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NDAs are unnecessary because ideas are worthless
written by Steven Bristol on June 30th, 2008
People are always asking us to sign NDAs. We sign most of them. Signing them has become a necessary step to open the discussion of someone’s idea. I can’t tell you how many times we’ve signed an NDA and the idea winds up being, “I want to build a website that is just like this other one, except with better navigation.” We have a bunch of NDAs in our filing cabinet just like this. And they are worthless. This is because an NDA only covers things that are not already publicly known. If an idea is 97% stuff that is already out there, even if its out there by others, that NDA is only going to cover the 3% that is new.
Paraphrasing Fight Club: “Your idea is not special. It is not a beautiful or unique snowflake.”
The 3% coverage NDA is also unnecessary because ideas are worthless. An idea might not be worthless because it’s a bad one, although it might be bad (we’ve seen a lot of bad ones). It’s worthless because ideas in general are worthless. Anyone can have a good idea, and they do. What has value is execution. The ability to take an idea and transform it into something real, something people love, something someone will pay for. I’m not talking about having insert your most hated consulting company here take your idea and create the latest, greatest PHP based ASP.NET WS-* compatible collection of HTML and bad CSS that is only a website because some color-blind “designer” figured out how to point a DNS entry at it. I mean something that people LOVE. (People has to be more than your obviously overly kind mother.)
To illustrate the point of how worthless ideas are. Here is a list of five good ideas (how good they are obviously depends on your own perspective).
- Monetize Twitter.
- Collect the public stream.
- Have people pay you to send an @ message to any person who uses a certain key word.
- We do this sometimes with people who mention “Quickbooks.” I send them a message asking them to checkout Less Accounting.
- Social network for finding golf buddies.
- Create a profile and find people to play golf with. Kind of like match.com for golf without the expectation of sex.
- iPhone pizza search.
- Show me all the pizza delivery places that will deliver at the current time, their menu’s, coupons and dial the number for me.
- iPhone/photos/gps/cloud.
- Upload your photo to the service.
- It will forward to flickr.com or your favorite photo site, but it will also show you all the photos taken in the same place that others have uploaded.
- It will show you all the stories that people have written about those places.
- Screen cast tutorial site.
- Create a site where people can upload tutorials they have done and you will pay them for each viewing (which you charge for).
- People can rate the tutorials and the amount paid can be be a formula that includes popularity and quality of the tutorial and author.
- iPhone police notifier.
- Two buttons, one for cop going in my direction, one for cop going in opposite direction. If the cop is not moving, still just click one of the two buttons.
- Display a warning when you are approaching a cop. Call the app “Bacon.”
Note: I said I’d give five, but I gave six because they are so easy to come up with.
It’s not your fault.
I think it’s human nature to think that ideas are valuable. I certainly get excited thinking I’ve created something precious when I have a new idea. I feel like I should guard the idea and not tell anyone until I have developed it. What I should do is tell my circle. I should have a circle of people who are smart and we all talk ideas through. Cultivate an idea until we either give it away or execute.
Tomorrows post will talk about how you can choose a consulting company without using an NDA.
11 Responses to “NDAs are unnecessary because ideas are worthless”
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Only the “Bacon” idea is worth the electrons it’s printed on.
:) jk – great post.
Interesting take… while I agree that quite a few business ideas are just plain silly or ignorant, it doesn’t matter how well you can execute if you have nothing to execute at all. Without an idea, execution is meaningless.
Seems like ideas and execution have symbiotic relationship here.
People like us who have tons of ideas, only see the work involved in actually implementing them. We value ideas much less than execution.
I could come up with new business ideas all day. I cook one up by accident whether I want to or not at least every week.
I don’t mind telling people what I’m doing because I know far more than they do about what’s actually involved and I have the ability to actually make it real. The only people who you don’t want to share your idea with are the exact people who will never sign an NDA anyway—people who are potentially backing or connected to your competition.
But there are a lot of people out there whose creative muscles are not big and beefy and they are always looking for a “great idea”. They are good individual contributors but not necessarily visionary founder types. If they want to start something, they must at least partner with a visionary and be damn good at execution.
My idea is to create a social network for finding golf buddies with the expectation of sex. Now that’s a winner.
But you told me my idea was good!
lol
No but really, I’m stealing your iPhone pizza idea. Drunk people all over the world will thank you, or should I say.. ME!!
Jeff, I was reading something a few months ago about the (un)necessity of getting a manager guy for a startup and that at one point said that the success of companies has no significant correlation to any quality of the idea. The actual decision to execute and follow through on any idea, regardless of how stupid, is what matters.
I agree with you on the NDAs. Most of the projects depends on how the idea is implemented.
I personally like the iPhone Pizza thing :)
Hmm. I do agree with your notion that your suggested ideas are not unique, but generally the implementation and basic theories of operation build that idea into something greater. The idea-space is muddied and overpopulated, so it is very hard to think of something truly new, and of course, we all know it does not need to be (Twitter. I was working on an implementation. Facebook had their own, etc.) and that’s what make it.
People like products that are aimed at them, and that are there to help and convenience them. It does not need to be new, that means nothing. The Social network wars are a perfect example. You just need to showcase your brand a certain way for people to like you better.
I would say 70% of all NDAs i’ve signed have been unique in some way, the rest have had some discerning or clever feature. It is important to protect one’s brand and the reason NDAs do exist are probably through a long time worth of business exploits. NDAs are never immediately needed, but if they save one client in 1000, then I can see them as a good thing.
And for what its worth, there is not much in the market of screencasting video tutorial sites where youe arn money for each video. In fact, we are the only ones (http://clipgarden.com), everyone else gives you a little cash and makes all the profit.
PS- Color blind designers rule!
Good post and I just wanted to toss a LOL @lowhandicap. Good stuff.
Brennen, I may have read that article too…it sounds familiar. There are many companies that succeed even though their idea is derivative, or just a shameless knock off (Giant Glass, JN Philips, any other windshield installer) but there the success is from differentiation AND execution.
But when you see a company/product/service and smack yourself with the proverbial “Why didn’t I think of that” ... that’s a good idea; it sure isn’t execution.
Couldn’t agree more, Steve.