Open-ness and the economics of information

Being open with information is key not only to getting funded but also to success in the modern business world.

I was reading an interesting post from Union Square Ventures Brad Burnham about entrepreneurship and the idea that they (along with many other VCs) are more likely to fund companies that are open with their ideas.

Many of the better entrepreneurs we know engage anyone they come across about their ideas. On the surface, this seems kind of dumb. Every time you describe your plans, you are providing a blueprint for a competitor. So, why do they do it? My hypothesis is they do it because their experience has taught them that, on average, every time they describe their ideas, they learn more than they reveal, no matter how much they reveal. And, as a result, they are able to concentrate insight in a way that creates a defensible advantage for them.

I know many people have a fear that VCs are going to steal their ideas and go start companies. While I am sure this has happened to some extent, the odds are the person who is starting the company will be much farther along than anyone who has heard the idea. Information only has value if there is substance behind it.

Union Square Ventures Via AllThingsD

About the author

Dave Rosenberg has more than 15 years of technology and marketing experience that spans from Bell Labs to startup IPOs to open-source and cloud software companies. He is CEO and founder of Nodeable, co-founder of MuleSoft, and managing director for Hardy Way. He is an adviser to DataStax, IT Database, and Puppet Labs.


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