Should I Keep My Product Idea a Secret to Prevent It From Being Stolen?

A close up of a piece of paper Description generated with high confidence

Should you worry about someone stealing your idea? The simple answer is no, not really.

The most common myth believed by new entrepreneurs is that someone may steal their amazing idea if they don’t keep it secret.

The problem with this myth is that it stems from the core belief that your idea has value. Let me brutally honest with you, an idea alone has no real value!

Coming up with an idea is easy, and almost everyone has ideas for new products. The truly hard part is executing on the idea.

NOTE: Here's a free PDF version of this article for easy reading and future reference.

 

In general, things that are easy to accomplish have little value. If it’s easy then anyone can do it. If easy things did lead to big payoffs then we’d all be rich, right?

The real value is in the execution. This is something that just about anyone who has created a successful business will tell you. But yet, those new to starting a business always put too much importance on the idea.

Companies simply do not steal unproven ideas. Instead, they wait until your idea is proven before attempting to copy it. This means you’ve brought the product idea to market and it has been a big sales success.

For example, when Apple was envisioning their first iPhone, they (i.e. Steve Jobs) had the idea to completely eliminate the keypad. If this idea got out to other phone makers do you think they would have instantly eliminated the key pads on their own phones?

No, they would not. Why? Because it was a completely unproven idea. There was no substantial market proof that getting rid of the buttons was a good idea.

The first generation Apple iPhone

If fact, I think most people at that time thought it seemed like a horrible idea, myself included.

Competitors waited until Apple had proven this idea by making the iPhone a massive success. Apple had to execute on this idea before it had any significant value.

Of course, today just about every phone capitalizes on this proven idea. Just as with Apple, you won’t need to worry about someone stealing your idea until after it’s a smash hit.

Now that Apple is such a dominate force this no longer applies, and they have to be very secretive of their new ideas. But, as an unknown first-time entrepreneur, you don’t need to worry about someone stealing your idea.

An idea is easy. Executing on that idea is the hard part!Click To Tweet  

If someone eventually copies your idea, pat yourself on the back for a job well done, because that means you’ve succeeded in proving your idea is a real winner.

Believing the myth that an idea alone has value can cause horrendous results for your startup. This is because it prevents you from doing what you really need to be doing. And, that is telling as many people as possible about your product.

So you absolutely must do just the opposite of what most newbies believe. Don’t keep your idea a secret, instead tell everyone possible about your idea.

In fact, this is one of the biggest benefits of running a crowdfunding campaign. It helps spread the word about your product.

A stalking leopard in stealth mode.

I often hear startups say they’re working in stealth mode. Don’t make this mistake. You can’t develop a successful new product while hiding away in a cave! Instead, you need to constantly be interacting with your target audience.

Marketing is almost always the biggest obstacle to success for any startup. Nothing you do really matters without marketing. Marketing should always be your top priority. Without marketing you aren’t truly an entrepreneur, instead you’re an inventor.

Yes, I’m a product development engineer telling you that marketing is more important than product development.

Obviously, development is critical and your hands are tied somewhat on how much marketing you can do without having a product developed.

But my point is that most entrepreneurs focus too much on the idea and the development of that idea. That’s fine for an inventor or a DIY maker, but if you’re an entrepreneur that hopes to profit in the future from your idea then you must always make marketing a priority.

Without marketing you’re an inventor not an entrepreneur!Click To Tweet  

Most of the entrepreneurs I meet tend to have more of a background in technical skills (software development being the most common) than they do marketing.

Techie types may not like marketing and therefore are probably not good at it. If this sounds like you, then you will need to either learn to like it, or find a co-founder who does.

This is what I learned many years ago. I’ve always loved technical subjects and especially engineering. Marketing, not so much. But from my experiences as an entrepreneur I quickly learned I better start liking marketing or my businesses won’t make any progress.

Your odds of succeeding are many times greater if you begin marketing your product from day one, instead of trying to keep it secret until you have it perfected.

That being said, some precautions can still be a good idea, as long as they don’t prevent you from sharing your idea and getting feedback.

For example, when possible, use non-disclosure agreements (NDAs) when sharing your product details.

Secondly, if possible, a patent can be one of the best ways to protect your idea. But patents are expensive and many products simply can’t be patented. Also, beware that over focusing on a patent is another common mistake.

