

Will I really steal your idea? - mjshampine
http://fullstart.com/knowledge/will-i-really-steal-your-idea-nda/

======
tyler-codenvy
I have a couple of stories that I want to share. One of which has taught me a
lesson about being too trusting.

I am both:

1) A venture partner (Toba Capital) where I manage existing investments, do
diligence on potential new ones, and make decisions regarding how capital is
allocated; and:

2) A founder / CEO (Codenvy), a development cloud with a browser IDE front-
end, often times called a cloud IDE.

This article resonates with me as I can see the perspective from both sides of
the coin. As a rule, in venture capital, myself and my firm does not sign an
NDA. The basic rationale is that it's virtually impossible to resolve all of
the potential conflicts that are associated with the NDA from both firms. So,
we go with the basic principle is that we need to trust the people we are
talking with and vice versa. Our reputations and history of deals /
interactions are the best guide and we openly tell people up front that if
there is information that is secret for themselves, they should withhold it
until they have a chance to do background checks on us. In some cases, there
are startups that are so secretive that we cannot infer anything at all, and
we just have to politely decline and move forward.

A couple of interesting scenarios playing for me recently. I sit on the board
of Sauce Labs, a cloud test company. But my venture firm recently inherited a
stake in Smart Bear, a QA vendor where there are edges of competition. While
neither vendor sees the other as competitive, the optics of the situation to
an outsider could suggest otherwise. So in this case, we have opted to create
a chinese firewall inside of Toba where I do not listen in on core data
provided by Smart Bear, even though their CEO said this wasn't an issue.

Another scenario that came up recently was a referral to explore a pre-funded
startup idea around making database querying easier for non-SQL expects. The
referral was a warm one to the founder. We asked for the usual background
information to make a surface area assessment. The input given was a very
limited sales presentation with a couple screen shots and a few accompany
statements from the founder that they presented to a VC and that the VC
recited their entire pitch to them. And then that person stated they would
only work with people who had their same vision. When probing for more
thorough information, the founder became a bit squirrely, which is probably
due to some sort of discomfort around sharing stuff. But there wasn't an NDA
requested, and we could only conclude that maybe their claims of awesomeness
were slightly exaggerated.

Now for the story around trusting too much. With my Codenvy CEO hat on in
January we had recently closed our Series A for $9M in January. It was a great
feeling as it took us over 6 months of raising to close it. And let me tell
you, just because you a valley VC doesn't make it any easier to close your own
firm's financing. Post funding we were looking at strategies for how we could
grow faster. We came across a likely competitor that had 2 people part of the
business and based in Europe that had raised a small amount of seed funding
(<$300K). It was obvious to us that there was some great talent in the team
and their focus on the market was complementary to our own. We felt that it
would cause both companies to grow much faster if we could merge and join
forces. They were interested and we all met together to discuss what a game
plan might look like. Of course, in that conversation, we shared specifics
around how we were envisioning the next 12 months to look like. We made an
offer and they opted to pass. No big deal. But where we learned our lesson was
that about 5 months later, this summer they released a number of features that
were -- somewhat -- reflections of the vision we had shared with them, all the
way down to them calling the features the same marketing brands we had ear
marked. At the time, we felt foolish and anger around their ethics of the
situation, and it was particularly irritating to our own engineers that they
were beat in the market. There were many discussions around this, and it
raises the question of how you discuss potential plans around an acquisition /
investment, if you are afraid they may steal the ideas.

In the end, it's all good as we have learned some stuff: 1) The acquisition
would have certainly failed. How could we have worked with people who have
thin ethics? 2) We have subsequently released everything they heard from us,
and our approach to everything is a) more mature, b) more scalable, c) better
received. We learned that while they could take the surface area ideas, they
haven't been able to exploit them to their true meaning the way they were
intending. 3) Our engineers found a new form of competitive motivation that
didn't exist before these - trusted - individuals decided to pawn some of
their ideas. The entire culture, motivation and mindset within our (rather
large) engineering office has developed into a killer instinct. And as a
leader I find this trait as crucial to long term success. I am unsure if this
killer instinct would have developed as quickly without this incident.

