Home How NOT to write an NDA

How NOT to write an NDA

I used to think that a Non-Disclosure-Agreement (NDA) was a useful tool in business. I've now decided it's a wedge that gets in the way of progress and conversations.

A typical scenario is between someone with an idea and someone who's in the position to help fullfil that idea. This can be a VC with money, a contractor with skills or a business partner. The person with the idea begins the conversation...

"I need your help, but before I can let you help me, I need you to sign something that says I trust you."

What a conversation killer. When you put it that way, it sounds rediculous but that's exactly what these conversations are about.

  1. I don't know you.
  2. I don't know your idea.
  3. I don't know your background or company.
  4. I don't even know if I can help you.
  5. What is the upside for me to sign an agreement?

Let's tell some more truths.

  1. Few people read their NDA's closely. It takes time.  This is time that is spent looking at papers rather then discussing your idea and how to execute it. What would you rather spend time doing?
  2. It's not clear to me how enforceable NDA's are if they are violated.  It's practically impossible to tell how information leaks out and who is responsible. If information leaks out will you really spend thousands of dollars in legal fees?  If you're a startup the answer is always no.  The only time NDA's get more serious is when they are with a larger publicly traded company.
  3. In most cases the NDA does exactly the opposite of what actually needs to be done.  If you need help the best way to get help is to put the word out. You'll find the best people and the best answers to problems. You enable me to introduce you to people who may be able to help.

At best the NDA says that both people signing agree not to be assholes.  Of course you shouldn't need a piece of paper to tell you that, after all you're the one asking for help.

Ideas are worthless

Imagine you're a brilliant entrepreneur, a savvy business women or a brilliant negotiator.  No matter how good your idea, the idea itself is worthless. Zero. Nada.  There are two things that matter with ideas:

  1. Execution
  2. Advantage

As I just said ideas are worthless, litteraly a dime a dozzen. It takes five minutes to come up with a dozens of ideas. Execution, is the way you implement the vision of the idea. No one is going to execute the idea the same way that you would execute it. It may be your drive, your passion, your tenacity. Whatever it is, no one else has it.  You have to be more passionate about your idea then anyone else.

The other thing that matters is your advantage. This may be your connections, your education, your life experiences, your expertise. Whatever you bring to the table that gives you the lead over your competition.  

If you can execute your idea and you have an advantage you can tell your idea to people all day long and it doesn't matter.  If other people don't have the same passion and advantage as you they will never be able to bring the idea to completion that way that you would.

It's been done.

Your idea, however brilliant has already been done. It's been done by someone else, in some other country, in some related field, in some other time, to some similar product, using a derivative technology. For all the NDA's that I've signed I have never once seen an idea that is totally new. Never.  Even the wildly crazy ideas have been imagined in TV & Film. It's been done.

Ideas are by nature evolutionary and build upon past ideas.  No matter how good your ideas may be it's already been done. It's has already been disclosed. A simple google search of your idea will likely show that there are tons of people doing what you're trying to do.  What hasn't been disclosed is how you're going to do it.

Ideas are a People Business

VC's talk about intelectual property or the secret sauce for your idea. In most cases it's not the patents sitting in a drawer. It's the people who have a vision to execute and a tactical advantage to make an idea successful.  If you're asking for help you need the right people and to get them you need to have a lot of conversations.  The more NDA's you sign the less total conversations you can have.  Among other reasons this is one of the reasons you won't find VC's signing NDA's.

Someone is building your idea right now. What are you waiting for?


This post is licensed under CC BY 4.0 by the author.