Just remember that the huge majority of patents never make it to market. This is because the inventors focused all of their effort on protecting their idea and no effort on marketing it. Once again this stems from the false belief that an idea has value.

In the United States at least, you can file what is known as a provisional patent application. A provisional patent application establishes an early filing date, but it doesn’t turn into an issued patent, unless a non-provisional patent is filed within one year.

A provisional patent gives you one year to pursue your product and conduct market research to determine if it’s worth spending the money for a full non-provisional utility patent.

The beauty of a provisional patent is that the filing cost is only $130. Once you have filed a provisional patent then you can begin using “patent pending” on your marketing materials.

Another option is a design patent. A typical patent is known as a utility patent which protects a fundamental concept. Utility patents are complex and expensive. A design patent, on the other hand, protects the appearance of a product. They are considerably cheaper to obtain than a utility patent.

Trademarks and copyrights can also provide some level of low-cost protection on your product’s name and marketing materials.

Conclusion

There is no easy way to bring a new product to market. There is no doubt about it, hardware is hard. It takes an enormous amount of vision and motivation to bring a new hardware product to market, and no one has this except the founders.

No one else will have the level of motivation necessary, so don’t worry about them stealing your idea.

So to summarize, please repeat after me: My idea alone has no true value, the value is in how I execute on that idea. Repeat this mantra every time you become paranoid about someone stealing your idea.

Do you have a question you’d like me to answer as part of my new FAQ series? If so, please ask your question in the comment section below.

Leave a Reply 21 comments

Thomas Sutrina - November 25, 2017 Reply

Great article. I have about 3 dozen patents in my working career, of which two make lots of money. Both solved a problem of a company that already did the marketing but didn’t have a product. I was a gun for hire for the second. And got lucky for the first if you consider they purchase half the machinery for the plant, had the foundation poured and then found out they didn’t a process that worked. Startup was scheduled for nine months in the future when I was hired. And six months passed before in 20 minutes and idea worked. They were considering how to minimize the losses by then. Dow Chemical doesn’t make that level of mistakes often. ($3M spent just on the packaging machine that had to be developed and that was in the 70’s.

I am just saying that you absolutely need to know that the critical parameter minimums are achieved before you really kick marketing into high gear.

K P Konan - November 24, 2017 Reply

Thank you once again for this new “lecture” on Electornic Design. It is like a cool and refreshing glass of water! Nobody can steal your idea(s). This seems true if you only tell a fraction of your idea! But if you end up telling all the content of your idea to people , you will eventually find one person who may be tempted to use your idea for his own purpose!!! Moreover, patentable ideas are very hard to find. Will it then be a good idea to just “give it away”? Now here is a true story I witnessed when I was living in Camden Town in London in England. One day while I was on Oxford Street in London, I met a friend of mine (Irish Joe) I used to call him. He asked me to follow him to a bar where there was going to be an event… During the event I was introduced to a man who told me himself that he went to America and came back to England with an idea but he cannot put his idea into production so another man is going to do it instead!!!!! That man is John Bird the founder of the London homeless weekly magazine “THE BIG ISSUE”!!! You just don’t know who has the tools you are looking for to fix your idea!!!!
Many thanks! Bye Konan Pyrhus Kramo. Abidjan Cote d’ivoire (Ivory Coast).
Au revoir et à bientot mon cher ami John!

    John Teel - November 24, 2017 Reply

    Thanks for sharing KP!

    John

Mike P. O'Keeffe - November 23, 2017 Reply

Great article. There will be plenty of points to argue either side. I believe it all starts with an idea, but the real genius and value is in the execution. Maybe it’s better said that an unused idea has no value?

I also agree you should talk about your idea (you don’t have to give away all the details) and find where and if it fits in the market.

In my own experience, I’ve found patents can be a double edged sword. I worked for a company a few years ago where we had extensive patents on an AC sinewave dimmer. The company was small enough and the product was decent. The company spent millions of euro trying to protect the patent against another company in the UK who was blatantly abusing the patent. They also sold a product that was non-compliant as well. As a result it was much cheaper and it stole the market from us. Holding the patent did nothing for us, other than waste money and resources. I found they’re only really useful if you have the time and the resources to protect it.

