Gapingvoid Daily Cartoons – Love and Entrepreneurs – Part 1
Feb 23 2010

So some of you may know Hugh MacLeod who is the guy behind @gapingvoid.  He started a series of original cartoons via his daily newsletter at the beginning of this year.  I’ve found several of his cartoons so appropriate for entrepreneurs and passionate people in general.  You can buy prints of his art.  In this post, I’m linking to some of his cartoons that highlight entrepreneurs.  Please click on the image to go check out how to buy a print.  In Part 2, I will share some of my favorite in his Valentine’s 2010 Love series. Be still my beating heart. 🙂

I know that many entrepreneurs feel delusional at times.  I certainly do and I have found myself doubting recently whether I am really an entrepreneur given the characteristics mentioned in my Are Entrepreneur’s Born or Made post.  Plus, I seem to be in between entrepreneurial gigs right now.  We have to believe against all odds that what we are doing is going to work when in the vast majority of cases, it doesn’t work out the way we expected…but we keep trying and in many great cases the stars align and the people appear to support you and it does!

I also believe that entrepreneurs are artists.  They take a blank page and create something that didn’t exist before that often ends up employing other people to share in the dream.  Entrepreneurs and artists come in all shapes, sizes, and vocations from technology, to cartooning, to non-profits, to singing, to painting, etc.

Author: | Filed under: entrepreneurship | Tags: , , | 3 Comments »

The Strength Of A Thought
Nov 30 2008

As Thanksgiving 2008 fades into pleasant memories, I came to ponder (as I often do) how a mere thought can rule our hours and days.  Most of our thoughts are about our work, our family, our daily obligations, and as we get older maybe about the meaning of our lives. 

Some thoughts are fleeting and some are recurring…causing us smiles, tears, pain, joy, or angst.  Some recurring thoughts get pushed aside by the ordinariness of our every day lives.  Some keep coming back and no matter how hard we try to dismiss them, they seem impossible to get rid of and ironically the pleasant thoughts often flee our minds more quickly than the uncomfortable ones.  

For those of us who don’t have the mental strength of mind to ignore/squash/bury our thoughts without being thrown into a state of mental anguish, it can result in frequent bouts of disequilibrium.  Those of us who seek to quiet the disequilibrium are often labeled as entrepreneurs.  It’s not easy being an entrepreneur as we are often trying to solve things that may be unsolvable in our current place in the space-time continuum.  Yet still we try.

I and many others have and continue to have these strong thoughts. In the past when I’ve followed those thoughts that surface and don’t leave me alone, I have learned from them, been able to help others, and barely lived to tell the tale. 

“Life is about learning.”  That in itself is a profound and already well worn thought carved in the minds of sages, prophets, and philosophers who came long before us.   Yet each time that thought surfaces, I fear it.  I fear what it is foreshadowing and despite having conquered that fear many times before, the differences between each ‘learning’ seem so vast. 

So, how do we rule our thoughts instead of our thoughts ruling us?  Or maybe the question is can we accomplish this in this lifetime? In this body? In this experience? 

Oh what power our thoughts have on the direction we step in our lives…whether it’s right, left, backward, straight, or directly into stardust…into our dreams.

Author: | Filed under: entrepreneur, entrepreneurship | Tags: , , , | 3 Comments »

The Entrepreneurial Ledge
Nov 20 2008

I had to talk myself off the entrepreneurial ledge yesterday.  Of course there is the often publicized glamour of entrepreneurship and then there is the unsung story of the not so glamorous side.  I think most entrepreneurs are a little bit neurotic, myself included, so when I heard that the first company I was founding CEO of officially shut down recently, I entered a state of…well I still haven’t figured out what state that is.  

The company was alive for 11 years.  For 11 years it provided experience, salaries, products and services to employees and customers.  I left in 2001 and my husband, Erin, who was the CTO left in 2003, and we have had nothing to do with the day to day operations since.  But the profound affect it has had on me cannot be reduced to mere words.  In many ways, it was like my first child (without the diaper changing).  It was a difficult parting of ways for me both personally and professionally.  

