6 ms·

No I won't sign your NDA, here's why.

220 points by jplarson 14y ago

rollypolly 14y ago
In some industries, NDAs are essential. You can ruin a production by releasing important plot details before the product is released.
- JamesLeonis 14y ago
  This isn't a rant against NDAs. He carves out a point where they are actually beneficial when specific operating details are discussed. But when your "idea" is still vague, then the signer now has to navigate a minefield because of how much overlap there can be in what that "idea" could mean.
exratione 14y ago
Related: the abysmal state of IP clauses in developer contracts. This and the NDA bandwagon all stem from the same root sickness in society - the delusion that someone can own an arbitrary piece of information in the same way that they can own a physical object. http://www.exratione.com/2011/11/the-miserable-state-of-intellectual-property-clauses-in-developer-contracts.php http://www.exratione.com/2011/11/the-miserable-state-of-inte... The topic for today is the sorry state of affairs that the intellectual property behemoth has brought to contracts between developers (programmers, coders, pick your word of choice) and companies that hire developers. The standard legal boilerplate incorporated into every consulting, contract work, or full time hire paperwork I've seen in my years in the industry included one or more of the following declarations: a) All intellectual property I produce during the period of work belongs to the company, regardless of its nature, regardless of whether it has anything to do with the work I am performing for the company, and regardless of whether or not I produce it on my own time. b) All intellectual property I produce during a period of time (commonly some months) after the work ends belongs to the company. c) All intellectual property I have ever produced in my life belongs to the company, barring that which is listed in an appendix to the contract. d) I may not create intellectual property on my own time and be remunerated for it by anyone other than the company during the time I work for them. e) The onus is on me to prove that I own any of my own intellectual property. I sent back every single one of these contracts with edits to remove the obnoxious and grasping provisions, replacing them with some variant clause to say that "what I produce for you while working for you on your software is yours, and everything else is mine."
- saryant 14y ago
  FWIW, I just signed an employment agreement with a major development firm which included similar clauses. I was about to reject it and ask them to send one without such onerous restrictions when I got to the end of the section which included a large caveat "This section shall only apply to work performed on company time with company equipment," just in more legalese. As a graduating college student I've heard others getting similar wording to allow for the employee to work on personal projects outside of work and retain ownership. Maybe things are getting better?
  - rscale 14y ago
    As a counterpoint, I recently wound up refusing to sign a contract that was an absolute mess. The prospective client wanted absurd things, like for me to indemnify them against any future IP litigation, whether I infringed on a patent knowingly or not. And they wanted ownership of every piece of code I typed, according to their contract I couldn't even hit backspace unless I committed the mistake first. We never reached any middle ground. This happened months ago, and they're still looking. I assume they'll continue to have this problem, because they're trying to hire a senior level person, but they want that person to make junior level mistakes wrt to the contracts they'll sign.
    - crdoconnor 14y ago
      I've come across that contract before. I think it was actually a $20 download-a-contract-from-the-internet and they had no idea what they were actually handing me. When I pointed out what it was that it said and asked for it to be changed, they were fairly happy to comply.
      - rmc 14y ago
        Hanlon's razor. "Never attribute to malice that which is adequately explained by stupidity."
    - netdog 14y ago
      A few years ago a potential client produced a similar contract, wherein they wanted me to indemnify them against any future litigation regarding possible copyright/patent infringement. I explained my position this way: You want me to produce a work for hire, which you will own. Since you will own it, you will also own all the potential profits you may be able to derive from the work. Therefore, it is appropriate that you also own all the potential risk of losses. You are asking me to carry a share of the potential risks, but without any share of the potential profits. They decided to look for someone else.
