
Why I'm not going to sign an NDA - tmcpro
https://medium.com/startups-and-things/4193aeda7251
======
acjohnson55
Generally speaking, my rule of thumb is that an NDA shouldn't be necessary if
you're simply discussing the business. If an idea is so copyable that simply
repeating aloud it is dangerous, then you're going to get copied by bigger
players as soon as the viability of the idea has been demonstrated. So the
company's pretty much hosed anyway. When it comes to basic business and
marketing advice, it really limits the valuable input that can be gained if
the business owners are super cagey about talking about their ideas.

On the other hand, if actual core IP (like code and business documents) is
going to be seen in detail and contributed to by someone, then an NDA is a
must. Not only an NDA, but also an IP assignment agreement. It must be
unambiguously clear that the business, not any individuals, owns the IP of the
company. I don't care if someone just wants to help out of the goodness of
their heart; if they're looking at the code, they need to be willing to sign
some paperwork.

~~~
6cxs2hd6
This.

Related: It's incredibly galling when someone wants you to sign an NDA to talk
about something on which they have a bullshit patent. Really?? Trade secret
XOR patent, please choose.

~~~
foobarbazqux
I get the feeling that companies don't like to talk about or advertise the
patents that they own, because it's fantastic for them if somebody else
independently has the brilliant idea of rounded corners on the casing of a
portable screen.

------
dasil003
The reason I ask you to sign an NDA is not because I am scared you're going to
steal my idea. We can talk in depth about the business over coffee, dinner,
long weekend ad nauseam. But if you want to see the code and hear about the
non-public deals then you sign an NDA.

I'm pretty sure this post is not meant to apply to real companies, but there
is a lot more going on out in the real world than this straw man of cold-
calling wantrepreneurs.

~~~
ctdonath
_But if you want to see the code and hear about the non-public deals then you
sign an NDA._

Aye, but that's not the point of the article. It's not that _I_ (or the
author) want to see code & details, it's that _you_ want me to see them. The
author makes clear he's got a thousand other items on his to-do list, and has
a thousand people coming to him with allegedly brilliant ideas; he has no
particular interest in the idea, is not already willing to give up something
for access to the idea.

Sure, if I want in on your idea, I might be willing to give up something for
that access - hence willingness to sign an NDA. But don't come to me with zero
context saying "I've got this amazing idea, sign away your rights and I'll
tell you about it." Kinda like a legislator saying "we have to pass the bill
so you can find out what's in it"; we see how well that's working out...

~~~
jusben1369
This is a critical distinction to make. I'm constantly approached by people
who want to use our platform for their business. Our platform is pretty much
self service (API's,docs, pricing) but they really want to have a call with me
to discuss their business and learn more about us. Ok, no problem with that.
Then they say "Oh and you'll need to sign our NDA before we can tell you more
about our business" Ughh! _You_ want to tell me about your business in depth.
I don't want to take on the burden of multi year lock in on data especially
when I talk to a lot of startups all the time.

------
ctdonath
Partway through a 12-week course, I had a student hand me an NDA to sign
before he would tell me the awesome brilliant idea he was so eager to discuss.
He was baffled when I didn't sign it on the spot and said I'd get back to him
after I had a chance to read it. He never showed up in class again.

If you want me to sign an NDA, make sure you follow thru on your commitments
to me. If you're a student and I'm the professor, _pass the course first_.

------
rosenjon
The biggest problem with NDAs that I've come across is that often people want
to slip non-compete type clauses into them. If it is a straight up non-
disclosure agreement, it's going to cost the company more to sue you than it
would ever be worth to enforce the NDA, so practically it doesn't have much
effect. Of course, if the company in question has huge resources, you might
want to be more circumspect.

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6cxs2hd6
Way back when IBM was a big juicy target for lawsuits, an employee told me IBM
doesn't sign NDAs: "We don't want you to disclose anything confidential to
us." Because, how the hell would they even keep track of the information
status across all those people and projects? Not realistic.

In my experience NDAs aren't practical to enforce and hardly anyone takes them
seriously. I've seen them used mostly as a sort of social ritual, much like
shaking hands, asking "How are you?", and "Hey, can you keep a secret?".

