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Love to tell my horror story re: my experience dealing with a Fortune 50 company. Under a NDA til May.

We are an east coast start-up and two months into creating our tech/product a large entity in the valley found out about us. This big name invited us out and talked about buying us. Well we have zero strong connections to such people like Paul Graham, but we did reach out to our network. They said, "I don't know if you should go or not, we've never had a billion dollar company like that make such an offer."

I wish I had found this post before wasting 4k on a trip and filing a provisional patent. We're a bootstrapped start-up.

Well when we flew out/got there to demo, this Goliath treated David like crap on a shoe. They invited us to demo, but when we went to demo at their offices in the valley they were blocking our tech from working(worked perfectly throughout every place we tested in the Valley including outside their building). Then they baited us with, "We'd like to work with you, please tell us how you achieved this technological feat." We took the bait and told them our trade secret. They soon left our meeting, then came back and promptly kicked us out! Right before leaving/being shown the door, one of these not so nice big wigs from X company said, "The race is on, better hurry!"

Ok, there was no guarantee of you buying us. We were cool with that. We weren't cool with being treated like crap on shoe and then stepped on and disrespected! It's hard to fathom that X company treats the little innovator guy as they did us.

Is this the normal?




It was better for us, they didn't have engineers skilled enough to understand what we were saying and asked for a second meeting with their top notch tech people. But I've smelled something fishy and just forcefed them with top grade tech-looking bullshit under very heavy pressure. Top notch tech folks were confused, corp dev guys were pissed off, but they didn't have a nerve to ask "just repeat what did you say in the last meeting".

Then they've asked for the code and I gave them the code! We had brilliant C macro library for memory management, hash tables, list traversal, etc developed by my cofounder. Very nice piece of code, elegant, efficient and reliable. They've got all of it :-) When they came back confused I told them that I thought they want to check the clarity and quality of the code and this piece of code is quite representative. They had to specifically ask for the trade secret (and I would have refused) but again didn't have the nerve.

It was a big name in the industry, $5B yearly revenue back then.


Yeah, you got lucky

But the part about them not understanding what you did doesn't surprise me in the least


Yes, this is normal.

Turn this around, and see it from the "big wig"'s angle. They get in some guys (you) who obviously have not been around the block a few times already. More importantly, there is no attorney present and no way after the meeting to establish who said what, when, to who, in what setting.

His upside to screw you nine ways to Sunday is a big bonus. Where's his downside? Simple: none.

You cannot even name and shame as someone else suggested. Retain an attorney to properly advise you before you put names up here post-May.

Chances are the "big wigs" you met were not C-level, nor the level of management below that. If my guess there is correct, then you were not really dealing with "big wigs"; you likely were dealing with essentially middle management. The closer to middle management you get, the more prevalent this cutthroat behavior comes out. I could post a wall of text on why I personally have found this to be the case in my anecdata experience, but this response is getting long in the tooth already. At Fortune 50 levels, if you are meeting with C-level or direct reports to C-levels, there might be some mitigating factors that makes them more trustworthy, but again, I don't have the time to get into that here.

Suffice to say, when these impressive-sounding Names start dropping by, you need someone with the sales experience to qualify the opportunity. There are ways to generally suss out how serious they are about vetting your team/tech/org, mostly in the vein of making them come to you. Most middle management won't have the budgetary clout to spend anywhere close to what a Big Name will really spend (easily 5 figures and up, or an equivalent amount of staff time and expenses) doing just due diligence evaluation.


Ummm, no these two people report directly to a fairly well known name in tech.

Also, what do I have to lose in naming and shaming them when we may just as well open source our work when we tell our story.

I'm tired of being stepped on and not being able to get the right people behind & helping us!


The key is not the reporting chain as much as who has operational control of budgetary decision making. It far easier to find out who reports to whom than who really wields the check writing power, and how big a check they can write before they have to get someone else's approval.

Right now, you have yet to open source and still have the potential to out-compete the Big Name. That is worth potential income in the future. Big Name might be impressive, but there are any number of people here that can tell you from first-hand experience why Big does not necessarily mean You Shouldn't Compete With Them.

When you name and shame, your options narrow. You have no way to prove what happened, and you should get together with an attorney to find out how exposed you are to a lawsuit if you name and shame. And any potential future income can become entangled in litigation budgets if that happens.

With regards to "the right people", you got a ton of them right here on HN. Rare is the deal that cannot wait a few days longer, especially large deals (for the Corp. Dev. guy pulling the trigger on an acquisition/acquihire it is still a big deal, just not as potentially a life-changing one as for you). Take advantage of that latency to ping the hivemind here and find out different opinions you and your braintrust might not have considered yet.