I knew a few good people who were still there and through the years they have reached out to me to help them find another job or share their experiences about working there.  Good people came and went.  Some bad ones came and went and some bad ones stayed, but overwhelmingly greatness was among us.  I heard about the company shutting down a few weeks ago but just mentioned it to a group of college friends on an email group I’ve been a part of since 1995 (pre-social networking sites for people who love mushrooms, pre-blogging, pre-twitter).  I had convinced one of the guy’s in the group to join us for the journey and he replied by saying this: 

Aruni – I know I’ve poked at you and Isochron since I left but I have to say it was the best business class I could have taken. This piece of Oil Field Trash was polished quite a bit while in Austin. I do want to thank you and Erin for giving me the opportunity to be a part of it. From that trial I learned sooooo much. I’m not sure I ever put it together sufficiently for you guys to know what the experience meant for me. Thanks! You and Erin were a rock I could depend on during my time in Austin as well. It meant a lot.

When I read his note on my phone before going in to an invitation only IBM Women Entrepreneur’s Webcast event held at IBM, the flood gates cracked a little.  I was sitting in my car in the parking lot so I had to pull myself together and go in.  The rest of the day I was on edge and I still am. 

I had to walk into my day job after the IBM Webcast and deal with bureaucracy, with people wanting 5 approvals to get something done, with collections, with employee allocations, and with being extremely underpaid because I’m doing much more than I was hired to do.  I had to suspend reality to make it through the day.   I repeated to myself “floodgates don’t open at work” over and over.  If I was a man and punched the wall, it would be more acceptable.  I had a “What am I doing with my life?” moment.  I had a “I’m working for ‘the man,’ I have two kids, I’ve been married for 7 years, we have a house and car payment, I have to keep our insurance benefits, our savings have sunk due to the crazy economic situation, and I feel trapped” moment. 

I had already committed to guest lecture at an executive MBA class yesterday evening so I went in not knowing what would come out of my mouth.  I shared the ups and downs of entrepreneurship and received several questions about Babble Soft and my day job.  I was surprised at how calm I felt giving my talk given the emotional roller coaster I had been riding all day.  One of the students took my card and said he wanted to see if he could help me get introduced to someone for a possible opportunity for Babble Soft.

I also happened to receive an email through facebook from one of my former students (I taught entrepreneurship at The University of Texas at Austin) who happens to be expecting a baby.  He sent me a link to a new book by Randy Komisar who wrote The Monk and the Riddle: The Art of Creating a Life While Making a Living (a book I made required reading in my class) called This I Believe.  Komisar writes about the Deferred Life Plan and how we make excuses about not doing what we want to do and putting off things until the time is right.

So despite all of that, I talked myself off the entrepreneurial ledge because I live in the real world.  The real world is where I have two beautiful children who smile and laugh.  A world where I tell my son after he ate a big dinner tonight that he was a ‘hungry hippo’ and he immediately replies and says in a comedian (trying to make his voice sound deep) tone “There’s a Hungry Hippo in the House!”  My daughter laughs, and I look at him with a smile on my face and know instantly he got his sense of humor from me. 8)

[Hippo photo by my friend Sandy Blanchard]

So I take solace from some words my day job boss told me the other day.  When I asked him why he wanted to hire me he said ‘because he heard I was a natural entrepreneur and he wanted one on staff.’  When I thought about those words later in the day, my soul said ‘thank you grandpa’ because he is who I gained my natural entrepreneurial tendencies from…I just happen to be a woman girl.

I hope both my children will be able to express themselves throughout their lives in ways I was never able to in the past but aspire to in the future.

Author: | Filed under: blogging, entrepreneur, entrepreneurship, social networks, working mother | Tags: , , , , , , , | 18 Comments »

A Fork In The Road
Jun 3 2008

This is a philosophical post at best and a rambling, forky post at its not-so-best.  Everyone’s life is filled with predictable stuff and non-predictable stuff.  And it seems like the life of an entrepreneur has more unpredictability than most.

Entrepreneurs often have to create a path where none existed before so the chances of seeing beautiful and amazing things as well as the chance of staring at the face of a lioness with her jaws open wide in a snarl about to pounce on you are higher than say going to work at a “predictable” day job. 

Of course predictable day jobs are also subject to stress, crazy bosses, insane co-workers, and layoffs, but it’s not your company that you might just have to see on the wayside as road kill OR on the plus side helping tons of people, purchased by a reputable company, or with a Wall Street ticker symbol. 😉  Either way you end up with some sort of vultures around you.

