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When I wrote a post about how important is to pitch your startup idea, it surfaced an old topic that I considered tackled. That is asking people to sign an NDA to pitch them.
The startup community is well aware about this mistake, and it was topic openly discussed back in 2006 (at least, this is as far as I can recall).
The startup community is growing and it seems more people are becoming entrepreneurs. That’s a good thing. The bad part about this is that you get to see people making rookie mistakes that were tackled a few years back. This includes the NDA.
Among other reasons, you don’t ask for an NDA:
- You’re asking someone to trust you with their money when you clearly don’t.
- People won’t risk what they have to steal your idea.
- Investors and entrepreneurs get pitched several times per day, and they can’t keep track.
- Your idea is probably not as original as you think.
- You should be pitching your idea as much as you can.
- Your idea itself is worthless; only execution matters.
- It’s virtually worthless as a means of protecting your intellectual property.
Techstars’ Brad Feld blogged that if you even ask investors to sign one, you might as well tattoo “I’m clueless!” on your forehead. They take this request as the clear sign you probably decided to become an entrepreneur only a few days ago.
The point is that respectable people in the startup community are likely to dismiss you along with your gazillion-dollar-idea. Fred Wilson hasn’t signed a single one in his more than 20 years in the industry. Guy Kawasaki also blogged about this back in 2006.
Real value is in the execution, not the idea.
As Paul Graham’s essay on how to start a startup stated, the idea itself is only the beginning. A lot of would-be founders think the key is in the initial idea, but VC’s know better. They will tell you to get lost if you ask them to sign a nondisclosure agreement.
Seriously, it’s all about the execution. It’s how you make this idea come to life and your day-by-day strategy on how to compete in your market and reach your target will define your success. In Gary Vaynerchuk’s words, ideas are horsesh*t, value is in how you execute them.