The Disclosure Indicator

Idea Guy wants an NDA signed.

October 31, 2016 • 5 min read

Every week, I receive roughly a dozen new project inquiries. Since Steamclock works with perhaps a dozen clients in a year, I triage roughly 50 leads for every one that turns into a real project. The time I spend doing sales is neither fun nor directly producing revenue, so I’m always looking for ways to speed up this filtering and get back to making apps.

Inspired by the classic Mule Design client screener, I always start by asking leads some core questions about their projects and their business, working to determine if their project is fit, so I can avoid wasting anybody’s time. I’ve completed hundreds of these mini investigations, and there are now patterns I quickly recognize – auspicious signs and red flags.

Some of the red flags are easy to spot. Maybe they start by declaring that they have no budget. Perhaps their email was sent from a hotmail address and contains simply “i have idea for app, please call me asap”. More interesting to me, though, are the more subtle cues that we don’t want this project. One of the most useful of these red flags is the refusal to discuss a project without a Non-Disclosure Agreement.

Please sign and return ASAP

Here’s how NDAs used to go back in the early days. Some guy gets in touch about a project – it’s gonna be yuge, believe me – but before he can reveal anything about his paradigm-shifting startup, he asks that we sign an NDA to protect his valuable intellectual property. Never mind that we keep our client conversations in confidence, as would any business that cares about its reputation. Idea Guy needs it formalized.

So he sends over some NDA, in Word format of course, and I sit down with a coffee to digest the thing. Inevitably his proposed contract has no time limit, doesn’t specify exactly what it’s trying to protect, is one-sided, conflicts with our service agreement, has bogus clauses that have nothing to do with IP, and most criminal of all, is set in Arial.

As it happens, just this week somebody sent me a 10-page NDA that included a laundry list of demands, including indemnification, royalties, and rules for performing audits.

So anyway, I would go back and forth with Idea Guy and his lawyer, trying to get to something we can actually sign. Assuming that we eventually got it down to something signable, I’d do the digital signature dance and file away the document – since we’re now legally bound to it – in a folder with the laundry list of other legal eels we’ve collected over the years.

Behold, he’s finally free to launch into his grand idea, which promptly turns out to be impractical, unoriginal, or borderline illegal. Nine times out of ten, this results in me patiently giving out some free consulting about how the app market works and what the core problems are with his scheme. For my kindness, I’ve achieved nothing other than getting ever better at describing why a project is doomed.

A simple test

Nowadays, with far more leads and far less patience for yet another photo sharing app, I have a much different answer when it comes to NDAs: no.

While pushing back against NDAs reduces the amount of legal wrangling and .docx slinging I need to do, it more importantly splits client leads into two groups:

  1. Folks who specifically want Steamclock to work on their project
  2. Folks who think their idea will be successful regardless of who implements it

This is super valuable, because group #2 is toxic and will never end up paying for a reputable design and development studio, let alone listening to one. Whether you describe ideas as an multiplier of execution, worthless, or dime-a-dozen, the simple fact is that we sell great execution. If you don’t value that, we’re not going to see eye to eye.

So, we don’t sign “idea guy” NDAs. Sometimes they get it and reap the reward of a free discussion about their project, and other times they take their get-rich-quick vision somewhere else. In some rare cases, though, they get argumentative. When this happens it can get weird, and promptly shine a bright light on another benefit of refusing NDAs: it keeps you from working with people that are inherently distrustful. I recently had somebody email me six separate times, each time with a different pitch for why I “needed” to sign their NDA, including one onslaught that was nearly a thousand words long.

Now, listen. Business is business and you need to keep your head up. I get that. But if your mental model is that everybody is out to steal from you and I’m just sitting here waiting to poach your sure-fire idea for a hamster-sharing app, something is seriously wrong. A key building block of a successful working relationship is establishing trust, and if a client’s default position is paranoia, you’re going to have a bad time.

Thanks for your inquiry

Now I’ll admit, we still sign NDAs from time to time. We have a single-page mutual NDA we use for projects where the potential client is an established business with a budget, and they need to share customer, sales, or other info that’s actually commercially valuable in order for us to put together a proposal. Surprisingly frequently, though, we get through the whole sales and proposal process without needing a formal NDA, even for some very large companies. For everybody else, the answer is no.

Okay, okay, not just “no”. I’m Canadian, and try to maintain a degree of politeness even when people crap in my inbox, so my real response is typically more like this:

While we keep pre-sales conversations like this in confidence, our policy on NDAs is not to sign them unless we’ve validated that a project is a fit for Steamclock. With that in mind, here are some questions to better understand your project…

Of course, that assumes I actually have questions. Sometimes, I don’t. When a lead selects the minimum possible budget on our contact form, lists their company name as “not without NON DISCLOSURE!”, and enters a contact email containing the term “thrustmaster”, my response is terser.

Thanks for your inquiry. Unfortunately, we do not sign NDAs for pre-sales conversations, and our typical project budgets are more than you’ve indicated. Best of luck with your project.

The power of TextExpander is such that I can maintain a facade of mere irritation when in fact I am only bringing myself to respond in order to discourage them from ever emailing again.

Whether I succeeded or not in my pursuit of balance, I’ll never know. Thankfully, they never replied.

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© Allen Pike. 👋🏼 You can contact me, or check out Steamclock.