Sadly, yesterday afternoon there was a car-squashed dead squirrel in the road outside our house.  Our neighbor across the street told me she saw a big vulture hanging out in one of the trees outside of her house.  I told her about the dead squirrel and it immediately made sense to both of us why it was there.  Needless to say, this morning the squirrel was no longer on the road.  Anyway, I digress…

Everyone knows intrinsically that high risk can equal high rewards but we often forget it also can mean high loss and sometimes making odd, creative decisions. 

So what’s an entrepreneur to do?

Well she doesn’t give up easily.  She looks at her situation, looks ahead at the several uncharted roads ahead of her, gets manic stresses about it for a while, and then puts her foot down on one of the paths on the fork in the road ahead and starts walking.  If she’s got control of her thoughts (which I don’t usually) she won’t look back and wonder “what if?”  She’ll move forward and hope the path will eventually rejoin, and perhaps even speed up, the wider, bigger path to achieving her vision.

I have just encountered such a fork in my entrepreneurial road. [As an aside, why do they call it a fork when the utensil we eat with has 4 prongs (sometimes 3) but when we think of a fork in the road it usually is shown with 2?!]  I’m hoping it will lead to bigger and better things for me, my family, and my company.  Time and presence-of-mind (what’s that?!) will tell.

Author: | Filed under: entrepreneur, entrepreneurship, working mother | Tags: , , , | 11 Comments »

I’m Applying for the Women 2.0 Napkin Business Plan Competition
Apr 7 2008

Go to to learn more

I’m applying for the Women 2.0 business plan competition in California for my company Babble Soft.  Thanks to Angie Chang for leaving a comment on my recent Economy and Entrepreneurs post letting me know about it.  At the time the deadline was April 1, but they’ve since extended it to April 15.  They encourage companies located outside of California (and the Bay Area) to apply so we’ll see if they will actually select a company from l’il ‘ole Austin, Texas.

It’s a pretty short application form that challenges even the most frequent twitter user (i.e., type your thoughts in less than 140 characters) with maximum character requirements between 210 to 410 characters to describe things like your target market, business summary, or competitive advantage!  It sure made me focus on picking what I believe are the right words.  The online application form is run by Angelsoft, which I mentioned in one of my SXSW posts.

I will be submitting my application later today and then mailing in my paper napkin with my best paper napkin handwriting ability (UGH!) soon thereafter.  I might have to ask my husband to write it for me because his napkin handwriting talent is much better than mine. 🙂

Wish me luck!!

Author: | Filed under: babble soft, competition, entrepreneur, entrepreneurship, fundraising | Tags: , , , , , , , , , | 8 Comments »

The Psychology of Entrepreneurship
Mar 27 2008

Entrepreneurs are all just a little bit crazy and add motherhood on top of that and you get a whole new experience!  Entrepreneurs see the world differently, yet we still want to fit in, maybe more so if you are a woman and mother, for the sake of our children. 

I’m sure there have been books written about the psychology of entrepreneurship, but I don’t have time to seek them out.  I figure one will fall in my lap as I need it.  And interestingly Liz Pabon, who wrote The MavHERick Mind, recently reached out to me and will be doing a guest post on my blog soon.  I just began reading her book and so far it’s a fascinating read on how and why women entrepreneurs in particular hold themselves back from achieving the success that they are capable of.

A post also recently fell in my lap in-box written by Marc Andreessen, founder of Netscape and Ning, called The Psychology of Entrepreneurial Misjudgment.  It is an excellent read where he puts modern language around observations made by Charlie Munger, Warren Buffet’s long time partner and Vice Chairman of Berkshire Hathaway.  Here are the themes and you’ll have to head on over to Marc’s blog to read the rest:

One: Reward and Punishment Superresponse Tendency
Two: Liking/Loving Tendency
Three: Disliking/Hating Tendency
Four: Doubt-Avoidance Tendency
Five: Inconsistency-Avoidance Tendency
Six: Curiosity Tendency

The Doubt-Avoidance Tendency is the one that resonated with me the most.  It’s true that “You’d better not have a lot of doubts about what you are doing because everyone else will, and if you do too, you’ll probably give up.” But it’s darn hard not to have doubts when the stakes can be so high.  I would add that if you don’t have any doubts at all, then you might just run over a cliff without knowing it.  But if you need a quick answer, you can always ask the Magic 8 Ball (thanks to Scott Allen of The Virtual Handshake for the link).  I only had to ask my question 3 different ways to get the answers I wanted. 🙂

magic8ball-strategy.gif         magic8ball-money.gif

One thing I remember from Marc’s past blog posts is that there is a direct correlation between success and how many times you get up to bat.  Many inventors had a string of things that didn’t work out before they found the few that did, and the chances of finding something that does work increases when you try more things.  So Babble Soft is my second at bat.  I believe we barely slid into 2nd base with our first company, which is still operating, so I’m swinging for the fences on this one!

