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I consult to companies. I specialize in problem resolution, project management, research and occasionally, if there's a call for it, development.

Recently, I was contacted by a development manager at a small company. I was referred to him as someone who can help him move some of his (mostly) hardware products into "the cloud". We met at his office so I could convince him to retain my services. It was a long conversation. He outlined his need to get "new directions" to differentiate himself from his competitors. As I was there to sell my services, I went along with it. At one point, an idea popped into my head - something no one has done before. I outlined it to him. He was skeptical at first, but I, as I'm wont to do whenever under the influence of a new idea/technology, kept talking and finally convinced him my idea is the best, brightest, coolest way to go. We agreed I'll do a feasibility research of my idea and quote him on a proof-of-concept.

Not a single paper was signed by either side (lawyers, I can literally hear your slap to the forehead).

For almost 2 months, silence. I kept contacting him and he had all kinds of excuses for not starting a contract. He just kept asking questions about my idea: will it run in this or that environment, what equipment would it require, etc. At one point, I became suspicious and started answering very vaguely.

Cut to this week. The guy calls me and tells me the reason he was busy was because they had their annual customers meeting. Oh, and by the way, they 'unveiled' a future product to the customers, and got cheers and interested inquiries. The 'product' was my idea - exactly as presented during the meeting.

As I was picking my jaw from the floor, he told me why he's calling me. Apparently, he thinks I have 'good ideas' and would like to buy a bank of hours from me, to chat for an hour or two every week, and see if I can give him new ideas. I kid you not. I tried talking about my original idea. He ignored (literally) the question and asked for a quote on the hours. I'm delaying my answer.

My questions are basic, but not simple:

  1. Do I let go of my idea? I have no papers, so I assume I can't sue. Should I just chuck it up to a lesson to keep my mouth shut in future sale calls?
  2. Since I did not sign an NDA, can I go on with developing my idea, or even selling it to his competitors (now that he ha done the market research for me)?
  3. Should I do business with this person/company at all? Would doing that be proof in the future that I gave up on my idea?
  4. Bonus question: how do you go about selling/proving your knowledge and expertise, without providing it for free?

Update 5/15/11: Just thought I'd update you about the situation. I spoke to the guy again. He acknowledged me being the originator of the idea, and promised that if/when they will decide to take it to market, he'll come to me first to develop it. In the meantime, he hired me for 2 other projects.

I should have said "no", but I took the advice I was given, and quoted the highest hourly rate I ever charged for such a task - and he signed the SOW.

I'm not sure about the long run of our relationship. But I will keep trying to develop my idea on my own. After all, there's at least one party already interested :)

I want to thank you all for sharing your wisdom and time. Hope I'll get to do the same for you.

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It sounds like it could end well, with a bit of caution on your part. Do you want to be selling ideas or the ability to execute them? If it's the ideas then definitely be careful in the future, but charge a high rate since it sounds like good value for the time. It could be a good move if you don't enjoy the 90% of your time spent on implementation. If it's the execution, this won't be the last time you talk to someone for a while and get nothing out of it! – richardg May 26 '11 at 20:01
Richard, I'm selling my ideas and my problem resolution capabilities, as well as development skills when/where needed. The problem is this: you come into a situation where someone describes an issue they are stuck on for months, and asks you how you would fix it. You think for a minute - you've seen dozens of cases like this before. You know the solution is a single device/product/approach. You know YOU would solve it in 5 minutes, given the chance. What do you say? – Traveling Tech Guy May 27 '11 at 6:10
If you're selling something that's very valuable and doesn't take you long, put a price corresponding to the value on it before you give it to them. If they're not convinced, establish criteria to determine if the solution worked and you get paid. Low risk and high value on both sides = good business! You might get resistance until you make it clear that there is no other option. The feedback you got indicates people would find value in just having you throw out ideas for a few hours. – richardg May 27 '11 at 17:14
Or if it's something that does require your development work, you might say that you'll do an initial discussion and high-level analysis and then provide a quote for the rest of the planning and implementation. As long as you establish a clear separation between idea work and planning development work you'll do (and set a fee for the planning when it takes enough time or someone else could implement the plan) I think it creates a range of services that makes sense. – richardg May 27 '11 at 17:16

9 Answers

up vote 7 down vote accepted

This is a common problem for freelancers: the tire-kicker who extracts a lot of valuable consulting knowledge in the guise of paid work coming "some day soon."

