There are two lessons here. One is that VC’s consider patent protection a check box. But a patent doesn’t ensure commercial success by any stretch. What’s more is that it won’t keep anyone from stealing your idea if they really want to. This is why Samsung and Apple are suing each other and they have a lot more money than you do. Lawsuits are very expensive and out of reach unless you’re Apple or Samsung. This doesn’t mean you shouldn’t protect your IP. Just understand that a patent is not a key to your product’s success in the market.
The second lesson is this. Sometimes people are introduced to us and want to talk about their business idea. Immediately after the business cards are exchanged, out come the NDA’s (non-discloure agreements). Well-meaning business attorneys encourage this. But this is a bad move. It shows a level of immaturity when it comes to pitching your idea. And the bottom line is, business advisors, incubators, mentors, investors, bankers and pretty much anyone else who’s out there to help you – will not sign them.
As a startup, you need more help than you can imagine. In order to acquire this help, you need to pitch your company… A Lot! The secret stuff you can keep secret; like how you make your ‘secret sauce’ or who your investors are. What business advisors are interested in is your business model and evidence your product works and that people will buy it. There should be nothing confidential about this. When it’s time to reveal your financial details or your design specs to a design partner, of course you want the protection of a good non-disclosure agreement.
Patents are a good thing and there is a time and a place for NDA’s but neither will protect you from competition. And you still have to figure out how to make your stuff, sell your stuff and get paid.
Blogging Gazelle is published daily by Shawn Carson