If you don’t want to miss more posts on entrepreneurship and parenting by me or my fabulous guest posters, Subscribe Now!  Oh and share your thoughts because blogging is a form of therapy even if most won’t outwardly admit it. 🙂

Author: | Filed under: babble soft, entrepreneur, entrepreneurship, marc andreessen | Tags: , , , , , , , , , , , , , , | 8 Comments »

The Economy and Entrepreneurs – Hold On!
Mar 17 2008

oryx-antelope.jpgUnless you live under a rock or don’t drive a car, you have no doubt heard about or felt the state of the US economy.  It’s in a state of well let’s say ‘confusion’ with indications it’s moving in the wrong direction.  Gas prices are at record highs, people are filing for bankruptcy, they are losing their homes, the government has a record amount of debt, the stock market is going down, etc. etc.

So where does this leave us entrepreneurs who want to raise funds to take their businesses to the next level?  Well, that’s a good question and a challenging one to answer.

I’ve had a handful of meetings with potential investors and a couple of them have expressed interest in participating, but they might change their minds given what’s going on in the economy.  As the saying goes “It’s not in the bank, until it’s in the bank!”  Fred Wilson, a venture capitalist in NYC, linked in his Read the Blogs post to a post on the Bear Stearns bailout by JP Morgan, which illustrates why even if you think it’s in the bank, it might not actually really be in the bank!  Our personal savings accounts are also going down with the market.

I had several conversations with entrepreneurs coming from different parts of the country at SXSW Interactive who have been struggling for a while to raise funds for businesses that are up and running with strong visitor and user traction.

So despite only being less than two months into the process, all of this has forced me to revaluate my fundraising plans for Babble Soft.  Entrepreneurship is not for the faint of heart as there are many ups, downs, and false starts.  The economy changes however have a huge impact on the success or failure of a startup.  If the economy is doing great you get all sorts of crazy new ideas/businesses popping up with chances to live and prove themselves.  If it’s bad, even the companies with wonderful ideas can suffer, die out, or never even get a chance to shine.

The good news is that of all the industries out there (except for maybe the alcohol industry), the baby market is fairly recession proof.   People don’t stop having babies nor do they stop buying things for their babies or things to help them take care of their babies.  The bad news is that what we are trying to do at Babble Soft does not yet have a predefined “mental need or want” (because it’s so new) like say bouncy chairs, bright/shiny toys, Baby Einstein videos, or diapers.

On the plus side, we have not taken any outside money to date so we don’t have to worry about how and when we pay investors back like some other start-up companies.  The downside is that if we don’t raise money right now, it will take longer to bring the exciting, potentially life changing vision I have to the world or worse we might miss the market opportunity.

I’m still trying to figure out the best plan of action.  I wish we had more money to create a new user experience, enhance our current applications, and create new applications ourselves.  I’m evaluating trying to raise a smaller amount of money and growing slower.  Now’s the time when the creative juices start flowing!

If you know an entrepreneur, give them a hug (if you can’t give ‘em money) because it’s going to be a tough roller coaster ride for the next probably year or so.  Some will be able to hang on and emerge stronger and better, some will get off gracefully, others might fall off unexpectedly, and yet others will wish they had fallen off before they lost their money and lost some of their sanity. 🙂

If any of you have any thoughts, advice, virtual hugs, or even questions please share below…

Author: | Filed under: babble soft, entrepreneur, entrepreneurship, fundraising, venture capital | Tags: , , , , , , , , , , | 6 Comments »

SXSW Interactive – Tuesday, March 11, 2008
Mar 12 2008

Yesterday was the last day of SXSW Interactive and I have practically a desk full of business cards.  Our son came yesterday (yes, it’s Spring Break here) for part of it as well but went with husband this time to a panel he attended.  I was only able to make one panel yesterday and spent the rest of the time networking.  Check out my posts on events I attended on Sunday (including my take on the Zuckerberg/facebook interview) and Monday.