On the other hand, their product and other competitors products would get destroyed under certain circumstances, which we had solved in our product. Instead of patenting the idea and detailing how we solved it, we decided it was better to claim that part of the market and tell nobody the solution.

Michael - November 21, 2017 Reply

Couldn’t agree more! Everyone has ideas. And they sound so wonderful in our head. And then they meet reality.

A good business isn’t just one good idea, it hundreds of them tested against what actually works.

Testing takes execution. I cringe when I here people “I had that idea! I could have made millions!” Right…

Of course a business needs ideas to run successfully, but the product of the business isn’t the idea alone, it’s the execution of the idea, it’s the delivery of value.

    John Teel - November 21, 2017 Reply

    Thank you Michael for the comment, and for agreeing with me (although I appreciate comments just as much from those that disagree with me). You are completely right that testing takes execution, and without testing an idea stays just an idea.

    Best wishes,
    John

bob turner - November 20, 2017 Reply

Hi John,
I’m 100% with you, I’ve worked in a large research organaisation, where having lots of ideas increases your yearly bonus, but how many got to the market place? probably none, did our competitors want to steal our ideas? Not really, they had enough flaky ideas themselves, but that’s not the story you tell management!. We certainly made some large and significant improvements to equipment and processes, so from the companies perspective there was a positive ROI. There’s 5 patents with my name on them, but if you knew your stuff you could always work around them, the same as we worked around others patents. A good product is a means to an end after all, and there is always more than one path to any destination, a patent merely blocks one or a few related path, but if the destination is valuable enough then tunneling through mountains and draining swamps be come viable options. No point patenting a swamp draining apparatus when a competitor could jump on a helicopter!
I later worked for myself doing electronic design, and originally had a motto “making your ideas work” which I soon dropped after the number of lame-ass ideas that were presented. My biggest money maker is a plain voltage sensing relay, (for railway use), it’s a limited market, but the selling price is good. The existing manufacturer closed up shop, so I used the same box, and a similar decal, but used a completely different , more efficient, design (the original powered a 48v relay from 120v supply with dropping resistors, and the box ran 60C over ambient, not good for reliability, and wasn’t particularly vibration tolerant).

    John Teel - November 21, 2017 Reply

    Hi Bob,

    Thanks so much for sharing your professional history on this topic, some very helpful insight you’ve shared. I think most patents can be worked around pretty easily, and it’s very difficult to truly broad patent. There are always multiple ways to accomplish the same goal. I still think patents can have some use, but just not in the way most people focus on.

    Best wishes,
    John

Gary Hanson - November 20, 2017 Reply

There is a short cut to suing a competitor for patent infringement if your patent is comprehensive enough for the Patent Office to recognize the infringement. The Patent Office can file an injunction based on their summary judgement that you would prevail. Getting such a judgement allows you to freeze their proceeds pending the outcome of the lawsuit. The problem with someone infringing and undercut your product is the competitor will have often gotten their profits and declare bankruptcy before you can enforce a judgement on them. If their proceeds are frozen, they can not afford to manufacture/market ending them before they can hurt your marketshare.

    John Teel - November 21, 2017 Reply

    Great tip Gary, thanks for sharing. That is a short cut that I did not know.

    Best regards,
    John

Gary Hanson - November 20, 2017 Reply

You can not patent an idea, you first have to reduce it to practice (ie prototype). Only about 2% of patents succeed, meaning that the product makes the inventor back as much as the patent cost them. Around 66% of patentees fail to pay their maintenance fees at 3 years after issuance, meaning the patent ends up in the public domain after 4 years. So for many inventors it is a better idea to file a provisional patent (remember to check the box for the USPTO not to publish the provisional patent). The difference in cost is about $130 for a provisional vs $8000-$15000 for a full, which does not count the time (about 3 years difference) (remember a full patent costs include a patent attorney drafting, filing fees, attorney/examiner correspondence and issuance fees). If you are careful during that first year of a provisional, using confidential/non-disclosure agreements you can do focus groups and concept test markets (where you evaluate the need without showing your product features), it is possible to file another provisional, resetting the clock. Remember once you disclose your product the important thing is getting marketshare, if you fill the niche quickly competitors are not likely to enter because most product life cycles have peaked within a year or so of introduction.

