Get Over Your Non Disclosure Agreement

A referral business email came in today from a friend. Apparently I had to drop everything to speak with my friends’ friend who had launched a brilliant business idea for the web.

Through a series of email exchanges I had requested from my friend to provide me with the web address of his friends new website. I mentioned to him that I would like to look at the idea before we actually spoke.

In response to my email asking for the friend’s website, I received a request that I first sign a Non Disclosure Agreement.

Taken a bit by surprise I responded with

Correct me if I am wrong but you have a friend who just launched a new website. You spoke with your friend and mentioned to him that I do Search Engine Marketing. In response your friend said he needs my help in getting traffic to his new website but in order for me to look at his site I need to sign a Non Disclosure Agreement.

Please inform your friend that my interest is to only look at the site, not to view his secret sauce formula. Additionally the NDA would be invalid if the materials are available to the public. If by looking at his site I can determine his secret sauce then there would be no use for the NDA. If his secrets are well hidden then there should be no need to worry.

-A

NDA’s were such a huge thing in the 90’s. We were all running around conferences with backpacks full of these things making sure we got people to sign them just before we revealed our billion dollar floppy ideas.

Over the past few years I have become jaded when someone wants to tell me about an idea they are working on but wont until I sign a Non Disclosure Agreement. When used correctly these agreements are fine but lately I find their use hinders the spirit of business.

Take the case I just mentioned. Here is a guy who has launched a new website. He hears from a friend that I know how to drive traffic to websites and this is something he needs help with.

The spirit of the process should be that party ‘A’ is need of help. Party ‘B’ understands party ‘A’s’ issues and knows of a party ‘C’ who could solve party ‘A’s’ problems. Party ‘B’ introduces ‘A’ & ‘C’ and if all goes well a business relationship is achieved.

But this does not happen. Party ‘A’ has a Non Disclosure Agreement and wants ‘C’ to sign it. Leaving ‘C’ wondering what Party ‘A’ has and of the possibility of having seen an idea similar to Party ‘A’s’.

What is the deal with people not sharing basic concepts of their ideas before getting signed NDA?

My theory is it’s the lawyers!

If the natural flow of business is interrupted or the spirit of the deal changes there is a good chance some lawyer screwed up the deal. I think in the late 90’s lawyers saw all the entrepreneurs running around making deals happen and they felt a little left out. So a few wise lawyers got everyone convinced NDA’s were needed before anyone could open their mouths.

When in fact, NDA’s were a means of protecting business parties when they actually were required to share confidential information (including unpublished patent applications, know-how, schema, financial information, verbal representations, business strategies).

You don’t need an NDA to show me a website that was just launched or to discuss concepts that are generally known by the public and can be looked up with a quick internet search.

When speaking with people about their business and the topic of non disclosure agreements is brought up I tell them several things

1. Chances are I’ve seen your idea.
2. Do you have a patent?
3. Why don’t you have a patent?
4. Can you discuss the idea without giving away any secrets?
5. If I could compete with you just from you sharing with me the basic idea, what value does the idea really have?

Every idea should have some sort of secret sauce where it would require a significant amount of work for the average person to figure out and solve. Then again, I saw on a television infomercial the other night a senior citizen took 4 flipped over Frisbees, stuck them under the legs of a large dining room table and pushed the table across a room.

The product had some gimmicky name for it, like Moving Men Furniture Sliders. But I digressed.

Going back to my email conversation, a few hours ago I received a response. They said we could skip the legal stuff and it was only brought up out of habit. They provided me with the web address to the brilliant idea.

It turns out his website was nothing more then a typical Affiliate site pushing dozens of common products. These types of sites only make up 90% of pages we see on the internet.

This entry was posted on Thursday, August 31st, 2006 at 12:32 am and is filed under SEO / Internet, Shandy Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.