shantanubala 14y ago
This is very anecdotal, so your experiences probably are very different (especially since I'm in Arizona, a lot of people here just aren't nearly as hacker-friendly as the Bay area). Out of the ~15-20 project ideas that people have talked to me about, I've been asked to sign an NDA 4 times. I found something interesting about the people who asked for an NDA: they weren't very good at following up. For most of the other "pitches" (I use the word pitch loosely, because I'm not a VC or anything like that -- just a college student who likes to help friends and acquaintances with projects), I'd get follow-up emails and a lot of lengthy discussions in coffee shops about the idea. The times I signed an NDA? Maybe a phone call once. Maybe a small conversation. The discussions always fizzled out. An NDA almost directly indicated (in my situations) that the person asking had a vision of grandeur without any idea of the work that would go into making that vision a reality. If the idea doesn't make me gasp when you tell me, it probably isn't worth an NDA. And the NDA always indicated that the person is just "looking for a techie guy" to crank out code. The people who asked for an NDA were never really interested in what I had to bring to the table, because it seemed like they assumed that their idea was enough to make a product regardless of the team they assembled. I'm fine if I'm not qualified to build a product (I'll be up-front about the limits of my skills, because I already have enough work!) or a good match for the team they are looking for. I run as fast as I can if I meet someone who doesn't care who they're hiring. I'd rather be rejected than work for someone who doesn't appreciate my work. If I'm going to partner with someone who isn't a hacker, I want them to at least appreciate the difference between good and bad execution on a technical level. If they can't effectively evaluate my work, the relationship is automatically dysfunctional. And that starts with the NDA -- if they prioritize the value of the "idea" over the value of the people, they are already headed in the wrong direction.
- joshu 14y ago
  > a vision of grandeur this sounds about right. "MY IDEA IS EARTHSHAKING, I can't possibly just TELL it to you. I am totally going to revolutionize the ..."
  - joshu 14y ago
    I can't believe this is getting so many upvotes. As an active angel I get emailed about 4 of these a day. Deletia, unfortunately.
joshu 14y ago
Indeed. What if you sign an NDA, and then they tell you some completely obvious idea: Are you now bound from it? Etc.
- salimmadjd 14y ago
  Some NDAs are worded to excluded any information available publicly attainable from third party or if the client makes it public.
  - joshu 14y ago
    So? I make you sign an NDA to hear my TOTALLY REVOLUTIONARY idea. You sign it. And then I tell you, we're going to do [incredibly obvious thing related to your current business]. If you then go and do it (like I said, it was obvious) I sue you for taking my idea. Oops?
babarock 14y ago
I recently turned down a freelancing contract where the client asked me to "kindly keep this confidential". Nothing legal more than this (does it have any legal validity?). The reason why I turned down the job offer is exactly because of this irrational "fear of disclosure". I am not saying that there aren't cases where NDA can come into play. But what I'm trying to mention is that, just like the author of the blog, I'm very put off by people trying to protect their ideas. My reasons are very similar to the ones mention in the article, I'll add this: By asking me not to disclose your idea, the client gives me the impression of someone undervaluing the execution part. She's establishing a framework where the "idea" is the core value and "execution" can be applied by some random code monkey she heard about through a friend of a friend; code monkeys are a dime a dozen, the "idea" is unique. Who in their right mind would want to work under these conditions? I backed out, clearly. My point is, if you have an idea, and are looking for someone to help you code something, secrecy and NDA won't make you come off good.
- jacquesm 14y ago
  > "kindly keep this confidential" Turning down freelancing contracts for such silly reasons is not going to go very far unless you are swimming in work. Really, as such requests go that's about as nicely put as I've seen it, and even if it wasn't said I would think that you would do that anyway, so where is the loss? Of course you don't go around disclosing the details of the work you do, that would make you absolutely unemployable as a freelancer. Confidentiality is assumed by default between an employer and an employee, unless you're flipping burgers. Any serious freelancer should take that to heart and if and when you do decide to talk about what's going on at some employer or business relationship please remember that it is a small world and you only get one reputation to mess up.
- paulhauggis 14y ago
  "By asking me not to disclose your idea, the client gives me the impression of someone undervaluing the execution part." This isn't my impression at all. Execution is the most important part. If you discuss the idea with someone who happens to have more resources than you do, they can execute the idea faster than you and possibly hurt your chances at gaining traction. The funny thing is, I've done just this. People have discussed their ideas on forums and I beat them to the punch and made money. This is why I know it's important to keep your idea a secret until you are very close to launching (so your competitors have at least a couple of months before they could come out with your idea). You don't really care because you are just the coder. You will get paid whether the app is a success or a failure. So it's you that isn't really taking the business aspect into consideration.
huhtenberg 14y ago
Frankly, I am getting tired of this "ideas are worthless, execution is golden" mantra. Of course, "let's build a online shop" idea is useless, but it's not really an idea to begin with. An idea that is worth discussing with others would typically include some minimal validation, an execution and marketing plan and, in general, some amount of thought put into it. Because otherwise it's not an idea, but a random brainfart. Moreover, the value of a good idea is in that extra thought that was put into it, something that is well worth a bit of protection. This is not an abstract MBA point. I am involved with a project that can be fully described in just 4 words, and these are plenty sufficient to tip off the competition and loose the first-to-market advantage. Should we not have been careful with how we talked to other people about the idea, we might've lost it to the established players already. (edit) I am not disagreeing that a lot of people asking for an NDA upfront are lunatics, because they are. It's the black and white take on the value of ideas that I have an issue with.