So, the issues in the article are real, and they show up when you least expect
them. I think, going forward, I am just going to keep thinking about being
truthful, keep my ethics high, and work with people who are the same. I'll
sleep easy at night as a result.

~~~
ScottBurson
I'm not sure I agree, in the case of the latter story, that the other company
was unethical. _You_ contacted _them_ , correct? In order to place them under
an obligation of confidentiality, you needed to offer them some consideration
in exchange for that obligation. It's not clear from what you relate here that
you did that. I think you just flat screwed up, and your engineers' anger
would have been more appropriately directed at you than at the other company.

Perhaps a fuller account would change the picture, but that's how it looks to
me from what you've said here.

~~~
tyler-codenvy
Yes, good points. There is some missing context. We did contact them, but I
failed to point out that the conversation developed over a number of pre-
cursor setup calls. And that before there were substantive acquisition talks,
there was discussion between the parties on the general areas where each of
our businesses were claiming strategic importance along with tacit
acknowledgment to generally vector away from those segments. In our case, we
provided deeper insights around the specifics of how we intended to pursue our
unique strategy after the initial discussion.

With any acquisition or potential partnership with a company that has the
potential to compete, whether on the edges or directly, there are unique
challenges to figuring out what information you should share and at what time.

But the take away for us was that we had a reasonable expectation that this
particular vendor would not behave this way based upon our pre-cursor
discussions.

------
Guest978120
I have some experience with stealing ideas.

1\. Someone posted a project to Reddit. It gained a lot of up votes, and tons
of comments about people liking the concept. I thought I could do it better,
and so, I did, blowing this other site out of the water within weeks. My site
became the best in that untapped market, and now it sits there for years
making me a living through passive income. The original site from the Redditor
closed years ago.

2\. After an unexpected announcement in the entertainment industry, some doors
opened for a new market. I worked day and night for 2 or 3 days to get a site
together over a weekend, and be first to launch. I was... and gained 1,000
members in a matter of hours after opening. Others quickly followed suit, and
took my concept, improved on it, and continued to develop it while I didn't
have the time. My site faded to zero within a year, their site went on to be a
success.

Lessons learned. Be quick to market. Only launch when you have enough lead
over the competition, and leave no glaring holes in your project which they
can use to overtake you.

As everyone says, it's all about execution. If someone posts an idea, or a
project that is gaining traction, and I believe I can do it better, then I'll
try. I don't feel bad for stealing an idea, if I make it a success. At the
same time, I don't feel bad when others take my ideas. That's competition,
I've had all sorts of companies try to develop knockoff sites to the one I
mentioned in the first paragraph. None have reached a similar level of
success. However, if one manages to take the crown, I wouldn't blame them for
stealing the concept, I'd blame myself for running an inferior service.

In short, yes, I'll very much steal your idea.

~~~
paulhauggis
Exactly. I did something similar a couple of years ago. I saw a great idea on
a marketing forum, came out with something better, and now make a living from
it.

The original poster has moved on from it.

Talking about any great idea in a public forum will bring competition. If that
competition has more resources than you, they may even beat you to market.
This is why I don't talk about any of my ideas like this.

------
d0m
The truth is that it's just annoying as fuck to speak with someone who insist
about signing 10 papers before explaining their omg-amazing-never-seen idea.

YES, it happens, sometimes there are confidential matters but for god sake,
just don't talk about that 0.05% part.

Ok you signed an agreement with a big gaming company and you're not allowed to
say the name. Fine, just say you have an interesting partnership coming along.

ALSO, maybe it's just me, but last 10 times I've got people wanting me to sign
an agreement, their product was terrible and so was the business model.
Actually, it was clear they didn't do any market research because if they did,
they'd realized their ideas was already tried 10 times and wasn't new at all.

I once signed an agreement to see a wireframe.. it was the most complicated
mess of UI I've ever seen. The guy was working on the wireframe for 8 months
without showing it to anyone of fear of being copied. Sigh, I was sad for him.
(Note that the idea wasn't anything new.. what was ultra-secret was the
complicated UI mess.)

------
joelrunyon
> as Fred Wilson said, “you’re far better off working with somebody of high
> ethics with no NDA than somebody of low ethics with a signed NDA.”

I think this is what it comes down to. If you can't trust the people you're
working with - then you shouldn't be working with them.

