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What to Do When Facebook or Google Wants to Steal Your Idea

Startups can fight back against the big guys and win.

If you're a startup worried about Facebook or Google duplicating your technology or business model, you are not alone.

Such is the situation with the popular but miniscule Houseparty app, which Facebook has had in its sights, possibly to acquire, for months but has instead decided to develop its own product. Tentatively named Bonfire, the competing app should be released this fall by the tech giant.

All is not lost for the little guys, however. Startups can fight back against the big guys and win. For example, Facebook not long ago essentially copied and integrated tiny OfferUp's app and called it Marketplace. As of last September, OfferUp is valued at more than one billion dollars, making it Seattle's only unicorn.

What's happened? OfferUp developed a clear value proposition that set its innovation apart from just being a feature on a platform. Connecting buyers and sellers in a safe, secure, curated space is all it does. In Wall Street parlance, it's a pure play.

Here are a few other realities about refusing offers you, as the saying goes, can't refuse -- meaning someone wants to buy you and if you demur, they will compete against you and perhaps crush you.

First, do you have an idea worth copying? Seriously. If your value proposition isn't the best in your space, the innovation machine has already moved on. All you can do then is join the pack of second- and third-tier competitors and hope for the best. If your idea isn't worth copying, maybe you should be open to offers if they come your way.

Next, ideas are cheap; everyone has great ideas. Execution is everything. If you can make good on an idea more efficiently than your unwanted suitor, you'll have won half the battle, as larger companies always will struggle to figure out how they will add on your idea given the greater scope of their mission. Remember: Young David of Biblical lore knew not to fight until he had two things -- his sling (innovation), and good aim (execution). If Goliath had a slingshot, he might have applied a focus group and called in his lawyers before he'd bother even trying to test it.

Lastly, speed -- not size -- matters. To win the other half of the battle, you need to understand what are big companies bad at -- moving and iterating quickly, being aggressive and making decisions. They hold meetings, looooooong meetings, for everything.

If you have a unique idea, can execute it and do it fast, you may have some staying power. Startups are a speed play. Small companies usually have 18 to 24 months before they will see even the beginning of competition. Tip: The way you become valuable is by literally coming out of nowhere and rushing the marketplace before anybody else knows what happened.

Don't worry about the competition's early warning systems, either. Everyone has one. You should, as well. We're all watching each other.

In terms of visibility, your goal is to be in a kind of celestial sweet spot where you are orbiting not too far away from the big planets or the smaller ones (so you can keep an eye on both), but not so close that you get pulled by gravity into them (and crash).

Embracing the suck

Oh, there is a fourth piece of advice: Expect to have your idea stolen. It's vitally important that you use your head start to great advantage. Because if they can't buy your idea, they are going to take it anyway. And just what are you going to do? A patent-infringement suit? And are patents even involved? How long can you pay the lawyers to fight for you if you decide to sue? Start anti-trust litigation? Don't make me laugh.

Moreover, what's the crime here? Who's the friggin' victim? Lots of people can have the same or similar ideas. It is what you do with them that counts. If you think the problem is a bunch of Silicon Valley Sasquatches big footing Bambis by taking and using (legally, let's assume) their ideas, well, it's what technology players do. It's how innovation propagates. It links the building blocks of our scientific DNA. It's life in the business food chain; the chances you can sit out there with your idea and not worry about someone coming after you -- either to buy you or bury you -- are slim and none.

So, if you really believe you can beat the giants and are prepped for battle, do as the military does: Embrace the suck, soldier on. It won't be easy or quick. It may be bloody. But, business is an extreme activity, part bridge and part mixed martial arts. If winning were easy, we'd all be billionaire-CEO-masters-and-mistresses of the universe.

#jdmaccounting #happynewyear #davidvgoliath #startups #accountant

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