Over the last six months I’ve learned a lot as I entered the world of start-ups but the issue I’m still grappling with is the trade-off between protecting my idea and finding the right information needed to take the idea forward. Should I talk to as many people as possible or be cautious and protect my idea?
From my limited experiences to date, I have received a wide range of advice. People with a technology background tend to advise the former, encouraging me talk to anyone who will listen. On the other hand, lawyers have counselled the latter sharing stories of the “friend” who held a domain name to ransom. And clinicians sit somewhere in the middle, emphasising the importance of talking through ideas but also sharing experiences of being pitched the exact same idea from two different people.
I’m talking to clinicians because my business is health related. I want to use insights from behavioural economics (a relatively new discipline which merges economics and psychology) to develop products which can help people self-manage chronic illnesses. Right now, my focus is on making life easier for people living with type 1 diabetes.
I’m lucky enough to tick the box of knowing my consumer as I have lived with type 1 diabetes for 14 years. I’m also nearing the end of my PhD in health economics, which uses behavioural economics to explain food choices, so I have a good understanding of why I think my initial product will work. However, I have very little experience operating in the start-up world. I’m learning a lot but still know very little about developing a prototype, building an app, medical device regulation, or commercialising a product. And as I seek advice, I’m trying to figure out how much information to disclose to people.
In theory, a non-disclosure agreement (NDA) is great as it protects the patentability of my idea whilst allowing me to get feedback from people in different fields. I use them when formally discussing my idea with potential subcontractors who quickly sign the agreement.
However, imagine this. I’ve finally managed to get a clinician on the phone after chasing him for weeks but he hasn’t signed the NDA I emailed him. Should I still discuss my idea? Or if I’m sitting next to someone at a business lunch that has the expertise to help? Should I discuss my idea in this situation?
This is a big problem because I’ve found that conversations which have provided the most useful information are from the people who are best placed to steal my idea. Companies working in a similar area are able to give invaluable advice about the diabetes market offering insights into how to approach large pharmaceuticals, the best way to gain regulatory approval, and even my underlying assumptions have been tested in these conversations. I have found a one hour Skype call can save weeks of work and result in a useful business contact for the future, but this comes at a slightly higher risk.
It is also worth noting I have decided not to disclose my idea in a couple of conversations.
Sometimes I just felt an uncomfortable vibe from a person which I suppose is my intuition kicking in.
After spending some months holding back information from people who may have been able to help, I’ve now adopted a two stage approach. First, I follow the “talk to as many people as possible” advice and get an NDA in place where convenient. Second, I have developed an intuition which allows me to decide how much information to disclose. I’m still at the early stages so it will be a few years before I can tell you if my approach works.
Liam Mc Morrow is the Founding Director of Adelie Health which aims to use insights from behavioural economics to help people self-manage chronic illnesses. Liam is still in the early stages of prototype development and would be happy to hear from you
Read a response to this article from from Craig Daniels, a solicitor with Harper Macleod. The firm works with hundreds of startups every year and are the legal partners of business incubator Entrepreneurial Spark.