Editor’s Note: This week, Fast Company is launching a new advice column by Maynard Webb, former CEO of LiveOps and the former COO of eBay. Each week Webb will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at dearfounder@fastcompany.com.
Q. How do I raise seed money but protect myself from someone else stealing my idea? I’m meeting with angel investors and small VCs, and some people want to make introductions to big players in my space. What do I do?
–Founder of a matchmaking firm now launching an app in the dating space
Dear Founder,
Don’t worry about someone stealing your idea. Everyone thinks what they are doing is so important and big and special. But here’s the surprising part: That doesn’t mean other people will want to go do it. Companies and investors are busy and have hundreds of other existing priorities. This is your one priority, so just go do it.
Amazing things happen when you share your idea. When Marc Benioff started Salesforce, he didn’t initially share his idea with a lot of people, but over lunch, his friend Bobby Yazdani, the founder of Saba Software, encouraged him to, saying that the number-one mistake entrepreneurs make is they hold their ideas too closely to their chest. Marc considered that and shared what he wanted to do. “It’s very good you told me,” Bobby said, and then introduced him to three contractors he had working for him who soon became Marc’s cofounders and helped him build an incredible service and company. Today, Marc has described meeting Parker Harris, one of the original three developers, as ”the luckiest thing in my life.” That’s synchronicity and it happened because Marc articulated his vision and shared it with someone who had experience, understanding, and a desire to help.
You’ll find way more synchronicity and power in sharing your idea than you will danger.
In fact, you’ll be more at risk if you are too closed off. It can be a real turnoff to investors if you are too secretive or cagey. We recently met a founder we really liked and we wanted to invest in her startup. We recommended that she meet a contact of ours at a big company who we thought could be helpful. She was afraid he would knock it off and build it on his own, so she refused to meet him. Her worry about being knocked off trumped her curiosity and dedication to build the best service possible, which was concerning to our team. It was such a big deal for us that we decided not to invest–even though we were very excited about what she was building.
Being too shy about what you are doing is a defensive move, not the offensive move you need to get money and to succeed. VCs are investors, not builders. Get them excited about you and your company, and get them on board so they can share their resources: money, connections, experience, and wisdom.
Of course, please remember, you don’t have to share everything. You can speak broadly but enough to make sure they are interested. I imagine it’s similar to what you would tell your clients. When you first start dating someone it’s imperative to share who you are, what you do, and what your values are, but you shouldn’t go into detail about your crazy sisters or bring anyone home to meet Mom and Dad on the first date!
As far as meeting someone who is in your space, do that later. Sharing your idea with investors is one thing, but you will not want to meet potential acquirers until you have traction. Control your own destiny as long as you can. Raise the money you need without going to those who can gobble you up.
Finally, if someone can steal your idea and do it better, then shame on you. But for now, let’s focus on what you can do if you stay focused on what you uniquely know. If you focus too much on the competition, you lose sight of where you are going. It’s hard to run up the stairs when you are always looking right and left, and for who’s coming up behind you. And, it’s not always as important as you might think.
Please allow me to share an example. Right when I joined eBay, Microsoft and Dell launched an online auction site called FairMarket. Everyone was very worried about this initiative. Could this be the end of eBay?
Obviously, we now know how this story ends: FairMarket never became a real threat and eBay wound up buying it a few years later. Had we gotten bogged down in competing against them we would have lost track of what we were doing, changed our strategy to be influenced by theirs, and given them validation in the market they didn’t warrant. It was more powerful to focus on what we wanted. We prioritized what was most important: scalability (we had significant service issues due to our success), trust (we had to make transactions safer for consumers), friction (most of the payments were by check or money order as opposed to PayPal, etc.), and user experience. We also expanded into multiple countries, either via new launches or acquisition. So, while we kept an eye on what the competition was doing, we spent most of our time making our successful service better, safer, easier to use, and more global.
Remember: You are your most important competition and ultimately your biggest threat. If you don’t build a product or service of relevance, it really doesn’t matter what your competition does. Believe in yourself, stay focused, and go out and create something amazing.
Maynard Webb is a longtime technology executive, investor, board member, and best-selling author. His most recent book is Dear Founder: Letters of Advice for Anyone Who Owns, Leads, or Wants to Start a Business
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