Many new aspiring entrepreneurs make the mistake of being too secretive with their business idea because they believe that it will be the next big thing and do not want anyone to steal their idea. However, such secrecy does more harm than good for a number of reasons:
- Excessive secrecy just isn’t a good look.
When you tell people that you’re starting a new company but refuse to share what the company does, you come off as arrogant, naive, and afraid of competition. You seem arrogant because you are suggesting to people that you believe you are the only person smart enough or creative enough to have come up with whatever idea you have. Unfortunately, that is almost certainly not true. Even if your idea is truly “one in a million,” there are approximately 313 million people in the United States, meaning that you are one of 313 people in this country alone with that “one in a million” idea. It makes you seem naive because it implies that you believe the key to success is the idea, not the execution of that idea. Finally, it makes you seem like you’re afraid of competition because, well, you clearly are if you don’t want anyone else to know what you’re working on.
If your key to success is being the only one that knows what you’re working on, your company is dead in the water already. You must have some competitive advantage so that you can defend yourself against copy-cats and other competitors or your business is going to fail.
- You can’t get funding.
The kiss of death for many an entrepreneur has been insisting that potential investors sign a non-disclosure agreement (NDA) before being given any information. Almost without exception, VCs and Angel Investors will NEVER sign an NDA. It simply doesn’t make any sense for them to do so. In addition to the fact that you’ve probably already diminished the investors’ impression of your ability to run a successful company based on the factors discussed above, you’ve also created a situation where they cannot look at your business plan even if they want to due to risk of future litigation. As we discussed, entrepreneurs always think they have an incredibly unique concept, yet in reality there are hundreds of other would-be entrepreneurs with the same (or at least similar) ideas. If an investor were to sign your NDA, decline to invest, and then end up investing in a similar company he/she would be setting him/herself up for a law suit. No investor wants the expense, aggravation, and bad PR of a lawsuit. Therefore, to avoid the potential for one, they simply refuse to sign NDAs and if you insist on one, they will simply refuse to hear your pitch.
- You miss out on the advice, guidance, and mentorship that is essential for first time entrepreneurs.
If you won’t share your idea with the people you meet, you won’t ever be able to get any feedback, guidance, advice, or mentorship from the entrepreneurs and business people that came before you. This advice is invaluable to a budding entrepreneur and his/her startup, so to forgo it because you’re afraid of someone stealing your idea is insane. You want to share your idea with as many potential mentors as possible so that you can validate the idea, get strategy development ideas, and learn what mistakes to avoid.
- You miss out on word of mouth promotion.
If your idea truly is the next big thing, don’t you want people to be talking about it? Why give up free publicity? If you’re a founder, you need to get the word out any way you can. Put up a landing page for your still-in-development site that gives a teaser about the product or service and allows interested parties to get added to the wait list and be notified when you launch. Then, talk about your new company to anyone who will listen. Get the name and the concept out there so that you have potential customers anxiously waiting to sign up. Don’t be forgotten because you were too afraid to share.
At the end of the day, excessive secrecy about your startup hurts nobody but you so take a deep breath and start talking. I don’t mean to say that you should give your competitors a road map to your business model or that you should be loose-lipped with trade secrets, but you need to be willing to share the main idea behind your new business. The advice and publicity you can gain will far outweigh the risk of someone “stealing” your ideas and you’ll come off as more confident, likable, and competent to potential investors and potential customers.