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At what point does a potential CTO sign an NDA if ever? If not, then how can a site like this work?

In consideration of this article,http://sealedabstract.com/rants/6-steps-to-get-an-iphone-developer-to-work-for-equity/ ...

Let's start at point zero. I wonder how comfortable the CTO I'm looking for would be with me as a potential partner if I wasn't having other potential CTOs I "dated" at CofounderDating sign NDAs. I can share some aspects of my business, but the points that separate my plans from other companies, these I keep in my head. This is frustrating because the stuff I keep in my head is the part where my value proposition is unquestionably strong.

Please also understand my own point of pain. I have literally seen my power point presentation get stolen and my introductory concepts get turned into a cheap imitation after working with start up community organizations. (I won't mention who or where as I do support the programs generally and don't want to disparage them. My point is the problem is real).The unfortunate result is that if you look at my web sites, you won't really understand what my product is. You get maybe some vague idea. This is deliberate. None of it conveys the minimum viable product or the value proposition.

Bottom line, after years of planning, I've whittled down the strategy to a concise minimum viable product. So my question to potential CTOs is, how can I attract your interest without revealing the recipe and giving every entrepreneur and CTO out there the punch line? I do realize you guys and gals have dozens of great ideas in front of you daily and there's, in your opinion, nothing new under the sun, but would you be put off by a "man of mystery"? I'm happy to be just friends but I'm a serious guy with straight forward objectives. Putting yourself in my shoes, how would you suggest approaching this?

11 Replies

Kevin Taylor
4
0
Kevin Taylor Advisor
Hackerpreneur, Advisor to Startups and Consultancies
I'm sure you've heard this before but it is very unlikely your secret recipe is as groundbreaking as you think. I've spoken to dozens of entrepreneurs with a secret sauce that they would only reveal after an NDA. At some point, after being continually underwhelmed after the big reveal, I stopped signing NDA's until things started to get serious in the discussions.

If you are stuck on the idea of an early NDA and that is really holding you up from hiring that fantastic CTO who will be surely snagged once he sees, then I think you have to figure out how to give them enough information to entice them to sign the NDA. Break up the information in some way that it doesn't reveal your secret sauce but hints at it enough to entice them into further talks. I don't know what that would look like, TBH.

At the end of the day, though, it really is about execution of ideas. Look at all the big success stories in tech and very few of them were in the pole position at the start. Most who win the race come after the initial innovator and bring one or more of:
  1. Critical improvements to the idea
  2. Better execution
  3. Ability to sell into an already warmed-up and educated marketplace.
Google wasn't the first search engine, Facebook wasn't the first social network, YouTube wasn't the first video sharing site, etc. The list goes on.

I suggest you put your fear of betrayal aside so that it doesn't become an artificially imposed roadblock to your future success.
Barry Vial
1
0
Barry Vial Entrepreneur
Chairman, Liquid Markets
Your last line "in my shoes" says it all. Condensing down Kevin's well-thought response into tough love: Get out of your shoes! Read "Nobody cares about your stupid (unquestionably strong) startup idea". http://fi.co/posts/937
James Carvin
0
0
James Carvin Entrepreneur
Write In Candidate for President of the United States
The question was directed at prospective CTOs. Bottom line, is a forum like FounderDating of any use at all for anyone who wants to build a prototype and requires equity only in the pre-seed stage? Yes or no.
Josh Levitan
2
0
Josh Levitan Entrepreneur
VP, Product & Marketing at AIR.TV
The other responses are right. Ideas are next to worthless, it's all about the execution. So the chances of someone stealing your idea and devoting months or years of effort into building it out and turning it into a sustainable business are next to zero.

If you're trying to get someone to work for or with you, put your best foot forward and explain what's unique about your tech, your business strategy, etc.

Put another way, if you're not going to tell them what's unique and special about your business, why would they want to get onboard?
James Carvin
0
0
James Carvin Entrepreneur
Write In Candidate for President of the United States
Each person brings their own value when it comes to execution. I could have hired a third party developer. I did get quotes from two but and almost moved forward but what I want is team with skin in the game proving passion rather than developers earning cash.
Andy Terrel
1
0
Andy Terrel Entrepreneur • Advisor
Fashion Metric CTO , NumFOCUS President
Would you present a prenuptial agreement on a first date?

After all you are asking professionals to take their highly valuable talents, forgo cash for equity, and then sign a document that says they will never cheat on you.

I think CTO candidates often sign these early in their career, but later realize it's not worth their time. You're going to date so many potential partners through your career that it is too much to manage all the NDAs that get thrown your way.

Personally, when someone throws down an NDA early in the dating relationship, it signals a control freak. Everytime I've gone down that path I've ended up working with someone who is more obsessed with controlling every aspect of the business, rather than building a company that makes money.