Do I let go of my idea? I have no papers, so I assume I can't sue. Should I just chuck it up to a lesson to keep my mouth shut in future sale calls?

I think you have to let it go. An intellectual property attorney once told me that the minimum cost to bring a lawsuit to court would be around $20,000. It could be argued that you had a verbal agreement to develop the idea, but that will only come down to your word against his. Without a signed contract, a lawsuit is probably an expensive and ultimately losing effort.

Since I did not sign an NDA, can I go on with developing my idea, or even selling it to his competitors (now that he ha done the market research for me)?

In a fair world, you should be able to go ahead and independently develop your idea. Of course, this isn't a fair world. You already know that this guy is a creep. Don't be surprised if he threatens you for working on his idea.

Should I do business with this person/company at all? Would doing that be proof in the future that I gave up on my idea?

From my perspective - definitely not. The guy has already demonstrated his true character. How could the business relationship get any better after this?

Bonus question: how do you go about selling/proving your knowledge and expertise, without providing it for free?

You recognized what was happening half way through your conversations, when you started providing vague answers. I'm sure you'll be on-guard next time. Set a threshold for yourself (say, one hour of "free consultation") and then put your foot down by saying "We need a signed contract to continue any further research."

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up vote 8 down vote

Yes let go the idea. If you are smart you will have more. If you are not, this idea wasn't going to help you :)

In general, idea does not mean the other person will make money. Is there evidence the pure idea turned into revenue?

If he took your idea and actually worked on it, then he deserves to have most or all of the spoils. Ideas on their own are worth nothing and that is an unfortunate and harsh reality.

Move on, have more ideas, execute on them, be happy :) and always aim to deal with honest people who will not do such things to you.

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Actually, @Genadinik, in this case there is clear evidence that my direct idea turned into features in his future product, but I think I will let it go. I am well aware of the difference between idea and execution - i do live in Silicon Valley :). But in this case, I just gave him too much and the actual development is minor. I just hope he won't patent my idea and come after me. Thanks for the reply. – Traveling Tech Guy May 7 '11 at 1:31
Stealing ideas is actually a very good thing. Just call it "take inspiration from" and you can see how all the artists and great creators of the world got inspired and built on top of others. Be the bigger person and wish those people well and move on to take inspiration from other people with good ideas :) – Genadinik May 7 '11 at 1:36
Most important is not to dwell in the past, or fight or bicker with old partners, but be setting your way on a good path forward. – Genadinik May 7 '11 at 1:37
up vote 3 down vote

In my 15+ years of experience as a freelance journalist I've adopted the practice of talking as much as possible to as many people as possible about my ideas and I can only think of one occasion where someone outright stole an idea from me. Overall being vocal and non secretive about my ideas have given me a lot of quality input allowing me to sharpen good ideas and reject bad ones. It's also helped me connect with a lot of great people. And, as others have pointed out, ideas are cheap. It all comes down to the implementation.

Caveat: I've never done hard news and I've never run a business.

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+1 for focusing on the big picture and not just the individual situation. – Kenneth Vogt May 26 '11 at 20:22
up vote 2 down vote

Do I let go of my idea? I have no papers, so I assume I can't sue. Should I just chuck it up to a lesson to keep my mouth shut in future sale calls?

Yup, learn from it and go on.

I once did something even dumber. A potential client came to me because I had some unusual expertise, and I stupidly outlined a software architecture in a written proposal. "Hey, thanks," they said as they headed off to find some guys in India. I was a lot more careful after that - see below.

Since I did not sign an NDA, can I go on with developing my idea, or even selling it to his competitors (now that he ha done the market research for me)?

If you really want to, why not?

As Brandon King suggested the company might threaten or sue you by asserting it was originally their idea. But if they don't have a signed NDA from you, I can't see they'd have a case, even if it were true.

Should I do business with this person/company at all? Would doing that be proof in the future that I gave up on my idea?

I'd stay away from this company; they're clearly dishonest. Doing so says nothing about giving up on your idea.

Bonus question: how do you go about selling/proving your knowledge and expertise, without providing it for free?

I've cultivated a habit of circumspection, and try to only talk about two kinds of things:

  • Technical matters I've worked on in the past that aren't part of anybody else's "secret sauce"
  • Business matters that I know are public knowledge

So when talking about an ARM-based tablet I worked on, I'm happy to talk about changes I made to WebKit, or how I sped up certain operations using Clutter, or work I did on gesture recognition. But if somebody were to ask who the touchscreen supplier was, or how we solved certain technical problems, I'd reply that those things were confidential and I couldn't discuss them. When in doubt, I keep quiet.

