Protecting the Ideas That You Pitch: Between a Rock and a Hard Place

Contrary to what some VCs claim, ideas matter. Yet, it seems like a Herculean task to keep your grand designs secret while trying to convince your prospects that you are the right person for the job.

Hello ladies and gentlemen! I hope you are having a great time and you are enjoying the upcoming spring. Whereas the beautiful weather might tempt you to spend more time outside and bask in the sun, you should not lose your focus and you should strive to be fast as a shark to succeed in business. Otherwise, you risk lagging behind and missing out on interesting business opportunities. Talking about opportunities naturally brings me to today’s topic, inspired by some very interesting comments following a discussion on the relevance of non-disclosure agreements in business. Yet, the focus of my piece is going to be a bit different as I am going to deliberate about the importance of ideas during the initial stage of business negotiations. This is the time when some of us might be willing to gamble and put all our solution cards on the business table in order to secure a deal. Sometimes, however, instead of a full house, you can lose big time, fail to get a client, and have your divulged solution used by the very same person or company that refused to hire you in the first place. If you are interested in learning how to avoid this scenario, read on. You might find some of my conclusions useful.

Back in my university days, my professor in Macroeconomics used to hammer in our heads the maxim that we cannot have our cake and eat it too. Yet, to our utter dismay, this is precisely the paradox we are facing nowadays. It may sound very contradictory, but paradigms have shifted and now businesses have to go the extra mile in order to land a deal. Indeed, the tables have turned, the business model has changed and for the last couple of years, we’ve been living in the Freemium Age. This is not necessarily a bad thing as it allows people to get a little taste of what they are about to purchase and figure out if they like it or not. Furthermore, as Chris Anderson argues in his book, Free: The Future of a Radical Price, the freemium model is extremely advantageous for businesses as it allows them to attract more customers. Yet, the freemium system has a meaner, darker side, which is worth examining. Whereas it is relatively safe to use the freemium model to promote your finished products or services, the same is not necessarily valid when it comes to pitching proposals that contain ideas or ad hoc solutions. In fact, it might be quite risky and someone might just take advantage of you and your generosity. Bear in mind that there are still some folks who who live off the naivety of others. Hence, beware of moochers! They are real!

Contrary to what Andrew Warner argued a few years ago, ideas are not worthless. They actually matter a lot. Execution of ideas, as I already pointed out in my non-disclosure agreements, is just one part of a successful business whole. Hence, protecting the ideas that you pitch to get a client, is important. Taking into account that the freemium model has radically changed the rules of the business and marketing game, companies, consultants, and freelancers have no choice but to walk that extra mile and prepare to pitch their refined value-added proposals. So far so good. It has become a common practice and there is nothing wrong with that. We all do it. Yet, here comes the hard part. Yet, what if your prospects or leads simply ignore the efforts you have put into honing your pitch and perfecting your proposal? Well, this happens quite often. All you have to do is learn to deal with it. What if your prospects or leads do not hire you but they still use the ideas or the solutions you have disclosed in order to secure a deal with them? Here the game gets rough and things can get ugly. After all, there are no formal and/or legal restrictions that prevent them from doing so. In addition, it is quite hard to prove that a company or an individual has stolen your idea and he has used it for personal or corporate gain. In fact, when businesses are struggling with a particular issue, they are usually negotiating with several potential problem solvers at the time. Given the very specific nature of their particular problem, the solutions to it would not vary that much. Indeed, they could even overlap to a certain extent. Hence, it is a hell of a task to prove that someone has indeed stolen your idea while not hiring you. You might be right or you can be simply paranoid. In any case, there are very few things you can do about it and I still have not found the best approach to protecting my intellectual property while negotiating with a potential customer. Just for the record, I have come across and I have unfortunately dealt with some extremely abusive prospects and leads. Please take a minute to read, analyze, and remember this short profile:

• Prospect/Lead tends to ask way too many and quite too technical questions;
• Prospect/Lead keeps on asking you to elaborate on your strategies and provide him or her with more details;
• Prospect/Lead keeps on asking you to come up with more ideas and send him or her your refined and improved proposal ASAP;
• Prospect/Lead tends to ask you to devise an ad hoc solution to his or her problem and send it to him or her to review and evaluate;
• Prospect/Lead asks you to devise and/or develop a complex feature or prepare a very detailed solution in order to test your abilities;
• The whole negotiation process lasts way too long;
• You feel as if you had been working on the actual project;
• Prospects/Leads tell you they cannot hire you and they actually do not hire anybody else.

