Why you shouldn’t keep your business idea secret

Kate Jones

Most entrepreneurs worry about their business ideas being stolen. But the greater risk lies in not sharing it.

Yesterday’s mindset of developing a business in secret has shifted dramatically. Today’s business culture centres on innovation through collaboration and knowledge-sharing.

Nowhere is this more evident than Australia’s co-working spaces, which are now spreading outside major CBDs to suburban and regional areas. Some co-working spaces double as startup incubators where entrepreneurs can test and refine their business ideas with experienced business operators.

“We believe in open collaboration and that innovation is never achieved in isolation.”

Co-working hub The York Butter Factory in Melbourne caters for high-potential early stage technology entrepreneurs. General manager Jason Lim says openness is crucial for startups to prosper.

“We believe in open collaboration and that innovation is never achieved in isolation,” he says.

“Entrepreneurship is a very lonely, tough journey. Opening up and sharing ideas with the right people can significantly help entrepreneurs in their journey.”

By holding your cards close to your chest, your business is at greater risk of failure, says Lim.

“Isolation often causes startups to think of a solution to a problem that doesn’t exist and we’ve seen that happening increasingly,” he says.

“That’s not a startup that can scale and people don’t want that. By sharing their ideas, startups have an early avenue to qualify these especially with the people who have the relevant industry experience or expertise.”

“We don’t sign NDAs because of the sheer number of deals we see.”

Sharing ideas may not be right for every industry. Those who feel wary can ask contributors to sign non-disclosure agreements (NDAs) or confidentiality agreements. But don’t be surprised if they refuse, warns Lim, who is also an associate at technology venture fund Adventure Capital.

“We don’t sign NDAs because of the sheer number of deals we see,” he says.

“It inhibits our ability to perform our work as well. There are times when an NDA works when a company is at a different stage, they may have acquisitions or financial data. But in general, it’s very unlikely they have extremely proprietary information that warrants an NDA.”

Deciding to share your ideas doesn’t mean spilling the beans all at once or to everyone. You may choose to release information in stages and only open up to certain people during these stages.

Select carefully when choosing people to share your start-up concept with. They should be industry experts or successful start-up founders who can act as meaningful contributors or mentors. 

Kate Jones

Kate Jones writes for the business and money sections of The Age and Sydney Morning Herald. She also writes for The New Daily, TAC, RMIT and is a news writing tutor at Monash University.