Replies to This Discussion

Permalink Reply by Neil Blakey-Milner on March 16, 2010 at 22:28

For the most part, my suggestion is just not to worry about it too much in the early stages.

Ideas are fairly easy. I can pretty much guarantee that others have thought of the idea you are worried about spreading, and that others will think about it independently without you talking about it. There may even be companies started on that idea, or that are currently acting on that idea. And that doesn't make it particularly more or less likely that you will succeed when you start a business based on that idea.

The idea is also probably not really transferrable. Unless you give out tons of information, you are going to know a lot more than whoever you're talking to about how you'd approach this opportunity. They just need to know the basics (social networking with a focus on animals, likely 80% girls with interests in ponies and pegacorns) and how you are planning to make money (selling kibble and merchandising). You are probably the one with the network that will make this work (your previous job was in merchandising, or your uncle owns a kibble farm). Once you reach a point that warrants it, get an NDA in place.

Most investors (individuals, investment companies) are unlikely to be interested in trying to take your idea and form a team to work on it, if they were unscrupulous unscrupulous enough to want to. It is just too much work outside their focus - it would be easier for them to work with you than try scrounge up an alternative team that might give the idea a good chance, and they would not want to take the reputation hit. Commercial investment (say, an established software company) may be a totally different story, though.

• ▶ Reply

Permalink Reply by Justin Stanford on March 17, 2010 at 15:57

I can only re-iterate what Neil's said!

• ▶ Reply

Permalink Reply by Martin Brandt on March 29, 2010 at 11:58

Greetings Andre

As a fellow innovator, although no longer in "start-up" mode, these are common concerns. When thinking about your product/service - there are 3 core and obvious elements: What? How? and Who?. The most important aspects to focus on when seeking investors is the What? and Who? The former gives insight into your solution in terms of purpose/goals and the latter provides information about your business acumen, "ability to conquer", and understanding of the desired target audience to achieve the proposed gains. In the early stages of finding an investor, the How? element can remain your business only - other than to enforce that you have the appropriate knowledge, methods, and other components necessary to deliver the solution being proposed. In the latter stages of presentation, when agreement almost beckons, you may have to disclose some elements of How? - but this can be divulged to limited parties in a NDA agreement.

My point is, always have the comfort that you will continue to know more than the party you are dealing with. Investors should focus on the business case and you/your team's potential from the outset - less so with the "mechanicals" and IP constructs needed for actual build. Initially, cover your business areas with workflow diagrams and strong business purpose... as opposed to detailed how? engineering exercises. Determine the value of REAL interest from the investor party, and from there, free the relevant information in more detail in the two components mentioned.

I also agree with some of the comments made by Neil, but I can appreciate - there will still be a degree of scepticism on your side nevertheless. Hence my few-cents worth here. The perfect trade-off is to secure interest without giving your "ace of spades" away up front. However, this assumes that your idea has a strong, well thought-out business case, with evidence (merit) to support your beliefs - and of course your persona (managed ability) to execute.

Lastly, make sure you are dealing with credible parties whose track-record can be referenced. As they will do their homework on you (by entertaining your presentations), so you should embark on a discovery exercise to ensure that your potential partners will meet your current and future needs in key performance areas that are important for you and the business model proposed.

Good luck with your "Killer App"...

• ▶ Reply

Permalink Reply by Richard Lackey on March 29, 2010 at 15:40

I've got a similar concern with a R&D lab I've set up over at www.sentinel-entertainment.co.za for films in development. My idea has been to create tiered membership and access to privileged content. So people who just sign up for free have access to very basic high level concepts and ideas, basically intended as a "hook" but those who contribute a minimum amount to one of the films I am funding on Indiegogo (check out www.indiegogo.com) have to agree to a NDA and then get access to slightly more privileged info on the website. Then there is a "partner" level with higher contributions who also agree to the same NDA but get even more info, and so on... It would be possible to give specific potential investors full access for a limited time and also have them agree to a NDA. It helps to have a system in place to log I.P. address's of members at all levels.

