They’re not going to steal your idea
Ideas are a dime-a-dozen; execution is invaluable.
“Would you be willing to sign an NDA?”
These are some of the most naive, tell-tale words to come out of the first-time entrepreneur's mouth; this egocentric, self-implied conviction of an idea so ingenious that anyone they speak to will invariably steal it.
We were all there at one point, weren’t we though? I still remember it clearly. Creating a binding, unilateral NDA was the #1 legal document I created. And I used it shamelessly. I required every single candidate I spoke with to sign it prior to our phone call, and literally turned down calls if they hadn’t signed it prior to our meeting time.
I recall being terrified when the first “advisor” I spoke to said they weren’t going to sign the NDA. He was a local investor that ran a seed investment fund. He literally laughed at me.
The discussion raged in my head: Why is he declining?
Is the idea really that bad? Or could it truly be that good?
6 years later I can reflect on that experience, and say with pretty solid conviction: it’s none of the above.
Why won’t they sign an NDA?
There are a handful of “throw-away” reasons that people will give as to why they won’t sign an NDA:
- It’s too restrictive
- Not enough time to properly dissect it
- They may already be working on something similar to what you’re doing, and don’t want to compromise their position by doing so
These reasons all pale in comparison to the real reason.
The real reason is — anyone who has worked on, near, or around a startup before knows exactly how much time, energy, and resources it takes to build a company.
They know exactly how hard it is to go from idea to execution.
They know the endless depths of passion and zeal required to break through every obstacle and keep up momentum when all the odds are against you.
They know the number sleepless nights and times they’re willing to curl up in their showers and cry as they question their desire to keep the dream alive.
They know all the things about starting a business you do not, and they know they are not willing to invest those things into your idea.
Why not? Because it’s not their idea.
When to be cautious
There are, however, 2 kinds of people with whom you should exercise caution in sharing your idea.
People with the necessary skills and a lot of time
Suppose you have an idea for a fintech company. You don’t want to go sharing that idea with the entrepreneurial senior software developer who was just laid off from Stripe.
Odds are they’re looking for their next venture, whether it’s to join something else or start their own. This person would have the requisite technical skills, the domain knowledge, and most importantly — the time — to actually make your idea a reality.
Tread cautiously in talking with this individual. They could be the perfect co-founder for your idea, but they could also decide they don’t need you and run with it on their own.
People with lots of resources and domain expertise
Likewise, you’d want to be cautious in sharing the idea with the CEO of Stripe, or with a VC firm that focuses in the fintech space.
You wouldn’t want to share it with the CEO of Stripe, as they’ll have the domain expertise that will immediately allow them to recognize the potential of your idea, they’ll have the context to see how it could fit in, and the influence/access to resources where they could spin up a team and task them to work on your idea.
With the VC firm, do your due diligence. Make sure they don’t have companies in their portfolio that could be a conflict. The VC firm won’t steal your idea (it’s not in a VC firms’ best interest to be known as a group that steals entrepreneurs ideas), but if they have portfolio companies that are competitors to your idea, it puts them in a conflicted position where your idea could easily get compromised.
In the end, recognize the best competitive advantage to your idea lies in your ability to communicate the idea clearly and concisely, and ultimately execute it. The best way to improve your communication comes through practice in sharing it.
Prepare multiple versions of it in 30 second, 2 minute, and 5 minute clips. Make variations that appeal to various demographics. Yes, your grandma should be able to understand it, but also so should your best friend, your mentor and your sister. They’re all going to have different backgrounds, and you want to be able to understand the variants that will resonate with different people at different times and places.
Err on the side of being too open — being too cagey will kill your idea before it ever gets the chance to get off the ground. Odds are, you as the entrepreneur will benefit the most from the practice and feedback, and they’re not going to steal your idea.