Filed under: News | Technology News


Should Developers Sign An NDA Before Hearing Your Idea?

Feb 6 2014, 9:43am CST | by

Should Developers Sign An NDA Before Hearing Your Idea?

The Non-Disclosure Agreement (NDA) is an extremely common form of “protecting” entrepreneurs’ ideas from being stolen. Each day on matchist, people looking for developers ask me how they can ensure their idea is protected. They ask me whether developers will sign an NDA.

For the most part, these folks need to face a cold, hard truth- an idea in its purest form is not worth anything in the business world. It’s the execution that matters. Unless entrepreneurs have some intellectual property to protect or code already written, an NDA is usually a sign of amateurism. Why? Here are a few reasons to consider:

1) Can you explain your idea at a high level?- Without disclosing your secret sauce, can you talk to developers in order to understand how much time and effort your idea will take to build? Most of the time, the answer is yes- until you start developing the actual technology, their is not much inherent value in the idea itself. Once you agree to start working with a developer, it’s completely fine to have them sign an NDA. Better yet, make sure the contract you execute has solid terms to protect your code and ensure ownership. Attorneys who work with entrepreneurs and startups will have good experience knowing which clauses to put in.

2) Are you starting the relationship off right?- An NDA is an inherent sign of mistrust. It’s certainly a form of protection, but in an informal environment when you are just starting to seek out technical help, having a developer sign an NDA before even talking to them indicates you don’t trust them. The best professional freelance developers often take this to heart, and many will not work with entrepreneurs who require an NDA up front because it’s a signaling mechanism to them that the entrepreneur isn’t sophisticated and not worth his/her time.

3) Can the developer really sign an NDA?- Professional freelance developers obviously spend most time coding, but a lot of time is spent finding new clients. They are speaking with entrepreneurs all day long, and if they have to sign an NDA before speaking to each one, it is highly likely they will infringe on someone’s NDA because ideas are very often repeated. This is especially true in times of fads. Take for example, a developer who has built a few daily deal sites (imagine this is a few years ago when daily deals were all the rage). If the developer could not speak to other potential clients who had ideas for daily deal sites, he/she would be out of projects very quickly. It’s simply not a practical business step.

4) Can you enforce the NDA?- Let’s say someone does run off with your idea after you have them sign an NDA. What do you do? Well get ready for some fun times and lots of money ahead. To actually enforce the NDA, you’d have to hire a lawyer, acquire evidence, determine what legal claim you can make, and consider criminal prosecution. Now, I’m not a lawyer, but that sounds like a lot of money, time and wasted resources. So if you can’t (or won’t) enforce an NDA, what’s the point of having developers sign it in the first place?

I want to emphasize, that NDAs are absolutely appropriate when there are trade secrets and other intellectual property at stake. Talk to your attorney about the appropriate time and place to use NDAs. The situation I am exploring is the entrepreneur who is too afraid of his/her idea being stolen that they have multiple developers sign NDAs before even talking to them about their idea and the cost to build it.

Entrepreneurs- remember, ideas aren’t worth much…it’s all about the execution. And you can’t execute if you don’t have a product.

Source: Forbes

You Might Also Like


Shopping Deals


<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




blog comments powered by Disqus

Latest stories

Samsung Project KQ might just be the premium Galaxy S5
Samsung Project KQ might just be the premium Galaxy S5
The Project KQ is expected to encompass the Galaxy F-line of products
Elin Nordegren, Lindsey Vonn are Pals. How?
Elin Nordegren, Lindsey Vonn are Pals. How?
Tiger Woods’ ex-wife and current girlfriend, Elin Nordegren and Lindsey Vonn are now close pals. Surprising. Isn't it?
The Right And Wrong Way How Aereo Works
The Right And Wrong Way How Aereo Works
Aereo, a service that lets users record broadcast TV shows over the internet and stream the recording to their mobile devices, is fighting for its life before the Supreme Court this week. (My colleague J.J. Colao is...
George R.R. Martin Comments On Controversial Game Of Thrones Scene
George R.R. Martin Comments On Controversial Game Of Thrones Scene
Spoilers through Season 4 of ‘Game of Thrones’ and the books it’s based on follow. We’ve already discussed the weird scene in last Sunday’s episode of Game of Thrones. What was once a disturbing, but ultimately...

The Hottest Photos of Victoria's Secret Fashion Show 2013


Viral Stories the Web