    John Teel - November 21, 2017 Reply

    Thanks Gary for sharing your insight on patents, very helpful. You are completely right and you can’t patent an idea, and if I said that in the article then I misspoke. There’s a reason I’m an engineer and not a lawyer:)

    Best wishes,
    John

Michael A .Keller - November 20, 2017 Reply

Sorry John…I don’t agree with you on this subject.
Ideas are worthless?
No … they are PRICELESS.
An original, patentable and defendable idea is what I look for everyday.
The quickest and best way to make money in this industry is to design, build and sell a million copies of something before your competition “The Chinese” copy it and steal the profits from your great idea.
We need a way to ENFORCE our patents.
Execution is the easy part, protection in a free economy is the hard part.

MAKeller

Alexander Suvorov - November 20, 2017 Reply

I feel this one is a miss in terms of reality-check. I share the view with Mr. Tan Pham that it’s actually all about idea. Indeed, many “ideas” I came across with aren’t sufficiently good/attractive to invest money and effort. But that’s the trick and rules of the business game: find an idea which worth investing and which eventually will turn a $1 into $1m.

Saying that his/her idea is worthless for a starting entrepreneur is misleading. There is no apparent reason and benefit in disclosing business idea (i.e. a solution to a problem with a great selling potential) and yet there are serious consequences for a young business in doing so. If your idea is really good and you start to talk your business idea to every one around, sooner or later (in most cases almost instantly) it will eventually hit another entrepreneurial mind who has enough capability and resources to make that idea reality in no time. In business, time-to-market is money. So, by the time the young entrepreneur will be just starting fundraising the product/solution he/she envisioned will be already on the shelves. This is an end without a start. If the business idea is good, it pays back to keep the mouth shut. As Steve Jobs said: “isn’t it funny, a ship that leaks from the top?”

Competition is a way of doing business and nurturing competition by sharing your own hard-earned ideas (ideas don’t happen out of blue) unlikely will secure huge sales at product launch. And no NDA or patent can prevent someone to start a venture that capitalizes on your idea.

    John Teel - November 20, 2017 Reply

    Thanks for sharing your viewpoint Alexander.

    In the end, the biggest obstacle to success for most entrepreneurs is they fail on execution (most commonly a lack of marketing), not because someone stole their idea. Without putting your idea out there for feedback how will you ever know that you are developing a product people want? If you keep it a secret until it is totally ready to sell, then how do you know you’ve developed a product people really want? You may think you know what they want but you truly can’t until you give them something and get their feedback.

    Of course, the idea is important, and executing on a bad idea will also lead to failure. But, once again without feedback how do you know if your idea is good or bad? You may execute on a bad idea, and during that execution you obtain feedback that allows you to make it a good idea. But an idea with no execution will lead no where except perhaps a patent.

    If an idea alone had value then everyone could simply license out there idea and let someone else do all of the work to bring it to market. But, from my experience, almost no company wants to license an unproven idea. You first must prove it will sell, then they may be interested.

    Thanks again for the comment! I know this is something that many will disagree with me.

    Best wishes,
    John

      Alexander Suvorov - November 21, 2017 Reply

      That’s the trick. Who’s said it’s going to be easy? The idea of business is to make $1m with just $1 investment, in other words lots of money with minimum investment.

      So, how to get the feedback from the market about the product? Here are some of the ideas.

      1. Get in touch with potential customers/buyers. Of course, for this the entrepreneur should have understanding of target customer profile, so the search will be narrowed and doable. During conversation with target customer inquiry about whether the problem (that product solves) is actual/relevant. And then ask whether the customer will be interested to use a solution/product you are about to bring to market. There’s no need to explain all the “know-how” of your product to customer, but explain all the features and benefits the product brings. Of course, if the idea is really good, there will be a buzz on the market/industry and at some point it will hit existing market players, but at least it won’t be clear for the competition what exactly your product is (“how” you solved the problem). This approach works better than marketing since it doesn’t require any significant spending (as marketing channel does; all you need, basically, is phone and travel), helps to get feedback from the target audience (there’s no feedback in marketing), helps to build relationships with target audience and, potentially, make pre-orders and prevents exposure of the product/solution (idea) to competition and existing market players (who, obviously, can and likely will initiate response to a new market entry). Some business angels call this approach as “Sales Due-Diligence” and proceed with investments only after sales due-diligence yields positive response.

