Sit on your big idea too long and you’ll probably lose it

When your start-up is breaking ground, you never know who will be talking about it. To keep track of the conversation, Lauren McLeod set up a Google Alert for mentions of Flightfox, the online marketplace for sourcing cheaper flights that she had set up with Todd Sullivan.

Imagine the pair’s surprise when an alert led them not to a curious blog post but to a listing on online outsourcing marketplace Freelancer.com. An opportunistic user was on the lookout for a web developer to “replicate Flightfox”. Their response turned from shock to indignation when they saw the price on their heads: a mere $400.

“We were a bit put off,” McLeod says.

Whether it’s copycats or just a serendipitous clash of ideas, many start-up founders find themselves facing competition very early. For some entrepreneurs, this is exactly the reason they prefer keeping their business under wraps until it’s ready. But McLeod – and a host of other entrepreneurs and advisers – disagree.

Instead, working out whether you have a product that customers want and will pay for is a race to the start line that needs to happen quickly and very much under the public gaze. The numbers back this up. The Startup Genome project, a survey of 650 start-ups in Silicon Valley, found that new enterprises that get out early and learn from their customers grow 3.5 times bigger and raise seven times more money.

McLeod and Sullivan opened their website to users as soon as they could.

“You get all types of feedback,” McLeod says. “We’re working as hard as we can to move fast on that first-mover advantage because that’s what we have.”

Flightfox is a crowd-sourcing play for the travel sector. Unlike websites such as Kayak and Expedia, which search for flights by trawling through airline websites for publicly available prices, Flightfox draws on a global community of “flight hackers” who use inside knowledge of discounts and technical work-arounds (such as using proxy internet protocols to access regional prices) to come up with the cheapest flights available.

The community member that uncovers the cheapest flight is paid a $29 finder’s fee by the user and Flightfox clips the ticket. Following user feedback, the pair are about to implement the ability to tip the “experts”. “If an expert has saved you $1000, a lot of people are saying ‘I want to give them another $50’,” McLeod says.

The pair will also implement gamification features, such as a leader board, to keep their experts loyal to Flightfox.

“We’re talking to our customers and our experts to figure out what our product is,” McLeod says.

By evolving quickly, McLeod is confident they can beat the imitators. “For someone [a competitor] to go through all of those learning experiences that we have, is going to take some time,” she adds.

It’s not always a case of copycat competitors. Local technology incubator Pollenizer recently held its Bootcamp to find the next start-up it would invest in. There were three pitches for travel planning companies and two art rental businesses. It was a watershed moment for aspiring entrepreneurs in the room, Pollenizer co-founder Phil Morle says.

“They need to understand that it’s all about execution and the idea is actually the flimsiest, most weakest part of the whole equation,” he says.

There is a requirement for businesses to “urgently and quickly execute on getting the idea in front of as many people as possible who you think are the target market,” he adds. “You learn very quickly how you should do it and who are the people, how much they’ll pay and how they’ll integrate in their life. You can’t get that by keeping it a secret.”

Common ideas are often inspired by a successful business, which unlocks a trend that can be applied to different categories, Morle says. At a prior Bootcamp, entrepreneurs were pitching collaborative consumption ideas, following the success of Airbnb and TaskRabbit. This time around it was “Pinterest for X” – whether it be jobs or media, he says.

Start-ups are plucked from the zeitgeist, so common ideas are almost unavoidable, a partner at Silicon Valley start-up accelerator 500 Startups, Christine Tsai, says. “People think that their idea is very unique and it’s not,” she says. “However unique you think your idea is, I guarantee you there are 10 other people doing the same thing.”

Tsai emphasises that much of the value in a start-up is wrapped up in the founders.

“There are a lot of start-ups that want to stay in stealth – I don’t think that’s smart,” she says. “Some people worry about competition but no one is going to go out and copy your start-up because they can’t copy you.”

Morle adds weight to this sentiment with an analogy for the group-buying sector. “I could go right now to various places and I could get all the functionality that Groupon has, for example, and I could launch a site and call it Phil’s Deals and then what do I do?” he asks. “Sourcing the deals, fulfilling the orders, building the databases . . . that’s actually where the business lives, not in the code.”

He reckons Flightfox shouldn’t worry about its plucky competitor. “As for an idea, which is ‘what if we get travel hackers to make [cheaper itineraries] for people?’ The journey to turn that idea into something which is a manifestly working business is a long and arduous journey, which is 100 decisions a day. That competitor that copies the site doesn’t understand that and can’t possibly compete with you.”

McLeod says it’s “a given” that there will be imitators. “If you have a good idea, someone will copy it eventually,” she says. “It’s just being able to look past it and focus on what you’re doing.”

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