If I blew up bridges every time I was stepped upon, then I wouldn't still be in business today. This happens in business; it's a very bloody game of inches that takes place over years and decades.


Thanks, but lawyers cost money and that resource is lacking for us.

We tried and tried and tried to get out to the valley and via an incubator(YC or TechStars), but all we could get to help us are local incubators. We greatly appreciate their backing, but they do not have the backgrounds/experience/networks a YC or TechStars has to thoroughly help us.

THough there are some people in this east coast town who could help us, but they do not seem receptive to. It's not like we haven't tried to connect with them, though!


Most attorneys will listen for 15-30 minutes in a free phone meeting, enough to tell you in general terms how likely you will need their expertise; that is, how much hot water you are getting yourself into. Your braintrust (incubator, mentors, advisers, board) would at least have known about that; that is basic business knowledge. Either communications has broken down badly between your braintrust and you/your team, or I'm missing critical pieces of the picture.

Your public persona is a resource to be husbanded and crafted as carefully as your codebase and/or finances. If you plan on open sourcing your code, exiting the entire sector you are operating in and never intending to come back, then there isn't much Big Name can do to you even if they felt like it, as long as your wording was careful. Go ahead in that case, and burn down that persona for that space. But never is a long, long time. And this industry is still really, really small when you look at those you want to work with in a specialty.

If you intend to continue in your specialty, then I would take some time off, decompress, and figure out what is really important to yourself. The fact that this style of arguably unethical behavior is abundant and a regular feature of the corporate landscape is already out there now, via this thread and meta-discussions reverberating out there; while it can be emotionally satisfying to divulge details, make no mistake, there will always be a cost attached. Just be certain you are willing to pay that cost.

If you have any direct competitors in your space, and your space is very small, you can mention to them that Big Name is fishing for both technical and market intelligence details by posing as potential acquirers, and to be careful what is said around them. You don't need to mention your gaffe. If the space is small enough, then that will have the effect of freezing out Big Name on any future fishing expeditions. That is likely to have a bigger, more focused effect that has direct beneficial bearing upon your activities than trying to generally name and shame them out in the open.


Thanks, so we feel based upon that meeting and all the subsequent large companies (Fortune 50 to 500) who then reached out after we have created something extremely special.

Basically it's BlueTooth/BlueTooth Audio on Steroids via the web. Sync 100s to 1000s of IP devices together via a URL to play/control audio, video & or any media in unison on all devices.

Tons of software & hardware innovation will happen in this space, we've already created a few apps using our sync technology.

We just need the right people... their networks and money behind us! We have yet to been to accomplish such and we have shouted and waved our hands telling this story to those who can help, but it falls on deaf ears.

Once and if we open source this tech, we think doing such and then the community further developing will have a big impact on any company that currently uses BlueTooth and or has their own syncing standard.

ALL I WANT TO DO IS INNOVATE AND BE FAIRLY COMPENSATED FOR IT. I feel I have a knack for it based upon my history and all noted here.


If you go the open source route, then you will likely derive revenue from consulting and support activities. Modifying the open source code for specific requirements and applications, fixing bugs for paying customers, that sort of task.

If you are more into the tech than the business angles, then you could keep it closed source, create various platforms around it, and license the platforms. The F50-500 companies have already told you their likely use cases, even big wig himself probably revealed what they want to use it for. Instead of packaging the technology unto itself, create the interface to the use case, then license that integration package as a whole unit.

If they want to sync under a WebSphere stack, hold your nose if you aren't into the enterprisey stuff, dive into J2EE, build out as complete an integration to your tech as you can, then license that entire solution. You could do an end-run around big wig's team by making it feasible to get to a solution faster than his team could by themselves, since you only have to create the integration, and they have to build and refine the tech from the ground up and then do the integration. By the time they finish (if they finish at all), you are onto the next use case, and the next integration.

If you aren't relying upon this tech to put food on the table today, then you have nothing to lose by doing much of the integration work for your customers, and bridging the gap in the business case to adopt your tech much closer to reality for the business decision makers.


Thanks, but I am not the logic coder of my team. I'm the designer & design coder only.

We could use some more dev/manpower. Everything is written in the latest javascript frameworks like Web Audio API, Node.js and other similar frameworks.

If interested or know anyone who is interested in working on what we feel is game changing, we'd love to chat.


I am not a lawyer, but sounds like you don't have much to loose. It's your calculation to make, but you are probably in a position where calling them out publicly could bring you more benefits than harm (when that NDA expires, obviously), in term of visibility and respect.

The net for society of doing that is most likely positive as you are forcing them and others to reconsider their behaviors and warning other entrepreneurs of this behavior.

