John Hu, founder of Stan Store, gave a bold take in a LinkedIn post about the fear of your idea being stolen. He said that if someone can out-execute you, then they are better suited to bring the idea to life. John is building a personal brand around the creator economy and his life as a founder. He typically champions an inclusive, nurturing working environment. He talks about paying people great salaries, buying his staff lunches, and investing in their ability to learn and grow creatively. I’m actually stunned that he even has this take. To be fair, I don’t know him personally and we all have an unsavory opinion about something.
So, in case I didn’t make it known…I 100% DISAGREE.
I won’t apologize for being dramatic. Here’s some examples of a stolen idea, IP, or work in general that might surprise you and what we can learn from these stories.
Let’s start with McDonald’s.
Yeah, the largest distributor of food on the planet was stolen from the McDonald’s brothers, Richard and Maurice. Ray Crock joined them as a managing partner to help them scale up to more locations. It was the 1950’s and the concept of fast food didn’t exist. We had drive up restaurants and the food took the same amount of time as it would at a dine-in restaurant. The McDonald’s brothers came up with a system that allowed them to make food within a minute or two. It was mind blowing at the time. After scaling up for the next few years, Ray Crock teamed up with his lawyer to trademark the McDonald’s name and gave them a one time pay out for the rights to buy the company. He famously gave them a handshake deal for royalties that never materialized.
They lost control over the company, they lost legal access to their own name, and ultimately missed out on the growth that McDonald’s went on to have.
At the time, there wasn’t a model for what we now know as the modern corporation. As a small business, they didn’t expect for someone to see something in what they were building that they didn’t see. Right away, they should have trademarked their name before opening up 2nd and 3rd locations. As their relationship with Ray Crock shifted, revisiting the terms of their partnership was also a must.
I’m not a lawyer, but the reality is that some people will see the opportunity and jump on it when you’re most vulnerable.
The second example I want to share isn’t in the video. You might have heard of an entrepreneur named Rachel Rodgers. Rachel Rodgers helps business owners scale to 7-figures and grow their businesses in general through her memberships and group programs. Before she launched Hello 7, she was a laywer who scaled her business to $700,000 annually. She did this with a digital product that helped founders streamline the legal work they needed at the onset of building their brand or launching a product. She did it in partnership with one of her best clients who eventually became a friend. Rachel built the product with her legal expertise and her partner handled the marketing. Everything was above board and on paper. Over time, the marketing fell by the waste side, but Rachel was still able to make it work with the product and make a descent about of sales. They eventually severed ties with no hard feelings, and Rachel walked away with the rights to the product.
To her surprise her old business partner started selling the product on her own without Rachel’s knowledge or legal consent.
Rachel’s team delivered a cease and desist, but it escalated to a 3 year legal battle to get her old business parter to take down the digital product. In Rachel’s book, she says that the lesson was about having the right boundaries and noticing signs earlier when something doesn’t sit right. Even upon reflection, I don’t know what she could have done differently to avoid the legal battle. The truth is that ideas do get stolen and your ability to prevent that depends on how much money and time you have to enforce things legally. It’s not all about execution or who has the vision. If it’s not yours to take, it’s simply wrong to do so (no matter if the law makes that clear or not).
Should you let the fear of a stolen idea stop you from building? Absolutely not.
But have clear boundaries in your partnerships, as soon as you can afford to, get a hold of a great lawyer in your industry who can guide you on the best steps to take to protect your business. Understand that what you’ve built matters. Just the way that we put on a seat belt every time you get in the car, your business deserves the same care so that your vision can come to life.Here’s an article listing out 5 high level ways to protect your business.
A list of resources and articles about trademark laws and legal protections
