L90

Tear Down Your Firewalls

October 19th, 2006   |   by Frank Addante

No, this posting is not intended for your IT department.

I’m not a big fan of secrets, NDAs or the term “stealth mode”. I’ve noticed that a lot of people are afraid of getting their ideas out into the public. They are afraid of their competition finding out about the idea, a bigger company trying to steal it or some other entrepreneur doing it first. So, as a way to protect themselves, they keep it a secret.

Well, my philosophy is that if you keep it from your competition, you’re also keeping it from potential users or customers. In trying to hide it from the 5-10 would-be competitors you’re also hiding it from thousands or millions of users and customers.

Sure, you need to take the proper precautions to protect your idea first (patents, copyrights, etc.), particularly with international patent laws. However, I say throw away the NDAs and get your ideas out there! Solicit feedback, see what users think… Maybe you’ll attract partners you never thought of or maybe you’ll learn that no one cares about it and you won’t waste your time.

If you are so concerned that someone is going to move faster than you, then that is the first problem you need to solve. Whether it be now or later, it’s an issue you’ll need to address before someone else comes along to crush you. Why not figure it out early before you invest a lot of time, money and energy into a new product or business idea?

Up until my current company, StrongMail (Startup 5.0), I never had people sign NDAs. At L90 (Startup 3.0), we threw our new ideas out into the public while they were still in the planning phases. We saved a ton of time in development because we allowed our customers, prospects and even our competition to provide us feedback before we built anything. Yes, I did say competition. We were able to see how they were going to react, far in advance, and we were always able to one-up them in the end.

At Starting Point (Startup 1.0), an Internet search engine, I would put links up on the site to announce new ideas. They would go to pages that said “Coming Soon…” with a “Feedback/Comments” button. I tracked the pages to see how many people clicked on it and would read all of the feedback. That is how I decided how popular an idea would be. If it was popular, I got a lot of good user feedback. If it wasn’t, I didn’t waste any time planning or building it. Funny thing, though, is that I found our competitors running out and building features that were never used (likely because they saw it on our site). While they were wasting time building unpopular features, I was able to develop and grow faster with far less resources. This ultimately lead to Starting Point being the 7th most popular site on the Internet with zero outside venture investment and a tiny staff.

At my current company, StrongMail (Startup 5.0), we started off signing NDAs with everyone we talked to. I thought we needed to do things differently because we were an enterprise software company. Well, the result was that we just made it more difficult for people to learn about our products and it slowed everything down. We spent a lot of time shoving paperwork back and forth and negotiating NDAs with lawyers. All this before we even got to talk about our value proposition. Well, one day, I decided to push everything to the opposite side of the spectrum. We took our software and put it on the Internet free to everyone for viewing and download. It was a dramatic shift in philosophy internally. Within weeks, we shortened our sales cycle. In fact, we had deals closed in less than 48 hours (which formerly could have taken weeks) because we had prospects that were able to find and evaluate our product while our sales reps were asleep. Intangibly, I think it also exuded a sense of confidence and also gave prospects the perception that our product is easy to use. Even further, a former competitor evaluated our software online and was so impressed that they contacted us to strike an OEM deal, leading to a very successful partnership. Probably would have never happened, had all of our information been behind our “information firewall”.

So, I say, tear down your firewalls and let the world know what you’re doing! You’ll be able to move faster, increase agility, reach more people and, if you’re smart, stay a step ahead of your competition. If not for any other reason, but because once you put your idea out there it will force you to run like hell to stay ahead of the pack.