Robert Scoble even did an interview of me that was posted to Qik but for some strange reason (due to the 3G connection) it got broken down to 16 different few second clips.  Here’s the first one, here’s a middle one, and here’s the last clip.  They are going to try to see if they can string it together, but it’s looking doubtful.  Guess that means we’ll have to do a more official one next time!

UPDATE: Qik was able to string pieces of the video together and you can see it HERE.  Once they get Robert’s phone, they will see if they can fill in some of the missing gaps using the files on his phone.  Once they do that, I’ll embed the video in a future blog post.

The Insiders Guide to Angel Investing
angel_button_frame.jpgThis panel was not really a panel because the only speaker was David Rose.  David is the founder of New York Angels and Angelsoft, a software application that helps angel investing groups manage plans received by entrepreneurs.  He had some great info on angels and angel investing.  He mentioned that he would make his slide-show presentation available and I will update this post if and when he sends the link, but here are some highlights:

  • There are 600K new companies started each year.  Of those 350K are self-funded, 200K are funded by friends and family, 50K by Angel investors, and a mere 1200 by venture capitalists.
  • Angels are generally about 57 years old, they have a master’s degree, 15 years of entrepreneurial experience, have been involved with and/or started on average 2.7 ventures.
  • To be an accredited investor you must have $1 million in assets and have to have made $200K of annual revenue for the past 2 years.
  • The average angel investor has spent 9 years investing, had done 10 investments, had 2 exits (profitable or lost their money), and 10% of their wealth is tied up in angel investments.
  • Angels look for companies with Scalable Business Models, an “Unfair Advantage,” a Great Entrepreneur, External Validation, Low Investment Requirement, Reasonable Valuation ($1 to $3 million pre-money range),  and a 20 to 30 times return on their investment within 5 to 7 years.
  • The single most important characteristic an Angel investor looks for in an entrepreneur is Integrity.  Then they look for Passion, Experience, Knowledge, Skill, Leadership, Commitment, Vision, Realism, and Coachability.

David said most angel investors don’t end up making a ton of money from angel investing.  In fact most lose money.  Many invest because they want to give back and help other entrepreneurs.  He even offered us a joke that goes like this:  How do you make a small fortune angel investing? You have to make a large fortune first! 🙂

He then went on to talk about the process of applying to an Angel network and described what the entrepreneur as well as the Angel investor sees if they are using the Angelsoft software application tool.  If you are an entrepreneur, he suggested you submit your plan at   They will soon be launching a site called Open Deals where entrepreneurs who don’t have access to a local angel group can submit their plan.  For a full list of angel groups, check out the Angel Capital Association site and their directory of angel groups.

All in all, I had a great time at SXSWi.  I look forward to attending next year and maybe even being a panelist!

Author: | Filed under: angels, conferences, entrepreneur, entrepreneurship, fundraising, new york city, venture capital | Tags: , , , , , , , , , , , , | 7 Comments »

Venture Capital Investment Competition at USC in Los Angeles
Mar 8 2008

For the past few years I have served as an Advisor to The University of Texas at Austin MBA team that competes in the Venture Capital Investment Competition (VCIC).  

It all started when I was an adjunct lecturer of entrepreneurship at UT Austin and since then I’ve continued to advise as they need me and my schedule permits.  This competition did not exist when I got my MBA, and even if I had the opportunity to participate I was too busy trying to start my first venture.  What a plus it would have been for any entrepreneur to have seen a term sheet presented by experienced investors in an academic environment rather than in real life when you feel like you have to learn another language just to understand parts of the investment terms!

This year the regional competition was held at USC in LA on March 7, 2008.  The UT team this year was comprised of:

Ben Jones – MBA 2008
Kyle Reese – MBA 2008
Rajiv Bala – MBA 2009
Ryan Sanders – MBA 2009
Scott Chiou – MBA 2009

I connect them with local venture capitalists and entrepreneurs to help them prepare but we had a late start with only about 5 weeks to get ready and midterms in between this year.  Other teams have semester long classes to prepare for this competition!

