Here’s why NDAs aren’t necessary for meetings about early stage ideas

Stef Lewandowski of Makeshift on why he hates non-disclosure agreements—and some alternative methods

Some people demand signed non-disclosure agreements before they will tell you their idea. I’m not one of them anymore and here’s why.

Hi! I’ve got an idea that I want to talk to you about, but first I need you to sign this non-disclosure agreement.

I’ve had a few conversations that started this way. Most of them, embarrassingly, as the person uttering those words.

If you’re not familiar, the principle of asking for a non-disclosure agreement, or NDA, before speaking to someone, is an attempt to get some security around the ownership of ideas being discussed between two or more people (and the organizations they work for).

In essence, you’re asking someone not to take your idea and do something with it, or even to talk about your idea to anyone else, and that’s never sat very well with me. When I meet someone opening with this line, I usually respond with “sorry—I don’t sign non-disclosure agreements.” Partly out of principle. Partly to send a message. Here’s why:

Ideas are not a limited resource

Ideas are a dime-a-dozen, and really, given how hard it is to take an idea and turn it into something—a product, a business, a project—the likelihood that someone is going to think “gosh, what a great idea, I’ll steal that” and turn it into something successful is vanishingly small.

By putting secrecy around your idea, you run the risk of sounding like an ideas guy, or worse, a no-idea guy. Ideas guys (I am guilty of self-describing as such in the past) assume that because they’re good at riffing on things and coming up with good suggestions that their ideas are of high value. And no-idea guys are people who have a predisposition for thinking they can come up with few ideas, and that this current idea is their one big idea of their life.

The thing is, idea-having isn’t a limited resource. Everyone’s coming up with new ideas all the time, but because of the nature of time and work, only some ideas can ever be turned into a reality. The hard bit is deciding what to work on, and what not to work on.

Will it really protect your intellectual property?

Many would advise you to get some legal protection around your idea somehow before launching a business. That could be a patent, an exclusive contract to supply something in a particular market, or ensuring you retain copyright over certain components, amongst other things. Raising investment for something where you’ve not covered the basics could prove pretty difficult.

I work on the web, though, and most of what I do relies on free, open-source, patent-free software, so it’s about finding the right parts to protect. Twitter’s approach sticks out as an example of a company doing things in a new way—they patent defensively with their Innovator’s Patent Agreement.

If there’s a part of your idea that’s patentable, sure, patent it if you want to do that, but you don’t need to lock down all conversations about your thing just because a component is novel—it’s counter-intuitive.

And furthermore, if you think I’m the kind of person who might take your idea and register something as a result of a conversation, why are you even speaking to me about it?

Pop your invention bubble

Given that there are a great many people coming up with ideas for things all the time, there’s a tiny chance that something you come up with is globally unique. To declare that the idea is in that tiny bracket of utterly novel inventions could be a sign that you’re probably in an invention bubble, and have an inability to consider that others have had a similar idea to yours.

It’s a solipsistic point of view, when in reality you’re only a few months or years ahead of many people who will soon discover similar things. You might even find that you’re behind in your thinking, but you haven’t done enough research to find out!

Don’t make life complicated

If I were to attempt to keep track of a number of non-disclosure agreements, it would make it really hard to remember which ideas I am allowed to know about, and which ones I’m not. Which ones are expired? Which ideas are now public anyway?

Oh, I have a friend who… Oh sorry, I’m not allowed to talk about it.

I really don’t want to have that internal thought process when I’m in a conversation because it’s bound to make me err on the side of not talking about interesting things as much. It decelerates serendipity.

Optimize for serendipity

The opportunity to excite people about your idea using your and their networks is very valuable. By locking down the person you’re speaking to about your idea to deliberately not sharing, you’re going after the opposite of serendipity. There’s a word for that: zemblanity.

When you’re speaking to someone, you’re not just connected to them, you’re connected to their network. By disabling their ability to make as-yet-unknown introductions, comments at networking events, to speak about your idea over dinner, you’re saying that the only value you place on that person is them, and not their network. That’s a mistake, because for any idea to work, you need a little luck.

Optimize for serendipity—enable the people you know to get excited about your idea and to connect you with others who can help.

