Three Reasons Why Not To SignNon Disclosure Agreements

In the nine-plus years that Pelago has been designing and developing web sites and web-based applications, we’ve been asked more than once to sign a Non Disclosure Agreement (NDA) before putting together an estimate. Whether they are trying to protect a business process or an idea, the client usually has a genuine concern for keeping information private. Given the client’s good intentions, why don’t we sign NDAs? We have a few good reasons…

1) The cl ient’s idea is rarely unique

There is a big difference between having a unique idea and being first to market. The prospective clients we’ve met with in the past have always fallen into the latter category. For example we’ve heard several pitches that involve launching a social network for people who are in to “fill-in-the-blank.” Creating a social network is not a unique idea, nor is building one for a given subculture. First to market may gain a startup some points with their target market, but in the long run it’s going to be the quality and marketing of the social network that maks a successful startup. NDAs are not going to stop competitors from besting one another.

2) It takes a lot of ef for t to copy an idea

The second most concern we’ve heard from prospective clients is that someone is going to copy their idea if it is leaked. Aside from the first point I made above, it takes a lot of work to start a company. It takes a lot more than just an idea. Most startups invest an inconceivable amount of time, money and resources in turning an idea into a working web site or web-based application. If devoted to an idea, a startup is going to be light years ahead of anyone trying to copy them. They’ll have developed business processes and intellectual property which are difficult to duplicate. As a web design and development agency, we have our own clients and products to focus on. We hardly have the time to copy an idea, much less share it with others.

3) What if we’ve already seen your idea?

We have developed over 300 web sites and web-based applications for over 100 clients. We’ve seen a lot of ideas. In fact, we’ve even seem the exact same idea, several times, from two different prospective clients, and only a few months apart. Had we signed an NDA for one, we could have potentially been in hot water with the other. And simply because we listened to their idea? No, thanks. In fact, web designers and developers stand to benefit by NOT signing NDAs. Without shackles on our creative processes we can specialize in a given industry. We can become specialists not only in web design and development, but within a target market where we can share our expertise with our clients.

Often times a client will still decide to work with you without an NDA in place. Just be sure to hold your ground. It may not seem like a big deal at the time, but the NDA could get you in trouble down the road. What happens if a past client decides another client infringed on their intellectual property rights and your web design and development agency is the only common denominator between the two? If the client refuses to work with you without an NDA in place, walk away. It’s the best advice we can give.

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