At the competition, 6 teams were given business plans for 3 real companies including NiLA, makers of environmentally friendly lighting, on Wednesday, March 5 at 5:00 pm.  They use the Internet and other relevant sources to research the companies and come up with questions for the entrepreneurs.  On Friday, they heard the entrepreneurs pitch their business concepts in front of 11 real live venture capitalists, including Aditya Mathur of Revolution Ventures, Nathan Joyner of Pacific Ridge Capital, Neal Hansch of Rustic Canyon Ventures, representatives from Tech Coast Angel Group and many more. 

They then go into little rooms and subject the entrepreneurs to answering several of the same questions over and over again from the 6 different teams.  Why would any entrepreneur do this you might wonder? Because the VCs are in the room while they are being asked the questions so they are getting exposure that they might not have had otherwise to them.

After the questioning sessions are over, the teams again regroup and come up with a PowerPoint presentation which outlines which company they would chose to invest in and why.   For the company they choose to invest in, they create a term sheet.  They present their choice in 3 minutes in front of the VCs.  The VCs then grill them for about 15 minutes on their company choice and investment terms.

At the end of the day, the judges decide who wins and who takes 2nd place.  The 1st and 2nd place winners get money and the opportunity to compete in the national competition at University of North Carolina Kenan-Flagler Business School in April.  I have personally seen one student get a job on a team I advised in venture capital because of participating in this competition.

As an advisor I get to be a fly on the wall and watch the VCs deliberate and observe the decision making process.  Plus I build my network in areas outside of Austin.  Personally, I believe this experience has helped me gain better perspective on what venture capitalists are looking for which is why I’m currently seeking money from angel investors or smaller boutique/seed stage venture firms. 

So I’m sure the suspense is killing you as to whether or not our team placed and unfortunately they did not. They picked the company with the biggest market potential but with the highest risk and the VC judges picked NiLa, which has a great opportunity but less risk and less upside.  Goes to show you that most VCs are not early stage investors!

There are so many variables that go into winning from judges backgrounds, to student’s experience, to understanding of the market of the presenting companies, etc. that you can’t always prepare for everything.  But what an experience! 

Flying back to Austin today for SXSW Interactive and will post about my experience as a newbie SXSW attendee.  I’m looking forward to meeting many of the people I’ve met through blogging and twitter!

Author: | Filed under: competition, entrepreneurship, fundraising, venture capital | Tags: , , , , , , , , , , , , , , , | 2 Comments »

To NDA or Not to NDA? That is the question.
Oct 3 2007

When I taught entrepreneurship at The University of Texas at Austin business school many students asked about the importance of Non Disclosure Agreements (NDAs) which are also known as Confidentiality Agreements.

I have observed a shift in their importance since the late 90’s (when I was starting my first high-tech company) to now.  In my experience, they don’t seem to be waved around as much as they were in the past.  I think this is because more tech businesses are Internet based and really don’t have that much proprietary information to protect.

Also, there seem to be fewer patentable Internet ideas and it’s much harder to claim exclusive ownership of a piece of technology with so many open source software applications available like WordPress, Linux, Bugzilla, etc.   [UPDATE: I just saw on Scobelizer — Scoble is a big .NET idiot — that Microsoft’s .NET development environment is being shared sourced, which is one step closer to open sourced.  Wow!]  Only a few Internet giants like Google and Amazon have patent protected algorithms for search and product optimization that are actually protectable if someone tried to violate them.

I have now begun to see business related discussions occurring prior to signing an NDA.  Maybe this means we are trending back to our “word” being as important as a written agreement stating we won’t divulge the other party’s trade secrets or other information?  I certainly hope so because I know those NDAs can sometimes be pretty worthless depending on what you are discussing.  Especially in medium to large sized business whose employees often have no idea what confidentially agreements have been signed with whom and about what!

If you are a high-tech entrepreneur here are some occasions where you will most likely have to sign their NDA:

  • When discussing a partnership relationship with a large corporation such as Microsoft®.
  • If a customer wants to buy a gazillion of your widgets, licenses, products, etc. A good problem to have!

Here are some occasions where you will want to have someone sign your NDA or a mutual (a.k.a. two-way) NDA of your approving:

  • Hiring employees or consultants
  • Execution of a large business deal that will require a lot of interaction between your company and another
  • If you’ve actually invented the time/space transporter in Star Trek then you should get everyone to sign one! 😀 Beam me up Scotty!

