How to Safely Steal a Business Idea

The real-life world of business doesn’t inspire many hit movies. The Social Network is an exception, not just because Facebook produced the youngest billionaire ever, but also because -- according to one version of events -- Mark Zuckerberg stole the idea for the online community from its actual creators. That’s the kind of money-fueled conflict that fills theater seats.

Of course, actual businesspeople know that few ideas are truly original. Almost every new product, service, or business model owes inspiration to something that came before. But, The Social Network aside, merely copying what’s already out there has its limits, not just legally, but practically. Budding entrepreneurs searching the market for that million-dollar idea need to co-opt a product or service that hasn’t been exploited to its fullest, or add a twist or other value to stand out.

That’s what Kris Pennella did when she created her convenience gourmet-food business, Little Pots & Pans Co., in Portland. Instead of trying to invent something brand new or simply copying an existing product, she took a product that was already working and adapted it.

Pennella saw the popularity of meat- and potato-filled pasties sold in England, and she decided to try out her own version stateside. “I took the concept, twisted the recipes around, and developed a line of vegetarian and vegan ones,” Pennella says. It’s paid off so far. Little Pots & Pans employs five people and just celebrated its fifth anniversary selling grab-and-go gourmet veggie tarts.

Anatomy of a Heist

Whether you call it stealing, borrowing, or adapting, working with pre-existing ideas may be as essential to entrepreneurs as closing a sale or balancing a budget. The real question is how to do it effectively. Do it wrong, and you’re a thief. Do it right, and you’re a billionaire.

That’s precisely the issue underlying The Social Network, says John Raymond Boatright, a professor of business ethics at Loyola University in Chicago. In Boatright’s opinion, even if others thought of Facebook first, if Zuckerberg didn’t acquire it wrongfully, there was no ethical or legal violation. The same goes for other business ideas.

The key is whether the acquirer got the idea legitimately or actually stole it. “If the idea is voluntarily disclosed by the idea holder, then I don’t think that person can expect any protection unless there is some understanding that [the disclosure] is confidential,” Boatright says.

Make no mistake, however: You can still get in trouble for stealing an idea the wrong way. That generally means violating either a patent or an understanding of confidentiality. Copying a nonpatented item seen in a store or trade show clearly is OK. But, Boatright says, if you sift someone’s trash for design drawings or pump a rival’s employees for product ideas while interviewing them for a nonexistent job, you’ve crossed the line.

Many -- if not most -- entrepreneurs have found ways to steal ideas without landing in hot water. Yanik Silver is an entrepreneur in Potomac, Md., whose business is founded on selling others’ creations for a profit. One of Silver’s favorite techniques is taking uncopyrighted written materials from the public domain and selling them through informational websites. He also licenses works, paying a fee or percentage for the right to resell them, and arranges joint ventures, in which an author or other expert creates intellectual property for sale. All methods are perfectly legit.

Silver’s favorite sources for safe, profitable ideas are trend-spotting websites, including Springwise.com, CoolHunting.com, and TrendHunter.com. “I like looking at all sorts of different sources to get a creative idea of what’s working,” he says.

Borrowing has limitations, however. “Rarely have I seen an outright [theft] of an idea work just as well for the second mover in the marketplace,” Silver warns. “Really you just look like a Johnny-come-lately. There needs to be a differentiation point or something that makes you relevant in the marketplace.”

Figuring out the right way to adapt something is often the real key. In Pennella’s case, for instance, adding a vegetarian recipe to the meat pie formula played directly into healthy eating trends.

How to Protect Your Own Ideas

Once you have “stolen” your idea and are ready to launch, how do you make sure someone else doesn’t come around and do the same to you? Despite the emphasis on confidentiality agreements by experts like Boatright, they aren’t always useful.

Josh King, general counsel for online attorney directory Avvo Corp., says the Seattle firm often hears from people with business ideas who ask him to sign nondisclosure agreements before revealing details. “I won’t sign an NDA,” King says. He’s not alone. Venture capitalists, for instance, typically decline such agreements, citing as one reason the possibility that they may already be working on something similar.

Instead of relying on confidentiality agreements to stymie thieves, King suggests carefully choosing whom you tell and when you do it. “The way you protect against [thievery] is not by getting people to sign NDAs,” he says. “It’s by developing [the concept] as far as you can before you start talking about it.”

At Little Pots & Pans, Pennella has already seen competitors marketing knockoffs of her pies. Her response: She keeps her recipes secret but otherwise relies on out-executing copycats. She doesn’t regret the way she came up with her first product, would do it again, and recommends that others do likewise.

“Somebody can always do an idea better,” she says. “Don’t be afraid to take the risk and try.”