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Protecting your IP in a co-working space

Tuesday, 14 February 2012 | By Oliver Milman

Entrepreneurs have always jealously guarded their ideas. Self-righteous rage is usually the response whenever they feel someone has encroached upon their intellectual property.


Legal action isn’t uncommon over “stolen” business ideas, as evidenced by the Winklevoss twins’ long-running legal battle with Mark Zuckerberg over the foundation of Facebook.


Other businesses are unsure as to how to react, as Australian start-up Shoes of Prey explained when a US rival allegedly copied it last year. 


With the growth of the internet, the opportunity to steal Aussie ideas, designs and logos has soared. But another factor is set to cause IP headaches for budding entrepreneurs – the explosion in co-working and incubator hubs in Australia.




Even a couple of years ago, the notion that you would choose to work in an open-plan office next to a rival business that was able to hear all of your conversations and, potentially, pilfer your IP would be unthinkable.


But the arrival of co-working spaces such as The Hub and Fishburners, along with hand-picked incubators such as AngelCube, PushStart and York Butter Factory, mean that the undoubted benefits of collaboration and networking come with the potential caveat of someone lifting your ideas.


Sebastien Eckersley-Maslin, who heads tech incubator BlueChilli, admits IP problems can occur – but at co-working spaces rather than organised incubators.


“There is a big difference between the two,” he says. “In a co-working location, there’s a real risk that there will be two competitive businesses in the same space.”


“I know of two businesses in Sydney that work right next to each other and they have been very careful to lock everything down. Conversations in an open plan office can be tricky. An off-hand comment can be picked up by a rival or even a freelance journalist that is working there.”


“It’s not really a problem in incubators, as you wouldn’t normally pick two competing businesses and the focus is on rapport and collaboration.”


“But if you have a serviced office that is more focused on financial gain than the protection of clients, you can have problems. It’s going to become more of an issue as this area grows. A few people will be burned.”


Ehon Chan, of co-working facility The Hub Melbourne, denies that IP is a major issue for the 200-strong members who use the space.


“If people have the same idea, they go off and work on it together,” he says.




“I think entrepreneurs realise that there are always ideas and talent that can help you. We are seeing more start-ups look for co-founders rather than do it themselves – some come here to look for co-founders.”


“I haven’t seen people worried about it here and it’s not really our role to help people protect their IP.”


“If you are having a confidential conversation, I think most entrepreneurs are sensible enough to go to a private area.”


Eckersley-Maslin stresses that the best way to protect an idea is to “get out there and do it quicker and better than anyone else”. It’s a mantra that other leading start-up gurus subscribe to.


“Ultimately there are no truly original ideas, so it is all about the people and teams within a business and how you execute those ideas,” says Kim Heras, who runs mentorship and accelerator network PushStart.


“With the latest applications we’ve had to our accelerators, there are clusters of teams all working on the same problem. Their ideas are scarily similar, but unintentionally so.”


“If someone has got the same idea as you, who cares? Just get out there and execute it better.”


So what should you do if a nearby start-up is working on the same kind of business that you are? Heras advises not to head straight to the lawyers.




“When Shoes of Prey said they had their design copied, they put it out there and blogged about it,” he says.


“They vented about it and let everyone know, but ultimately, they just have to go out there and be better than them.”


“There are people in Germany and China staring at business concepts from around the world all day. What can you realistically do about it?”


“You’ve got to assume that other people have the same ideas as you. The benefits of putting your idea out there far outweighs the dangers.”


“If you don’t say what you’re doing, you’re missing out on networking and help that others can give you. If someone does the same thing as you, just chat to them about it. In most instances, they’ll change it.”


According to Eckersley-Maslin, start-ups need to cover themselves, but demanding the signing of non-disclosure agreements at every turn can be self-defeating.


“We are pitched 10 or 15 ideas a week and it would be hard to remember what we were allowed to mention if we signed NDAs all of the time,” he says.


“Also, there may be another business that does what you want to do. If you don’t get feedback on your idea, you’re limited to just one person’s research into the market.”


“Lastly, if you tell me your idea and I meet someone who could help your business, I can tell them about it. Not every detail, of course, but enough to be empowered to be an ambassador for your idea.”


Eckersley-Maslin advises that budding entrepreneurs come up with a standard elevator pitch to broadcast to the world, but keep certain elements under wraps.




“Work out what you want to tell the world and keep the ‘secret sauce’ to yourself,” he says. “Tell people what your general concept is, but certain aspects of your business model and how you’re going about it should be secret.”


“For example, you can tell people that you have a business that helps people share car parking in central Sydney, which is a big problem for commuters. But if you have done a deal with a major real estate player, keep that to yourself. Tell people the concept, but not all of the execution.”


Top five tips to avoid over-share:

  • Don’t have delusions of grandeur – as much as you think you have a world-changing idea, the chances are that someone, somewhere, has had the same brainwave. Accept this fact.
  • Realise that it’s about the execution – ideas are great, but it’s how you execute them that is what will make or break your business. Focus on how you apply an idea rather than the idea itself.
  • Work on your elevator pitch – if someone wants to know about your business, you need a standard, simple 30-second explanation to give them. If you haven’t got one, come up with one.
  • Keep a little in reserve – sharing is great. You get to bounce ideas off others, avoid becoming stale and even forge partnerships. But you don’t need to tell everyone about every detail, especially something that provides you with a competitive edge.
  • Don’t indulge in careless talk – it sounds obvious, but if you’re worried about your IP in a shared work space, then keep your private conversations to yourself. Blabbing all your secrets probably won’t do you any harm, but do you want to take that chance?