~~~
loceng
Most of the time you won't know the person you're talking to that well, and
unless you have a conversation beforehand - how do you know what their ethics
are?

~~~
foobarbazqux
If you know how to read people this all comes out in an interview. If somebody
lacks integrity there will be many red flags.

~~~
loceng
Sorry, but I'm confused - where does an interview come into play when you're
sharing someone your ideas?

~~~
foobarbazqux
I was assuming the context was signing NDAs as a condition of employment. Even
if that's not the case, I'm still going to talk to someone a little before I
just spill the beans.

~~~
loceng
Company interviews are quite different then just sharing an idea with someone.
If you're going to a company to be hired and paid, they aren't going to likely
be telling you ideas - more of a general idea of what you might be working on,
and to see if you're a fit. You'll then be made an offer for the job (or not)
and will have to sign papers, including an NDA to accept the job, likely also
copyright-related agreements, etc..

~~~
foobarbazqux
Some companies don't require that their employees sign NDAs about the work
they do. These companies still manage to keep confidential information
confidential because in the interview process they are able to weed out the
people that lack integrity.

~~~
6d0debc071
How are you distinguishing this from the person just not having a significant
incentive to sell out?

~~~
foobarbazqux
So per my original comment, there are lots of indicators of a lack of
integrity. Just ask enough questions about someone's life, their values, their
ambitions, how they'd respond to various conflict situations, ask them their
opinions on just about any issue. If you get unbalanced, dramatic, polarized
results, it indicates a lack of integrity, which might crumble altogether
given enough incentive, monetary or otherwise. If this approach is too
sketchy, or you don't want to miss out on otherwise talented people, use an
NDA.

I know that might sound a bit bullshit. I guess this is speaking as someone
who lacked integrity in the past that feels they can generally recognize it
with some precision in others now.

~~~
loceng
Those aren't the type of people you need to worry about though - it would be
the sly ones, and they are hard to know who they are. They are friendly until
they don't care to be. I'm unsure if people purposely do this or they just
become inspired by the ideas, feel they could do them on their own, and then
start - I'm sure there's a mix, though you'll get a mix of honest and
dishonest people in the both groups, the ones who are willing to sign the NDA,
and those who aren't willing to.

------
loceng
The only honest counter-point to "ideas are a dime-a-dozen" is that the 19
years experience I have of unique experiences online, and in web development -
throughout having spent that time focusing on different-but-connected problems
for long periods of time - will result in me ideas that are nuanced and unique
to me and my understanding. Most of the time people won't be able to
understand the value of what your presented idea - they have less of your
experiences that lead you to this same point.

This is in fact the problem with finding investment money, especially if
you're trying to disrupt a market and haven't proven your nuanced theory yet -
which is why it's best to find investors who invest in similar ideas or that
you could fit under their investment thesis umbrella. Or where you reach
traction of whatever sort, so investors can see evidence of something working
- so then they can be put at some ease.

Knowing something - figuring it out - before someone else does is a
competitive advantage, and a needed one if you want to own or be first to
disrupt a market. Execution is also very important - though if you're a
creative person, who can come up with unique theory and see things others
perhaps can't - then are you as good at execution? Perhaps there are others
that can execute quicker and better than you.

Or if you're Mark Zuckerberg - you could be a developer hired to help develop
ConnectU - and then lead the brothers on, pretending it's almost ready -
meanwhile working on your copy, The Facebook - and launch before them, because
you yourself even stated to a friend in an online message that "there's not
really room for two" platforms like ConnectU/Facebook.

Can another Twitter exist - in the same market space? I don't think so, not
with a ton of capital invested and so long as Twitter doesn't do something
stupid - which I don't see happening based on everything they're doing. P.S. I
would buy Twitter stock if I had money to. Facebook on the other hand
continues to do things people don't want, violates and abuses people's privacy
and settings, on a fairly regular basis. Facebook is ripe for disruption, even
if merely for treating users better.

These nuances you discover are reasons why you don't necessarily need to worry
about others executing your ideas well, though some people are very good at
reverse-engineering, and all they need are some keys - and they can start to
unlock the rest. Some people have access to a lot of resources to copy ideas
too - a well-known firm in Germany (?) who copies most anything successful:
Pinterest / Pinspire, Stripe / etc..