Just like you have to pitch investors without an NDA, you have to pitch seasoned CTOs without one. This site helps you identify folks but doesn't build the necessary rapport required to build a relationship. That takes time and more than a few meetings working together.
James Carvin
0
0
James Carvin Entrepreneur
Write In Candidate for President of the United States
Your final point gets at what I'm after with my question. I'm not advocating getting the NDA signed up front. I'm asking how to use a forum like FounderDating. It's a dating service. Not only do I not sign a prenuptial agreement on the first date - I don't have unprotected sex on the first date either. In fact, I don't have sex at all. You want to know me? I want to know I like you first and I'm thinking long term. I want to make sure you like me before I show you all I've got. My character will shine for you in our business relationship just as it does in my marriage. And if I'm not your type, we move on before we get started. Proven relationships take time. Trust also is a factor. And if I let you know that in the past the trust I've offered has been betrayed, please don't dismiss the wounds. They are very real. Trust has to be earned and if I seem tentative, it may have more to do with my being cautious than being controlling.

It is also a very practical question. It costs me money to look for cofounders on a site like CoFounder Dating. I've invested in it from my shoestring budget. It may take me longer than 90 days to have an answer. I want to know if any of it is worth the time and expense. The NDA is just the first of the six points in the article. I am also not a software developer and I can't build a prototype. Does that disqualify me? I'm a jack of all trades, and many sites I've built with some knowledge of html, php, css, java and front end cms, but learning programming languages is a serious time commitment and frustration. Estimates from professionals for my prototype have ranged from $8K to $20K. I'd guess it would take me at least a year full time to learn what is needed to produce even a bad version of it. Other team members who have actually mastered these skills are obviously better suited for doing that work. Does my lack of ability in this area mean that no CTO will consider me? If not, what's the point of using a site like CoFounder Dating?

I see the CTO as guiding the majority of the enterprise. I come with wire frames to introduce the project, but my job, as I see it, is to direct and forge the best path to further market opportunities by leveraging from the niche I seek to first dominate with our minimum viable product.

I should also mention that this is not a matter of whether my idea is unique. I assure you it is not unique. Companies are already earning millions on similar apps. I see a serious flaw in what those companies are doing that represents a missed opportunity. If I publish what that flaw is, they would have to take a very different approach but are positioned to fix it with upgrades to capture the market segment I've identified. I don't want them to do that. I want to compete with them successfully. Execution is everything. Protecting trade secrets is a vital part of that. It's not about the CTO. It's about them. They are already in the business. The concept has been proven for a long time. Doing what I want to with it: partly, and badly. They didn't actually know that market like I do, so they screwed it up. And they're definitely missing out on what they could do with it afterwards. I can fix this. I need a CTO. I need money. Money comes after team. The article assumes the prototype is already built. I don't have time or money to build it just to show my prospective CTO I'm serious. My skin in the game is something that can be attested to by others. Can't that suffice?




Andy Terrel
3
0
Andy Terrel Entrepreneur • Advisor
Fashion Metric CTO , NumFOCUS President
I don't sign NDAs until there is money, or equity, on the table. I've usually work with potential cofounders for about six months before getting serious.

I've found FD to be worth the time, the money is pretty trivial. Just having a vetted community to bounce ideas off of is pretty important. The amount of money folks can save you by not doing silly things can be substantial.
Aiborlang Andrew Chyne
2
0
Aiborlang Andrew Chyne Entrepreneur
Bass Guitarist at Klevoans
NDA can be signed with a CTO from the day one of your work. This is because CTO plays a role in the field of product development and management. It might sound not so positive for first time CTOs but it is an important step because as an product entrepreneur, you are making yourself sure about your work and its requirement. Here are few things that one needs to highlight:-

1. Clear communication from day 1 of your work.
2. Call a spade a spade.
3. Communicate one important goal to your CTO.
4. One needs to be informed that organizations or products won't survive without any revenue generation.

The above four points would surely assist you James. @ James Carvin
David Austin
1
0
David Austin Entrepreneur
Entrepreneur
The truth about ideas and NDAs and early stage business plans are as it is with most things: somewhere between the extremes of yes vs no. But generalizations can be made and provide a good rule of thumb. That's all I'll say about that.

CTOs are not traditional investors, and are made differently and think differently. They need to know details that your investors don't need. Seasoned CTOs have usually worked their way up in technology and technical roles where they were required to sign an NDA as part of their employment. Investors... Not so much. I've signed many NDAs as a technology consultant and have no problem doing so. In fact with some technologies if I'm not requested to do so it's odd... Even perhaps a sign that there's no real IP ownership there, which as a technologist can be disconcerting since IP development is what I deal in.

Most CTOs would agree with me on that matter. You might however find some hesitation to sign an NDA depending on how restrictive it is if the tech overlaps their expertise, or if it seems like you think intuitively obvious things are proprietary to you, or if the NDA contains language that suggest you might try to sue them if they continue in that technology field after moving on. You'll need to be specific about exactly what they can or can't disclose.

Additionally, keep in mind, an NDA is not a non-compete. CTOs don't like signing non-compete agreements as they are generally too restrictive and remove some natural protections and incentives for maintaining a healthy working situation and relationship between the CTO and the CEO. So keep that kind of language out of the NDA.
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