If a prospect or a lead shows some or most of those troubling signs, you might have encountered an individual or a group of individuals that might be planning to use the detailed ideas you have been willingly disclosing for personal or corporate gain. You should not expect to be given any credit, recognition, or even a thank you note. So, do the right thing, do not be greedy as there is no money here, and call it a day or deal with the fact that you have to work or you have worked for free for the wrong person or company. Nonetheless, this is somehow normal. Bad seeds are to be found everywhere. The worst part, however, is that there is no effective remedy to such blatant abuses. Indeed, the current business model somehow obliges us to reveal some of our ideas and elaborate on some of the approaches we are going to adopt to tackle a certain problem or a task. Yet, sometimes, you just have this palpable sensation that something is not quite right. Nonetheless, the problem here is not the freemium system but the people who believe they can cheat it and hence, take advantage of the naive participants in it. Whereas this is very possible, I do not recommend it. Sooner or later your notoriety will come to the surface and your dirty cheats and tricks will eventually bring you down. If that never happens, then you are the luckiest person in the whole wide world.

Legal Resources or the Lack of Such

When in doubt, always turn to the law. Yet, this time, we have been left on our own as the law is silent on that particular matter. Unfortunately, there are no laws governing the initial stage of entering into a business partnership. Any exchange and/or disclosure of information not regulated by legally binding agreements is deemed a conscious voluntary act. Hence, you cannot ask for damages or reparations if someone has used the idea that you have kindly given away for free. Moreover, you cannot really insist on signing a non-disclosure agreement with a prospect or lead in order to pitch your proposal or tell them more about the techniques or the approaches you will be using to solve their problems. It works the other way around and the one who is eligible to receive legal protection is the customer, not the supplier/provider.

But what is one to do under such circumstances? Is the world such a cruel and unfair place? Well, before I answer affirmatively, I should let you know that it is not all doom and gloom. There are a few alternative but not so very effective options including:

• Adding a special clause to your customer policy (terms and conditions), which stipulates that any solution provided by you or your company during the initial stage of business negotiations remains the exclusive property of you and/or your company and it should be used for evaluation purposes only. Then, you can furnish your prospect with a copy of your customer policy and ask if he or she agrees to the terms and conditions outlined in it. Whereas it sounds serious, the effectiveness of this legal measure is somehow debatable;
• You can add a disclaimer on each and every page of your written proposal, which states that the information contained in this document is to be used for evaluation purposes only. Yet, this is not the best defense in a court of law;
• You can actually become a master of teasers and learn how to provide your prospects and leads with a little taste of what they are about to get without divulging too many details. This is the proverbial “to have your cake and eat it too” scenario and you need a great marketing team to help you with your pitching endeavors. Yet, results can vary and there is no 100% guarantee that every single prospect will dig it;
• You can learn to appreciate the real value of ideas, learn to discuss only the essentials with prospects or leads, and save the details for the ones who are willing to pay for them. After all, you are running a business, not a charity organization, and you need to profit from your intellectual capital.

Before I officially wish you a great weekend, I want to warn you to be careful with your ideas! Do not let lucrative offers by prospects or leads lull you into a false sense of security or cloud your judgement! Think before you act and bear in mind that your ideas have a price and people have to pay if they want to use them!

Thanks a lot for taking the time to read my article! I do realize it is a bit long and it is quite polemical, but I believe it is important to discuss such issues and avoid falling into the same old traps over and over again. Now, I shall bid you adieu with the promise that I will be back next week to tell you how to give your website the looks that kill! So get ready and stay rock steady!