Why we don’t sign NDAs

Our policy as a software company is not to execute pre-engagement NDAs (Non-Disclosure Agreements).

Of course, our standard contract, after we’ve been hired, includes mutual confidentiality protections. Of course we protect the trade secrets and confidential information that our clients entrust to us.

But with very rare exceptions, we do not sign non-disclosure agreements that prospective clients bring to us as a condition of discussing their projects. Why?

NDAs are risky bets

The usual set-up is a prospective client seeking our expert advice on the feasibility and cost of their business idea. We know that advice is valuable and the prospective client evidently agrees.

If the client gets valuable advice, what value does our firm get in exchange? Yes, we get the confidential information, needed to inform the advice we are going to create and deliver. And how valuable is that information, in itself, to our firm?

Quite often, after we decline to sign an NDA, we get to hear the idea anyway. We are sometimes less than whelmed.

“It’s like Uber for sailboats!” … “It’s like Instagram for babies!”

So that can be disappointing. But the real risk for us is that you actually have a good idea an idea so good, in fact, that we’ve already heard of or talked about it with other prospective clients or fellow entrepreneurs.

Now we’re really annoyed. Because that NDA means we’re going to have to do a bunch of work to prove that we had the idea before you shared it with us. Now we have to dig through old records and read old emails and pull together documentation to build our case and prepare for your possible lawsuit down the road.

That’s a huge hassle to volunteer for, and the NDA doesn’t compensate us for that at all. An NDA requires us to create value for you, in the form of expert advice and guidance, while also giving up our own rights and assuming significant business risks.

We’d be crazy to do that for free.

There’s a better way to start a custom software project

People press for an NDA because they think a software company needs lots of confidential details to bid on a project. Most of the time, that’s not true.

We need to know a rough idea of the size and scope of your project. We can usually gauge this with you pretty effectively by helping you compare your project against some of the previous client work in our portfolio.

With that info, we can give you an estimate. If that estimate seems feasible to you, and if we both feel that our companies are a good fit, the first step to start your project is a Discovery and Documentation (D&D) project.

D&D is a deep dive planning project, where we can examine your idea and goals in-depth and prepare a fully documented plan for how to achieve it. It delivers a D&D report that will spell out a feature set, architecture design, implementation details, schedule, and budget. This report becomes the road map for your project and ensures that we all know exactly what we’re going to build for you.

A  Discovery and Documentation project is a low-cost, low-risk way for you to start your project with us. It costs about an eight to a fifth as much as a first-phase development project, and it will make the actual development faster and more cost-effective. And since it’s a real contract, it includes all our standard assurances of confidentiality.

Your success does not come from (just) an idea

Most NDAs that we see are actually unenforceable. Some developers will sign them, knowing that they don’t mean anything. That’s just too much drama. Because for us, even an unenforceable NDA is a red flag. Unfortunately, I find that the folks most adamant about getting an NDA often have a skewed concept of their value proposition.

Here’s the uncomfortable truth:

Ideas are cheap. Ideas are easy. Let’s sit down over a couple beers and we’ll be combing ideas out of our hair.

Ideas are easy. Execution is hard.

And if you really do have a great idea, you shouldn’t be keeping it a secret. You should be telling anyone who will listen, boring your friends, going on and on about it, till you can light the fire that will fuel all the work you have ahead of you. Because the idea is the easy part. Turning your idea into a product that people will pay for then gathering the team who can make it happen  then building the business where your team and your customers will change the world with your idea  that’s the real work.

That’s not easy work, but it’s what we help our clients do. And if you succeed, when you look back, you’re going to remember the perspiration a lot more than the inspiration.

And finally, remember what IBM computing pioneer Howard Aiken said about new ideas:

“Don’t worry about people stealing an idea. If it’s original, you will have to ram it down their throats.”

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