The big companies will take the ideas of most entrepreneurs, and there is not a damn thing they can do about it. So how do you keep from becoming Lions feed?
This story in the Guardian prompted a lot of memories of clients torn apart and devoured by Lions. They came to us after they were mortally wounded and the best were able to do for most was to negotiate a settlement. For the others who came too late, they were DOA.
But, why does this happen, this is not right or fair.
Large companies have more or less given up on innovation. Honestly, the last thing a big company committee innovated was the $200 per person lunch. It is easier and more effective for them to see what ideas catch traction. The entrepreneurs of the world spend, for argument’s sake, 10 billion on thousands of startups. Hundreds of ideas fail, some stagnate, and some have that certain spark and gain traction in the marketplace. Why should a big company make and pay for all of those mistakes when others are doing it for them? An added peril is in a big company if you have an idea and it fails’, you just might lose your job. No no no it is best for the creators of the world to create and the Lions to prey upon the weak and unprepared.
The sad thing is Lions often do not have to forage, the entrepreneurs readily bring them their ideas and say – “gee Lion what do think”?
I know we all want to start the next million or hundred million dollar idea. It is easy if you fail – it is over. If you begin to succeed you have another peril and that is the theft of your ideas.
So now a Lion likes you and begins to court you and your company, you tell the Lion everything, and they copy your idea. Can you sue them? Of course, you can. You can run right up and kick that Lion as many times as you want. Unless you have lawyers, guns and money – about 10 million for litigation and 3 to 6 years of your life – the Lion is going to kill you, eat you, and enjoy a nice nap afterwards.
To prepare for a meeting with a Lion, the small company must spend an inordinate amount of time to clearly identify their Intellectual Property and Critical Information (IPCI). Intellectual properties are copyrights, trademarks, patents, and trade secrets that make your sauce special. Critical information is the information you do not want your competitors to have. The IPCI must be clearly identified and labeled. Knowledge of the IPCI and what is IPCI should be clearly identified in all non-disclosure agreements, key supplier agreements, customer agreements, professional agreements and employment agreements. Detailed knowledge of IPCI and how it works should be on a need to know basis within the company. A receptionist does not need to know the formula to the wrinkle cream. Someone in accounts payable does not need to know about a strategic marking and development plans. You get the point – keep the IPCI close to the chest.
You must be very clear on the origin of concepts, the origin of ideas, your market research, your development and your deployment. You must document in detail all of the steps to the creation and ownership of the IPCI.
Greedy Lions are not new nor is the prevention. Schawlow and Towne’s claimed the work done by Gordon Gould for the laser launched a 30-year patent war. Robert Kearns had a 28 year battle with automakers of over the pulsating windshield wiper. Both showed their inventions to Lions, and the Lions tried to eat them. These are only two of the very few entrepreneurs that every kicked a Lion and lived. What saved them was their meticulous documentation and otherworldly determination.
Does this predatory nature hurt startups? Yes, it does. From the article, the total number of startups formed in 2015 (the last year surveyed) was 414,000 – a huge drop from the pre-recession figure of 558,000 in 2006.
We all want that multi-million dollar deal and buy out. It’s part of entrepreneur lore. But why would a Lion buy what he can just take? Prepare, prepare, and prepare so when you have that first power lunch with the Lion – you are not what is being served.