James Koshigoe

Software engineer, entrepreneur and all around startup hacker type of guy.

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Your idea doesn't need an NDA

As someone who frequently works with startups, I often come across NDA paperwork (i.e. Non-Disclosure Agreements). These generally serve various purposes to protect intellectual property and to prevent competition. Although I do see a need for NDAs, I won’t sign every one that comes my way. You see, every time I write my signature on a piece of paper, I arrive closer to the prospects of being sued for something. For me, its a feeling akin to watching the Doomsday Clock tick ever closer to midnight. I like to limit the probability of such things occurring so I avoid signing documents such as NDAs when the risks outweigh the benefits.

I have a super cool idea, but I need you to sign my NDA in blood first

Let me tell you a little secret amongst us technologists working in the startup scene: asking us to sign an NDA before you’re willing to divulge your business idea makes you look like you don’t know much about startups. The reason is actually rather simple: ideas are a dime a dozen. If you ever consider applying at a startup accelerator such as Y-Combinator or TechStars, you will find that your idea is one of the least significant criteria they will judge your application upon. To them, the more important factors are your team, your team, also your team, the market AND finally your idea. Your team’s knowledge of the industry, capabilities to deliver and connectedness FAR outweighs the importance of your idea. Yes, the idea is nice, but anyone can have an idea. What matters more is how it’s executed.

But..but if you don’t sign my NDA, you’ll just Zuckerberg me!

Remember the part in The Social Network where Mark Zuckerberg (accursedly) stole the Winklevoss twins’ idea for HarvardConnection? Mark heard their crazy cool idea and then founded Facebook instead. Now after hearing this harrowing story, you’ve decided to take precautions so you don’t end up like those multi-millionaire Winklevii suckers. Ain’t nobody going to Zuckerberg you! Everyone from here on out signs an NDA in blood before they can even hear your elevator pitch.

The reason why Mark Zuckerberg is the multi-billionaire he is today is because he was able to execute where everyone else failed. Sure, the idea of exclusivity helped Facebook take off, but that wasn’t the primary reason. He was just a much more capable person to make it happen.

The success of your startup relies more on your skills and knowledge than your idea. When it comes to the idea behind your startup, what you (should) be bringing to the table is your industry insight and connections. If you lack these things, then you might not be the best person to build your idea. You should be able to defend against copycats and competitors because your knowledge of the industry allows you to solve the market’s problems more effectively or efficiently where others have failed. You are the guru, having invested a significant portion of your time to your particular specialty. It will take others not familiar of your industry much longer to acquire the knowledge and connections you have to build your idea on their own.

Ideas are a dime a dozen

After you’ve finally built your product, launched it into the stratosphere with press coverage up the wazoo, you might find that nobody actually cares. If you’re not an expert at the problem domain, expect this to be more likely. You see, the reason why tech startups are so fun is because you don’t need to drop hundreds of thousands of dollars to build your business. The traditional business route starts with market research and a lengthy business plan to apply for a small business loan. This isn’t necessary with tech startups because the idea IS the market research. You build a quick Internet property and see what happens (aka your minimal viable product or MVP). Hell, some even opt to create “launch pages” with merely an email subscription just to test how many people will sign up to get some verification of the idea before building anything at all.

At the end of the day, you might find out the idea flops and you have to pivot to a new idea. I’ve been in startups where this has happened. It’s just the name of the game. You pick up the pieces and start on a new idea, but keep the most important asset you have: your team.

So if you know your industry well and you know you might be pivoting anyway, is it really necessary that I put my signature on a piece of paper just so you can tell me your idea already? How many individuals must you have go through this song and dance before you realize that you’re turning people away that could otherwise be very beneficial to your endeavors? Think about this next time you fret about being Zuckerberg’d.

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