No I Won’t Sign Your Startup NDA (Yet!)

No I Won’t Sign Your Startup NDA (Yet!)

Was Facebook a trillion dollar idea? Would you have recognized that in 2004?

Friendster already existed, with tens of millions of users. Myspace had recently launched and was rocketing to domination, largely due to fun customization features and, you know, not constantly having uptime problems like Friendster.

Now you want to launch a website in a market with an established, funded player and a new competitor exploding in popularity? Oh and you won’t have the features that make Myspace popular and want to target college students who have no money? Cool cool cool, I don’t see it.

Was Dropbox a multi-billion dollar idea? Would you have seen it in 2007?

Unlike Facebook, this idea actually made sense to me at the time. But it seemed like something that was relatively “trivial to build”, and if it gained any popularity at all, Microsoft or Apple would just build it into their OS and force you out. It felt like maybe a good idea for an acqui-hire startup, but I certainly wouldn’t have tried to steal it.

The point I’m belaboring here is that it’s nearly impossible to recognize great ideas. Venture capitalists focus their entire careers on building this skill, and even they get it wrong most of the time.

“The truth is, we know so little about life, we don’t really know what the good news is and what the bad news is.”

― Kurt Vonnegut, A Man Without a Country

Your Idea Is Not Special

Simple Thread is a digital product agency. That means we talk to a lot of people who have an idea for an app. I genuinely love that part of my job. Enthusiasm is contagious, and I relish that time at the very beginning of an idea – when anything is still possible. It’s incredibly exciting and fun.

Talking to aspiring founders who have a passion for some industry niche reminds me why I started consulting in the first place: to help people improve their lives with technology, help people improve the world with technology.

That said, sitting on this side of the conversation, I see patterns that aren’t always obvious to the founders and visionaries.

Founders are typically convinced they’ve come up with an original idea. A genius idea! And once every few years, this does happen, where I have my mind blown with some clever take on an age-old problem.

But more often than not, once we dig through the details and get down to the root of the idea, it’s usually an idea that I’ve heard many times. In fact, it’s often a nearly-exact replica of a solution that already exists. Multiple solutions.

That doesn’t make it a bad idea.

However, it does mean I’m not interested in stealing your idea. I’m not interested in signing another NDA about a two-sided marketplace to leverage underutilized restaurant kitchens or event space or woodworking tools, etc. The idea is almost never special.

Execution Is Special

If you look back at most successful startups, the idea is barely a factor in why they made it. What matters most is how they executed the idea.

Facebook intentionally constraining the network to Harvard and then slowly rolling out to other Ivies made it feel exclusive – and more valuable in general, seeing real-life friends on the site. Dropbox focused on getting the user experience insanely frictionless – far more polished than a large company would ever produce.

That pattern repeats again and again over the last 20 years. The iPod wasn’t the first MP3 player, but it was markedly better. Pinterest launched a few years after Yahoo acquired Delicious, but Pinterest was an exquisitely better execution of the simple bookmarking idea.

More recently, why does everyone use Slack instead of Flowdock or IRC? Or why use Zoom instead of Skype and all of the others? It’s not the idea. It’s the execution.

The Tie That Binds

Okay, so the idea is less important than execution. I get it. Now why won’t you sign my NDA?

First, I should explain that a non-disclosure agreement is almost never exclusively about disclosing confidential information. It often has language around agreeing not to build any competing products, work with competing companies, etc.

So the NDA isn’t just about letting us talk freely in this initial meeting or us keeping your secrets. It’s a binding legal agreement for the next 1-3 years. I’ve even seen contract duration terms out to 10 years. This agreement becomes something we need to keep track of and consider whenever we partner with a new client or discuss a new project.

Does this project conflict with any existing agreements? It’s something we need to consider when a team member starts a new side project or a client launches a new business or acquires another company. Every NDA we sign adds a little complexity and overhead to every decision.

That’s fine. It’s part of doing business, the same as a law firm or any trusted advisor. But it’s not something we enter into lightly.

When I Will Sign Your NDA

Having said all of that, I absolutely understand why founders feel protective of their ideas. If you don’t believe your idea has legs, you wouldn’t be pursuing it. And to be clear, I will sign your NDA, eventually.

I want to get to know you a bit first. Regardless of the idea, are you someone I want to work with? Someone our team will enjoy working with? Life is too short to work with jerks, even if they’re brilliant or deep-pocketed.

After the vibe test, we need to understand if your budget and timelines are compatible with our current project load, if your problem is in our wheelhouse, if you are comfortable with our iterative development process, if you are working in a domain we want to pursue, etc.

There are a dozen or more elements we need to consider before we even hear any details about the idea. Let’s get those out of the way, and then I’ll be happy to sign your NDA.

I want to hear your idea. I want to get excited about it. I want to advise you and challenge you and help you turn it into something that changes the world. Let’s just make sure we can work together first.

If you’re still feeling nervous talking about your idea, even vaguely, I’ll refer you to this classic quote from Howard Aiken, a physicist known for working on some of the first computers in the 1940s:

“Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.”

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