------
agibsonccc
I have one general rule when it comes to signing NDAs: I'll sign if you're
paying me something. Why else would it be worth my time?

~~~
reginaldjcooper
Yep. NDA = pay me. Non-compete = pay me. Anything that reduces my ability to
make money means you compensate me for it or I don't agree.

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thejteam
A lot of this seems like mis-communication between a lawyer and a client. It
sounds like people have talked to a lawyer. The lawyer says, "you need an NDA
to talk with people about your business." The lawyer means for real
negotiations about partnerships, etc. He never intends for it to be about
semi-casual discussions about ideas. He is not in the tech business. "Talking
about your business" to him means specific business strategies, pricing, bid
and proposals, etc. And he crafted the NDA to cover these items.

A good alternative to "I'll never sign an NDA" is to counter with your own NDA
that properly excludes the obvious. A good NDA, including ones that I have
signed from major corporations, exclude information that has been made public
in any way or that you hear from a third party. Or material that can be
derived from public information.

~~~
sopooneo
That makes sense. But then you're into back and forth contracts in relation to
your free gift of time and expertise. And once official rules are involved,
relationship dynamics change.

------
eitally
I think this is something where the perception of utility is far different in
the startup world that big enterprise. In the enterprise world, where there
are too many people with too many complex business relationships to keep track
of everything, and too diverse a group of meeting participants to know
everything about them, and where you may not be discussing your IP or your
business deals but the situations of your own customers or suppliers, an NDA
is a no-brainer. It amounts to much the same thing as doctor/patient or
attorney/client confidentiality principles and allows free, assumed-secure
speech in any environment where all parties present may not otherwise have an
appropriate level of trust to be comfortable engaging that way. In my business
of contract engineering & manufacturing, we don't create nearly as much
internal IP as we handle the IP of our customers. However, we apply our unique
processes & systems to achieve the goals of our customers and if we want to
discuss how we do that when engaging with potential new customers, we
absolutely require NDAs. It doesn't help things that in the EMS industry
almost all the big OEMs have contracts with several competing EMS companies
(just look at Apple with Foxconn, Samsung and Pegatron, for example... or
Dell/HP using both Quanta & Compal... but also using Flextronics, Sanmina,
Jabil and Celestica.). It gets messy fast and ensuring legal recourse for
accidental or intentional leaks is a necessity.

~~~
hga
On the other hand, as an established business, if you needed the sort of
consultation this guy is providing for free to would-be startups, you'd pay
for it. Not only does this drastically change the risk/reward tradeoffs for
the consultant, your issues are likely to be a lot more concrete and specific
than pie-in-the-sky I've got a _revolutionary_ idea startup stuff.

------
maxk42
If your business model is so fragile that merely discussing it threatens is a
threat then you haven't got a business model at all.

Great businesspeople _talk_ about their business. They tell everyone: Friends,
strangers, potential customers. All kinds of people can provide useful
feedback and the more you discuss your business the better an idea you're
likely to have of how to build a good product.

Besides -- the only people who ever ask me to sign an NDA are the people who
haven't got anything worth guarding to begin with.

------
7Figures2Commas
There are plenty of good reasons not to sign someone else's NDA, but there's
usually a very good reason not to ask someone to sign yours: without the
willingness _and ability_ to _try_ to enforce it, your NDA isn't worth the
paper it's printed on.

In reality only a fraction of the people who enter into agreements actually
have the wherewithal to enforce them. This is particularly true when dealing
with individuals (especially "entrepreneurs") and small business owners.

------
ptbello
Predecessor: [http://blog.jpl-consulting.com/2012/04/why-i-wont-sign-
your-...](http://blog.jpl-consulting.com/2012/04/why-i-wont-sign-your-nda/)

HN discussion:
[https://news.ycombinator.com/item?id=3844893](https://news.ycombinator.com/item?id=3844893)

------
jMyles
I normally don't sign NDAs, but I'm currently at a company that I'm really
enjoying and they're putting one in front of me. The case they're making is
that if they don't get all their devs to sign NDAs that they'll have trouble
attracting investors. Thoughts?

------
wmf
Why I'm rewriting a post that's already been written a dozen times before.

------
gesman
Charge $1000 per NDA signing _on your terms_ and be done with it.

~~~
tmcpro
I like this idea

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kirksan
I've heard of a few misguided attempts to go after former employees who,
supposedly, violated anti-compete clauses, but I don't recall anyone being
sued for violating an NDA. I'm sure it's happened, but it's got to be rare.
Usually successful companies are too busy building a great product and don't
have time to mess around with NDA lawsuits.

I'm curious, can anyone recall a successful lawsuit over a violation of an
NDA? Particularly with regard to early stage startups.

------
brianbreslin
Tyler, good post. I agree with you on most of it. I think your issue really
becomes (and this is why I refuse to sign them most of the time): the cost of
defending an NDA is usually not worth the cost of the engagement. I.e. if the
project is worth under $20k to you, its not worth the potential cost of hiring
a lawyer to defend it. Also what are these people building? nuclear weapons?
most ideas aren't as original as people think.