So that's to showcase projects, giving different audiences different login levels and specific information aimed only at them. The system becomes useful in a practical way when eventual heads of department and creative collaborators, crew, cast, team members etc, can have access to all kinds of content online to develop the film together in a managed collaborative way from anywhere in the world.

• ▶ Reply

Permalink Reply by Peter Ing on April 3, 2010 at 11:52

Heres my 2c, Ideas are easy to steal but not easy to replicate.

You have an idea in your head for an app or a product, but in almost every case the semantics of the concept is something that exists in the neural pathways in your head in a way that nobody else could understand from hearing a basic description of your concept.

If your idea is too plain or straight forward, common knowledge or obvious like starting a web based email service like Gmail or Yahoo mail or something, then its pretty obvious that the idea is open and already out there.

However if it is a somewhat unique and fresh idea or even a unique spin on something that already exists, you will have your own feeling and idea for how it will work, what it will do and what it will be. This will develop in your mind as the idea is born and grows into a startup.

Even if someone else tries to copy the idea then they will never have the same feeling that you will have however, they might have a better business model and might succeed with their own version of "your idea"(based on your basic concept description) , meaning that your idea or its business model might not have been that great in the first place. In the same vain you might hear someone else's idea pitch and start to see a better way to do it and then you go off and implement your own "subclass" of that idea and it goes off in a different direction to the original idea and actually turns out more successful. That's beauty of the free market economy and innovation.

Look at Facebook and Ning (what we are using right now) the founders of both these sites had their own vision for these sites and both grew in different directions within the social space. Also Myspace has been around before Facebook and yet which one is more popular.

With that said I guess you still have to be careful to give away too much if you are really worried, and take steps to protect your IP such as code for example, but I think in this day and age we all need to be more open with our ideas because that's the only way you will ever find support, partners and investment.

• ▶ Reply

Permalink Reply by Stephen Watt on April 19, 2010 at 16:53

Patents are designed to do this very thing. I work for IBM and we are required to continually patent as part of our job to protect the IP on the projects we work on. Although I work for a large enterprise, our issues are the same in that my team displays early stage prototypes to our customer to see if we are on the right track. The NDA is an option we often use, but if the key features in the prototypes have patents filed on them we have much more holistic coverage. You don't need a lawyer to get immediate provisional protection. Most countries allow folks to file a provisional patent (to place their stake in the IP ground) to provide them protection (at a lower cost as well) while they shop their ideas around. You can then later follow that application with a more complete application. Amazon has a few good Intro books on this with the forms included and samples on how to fill them out. I'd recommend filing the provisional patents yourself and then using a lawyer for the more complete patent, or use a lawyer for both if you can find one with amenable rates. Keep in mind that each country has their own patent system. So you'd need to file in SA, USA, Japan, Germany, etc. I'd start with just SA and the USA.

Lastly, Investors like Patents ! They are a company asset that is tangible collateral on their investment. They also reduce direct competitive risk.

• ▶ Reply

Permalink Reply by William Kleynhans on April 20, 2010 at 14:50

I thought you couldnt patent software stuff in south africa?

Stephen Watt said:

Patents are designed to do this very thing. I work for IBM and we are required to continually patent as part of our job to protect the IP on the projects we work on. Although I work for a large enterprise, our issues are the same in that my team displays early stage prototypes to our customer to see if we are on the right track. The NDA is an option we often use, but if the key features in the prototypes have patents filed on them we have much more holistic coverage. You don't need a lawyer to get immediate provisional protection. Most countries allow folks to file a provisional patent (to place their stake in the IP ground) to provide them protection (at a lower cost as well) while they shop their ideas around. You can then later follow that application with a more complete application. Amazon has a few good Intro books on this with the forms included and samples on how to fill them out. I'd recommend filing the provisional patents yourself and then using a lawyer for the more complete patent, or use a lawyer for both if you can find one with amenable rates. Keep in mind that each country has their own patent system. So you'd need to file in SA, USA, Japan, Germany, etc. I'd start with just SA and the USA.

