“How to Protect Your Business Idea When Outsourcing its Development”

You’ve just come up with a brilliant concept of the app or website development that’s sure to win over the hearts and minds of users. You’re really excited to start sharing your idea with others and you can’t wait to find the perfect partner company to begin developing your project.

But you have hesitations and thoughts on how to protect your business idea.

How can you be sure that you can trust an unfamiliar person or company with your valuable idea? How can you share your project’s features and particular details without worrying that someone else will steal them?

In this post, we’ll cover the 3 most important points you must consider when outsourcing the development and realisation of your project.

1. Do your research

First and foremost, you should spend some time researching the market that your idea is relevant to. You should also look into which development companies best meet your main requirements, including expertise, budget, and timelines.

Narrow down your choices and even ask for a second opinion from someone you trust, like a good friend, a family member, or a close work colleague. Reach out to your shortlist of companies with some basic questions to gauge what their response time is like, how thoroughly they are able to help you, and to get a good general sense of who you might be working with. Hire someone reputable and reliable to help you make your idea into a reality and to prevent this idea from being stolen.

There are lots of choices out there so make sure to do your due diligence when choosing which development company you want to outsource your project to. Read our related blog post for some helpful tips to aid you in making the right decision.

2. Make use of confidentiality agreements

Once you’ve found a company that you want to work with, ensure that you have appropriate legal documents signed to protect your idea.

The most common confidentiality agreement that is usually signed before detailed discussions begin is a non-disclosure agreement (NDA). This is a legal contract that creates a confidential relationship between a person who holds some kind of trade secret (i.e., your idea) and a person to whom the secret will be disclosed (i.e., the company you want to outsource development to).

There are three main types of NDAs:

  • Unilateral agreement - one party discloses confidential information to a second party. The second (receiving) party agrees to keep the information confidential and protects it from further disclosure. This is also known as a one-way NDA.

  • Bilateral agreement - both parties share confidential information, with each party agreeing to protect the information shared from further disclosure. This is also known as a two-way or mutual NDA and is common in joint ventures, mergers, or partnerships.

  • Multilateral agreement - includes three or more parties which all agree not to disclose confidential information beyond the parties in the agreement. This type of NDA is beneficial when working with three or more parties, but requires unanimous consensus during the negotiation of the agreement.

Another important document to include when outsourcing to a development company is a non-compete clause (NCC). This is an agreement that ensures companies you work with cannot pursue an idea or project that is in direct competition with your idea or project. It also limits their ability to work on other projects which would directly compete with yours. NCC agreements are usually valid for a certain period of time that is specified in the document.

The main objective of signing confidentiality agreements like NDAs and NCCs is to ensure that you and your idea are protected by law in case confidentiality is breached. If the company you’re outsourcing development to discloses information that is protected under these agreements, they can be held responsible and may be obliged to compensate you for losses.

Confidentiality agreements generally remain in force until the main contract is signed. The main contract should also cover confidentiality and, as the project development begins, will usually be used as a substitute for NDAs and NCCs, with corresponding notes to these previous agreements. It’s also possible that the initial confidentiality agreements continue to be valid for the entirety of the cooperation period.

3. Communicate wisely

After ensuring that your idea is protected by law, you should be able to rest assured that you can trust the people you’ve chosen to work with.

If you want to err on the side of caution, however, there are a couple of other things you can do to keep the lines of communication open while still protecting your business ideas.

The first is to divide the project into parts and to discuss these parts with project managers and other company contacts only when necessary. You can decide how much you want to share, keeping in mind that key details may affect the project’s development. Ideally, you’ll have a direct point of contact at the outsourcing company (such as a project manager) that you trust and can collaborate with to identify how much information you need to share and when it’s best to share it.

The second is to ensure that important details are discussed and documented in writing. If you discuss aspects of the project via phone or Skype, make sure that there is a follow-up email that summarises or covers those topics. It’s best to have a “paper trail” that you can easily point to (either via email, an online project management tool, etc.), just in case confusion or disagreements arise in the future. By having a written record of what was discussed and when, you’ll be able to make a strong case to protect your product idea.

Protect your idea by working with us!

In today’s world of modern communication and easily shared information it can be difficult to trust strangers, especially with your business ideas. That is why it’s particularly important to remember that it’s your responsibility to protect your idea or project. Take the time and steps necessary to ensure you’re working with trustworthy companies and people.

At SteelKiwi Inc., we value your information and make your business idea protection a priority, signing NDAs with our customers before receiving important project details. Customer satisfaction is key to our success and reputation. That is why we take confidentiality and privacy seriously, coming up with the best solutions on how to protect a software idea.

Read customer reviews of our work on Clutch.co and view case studies on our website to find out more about how we work. And, if you’re looking for assistance with an idea or project, let us help you make it into reality!

Contact us to get started today!

Useful links

  1. Requirements. Why is it important
  2. How to make an effective product requirements document
  3. Why does my business really need a mobile app?
  4. I have a great mobile app idea. What do I do next?
  5. 5 benefits of outsourcing your website