Every day I see entrepreneurs trying to find that right balance between keeping their intellectual property confidential while sharing and promoting their business model - especially to investors - whose interest they so very much need to pique.
My bias generally falls strongly on the side of transparency - both because it is a virtue unto itself - and because it takes a lot of effort in our “post your business on the Internet for all to see” age to truly maintain confidentiality.
However, I have a more fundamental reason why I generally advise entrepreneurs and investors not to worry all that much about confidentiality.
Supply and demand.
Quite simply, there are so incredibly few entrepreneurs out there with the “right stuff” to actually build profitable businesses.
And those that have it are on balance, either too busy, too rich, and/or my favorite - of the should be expected ethical type that 999 times out of 1,000 – that as opposed to the problem being someone of substance stealing a business idea, that the far more likely reality is a vast and unrelenting sea of apathy toward it.
Now, this does not mean that there is no place for confidentiality in modern business.
But the reason why it is important is almost always more subtle than the fear of idea theft.
You see, for the vast majority of entrepreneurs without eight to nine-figure research and development budgets, the reason why confidentiality is important has to do with the under-appreciated context of mystique.
Oxford defines mystique as "a fascinating aura of mystery, awe, and power surrounding someone or something."
I would combine this definition with one of my favorite lessons from my long ago MBA marketing class – namely that in a modern marketplace there is zero difference between "actual" and "perceived" value.
So, in these contexts, the value of business confidentiality derives not so much from the threat of a nefarious competitor stealing an idea.
Rather, it is how the aura of confidentiality can bestow on a business that lovely element of mystique that draws people and resources to it, and does so in such a way that a nicely high perception of value follows.
And from this perception flow many wonderful things: brand equity, pricing power, and marketing effectiveness being chief among them.
Now for those who say that this is quite the cynical view of things, I would encourage them for the next seven days to not take in any entertainment media - no movies or television or Internet - nor to appreciate the lovely design of an iPhone, and certainly to not gaze fondly on an elegantly dressed and coiffed woman or man.
In other words, to suffer for just one week like the terribly poor, extraordinarily unfortunate and very marketplace mystique - deprived people of North Korea must unconsciously suffer through every day of their lives.
And then come back and tell me that mystique doesn’t matter.
So appreciate mystique - that beautiful elixir of the modern marketplace – for its own sake as the incredible gift and blessing it is.
And you entrepreneurs understand how confidentiality and discretion, when utilized gracefully and not ham-handedly, can help create it.
As for investors, look for this “you know it when you see it” quality in entrepreneurs and business models to back.