Finally, here are some occasions where you should not ask to have someone sign your NDA (unless you’ve invented the transporter mentioned above):

  • When seeking money and/or advice.  Most reputable Angel or Venture Capital investors will not sign an NDA because they see so many deals.  It would not make sense for them to put themselves at risk for any potential lawsuits.  If you are pitching some great XYZ Internet deal and you are in Texas you can bet someone else is pitching them a variation of XYZ Internet deal in California. If you want their money badly enough and the investor has a good reputation, then you will just have to play by their rules.
  • When you are negotiating with a large company such as Microsoft. You will most likely have to sign theirs or just choose not do business with them.

There are many great ideas out there so don’t make the mistake of thinking that your idea has not been thought up by someone somewhere in the world.  In my opinion, the difference between an idea and a company is execution (blood, sweat, tears, right decisions, wrong decisions, hiring, firing, bringing the right people together, etc.)!  If someone can steal your idea and create a profitable, successful company in 6 months then see if you can get a cut up front and let them do it.  It’s always better to have a small piece of a huge pie than 100% of a non-existent pie!   If you can’t get a cut, then just come to terms with the fact that they deserved the success because they orchestrated the variables to make it happen and just don’t tell them your next big idea!

Since it’s important that my student’s learned this concept, I often brought in Gary Hoover, founder of Hoovers, BookStop, and TravelFest as well as author of Hoover’s Vision as a guest speaker.  He says he talks to so many businesses and students that when someone asks him to sign an NDA he proceeds to ask them ‘Why?’ and immediately wonders about the viability of the concept.  Talk about a serial entrepreneur!

IMPORTANT:  Just because you sign an NDA you do NOT HAVE TO disclose your confidential information.  You can choose not to share certain pieces of information.  Often people think that if they’ve signed an NDA they have to put all of their confidential information on the table.  If you sign something with Microsoft, they are not all of a sudden going to give you the software designs of their operating systems so in the same vein you as a small business owner do not have to tell them about your secreat weapons.  Believe me…sometimes I wish I had just kept my mouth shut….

However, the above is just my opinion so despite what I’ve written it’s always best to consult with an attorney.  Just a forewarning, they will most likely tell you to have everyone and their dog sign an NDA.  They are after all lawyers.  🙂

If any of you are lawyers, pretend to be one in your spare time, and/or have anything interesting/funny to share on this topic, I’d love to read your comments.

UPDATE on Oct 8, 2007: After reading my post, Gary Hoover had the following to share:

On my reference to NDA’s, my points are these:

1) If you have an idea that is easy to grasp and easy to copy, one that everyone says “I wish I had thought of that,” you may not have a very good idea; the best ideas usually are not so easy to grasp

2) Anyone who would steal an idea and copy it likely does not have what it takes to carry it out; real entrepreneurs have more than enough ideas to last a lifetime and don’t need anyone else’s ideas to the pile!

Of course if you really have invented a cure for a disease or some other magical thing, or if you are talking to giant corporations about your idea, you should protect it. but that is rarely the case with the entrepreneurial ideas I usually hear about.

I pretty much refuse to sign NDA’s these days. They are a mark that bureaucrats and lawyers are making the decisions, not entrepreneurs, and that scares me. Too often I have bothered with NDA’s in the past only to find “is this all you were hiding?” no one would steal this!” Of course since I am not the entrepreneur with that particular vision, I could be wrong. But having people sign an NDA is so often just a distraction to the entrepreneur and the signer.

The outbreak of NDA’s over the last 10-15 years often reflects a paranoia, a sense that “I have this great idea and someone might steal it so I better keep it under a lid.” Venture Capitalists often think this way, entrepreneurs rarely do. When I develop a new idea, particularly one that is well outside “the box,” I find it useful to talk to many many different people about it, to strangers on planes, to people I meet socially, and so on. The more people who react and comment on it, the better my research. That does not mean they are all correct – I usually learn something whether they love the idea or hate it. You have to ask “why do you love it” and “why do you hate it?” And you have to take their lifestage, background, and preferences into account. I don’t know that my mother thought any of my ideas were particularly good, and Hoover’s probably seemed particularly silly to her.

Gary E. Hoover
Chief Storyteller, RoadStoryUSA
CEO, Story Stores, LLC

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