The real solution is be smart about what you tell people, who you tell what
to, and when you share certain parts of your idea - otherwise you're being
naive or just don't care about the overall success of your business. It's
engineers, developers, who these days are mostly getting funded and becoming
successful because they can build product - get it to a point where it's ready
to start scaling and get resources attached to them to turn them into a real
business as quickly as possible. If you're just an idea person, without
personal wealth or family wealth, and no technical skills - your chances of
success are very low in many business arenas.

It all really comes down to how serious you are and how big and stable of a
business you want. There are tons of small ideas that aren't done because you
won't make a lot of money doing them - they aren't defensible in that way
either - so if you enjoy doing it or want the experience to learn some things
- then that's great - though not likely something you can retire on. There are
the outliers, a more in line use of the word, who make something small that
becomes big and then they can sell it off - though the internet is no longer
in its infancy, and it is a serious competitive business environment.

My two cents.

~~~
prostoalex
> Or if you're Mark Zuckerberg - you could be a developer hired to help
> develop ConnectU - and then lead the brothers on, pretending it's almost
> ready

That is actually not true. Contrary to the cinema depiction, Mark Zuckerberg
was not the only remaining PHP developer on the planet, and Winklevosses
quickly brought in additional talent to finish up ConnectU as well as launch
Jungalu.com, StallScribbles.com, DigitalFlyers, ConnectHi, ConnectGroups and
numerous other Internet properties

[http://en.wikipedia.org/wiki/The_Winklevoss_Chang_Group#The_...](http://en.wikipedia.org/wiki/The_Winklevoss_Chang_Group#The_Winklevoss_Chang_Group)

~~~
loceng
What does it matter if they tried to continue on their path? They tried
finishing up ConnectU after Mark had ample time to get TheFacebook farther
ahead and then launch beforehand. Not sure how that makes what I said untrue.
I can't remember the source, though I had read an article from someone that
was ~20 pages long. It went in-depth and included 'leaked' conversation of
Mark's. In it I believe it even had him roughly saying that he's trying to get
TheFacebook done so he can launch before ConnectU - and purposely is leading
them on to be able to do that - because as I said before, he sees there not
being room for two versions of what's being made...

You say it's not true though - how do you confirm that? Other than referencing
the movie wasn't accurate? If it wasn't, why didn't Zuckerberg sue for
defamation?

------
troels
I think the whole "ideas are cheap" meme gets overblown a bit. There are
certainly both good and bad ideas. But that's a bit missing the point really.
The reason I won't sign an NDA is that it is a great liability at a very low
perceived value. They are, by their very nature, usually brought up very early
in a relationship, at a time where there is little commitment from both sides.
Yet the ramifications of signing it are potentially vast. That mismatch just
seems way out of proportions, unless there's something exceptional about the
whole situation (Like, if the person asking for the NDA is someone famous,
that I have respect/admiration for).

------
davemel37
Here is Eric Reis's Formula for breaking free of the fear of having your idea
stolen. " Take your second best idea,the one you aren't going to end up doing,
figure which company is in the best position to execute on it, and try your
hardest to get them to steal your idea!!!"

------
gfodor
The argument about the value of ideas is a stupid one because it assumes that
"idea" is a concept we can even talk about. There is a key dimension to ideas
that matters and can make an idea a very valuable thing on its own: depth.

Anyone can just come up with a random idea with no depth, but objectively good
ideas do exist: they have a detailed and nuanced concept that has been refined
through careful thought and experience. A good idea for a product comes from
experience and intuition, and contains a number of aspects to it like a target
market, a particular way to position a product, a particular way to provide an
underserved need, and a compelling justification for why something is going to
make money. And for all the things about an idea that you see, there are
countless of things you _don 't_ see, ie, the things the idea _isn 't_ and the
reasons it's not.

They used to call these things "business plans" but I heard people don't write
those anymore.

------
willbarksdale
If you came to me with a really great idea, and you are actually somehow
useful to its implementation, and I think your idea is so damn good as to drop
what I am doing and work on it, I am for sure going to want to be on your
team. If on the other hand, you are unnecessary to the execution of the idea,
then you just fucked me by making me sign this NDA. So signing an NDA often
means you are getting screwed over by a scrub.

