Your idea is worthless

Alternative titles for this post could have been "Execution is everything", "Your idea isn't unique" or "Why we won't sign your NDA".

Yes, the subject is a dead horse. A lot has been written about it and we often point people contacting us to articles by VC's and industry leaders to try to explain people why we won't sign their NDA. Based on those articles and our own experience I'll try to explain why your idea isn't worth much and why we would soon be out of business if we signed NDA's everytime someone asked us to. This way we can declare this post "company policy" and you don't have to go around reading others opinions, although we still encourage you to do so.

Please note that most of this post applies to people who want us to invest in their yet nonexistent company, or want to have an application developed based solely on an idea and some rough sketches. Of course we have a clause in our standard agreement that states we will treat everything you tell us as confidential, and we tend to bring this this agreement to the table in a fairly early stage. For some that isn't enough.

So what's an NDA?

I'm pretty sure you know, but for completeness sake: a Non Disclosure Agreement is a contract you want someone to sign before you let them in on your idea, so they don't run off and steal it from you. In its simplest form it will make us treat whatever you are going to tell you as confidential and we'll agree to pay a certain amount of money in case we don't. NDA's can range from anywhere between a single page and a lot more than that (I once respectfully declined to read, let alone sign, one of 50+ pages).

Why would you want us to sign one?

99% of the time: because you think you have a great idea (which could very well be the case) and you're afraid that by telling someone it may get stolen (or better: be executed by someone else). You may not know us well enough to just take our word for it. If we run off with your idea you at least want us to pay that 50,000 euro penalty and have us turn over any revenues. There are exceptions, for instance because you're working under embargo of another party, but I'm ignoring those edge cases for sake of simplicity.

Your idea is worthless

I'm sorry to be the one to inform you, but your idea is worth pennies. You don't get rich over an idea. Apple doesn't make billions a year because people pay for Steve's vision of a tablet device. Execution is what counts, what makes money and brings value to the table.

Your idea is not unique

Pretty much any idea that has the potential of actually being executed is not unique. You're not the first one to cook it up, many before you have thought about a web app that can do X. Our ideas are always based on other ideas. We only think of a web app that can do X because others paved the road before us, created a market, etc. Facebook wouldn't have been executed if it wasn't for the different face books floating around at Harvard, which made multiple people think about developing a Facebook-like application.

We would soon be out of business by signing NDA's

Lets put it all together. You have a great idea for a social networking site for <insert niche> that integrates with Facebook and Twitter. You have though about it for a while and came up with a brilliant business plan. The only problem: you have no money. No worries, because you have read about our Startup Program. You set up a meeting, tell us the above and ask us to sign an NDA. At the point where we haven't even discussed working together yet and we have no idea what your idea is. Chances are pretty good that we won't be teaming up in the end. But, for sake of this argument, we'll sign your piece of paper. After disclosing your idea we believe there is no money to be made based on your business plan, so we part ways.

A month later someone drops by who has an idea for a social network for <insert different niche> that integrates with Facebook and Twitter. It makes sense, can be developed in a reasonable amount of time and it looks like it will be profitable after only a few months. Lets do it! But wait... we can't. If we do so you can sue us because of the NDA we signed.

You gain from sharing your idea

Every time you tell someone your idea they will voice their opinion. That's great, because it allows you to keep sharpening your idea based on the opinions of real people instead of the voice in your head. If you tell us your idea and we don't end up working together, I'm sure you won't regret coming over. We will make you think about the little things you didn't think about, let you know which parts of your idea are really good and assess your business model based on our own experiences. And all of this you get for free, just because you let us or anybody else in on your idea.

Bottom line

If we would have signed NDA's every time someone asked us to, all with a scope as broad as most of them, we could never build a web application again. We would always be violating some NDA.

So you're asking us to sign an NDA that forces us to pay an insane amount of money if we execute your idea (which has little to no value lacking proper execution), or if we build any application that falls within the broad spectrum you defined in the NDA. We will of course keep whatever non-generic information you disclose to ourselves, and we're willing to promise you that in writing. If that's not enough for you to trust us with your idea, you better keep it to yourself.