- shasta 14y ago
  Is one of the four words "awesome"? But in seriousness, I agree with you that in many endeavors the ideas are as important as the execution. Hell, in software, much of good execution is just good ideas on a smaller scale.
- jaysonelliot 14y ago
  If this idea that needs protection can be fully described in just four words, what, in your opinion, has prevented the "established players" from coming up with this idea already?
  - huhtenberg 14y ago
    Lack of lateral thinking skills? Not fully understanding niche segments on a larger market, segments that add up to something substantial? Plenty of reasons.
  - j_baker 14y ago
    "A design is not finished when you have nothing left to add. It is finished when you have nothing left to take out." I'd imagine narrowing the idea down to 4 words took a lot of work.
TomGullen 14y ago
The thing that confuses me about all this is that an NDA is a non DISCLOSURE agreement, not a non COMPETE agreement. Therefore and NDA is pretty worthless when it's at the 'idea's stage. Most people seem to think it will prevent you telling anyone about it AND copying it. Or am I missing something?
- mdda 14y ago
  If you built the idea for yourself, you'd have a hard time launching it on the web without disclosing the idea to someone (i.e. any prospective customer).
ditojim 14y ago
great. we'll never be able to do business with you since we can't disclose information about our customers to 3rd parties without one. way to limit your options.
- greiskul 14y ago
  The type of people this article talks about don't have any customers yet.
BobertK 14y ago
I love this: boy it's true... It’s a well documented phenomenon how idea-havin’ first timers just need a programmer to bring their vision to life, as though the idea is somehow half the battle (or 90%, as folks like me often get offered sweat equity deals–10% seems to be a popular number).
- emp_ 14y ago
  Not exclusive to first timers, I have a friend that for 10+ years shows every 1-2 years with this game changing idea that just needs a 5-10% "just convert this 1-page spec into code" founder.
- paulhauggis 14y ago
  The idea is half the battle. If it wasn't, you could write a hello world app and make a million dollars. I'm a developer and from my experience, coding=50%, timing+idea=50%. The reason most idea guys are worthless isn't because ideas are worthless. It's because they usually only have a very general picture (I want to write a Facebook clone that does X) when the details are what really matter.
  - BobertK 14y ago
    The idea is huge. The vision and ability to execute it is huger. Point is I won't even work with people who think think "I just need a programmer" - they will not value your contributions and try to chisel you out of as much a s they can. After all, you're just a programmer, THEY had the idea. This w/o getting into the fact that: product == original idea == never happens ....
nostromo 14y ago
I could put it in a single sentence: because I don't want to increase my exposure to lawsuits.
alasano 14y ago
I have a friend and partner who is building the back-end to a project I talked to him about. I presented every aspect of it, built a comprehensive wireframe and I'm working on the design. He has plenty of work and talent, all I tried to do is explain myself clearly and try to spark his curiosity a bit. Then I built something on my side to be able to present to him and show that I'm also bringing something to the table. I don't want him to feel at any time as if he's working for me rather than with me. Of course it helps that for him the task is <britishaccent>"Really fuckin' easy!"</britishaccent>. I'd deal the same way with someone I don't know as well and I think that openness and equally perceived work load are key elements to a successful working relationship where you might feel as if the other has a more useful skill set.
joshfraser 14y ago
I don't sign an NDA unless there's something I want on the other side. For example, I sign them all the time with potential customers before they'll tell me their traffic numbers. In this case, I skim and sign. The same goes for potential partners who want to share their roadmap or confidential business information. I've also asked people to sign an NDA before sharing financials. No, I won't sign an NDA to hear your business idea, but if it's the only thing between me and the information I want, I'll keep my thoughts about NDAs to myself and just sign it.
sjwright 14y ago
Not only wouldn't I sign an NDA, I've also started getting very careful about when I might contribute my own wisdom and experience. Far too often, I've found those sorts of meetings to be as much about trolling for free advice as anything. I explain to these people that consulting is one of my services, and the price is on my rate card.