      2. If there are some funds available for the entrepreneur, go to the trade show. One for which a new product/solution appears to be most relevant. This is one place where customers and vendors meet and not only you can get customers’ feedback at single place, but also check up what competition (existing market players) are doing and how far are they from the concept you are about to bring to the market. You can also check whether the concept you’re developing is also work-in-progress of your competitors (again, carefully, without disclosing that you’re doing that; just check whether company X is planning to bring some of the features to their product). Talking to competition won’t be a piece of cake, but some of them are prone to show-off and arrogance (or simply limited business acumen), so some information can be collected. In my view, this is one of the most efficient approaches to get market-data/sales due-diligence in terms of money-time invested and results. I myself experienced number of cases where ideas were scratched at the trade-show visit: either the product wasn’t relevant for target audience (there were more priority issues to solve) or competition was already exploring the idea/concept an entrepreneur envisioned. Of course, this is quite sad to invest couple of thousands dollars (event fees + travel) just to see that the idea isn’t worthwhile venture, but that saves tens of thousands dollars on product development, marketing and other administrative fees which would have been invested in unprofitable idea; not to mention time. That’s the way business works: some money needs to be invested just to try out new ideas (“sunk costs” as they call it in MBA classes); what one (experienced) businessman does is to try to reduce this “sunk” costs (i.e. loss) to minimum.

      Both approaches require some investment on the entrepreneur side. Not a big one, but some. Unless entrepreneur is in really tough financial situation (well, one is better to find a job) there are opportunities for savings to be made (no fancy phone, smaller fuel-efficient car, less parties). These savings in couple of months will be sufficient to afford sales due-diligence costs (phone bills and travel) or a trip to a trade show to reality-check whether the new product being envisioned is going to be a bestseller or scrap.

        John Teel - November 21, 2017 Reply

        Great suggestions Alexander, thanks for sharing!!

        Best wishes,
        John

Craig Ross - November 20, 2017 Reply

Hi John, Didn’t the patent reform in 2011 change the criteria from “first to conceive” to “first to file”? Secondly, as I understand it, the patent only gives one the right to sue for infringement. If a patent truly has value, a larger company (with its battery of lawyers) can infringe with practical immunity, threatening to tie the patent owner up in endless litigation until bankruptcy. For a small company, or single entrepreneur, maybe it should take the crowdfunding route, or make the product an open source endeavor. Just a thought.

    John Teel - November 20, 2017 Reply

    Hi Craig,

    Thank you for leaving your comment!

    Yes, you are correct that the U.S changed from a First-to-Invent to a First-to-File. This makes the filing date even more critical.

    Secondly, I agree that a patent generally just gives you the right to sue for infringement, which most entrepreneurs can’t afford. Although there is such a thing as patent insurance, which will pay your legal fees if someone tries to infringe on your patent. Also, the more narrow a patent the more easily it is to work around. A broad patent has much more value than a narrow one, but a broad patent is more difficult to obtain.

    From my experience the true value of a patent, is that retailers, investors, and manufacturing partners like the extra security offered by a patent.

    Best wishes,
    John

Tan Pham - November 20, 2017 Reply

Most ideas are trash…but to generically say an idea has “no real value” means you have no idea where everything begins – an idea…it’s true that execution is critically important for a successful business, but a good executioner without a great idea is also worthless…many times there are people who come up with ideas that no one has thought of before, and to say that no company would steal a great idea means you are in the dark…

    John Teel - November 20, 2017 Reply

    Hi Tan,

    Thank you for the comment! I knew there would be some disagreements over this article:)

    You are correct that it all starts with the idea, and executing on a bad idea will get you nowhere. However, 99% of hardware startups fail because they don’t execute properly, and very few startups will fail because of someone stealing their idea. So, I stand by my comment than an idea alone has no real value.

    Also, part of executing on an idea is gathering market feedback and tweaking the original idea to meet the market demands. Rarely, is the original product idea identical to the final product.

    Your chances of failing will be much more likely be due to insufficient marketing than idea theft. That being said, I always advise taking as many precautions as possible (NDA’s, etc.) but not at the cost of marketing. So, for example, when contacting manufacturers and developers I always recommend using an NDA, especially for Chinese manufacturers. Use of an NDA or patent pending doesn’t inhibit your ability to market. But keeping your idea totally secret will prevent marketing.

    Thanks again for the comment!
    John

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