As a for-instance, I pre-qualify prospective clients for people who already believe that a metrics-based approach is good. For them to already be demonstrating they value numbers because they're collecting their own data—and aren't afraid of math.

So many newbie business owners are afraid of a little math.

When I do talk to someone about our services, I know they're already on board with doing some math...that they speak the language of marketing and operations results. I do not have to risk falling into the situation of trying to sell someone who just isn't into numbers and probably never will be. What a frustrating experience that would be!

Do you see how this directs your marketing?

Your marketing is best deployed in filtering in those people who already believe as you do. Then you can talk to those who qualify—those you've made The First Sale to—further about the details of your amazing solution.

Of course there are situations where a new problem and a new solution are very real. But you'll still have to deal with The Two Sales: before you'll ever make a sale you'll have to educate and convince someone, or get them to agree, that there is a serious problem in this area. Then you can move on to you being the best solution provider.

Many, many businesses have died an early death because their founders did not understand The Danger of the Two Sales. I encourage you to not be one of those founders.

>> Jason Kanigan is a business strategist and conversion expert. To book a session to speak with Jason, click here. <<

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Be Brave and Do Information Interviews

Information interviews are one of the true secrets of successfully entering a new market.

And fortunately for you, your contemporaries are just too darn afraid to ask for them.

Someone who's experienced in the field you want to get into will know things. They'll have an idea of what the pain points are.

Not every time—occasionally you'll run into a member of that target market who simply doesn't know how to articulate the common problems of the niche...

...but you'll still have a friendly conversation, and I'll bet they introduce you to one or two other people who do know.

What you're looking for are the key words and phrases that declare, "Yes! I am a member here! I know what you're struggling with."

For me, they stand out immediately. As soon as I've heard them, I recognize them.

And after 20+ years in the professional working world, even I have to go back to the drawing board and do some information interviews every few years or so.

I'm not exempt.

information interviews two women chatting discussion

Photo by mentatdgt from Pexels

Information Interviews Help You Learn FAST

All that learning I did to this point means little in the context of the new target market.

I am not my customer.

What I believe is important is not what they believe is important.

You'll see people try to jumpstart this step by using an online survey.

I don't believe that's anywhere near as valuable as a one-on-one conversation. In person if you can, by video or a phone call if you can't. I've used Zoom, Whatsapp and the old fashioned phone.

If you can, record the conversation. Make sure you get the interviewee's permission first.

Now the key thing here is having the guts to ask.

It really does not take much.

Just ask if they'll meet with you for 20 minutes. You want to hear from them about their experience in the field.

I've had people offer to do this without me asking them.

Why?

Because some people enjoy sharing. Others like to show off what they know. Sometimes it's a combination.

Sure, you'll get an individual who's "too busy." I still get that today. But it's one person in a hundred I ask (no kidding.) It's a little shocking for a moment, but then I laugh and look at the 25 other people who've already agreed to meet with me.

You don't need 25.

Four or five would be a great start.

But imagine if you did meet 25 members of that target market. Imagine if you met with them over a week or two. How much would you pick up about that market?

And really, really fast.

So be brave. Have the guts to ask. You only need to be brave for a minute.

The payoff is amazing.

>> Jason Kanigan is a business strategist. To book a consultation with Jason, click here. <<