- wpietri 14y ago
  Personally, I've always been happy to give modest amounts of free advice. My standard rule when I was consulting was that I was happy to meet with anybody for lunch. The overhead of signing a contract isn't worth it for an hour or two, and it was fine free advertising. It's no bad thing to have a lot of people know you as that smart person who really helped them out in a pinch.
angrycoder 14y ago
When I am asked to sign an NDA or non-compete contract I explain to the client that I understand that their ideas have value, but so does my ability to work once their project is complete. I tell them I will read over their contract but will not sign it unless they agree to pay me 70% of my billing rate for 30 hours per week until the NDA/non-compete expires.
salimmadjd 14y ago
I do share the OP's sentiment and have refused my share of NDAs and have lost potential clients. That said, NDAs are important when protecting one's patent prior to filing. So if you have something novel that you want to patent, be sure to get NDAs before disclosing it.
desireco42 14y ago
My rule was to ask people who ask for NDA, yes, I will sign it, but, you have to write EXACTLY what ideas are new and never seen before, explain what is protected in very specific terms and how this can't be found elsewhere. If it can, then we don't need NDA. Most people will send you NDA they found googling online and expect you to honor it and obey, even though they most likely didn't read it. I agree with author of this article fully and completely. People who wrote even small business plan usually don't ask for NDA, yet they already have something tangible.
- evincarofautumn 14y ago
  An example of the “googling…didn’t read” thing: I once signed an NDA that barred several common means of transmitting information about a project, but made no blanket prohibitions—so walkie-talkies, ham radios, telegraphs, semaphore, Morse transmitted by flashlight, &c. were all perfectly admissible. ;)
  - desireco42 14y ago
    :)
suresk 14y ago
Unless things have changed since I was an intern at a VC fund almost a decade ago, VCs rarely sign NDAs, especially before due-diligence is complete. There are a lot of good reasons for that, and I've since found it a good personal policy when working with potential clients - the legal liability incurred by signing an NDA that covers something you don't really know the scope of isn't usually worth it. I hate to beat the 'all ideas are worthless, only implementation matters' drum, but a lot of ideas are pretty worthless. If I had a dollar for every time someone tried to get me to sign an NDA for an idea that was literally "Build a web page that we can charge people to list their website on.", well, I'd have a lot of dollars. People are generally a lot less clever thank they think they are. That said, I don't think it is too terrible to sign a limited-scope NDA once you have a general idea of what information you might be coming into contact with and are ready to actually start working. There are very few ideas that are so powerful that you can't at least have some high-level discussion about prior to signing an NDA, but there are certainly a lot of details worth protecting in some cases.
pygorex 14y ago
An NDA really is a "poor man's patent". But thinking in term of patents can be useful. Recently I've determined to only sign NDAs that are severable, that only cover the patentable aspects of a business. If it isn't patentable it isn't NDA-able. Case in point: last year I took on a project for a personal fitness trainer looking to launch a web app where users could enter their weight, height, activity level and exercise goals (lose weight, build muscle, etc). With this input the app would return meal plans, exercise routines and supplements schedules. Nothing I've mentioned so far is patentable - these features are obvious to anyone who has tried to lose weight and already exist online. So what was the patentable bit? Well, the client had devised an algorithm that worked the inputs and emitted the diet recommendations & exercise plans. That he had created in an Excel spreadsheet. And I am more than happy to keep that confidential under the NDA.
franze 14y ago
once upon a time i signed an NDA about an NDA, it was probably the second most stupid thing i ever signed (the first one was a "unternehmensgründerförderungsvereinbarung"). nowadays i only sign NDAs that are shorter than one page, prohibit one or two specific actions and have a fixed expiration date (not to far in the future).
ctdonath 14y ago
An NDA should also be dependent upon the signer being compensated in some non-trivial way, as in a condition of being hired or part of terms of a sale. Requiring one prior to that is highly suspect, and signing one, I say, is highly inappropriate. Great point. Had an odd variant: One of my students, enamored of some idea involving the then-new iPad, wanted me involved I his idea but would not give any hints until I signed an NDA. Not one to make spontaneous commitments, I said I'd look over the NDA and get back to him next class about it. He never came back to class. Point: if you're not even going to bother passing my class (much less assuring serious compensation for signing an NDA blind), no I won't sign.
