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Playing your cards close: The futility of secrecy and NDAs in developing your idea

I've been contracting professionally now on and off for about 4 years. This past year has been the first time I've been under contract pretty much the entire year. One of my earliest memories of being approached to build software (web apps, mobile apps etc.) though, has to be a reprieve that almost all people like me know - "Can you sign this NDA first?".

I sign NDAs. I think they're ridiculous but I sign them. There are only two ways that a client has come to have an NDA. They've either paid a lawyer to write it, which is expensive (and judging by the quality of some I've read - not expensive enough), or they've downloaded a template one from the web. The latter has to be the most hilarious, protecting intellectual property by essentially using someone else's intellectual property. Absolutely buckwild.

Here's the rub though. An NDA is only worth the amount of money you're prepared to spend to enforce it. I take client privacy seriously. I believe we have a duty to take data protection at every level more seriously than we do. But, an NDA does not protect you more than a contractor's professional integrity. I don't share our discussions outside my team, not because an NDA requires me to, but because that's the professional courtesy inherent in the work I do.

More than that, I think NDAs make very little business sense. When I talk about software ideas and project ideas, I have lots of categories I separate them into. One of those categories is 'novelty'. "Is this idea novel?" Novelty is a hard category to get a "yes" for. For an idea to be novel, it truly has to do something in a way that no one else has done it before. This isn't small tweaks to an existing idea - "Oh we're going to do a recruitment app, but it's better because we've got a different test".

Novelty is completely reinventing the way something is done.

Most ideas fall into the "no" side. Not getting a "yes" in novelty is not a bad thing. Most things aren't novel. Google wasn't novel. It was - however - a substantial improvement on its predecessor, Alta Vista. In both cases, protecting IP is rarely the biggest risk factor in your idea.

To prove this, find someone you really trust and explain your idea at great length to them. Like every minute little detail. They won't be interested. It's not because they don't like you, or your idea is bad. It's that they're not as passionate about it as you are. When we have a good idea, we always think that it's an objectively good idea. An idea is not an objectively good idea until it's proven objectively. You only prove an idea is good objectively if you make a success of it.

And therein lies the ultimate conclusion - no one will want to steal your idea until it becomes successful, and at that point, you have the advantage. Sharing your idea widely is therefore better because it enables idea validation - do people actually respond to it. You play an idea close to your chest in this scenario, and you actually won't know if you hold a good hand.

Finally, you might be thinking - "but my idea is truly novel, it's unique, no one has done this before."

Let's assume this is true. There's a second category we should discuss - where does the novelty lie? Is it in the technical implementation, or in the non-technical implementation? If it's in the technical implementation - i.e. the code is going to do something no code has done before - how is it really your innovation if you're not able to build it?

Anyone is able to say "Ahh well let's use AI to track the performance of students across a school and tailor an education program to them." It's a novel idea - but if you haven't actually worked out the technical aspect, it's not really your idea. More than that, circling back to our original discussion, you're asking a contractor to solve a technically novel problem. You'll struggle to find a contractor that will do this. You can't really hold the technical intellectual property on intellectual property you don't understand.

In circumstances like this, you need a co-founder. You have little to no hope of adequately protecting IP you don't understand, and beyond that, from a purely technical perspective, developing and improving it.

Of course, even if your idea is novel, launching a business is still hard, even if the idea is a fundamentally good one. It still remains unlikely that your idea will be stolen before you make a success of it.


Adam Green


Published 3/1/2022