There’s a downside to stealth

Non-disclosure by default introduces the risk that your company culture could be poisoned by secrecy at an early stage. I distinctly remember moments in a previous “stealth startup” company where I and those around me were so tied down with non-disclosure that we didn’t tell our own families what we were working on.

The effect of this after we launched was that nobody was sure when or if they were allowed to talk about what we were working on. As we all know, regularly communicating about what your company is working on is a big part of a good marketing plan.

Stealth can be poison to company culture. Through secrecy, you accidentally push your company into a closed, rather than open, mode. And that can be hard to cure.

Are you really going to sue me?

Let’s assume for argument’s sake that you do have something amazing and original. And I sign your piece of paper. And something weird happens and it ends up with you suing me as a result.

Seriously, are you going to spend those ultra-limited seed funds on litigation? If not, why make me sign it?

You can’t steal execution

If making a business was as simple as stealing an idea, we’d have lots of examples to point toward of people taking an idea from a conversation, ripping it off wholesale, and turning it into a successful business.

There is the occasional horror story—the guy who pitched his idea on the Dragon’s Den TV show, didn’t get investment, and someone watching the show thought “that’s a good idea.” But that’s an outlier.

Many of the big success stories you see started with an interesting approach in a “me too” area, and they differentiated by executing better than their competitors. You should focus on the execution of your plan and let the copyists copy if they want to try.

How about taking an unusual angle with your next idea?

In thinking about this post, I’ve realized I have a few unusual approaches to the NDA, and revealing ideas. Perhaps have a try…

Friend + NDA = FrieNDA

This is an alternative to the NDA. You don’t write anything down, you just say “I’m not making this public at the moment, but you can talk to your network about it.”

I’ve done this a few times, and it seems to do much of what an NDA does, but it feels more sane, less legal, and as Fred Wilson said, “you’re far better off working with somebody of high ethics with no NDA than somebody of low ethics with a signed NDA.”

The PDA—Please Disclose Agreement

When you next start a conversation about something, start or end by explicitly saying something along the lines of “I’m doing this idea in the open. If you like it, please pass it on, or let me know who I should talk to.”

Head-in-sand research

When I come up with a new idea, I often delay doing market research on it, focus on thinking it through without external influence, under the assumption that it is very, very likely that a similar or overlapping version of it exists out there. It can be pretty demoralizing at an early stage to get excited, google it, and discover someone having a go at a relatively similar incarnation of your idea.

The thing is, the execution on an idea will always be different, depending on who takes it on, so hearing that someone has had a punt at a similar idea to you is not a problem. In fact, that kind of market validation could actually prove helpful in validating that it’s a potential business idea. All good ideas have competitors around nuance. “And anyway, screw those guys, they’re doing it wrong.”

Alternate your idea-openness

Idea-having isn’t a depleting resource. There’ll always be another idea. Unless you think this is the only one you’ll have, which is a worry in itself, and another article.

You could, as I have, alternate between a number of different modes in relation to your ideas. For instance:

  • Please disclose—immediately tweet the idea you just had, then publish a hack after one day of work. Then, follow through, probably with an open source or Creative Commons license thrown in for good measure. On Thursday we did this and put out four things in a day, including and
  • FrieNDA—tweet “hey guys, looking for some folks to try out a hack I’m working on,” share it with immediate friends but ask them not to talk about it just yet, put up a landing page, and slowly develop the idea. We’re doing this with Wrangler.
  • Hack-and-think—do a little bit of “hey guys!” but spend most of your time collecting great people around your idea, fulfilling regulatory restrictions, and developing a product that is secure before you launch to market. We’re doing this with Savemates.

Open by default

Some modes seem to work better for some ideas over others. In general, I am open by default, and only if there’s a very good reason to not talk about what I’m up to would I keep it quiet.

Given the enormous amount of personal sacrifice, risk, hard work, stress and conviction it takes to make something successful in this world, I am confident in my general approach to meetings:

You might try to steal my idea, but you can’t steal my passion, so I’ll assume you’re here to help.

Editor’s note: This post was originally published on Medium by Stef Lewandowski, the Founder of Makeshift, a London startup that makes tools for startups.

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