When somebody wants me to brainstorm a solution for them, I've learned to say, "I have a special rate for design services that aren't part of an implementation agreement. It's twice my normal hourly rate. So if you'd like to sign an hourly consulting agreement for that, I'll be happy to continue."

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up vote 2 down vote

Not signing contracts works both ways.

Absolutely develop the idea on your own or with a competitor if you think you can do a better job. Since he failed to retain your expertise with a contract, you're free to compete with him as you please. You can even continue to "work" with him by the hour and feed him second-rate ideas (that are still good/believable) but inferior to ones you can execute alone or w/ his competitor. All this time you're interacting with him you can gather valuable intel about his business status to further enhance your chance of out-competing him. To some degree, this is similar to what Bill Gates did to Apple back in the day.

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+1 for "Not signing contracts works both ways" - but I have to disagree with the second part of your advice. I think the OP should treat the bad guy as persona non grata - no contact whatsoever. If he decides to go ahead with his own implementation of the idea, at least it will have been done completely independently. – Brandon King May 7 '11 at 13:22
up vote 1 down vote

An idea is just that, an idea. Without execution an idea is meaningless.

Short answer, MOVE ON. You can't pursue any legal action if nothing was done to prevent him from doing this in the first place.

Move on, you will come up with better ideas in the future, if you don't, you probably aren't in the right field anyway.

Seriously, in the time you spent thinking out this entire post and all the different ways you could have handled it, you probably could have came up with a better idea than this one.

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up vote 1 down vote

Regarding your relations with this company: 1. do you have any objective proofs that you had this appointment with him ? Mails or letter ? 2. do you have any objective proofs that you had this idea while he was implementing it ? Like search logs, drafts of idea designs, tests,... and witnesses ? If yes you could request some percentages of the benefits on this idea.

If not, consider the offer of consultancy as a way to reward you. This is a way he'll pay you back. Ask for a high price and make it last as long as possible. You are in a very good position on this aspect because not only will he reinvest some of his benefits of your idea into you, but he may well pay you beyond this in hope that you'll give another great idea. So you may get your reward but not in the way you expected it. You may also negotiate a percentage on benefits on new idea. The hope to get another brilliant idea, is a strong incentive to accept your conditions.

If none of these succeed, or you don't feel to work for them, then talk about it to competitors, so if you can create your business to compete with them. Since you are apparently very smart, you could probably outperform their execution.

Things are apparently not as bad as they look like. You just need to look at it from a different view point. This guy is probably considering you now as a golden egg goose. Get your revenge.

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Thanks Mike. You just put a smile on my face :) – Traveling Tech Guy May 7 '11 at 18:59
:) you may also give some publicity to what happened to you as marketing of your consultant value. Present it as sharing your experience to other people like you so that they avoid the mistake you did. Don't name the company. Leverage this experience to grow your value. Other people may then also want to hire you as consultant in hope to also get a golden egg. – chmike May 17 '11 at 7:55
Good point :) Done. – Traveling Tech Guy May 17 '11 at 8:01
up vote 1 down vote

You gave him a great idea and you've landed a long term client. Sounds like a win-win.

Also, raise your rates :)

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up vote 0 down vote

You know what really annoys me? People who try and tell you that ideas are worthless and that you should share them with everyone because it's the execution that matters. It's not always the case as your situation as highlighted which brings up the question should we share our ideas with other people who you know have the resources to make it happen themselves?

I feel for you dude, I really do, but unfortunately there is nothing that you can do about it. Although if you have records of correspondence you might be able and I stress the word might very far do something about the situation.

The guy thinks you have good ideas and knows that without you the original idea you presented can't happen because he doesn't see it inside of his head like you do, hence he would struggle to implement it the way you already know how to. So sounds like to me the situation is evening itself out slowly, but surely.

A good lesson for the rest of us entrepreneurs to be careful who we share ideas with. I'm definitely going to be more careful as well.

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Thanks Dwayne. I also about had enough of that "it's the execution that counts" attitude. Having been on both sides, and having been a problem resolution consultant for years now, I can testify first hand that sometimes a single sentence can solve a huge, multi-million-dollar problem. All in all, I should be a bit more cautious in the future, but if you want to sell your expertise, you sometimes have to prove you're smart :) – Traveling Tech Guy May 27 '11 at 6:07

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