I see two fundamental problems with companies that I call startups for startups (SFSs), i.e. startups like Cambrian House, Cofoundr, Spigit, Startup Addicts etc that exist apparently to help other startups or people with ideas for startups. Typically, these companies (usually websites) enable their members to post business ideas online and have other members comment on and rate those ideas. Others want to help you find investors or partners etc. The problems I see with them are:
- Lack of Intellectual Property Protection: As much as people say that” ideas are cheap”, “it’s all about execution” and ”don’t keep your ideas to yourself”, people still do keep their really good ideas secret or reveal them only on a need to know basis. There is a big difference between revealing your business idea to one or two people who can help make it real and posting it to an online community with thousands of members, knowing that some of them have the skills to take your idea and run with it. The effect of this problem is that you seldom find really good ideas posted on these websites.
- No End Product: Most people who join an SFS do so because they lack the time, technical skills, business experience or funds to turn their ideas into real businesses. What they really want is for someone to say – “hey this is a really cool idea, I’ll implement or fund it for you”. Unrealistic as this expectation may seem, it is not difficult to imagine a system that would encourage and facilitate this sort of collaboration. Cambrian House comes close to doing this with its “Turn your idea into a business” feature but I don’t think it goes far enough.
So how might an SFS go about solving these problems? Well, here’s one idea: Continue to offer a free and public ideas forum but in addition offer a premium service that invites really good ideas under non-disclosure agreements and for a fee, has them assessed by an expert panel; conducts patent searches; provides feedback and submits the really good ideas to partner angel/VC investors. A group of ”venture technologists” could also be formed from the member base to help implement good ideas that do not qualify for funding. Basically, a service similar to BoggleIt in the U.K but with a social network wrapped around it.