Lastly, Investors like Patents ! They are a company asset that is tangible collateral on their investment. They also reduce direct competitive risk.

• ▶ Reply

Permalink Reply by Stephen Watt on April 21, 2010 at 16:10

Peter Pistorius said:

Ideas are worthless. Execution isn't.

Peter, I'd have to disagree. IBM has a multi-billion dollar patent portfolio based off of licensing revenue from just the ideas themselves. The ideas, which are written down and filed as patents but in a lot of cases not executed on are what we are licensing here.

• ▶ Reply

Permalink Reply by Stephen Watt on April 21, 2010 at 16:12

William Kleynhans said:

I thought you couldnt patent software stuff in south africa?
Stephen Watt said:

Patents are designed to do this very thing. I work for IBM and we are required to continually patent as part of our job to protect the IP on the projects we work on. Although I work for a large enterprise, our issues are the same in that my team displays early stage prototypes to our customer to see if we are on the right track. The NDA is an option we often use, but if the key features in the prototypes have patents filed on them we have much more holistic coverage. You don't need a lawyer to get immediate provisional protection. Most countries allow folks to file a provisional patent (to place their stake in the IP ground) to provide them protection (at a lower cost as well) while they shop their ideas around. You can then later follow that application with a more complete application. Amazon has a few good Intro books on this with the forms included and samples on how to fill them out. I'd recommend filing the provisional patents yourself and then using a lawyer for the more complete patent, or use a lawyer for both if you can find one with amenable rates. Keep in mind that each country has their own patent system. So you'd need to file in SA, USA, Japan, Germany, etc. I'd start with just SA and the USA.

Lastly, Investors like Patents ! They are a company asset that is tangible collateral on their investment. They also reduce direct competitive risk.

That may well be true. Hopefully we can have someone with a better knowledge of South African IP Law weigh in here. However, in order to truly protect your idea, you need to protect it in each market you'll be participating in. So (assuming you can patent software in SA) and you'll be selling in USA and Germany. You'd need to file the patent in all three countries.

• ▶ Reply

Permalink Reply by Andre Scholtz on May 19, 2010 at 11:44

Thanks to everyone for their input and assistance on this.

I have done some looking around and talking to people with legal expertise.

Patenting of software appears to be a very dark art with no well defined 'rules' in South Africa.
The simplest answer is that software can not be patented in South Africa, however... there are some other options for us to protect new ideas.

Registering Trademarks and Copyright of content possible, but these will only protect your content and not the actual idea or functionality of your product.

Something that can be used to protect ideas in the early phases is non disclosure agreements. These provide some protection when presenting ideas to potential investors.

• ▶ Reply

Permalink Reply by Peter Ing on May 19, 2010 at 14:37

At Net Prophet Vinny Lingham who has actually got more experience in this area than many of us put together gave some advice along the lines of "don't work in secrecy". VC's won't bother with you if you hide your idea away too much.

You can never hold back an idea all for yourself, however you can protect your own product based on that idea and its associated IP. Imagine if Alexander Graham Bell held the world to ransom on the idea of a telephone...

The way I like to think about it is, why would that potential investor want to take your idea and steal it and pay someone else to develop it anyway, when he has you right there who he can invest in to continue working on the idea while he benefits from it. If he gives the idea to someone else they might mess it up but you will already have the experience and expertise and vision to make your idea work.

Perhaps if you are worried about your idea being poached, you should be more afraid of bragging about the finer points of your idea over a burger and beer to a fellow programmer, than to a potential investor. Because that programmer will have the means to run with your idea if they are that way inclined.


Andre Scholtz said:

Thanks to everyone for their input and assistance on this.
I have done some looking around and talking to people with legal expertise. Patenting of software appears to be a very dark art with no well defined 'rules' in South Africa. The simplest answer is that software can not be patented in South Africa, however... there are some other options for us to protect new ideas. Registering Trademarks and Copyright of content possible, but these will only protect your content and not the actual idea or functionality of your product.
Something that can be used to protect ideas in the early phases is non disclosure agreements. These provide some protection when presenting ideas to potential investors.

• ▶ Reply