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Why NDAs are not worth the bother

By on October 14, 2009
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Chris Dixon wrote a great post on why entrepreneurs with an idea should share it with everyone. He argues that there is very little downside and makes good points that you should read.

He ends with a coda on non-disclosure agreements.

A note about NDAs:

  1. almost no experienced entrepreneurs/VCs will sign them (in fact, you asking them too is widely considered a sign of inexperience)
  2. It’s not clear they have any real value – are you really going to spend years suing someone who signed an NDA?  I’ve personally never heard of it happening.

While the same may not be true of big corporations about to launch, for example, a new console, it is generally true for start-ups and even early-stage game ideas.

My personal mantra is that “ideas are nothing; execution is everything”. A great team can take a rubbish idea and make a good business, whereas a rubbish team can turn the most brilliant idea into so much wasted time.

In the end, though, I’m going to refer you back to Edison:

“Genius is one percent inspiration and ninety-nine percent perspiration.”

Do you agree?

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve:
  • Raul

    You've just convinced me.

  • Raul

    You've just convinced me.

  • Hi Nicholas – you won't be surprised to agree I'm in full agreement with this. Here are some additional thought, stolen from Brad Feld.

  • Absolutely agree.

    Waiting days for people to sign/scan/send/countersign NDAs just slows down the process when you're trying to develop an idea, or build a team around an idea – and it's even worse if anyone gets a lawyer involved. If you can't trust the people you're working with, don't work with them.

    My approach (at Beriah) is to start each relationship with an email outlining how we will deal with confidential information, and stating that we expect partners to use the same high level of regard. It takes about 15 seconds, clarifies that confidentiality is important, and then lets us just get on with the work.