There is a risk they would try to sue your startup out of existence (ie. even if they don't have cause they can attempt to drown you in legal costs), but this would bring even greater attention to the matter.


A thought: Big orgs have a hard time getting shit done. Lots of initiatives die before they even get out the door. Just because this bigwig was excited doesn't mean something will definitely come of it. Another thought is this might be a FUD play. Get you to give up so you're not threatening something else. Definitely interested to hear the story after your NDA period.


This is unfortunately more common than many people think. I worked for a startup that had gone through something similar, though perhaps not as egregious. The patents were the only thing that (barely) saved it.

As much as HN likes to hate on patents, this is a huge reason why startups should file some if you have some technology worth protecting. Most probably they won't be enough to save you anyway, but it may be better than having no recourse at all.


Yeah we filed our provisional 30 minutes prior to this meeting. It is now a patent-pending.


On a cautionary note, and while I'm not a lawyer... Any patent is at risk of invalidation, and disputes become a battle of resources. At the same time, the provisional does at least help establish your freedom to use your own invention.


They don't even need to invalidate the patent, they can just run the lawsuit out for decades and most likely get the patent holder to settle for a pittance.


Please name and shame when the NDA expires.

Preferably with the name of the not so nice bigwig.


At this stage and without backing/guidance from networks like YC, TechStars (tried both a few times) or big angel or VC firms we have nothing to lose in telling our story.

We are technologists who have a history of creating innovation that gets noticed & or a novel idea we published in 2007 has gone onto have million of users after being copied 100 or more times.

Our weak point is networking and overall connecting with people & getting the right people behind us! It's so frustrating.....


This sounds snarky but isn't my intent: your weak point is selling, which is different than networking or connecting with people.


I would say if their tech has been copied 100 times and used by millions that the problem is not sales it is monetization.

To the OP hang in there and don’t let these games get you down.


> Love to tell my horror story re: my experience dealing with a Fortune 50 company.

A couple of points:

1. Obviously this is very different from pitching to an angel investor or venture capitalist, who might be unlikely to care about your secret technology. As you discovered, it's entirely possible that BigCo's engineers were very interested in learning what you were doing so they could do likewise, ideally without having to pay you anything.

2. Courts will sometimes enforce trade-secret rights even without a written NDA, if the circumstances were such that the party receiving the information implicitly agreed to keep the information in confidence. But that can be a really tricky proposition to prove, and will vary with the jurisdiction.

3. A written NDA might or might not be of much value in a situation like this.

A) BigCo might not want to sign an NDA. That's a red flag right there, of course. BigCo might even want you to sign an agreement saying that anything you say to them is not confidential (this is not uncommon, because big companies get a lot of idea submitted "over the transom" and don't want to have to deal with lawsuits from cranks who re-invented the wheel).

B) NDAs usually have carve-outs that say that "Confidential Information" doesn't include information that was published or otherwise known to others before disclosure (or that becomes such afterwards). BUT: Under U.S. law, a specific selection or combination of individual pieces of public information can be protectable, just as Kentucky Fried Chicken's secret blend of 11 herbs and spices is (reportedly) protected as a trade secret.

C) You want to be careful to comply with any requirement in the NDA that confidential information must be disclosed or summarized in a writing that's marked "Confidential" or "Subject to Nondisclosure Agreement" or something like that, on pain of losing protection. For example, in the Convolve v. Compaq case, the computer manufacturer Compaq (now part of Hewlett-Packard) defeated a claim of misappropriation of trade secrets concerning hard-disk technology because the owner of the putative trade-secret information didn't follow up its oral disclosures with written summaries as required by the parties' non-disclosure agreement. [1]

D) Enforcing an NDA can take a lot of time and money, especially if BigCo is convinced they haven't done anything wrong. On the other hand, sometimes it can pay off, because a jury might well punish a company that it found violated an NDA. See, e.g., the 1996 case of Celeritas Technologies v. Rockwell International, where a federal-court jury in Los Angeles awarded a startup more than $57 million, and the judge then added $900,000 in attorneys' fees, because the jury found that Rockwell had breached an NDA. [2]

4. Suggestion: Even for non-secret information, an NDA might be negotiated to include the equivalent of a break-up fee. That is, even if it turns out that the secret technology wasn't a secret after all, but the receiving party didn't know the technology, then the receiving party might be required to pay the disclosing party something as payment for "show-how" (as distinct from know-how), in return for having taught the receiving party about the information, thereby saving the receiving party from the time and expense of having to find out the information on its own.

[1] http://www.cafc.uscourts.gov/images/stories/opinions-orders/...

[2] http://scholar.google.com/scholar_case?case=1681061439024444.... Disclosure: I was part of Rockwell's trial team in that case.




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