Do You Need An Nda For Your Saas, App Development [Template Included]

Let's say you have a brilliant idea for a revolutionary product or service (App, SaaS or any other digital product).

You want to attract potential investors, partners, early stage employees, local developers, overseas developers but still want to keep your idea safe and protect that light bulb moment idea from being stolen away.

"No problem! I'll just get myself an NDA. - you think"

In simple words, an NDA (Non-Disclosure Agreement) serve a purpose, it protects confidential information and trade secrets. Particularly from the situation and people you've never worked with before.

So that your hired developer is legally bound to talk to anybody or using your idea for their own benefits.

So, When To Consider an NDA

You don’t want to demonstrate your technology and disclose your secret sauce. If a demonstration gives it away then show the people something else, perhaps the problem you’re seeking to address. Once you are confident about your partner/developer and ready to get serious, that’s the time to consider an NDA.

Here are three most important factors you need to keep in mind when considering an NDA

Never rely on a Form NDA: Form NDAs are trickier than you think. There are NDA that prohibited the secrets of your business but don’t limit the usage of the confidential information. So you think you’re protected but actually, you’re not.

Trade Secrets V/s Confidential Information: Distinguish between trade secrets and confidential information; they are not the same thing. Trade secrets are the most important confidential information of your business. Usually, restrictions on confidential information have an expiration date. But trade secrets, on the other hand, need to be kept secret forever. Trade secrets are usually those things that have economic value to your company and your company takes reasonable steps to protect that secret. Kind of like the formula to CocaCola.

Avoid Revealing your Trade Secrets: Lastly, avoid revealing your trade secrets because when they are out; they are out. You can’t put the toothpaste back into the toothpaste tube.

The Other Side of NDAs

Here is the bitter truth about the NDAs - you need to enforce the NDA by yourself if something goes wrong.

Yes, you are the one who needs to take care of your property.

Often times we end up hiring people we really don’t know or see before from freelancing sites like Upwork, freelancer. These people are not always in your country, they are all over the world, they typically speak the same languages but you may never meet these people. So think of it like this - you get signed the NDA but what if they end up breaking that NDA, will you going to fly to somewhere like south east Asia or south America to enforce it.

So here’s the thing it’s only good if you are hiring in your native country where actually you could go and talk to them and enforce the laws then may be you want to think about it. But for the most other parts, it's really hard to enforce.

Then, What To Do?

Don’t Panic!

When you build a good relationship with your developers from the very start, they are not really incentivized to steal anything especially when it comes to intellectual property like ideas or creativity.

They are not in the business of finding people who have great ideas, getting those ideas and toss them to their own benefits or build their own app business.

Think of it like this; when you go to a hotel, you not necessarily worried about that the cleaning people are going to steal your clothes because that’s their job.

So, 99.9% of the times they are not interested in your idea. But they are interested in the budget, time of completion, plan etc.

And by the way, most developers have heard most of the ideas before, there are very few ideas that are truly revolutionary. And don’t forget the real money in any business is in execution and not just in the idea alone.

But, all in all; you should get an NDA to make them think twice before doing anything wrong with your idea.

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