------
melling
So, what about that famous case when a pair of twins hires a developer to
build a college website for them, and he goes and builds it for himself? For
some reason, the courts thought that the idea was worth $65 million dollars.

~~~
wpietri
What court thought that? My recollection is that there was a settlement, which
I think means there was no finding of fact.

------
fragsworth
An NDA is usually pretty ridiculous for a tiny company that hasn't even built
anything wanting to prevent people from stealing their idea. But in my
experience, that's not what people use them for.

If you're in the middle of developing a product, you should have others sign
an NDA to control the launch of your product. You don't want someone else to
publish anything about what you're working on until _you_ want it to be
published. And there are lots of people out there who are stupid enough to do
this kind of thing without consideration of what your company wants.

------
dools
The whole "I will not sign your NDA on principle thing" is trite and stupid.
Who cares if they want an NDA? You think you can immediately judge someone
based on that one thing?

Of course, signing anything is a PITA so I charge a signing fee of $150 which
I think is perfectly reasonable, but saying it's some sort of heroes mission
against NDAs makes you seem like a bigger jerk than the guy asking for an NDA
in the first place.

~~~
petervandijck
No, there's a cost to signing an NDA. That cost is higher for investors.

------
nyan_sandwich
Disappointed. I thought it was going to be the scoop from someone who steals
ideas for a living, but it's just another lecture that ideas are cheap.

------
krrishd
I think that if you have a good idea and are passionate about it, no one will
really take it seriously enough to stop what they are doing just to implement
your idea, which they haven't considered as much as you have to actually trust
it.

------
gourneau
Check out our web app PinkSwear.
[http://pinkyswears.herokuapp.com](http://pinkyswears.herokuapp.com)

You can pinky swear you won't steal ideas. Made with @yuvadm

------
md2be
If you are going to ask someone to sign an NDA (which is insane if the person
is a VC), go all the way and put the "remedy" in the contract. If you disclose
x, you agree to pay me Y.

------
wasd
I don't ask people to sign NDAs and I personally don't really care about them
but is there a legal reason people/VCs don't want to sign NDAs?

~~~
300bps
Imagine you invest in several companies simultaneously. You have funded
Company A who is working on something that does X. You meet with Company B,
sign an NDA and discover their idea is to also work on X. At best this will
resolve itself as a simple misunderstanding and at worst there will be
attorneys involved.

~~~
loceng
It's a smart business model ... having all of the most innovative and
disruption seekers coming to tell you their ideas - which then can help you
form your understanding of where to invest, and then invest in the best
options that come forward - and then more than likely help guide the companies
via being on the board of directors..

~~~
vdaniuk
Yes, it is a smart model. However consider that the process of the unravelling
of idea may be much more important that the data communicated about the idea
to VC. Even if founders wanted, they couldnt transmit all the data about the
idea.

------
ethanazir
So ideas are like people; and since we are all equal, your ideas have no more
value than my ideas.

------
quaffapint
So does this mean we should be leary of doing a show HN. Offline asking can
only get you so far.

------
spiritplumber
Will you? If you do I will beat you until you pass out. I've had enough of
that happen to me that I just tell this to people up front now. Hasn't cost me
any business.

------
bayesianhorse
Ideas are cheap. Execution not so much ...

------
AsymetricCom
Sounds like a bunch of BS. There are several logical flaws with the author's
arguments. One of the most fundamental is the idea that your idea is of little
value because ideas in general are "cheap" which is also something I disagree
with but that is more philosophical than practical.

There are a lot of IT firms out there that are very much in a position to
"steal ideas" by the nature of their better resources and connections, but
that's not really the point. The point is that the author has no valid
argument so that's all that really needs to be said.

What the author really should have started with is "I think I understand the
value of my idea more than anyone else is capable of realizing. Given that
assumption, then..." proceed from there.

~~~
wpietri
Would you be so kind as to name three significant businesses created by IT
firms from stolen ideas? I have never heard of this happening.

~~~
AsymetricCom
I'll do you one better and invite you to Google it yourself. Teach a man to
fish, as they say.

Perhaps you've heard of Facebook and the Winklevoss twins? Maybe you've heard
of Samsung and Apple?

~~~
xivzgrev
The extent of collaboration between Mark & Winklevoss twins was far more than
any single discussion for advice...

~~~
AsymetricCom
Oh, nevermind that.. list 3 companies.. my ass. I didn't make your roof a
rock.

