Comment by hemancuso | Hacker News Reader

Comment by hemancuso | Hacker News Reader

An obvious counterexample is sittercity/care.com

"On July 20, 2006, Sheila Marcelo and Nick Beim flew from Boston to Chicago to visit a company called Sittercity. The business, which charged parents to access an online database of sitters and nannies, had been launched in Boston five years earlier.

“We took the meeting to talk about an investment,’’ says Genevieve Thiers, the Boston College alumnae who founded Sittercity. She’d met Beim, a partner at Waltham-based Matrix Partners, that year at a trade show. “Nick talked about how Matrix worked with companies and founders,’’ Thiers recalls.

Marcelo was serving as an entrepreneur-in-residence at Matrix, hoping to join or help start a business that Matrix would back. “I wanted to do family, health, or education - those areas were my passion,’’ Marcelo says.

Three months after the trip, Marcelo started a website, Care.com, to compete directly with Sittercity. Matrix Partners and several prominent investors poured capital into her new company - totaling more than $16 million so far. It wasn’t until late last year that Sittercity raised its first round of venture capital."

http://www.boston.com/business/technology/articles/2009/11/2...

A lot more backstory: http://www.boston.com/business/technology/innoeco/2009/11/th...

Is that a counterexample? Suppose they hadn't taken the meeting. What would have prevented Marcelo from starting Care.com?

As far as I can tell, nothing. Sittercity had been operating for 5 years in public view. Obvious idea, proven market, easy to find Sittercity users to interview.

(However, bringing an EIR to an investment meeting strikes me as incredibly dubious.)

You don't know it's a proven market until you sit down with a potential fundee and talk financials.

That's not true. If the business has been running 5 years, that tells you quite a bit. You can mine all sorts of activity information from the site, and you can get more through user interviews.

Moreover, startup investors are completely happy to invest based on estimations of total available market. It's pretty easy math to look at the number of kids, the average cost of sitters and nannies, and typical consumption of caregiving services. If you can also say, "And these guys have been running for 5 years despite [flaws A-M]," that's just gravy, even if you don't know any of their internal numbers.

Sounds like market based competition.

Completely agree here, this is not a counter example of 'stealing' an idea but one of 'executing' on an idea.

And not surprisingly this is what folks worry about, that someone with more resources than them will hear about their idea and be able to execute on it before they get off the ground. That would be true, if the person who had the resources didn't have anything else to do, but as a rule that is very rare, people with the ability to execute and resources do.

The care.com example is an example of an entirely different situation. That situation is that a business concept is proven out but doesn't have the capital to scale and the owners aren't doing the scaling. There are a number of folks who look for this type of business and build it in a different market. There was even a story linked here about a German company that did this. Much less risk since the idea is already 'proven'.

But if nobody is doing your idea, many people will think it won't work because if it did then someone else would already be doing it, so they won't 'steal' it because obviously its not a viable idea :-)

Ok But I think you are missing the point. They reached out to a firm "Matrix Partners" to help them execute by financial means and that firms individuals chose to spin off an exact duplicate of their startup?! Sham! ~That firm should be frowned upon and ridiculed and avoided by all entrepreneurs.

Do you really think "babysitters, online" is a novel, protectable idea?

And regardless, to start a company you have to let people know what your company does. You can't just say "give us money, we can't tell you why but it's totally worth it". So the idea has to be released eventually. What would you have had them do differently?

These guys were around for 5 years and somebody else beat them within 3 months? That's not a stolen idea, that's a failure of execution.

There was fare more discussed in that meeting than just "babysitters, online". They where in bushiness for 5 years and could easily answer things like 'What's the most useful way to do background checks?'. Which is not 'just an idea', but a validated and valuable one.

Heck, go back to when Steve Jobs visited the Xerox PARC labs in late 1979 and saw the mouse and windows-computing for the first time.[1] Not that PARC was doing anything commercial with it, but those ideas definitely got incorporated into Apple's products.

Jobs goes to PARC on a Thursday, and on Friday afternoon he is ordering one of his people to create a mouse for him. Now Xerox had invested in Apple and Apple got a tour of their research lab in exchange for that investment, but ideas do have value if you're not executing them efficiently and someone else can.

[1] http://www.newyorker.com/reporting/2011/05/16/110516fa_fact_...

Perhaps it's interesting to think about what the actual 'idea' here was. Did Xerox ever have the understanding that using mouse-windows computing would usher in a new era of computing? If not, perhaps it would be more accurate to say that the real idea here was Jobs', and that it was built in part with building blocks created at Xerox, which is true for most progress - it's always built on previous progress by 3rd parties.

From what I can remember of the Steve Jobs biography (and assuming it's accurate) yes, many people at Xerox understood that they had developed something revolutionary.

I wish we could get the story from Xerox's side. If they understood they had something revolutionary on their hands, why did they not try to market it themselves? What resource were they missing?

From the article quoted above ...

"... Apple was already one of the hottest tech firms in the country. Everyone in the Valley wanted a piece of it. So Jobs proposed a deal: he would allow Xerox to buy a hundred thousand shares of his company for a million dollars—its highly anticipated I.P.O. was just a year away—if parc would “open its kimono.” ... "

I don't think either party had any delusion about the purpose of the "meeting".

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