------
gz5
It is very hard to copy the most important parts of a startup, even if you
have some of the ideas:

\+ business model innovation

\+ go to market strategy

\+ execution, focus and efficiency

\+ iteration

\+ user/customer care and cultivation

\+ brand integrity and trust

\+ vision

\+ partnerships

Said another way, if it my idea and I am going to you, then I am doing so to
brainstorm and get ideas from you too that may eventually conflict with your
interests. Should you ask me for an NDA?

------
grabeh
No one ever sues over an NDA. The point of an NDA is to set up an expectation
of confidentiality. It's easier than having the conversation that you expect
the discussions to go no further which leaves the possibility of ambiguity.

Absolutely problems arise where an NDA is overly broad, the duration is
excessive or there are circumstances where it is inappropriate but the idea of
the NDA itself is not bad per se.

------
coffeeaddicted
Neither did Mrs Kildall. Just saying ;-)

~~~
hga
Mr. and Mrs. Kidall, and back then IBM NDAs etc. were so onerous they would
essentially own your product/company if they so choose. I was told this
specifically about the MIT AI Lab's Lisp Machine, they were approached by IBM
but turned them down after a MIT lawyer looked at the agreement.

Digital Research had an existing business to protect, Microsoft didn't have an
OS business besides their licensed XENIX, and was just starting to branch out
from computer languages (e.g. BASIC). It was a calculated risk for both, and
for all we know against the Kidalls IBM would have gotten away with a lot more
than against Bill Gates.

Who I'd note was massively connected through his family, e.g. his mother, per
Wikipedia:

" _Beyond the Seattle area, Gates was appointed to the board of directors of
the national United Way in 1980, becoming the first woman to lead it in 1983.
Her tenure on the national board 's executive committee is believed to have
helped Microsoft, based in Seattle, at a crucial time. In 1980, she discussed
with John Opel, a fellow committee member who was the chairman of the
International Business Machines Corporation, her son's company. Mr. Opel, by
some accounts, mentioned Mrs. Gates to other I.B.M. executives.

A few weeks later, I.B.M. took a chance by hiring Microsoft, then a small
software firm, to develop an operating system for its first personal
computer._"

His father was principle counsel and later a named partner in a major white
shoe law firm. He wasn't someone IBM could casually screw over.

------
j_m_b
Ideas are cheap. It takes people to implement them. People are expensive, good
people are priceless.

------
srebeck
Sure I'll sign your NDA. But then you sign MY NDA before I give you any
feedback on your genius idea. Seriously people, WTF?

------
icecreampain
This NDA business seems far more prevalent in the US than in Europe. I've only
been asked to sign an NDA at one place I worked at for several years. After
refusing they just let the idea go and I didn't hear of the NDA ever again.

------
billb2112
Meh, just sign the NDA.

~~~
michaelt
There's no point in me having you sign an NDA if I don't plan to sue you
should you violate it.

I'm asking you to sign a document so I can sue you later. What do you get in
return?

This guy says he's giving out free advice to strangers, expecting nothing in
return. There's very little upside for him. So why should he take the risk,
how would it benefit him?

~~~
billb2112
I think your interpretation of "sign a document so I can sue you later" is
pretty inaccurate. Someone is disclosing an idea and wants to protect
themselves in case you decide their idea is worth implementing. I don't think
it's an unrealistic request. Furthermore, most NDAs I've seen don't really
protect much of anything.

The downside of saying 'no' is that you will never (or rarely) have them as a
potential client. Maybe you have clients throwing themselves at you, but in my
neck of the woods, clients aren't exactly a dime a dozen. I'm not going to
sign anything that I feel would put me or my business at unreasonable risk,
but no NDA I've ever signed has been worded that unrealistically.

To make a blanket statement that I'll never sign your NDA and NDAs are a dumb
waste of time sounds like a difficult person to deal with right off the bat.

~~~
karamazov
Did you read the article? The author is talking about NDA's from people who
want to discuss startup ideas with him, _not_ NDA's from clients or potential
clients.

~~~
billb2112
Wow, so someone would sign an NDA for the purpose of having a free consult and
nothing further? How is this some sort of bold statement that is making it to
the front page of hacker news? "I won't incur risk for nothing in return". So
brave.

Many relationships start with potential clients shopping around. They get a
free consult. If that's not what this guy is referring to, then my mistake. I
wouldn't sign the NDA either, but I could just as easily named this article "I
won't stab myself in the eye".