JVIDEL 14y ago
I been at both sides of the table, had every idiot out there with TNFB ("the next facebook") ask me to sign a poorly written NDA before sharing their half-asses ideas. But it stops being funny when you consider how much it would suck to get not only your idea but your entire plan for a startup stolen. I heard this story at TheFunded about how a certain well-known startup began in that way. The original founders pitched it to some investors who liked it, but had doubts about the team, so what they do? they give everything (biz plan, doc, mockups, etc) to their EiRs and they launch an exact copy of it, sans the domain name for obvious reasons. For me it was just another story, until I talked to one of the investors at that fund and instead of flat out denying it he said "how do you know that?" Consider that whatever verbal contract you got with investors or other entrepreneurs is not legally valid, so if they actually copy your ideas you are SOL.
davemel37 14y ago
Quite Frankly, I don't get what the big deal is in signing an NDA. If you believe the idea is in the public domain or the person with the idea can't execute, whats the big deal? The paper is basically worthless in both instances. Not wanting to sign an NDA is probably more about the way it makes you feel that someone thought of something so good they wont share without legal protection. The feeling that this guy thinks he is SO MUCH BETTER THAN YOU that you must sign a contract for permission for him to show you up with his latest spark of genius. This is about ego, about flexing muscles and seeing who can best the next bloke. Bottom line, I most likely wont ever ask you to sign an NDA and probably wont sign yours either, but lets be honest, it is about how you make me feel, not about protecting you or me.
- anandkulkarni 14y ago
  If the person can't execute the idea, you're still legally bound not to disclose it yourself, which renders you legally liable. Later, you may be sued because you pursue something superficially similar and the other party believes they have grounds because you signed an NDA.
  - davemel37 14y ago
    I'd be fascinated to learn of one such experience. I'm not saying it cant happen, I am just saying, people demanding to or not wanting to sign NDA's over sharing just ideas revolves much more around ego than it does around practicality.
Joe_Knapp 14y ago
Many people fail to realize that NDA's are only valuable if both parties are in the same country. Its impracticable to enforce otherwise.
idan 14y ago
Best line I ever heard about NDA's (not mine): "If you are capable of broaching your NDA in a couple of sentences, you had nothing NDA'able there in the first place." I heard it at an entrepreneurship panel in 2004, so I don't remember the speaker. I think it might have been somebody from Broadcom. Interestingly, the people who (misguidedly) asked me to sign an NDA are usually receptive to this explanation when I tell them why I won't sign their NDA.
- espeed 14y ago
  Broaching or breaching? -- the line might have been either "broaching your idea" or "breaching your NDA".
nirvana 14y ago
I think its time to stop signing NDAs on job interviews too. (Is anyone still doing this?) I guessed that was what the article was about before I read it. The article is good, and I agree with all the points. But I'll go further. Realistically if there's some piece of information that needs to be kept secret, and that piece of information, if released, would significantly damage your business, there's no way a startup is going to reveal that information in an interview with a job candidate. The reason is, even with and NDA, the info getting out would do the damage long before they might be able to enforce the NDA. Thus NDAs are essentially pointless on Job interviews. Back in the last decade, when I was still willing to work for others for a salary, I would refuse to sign NDAs that had terms that were too onerous (like many companies had a combo NDA & IP assignment, that they'd ask me to sign on interviews! Others had terms in the NDA subjecting me to potential audits, including inspection of my living space, for the next 12 months!) I don't know what common practice out there is, but its time for job seekers to not sign NDAs. In fact, I think being asked to sign an NDA, is a good sign that the people running the company are either of the "idea is %90" type or doing it just out of tradition. I think most of the NDAs I was asked to sign on interviews were out of tradition-- somebody back in the day, made off with a customer list, so now its "best practices" to have candidates sign and NDA. But this is a big clue itself: It tells you management just mindlessly follows "Best practices" without thinking about them and applying them intelligently. That tells you something about how... nimble... management is going to be (and whether they're ready to run a startup.) Many of the startups that failed in my experience-- second only to fights between the cofounders and bad VC advice-- failed because they were started by people who'd gotten lucky and thought that meant they were brilliant. (EG: worked at Microsoft or Amazon at the right time and made a lot from their options, but didn't really actually know much about running a business.) I remember, a decade ago, having such a brilliant idea that I asked my friends to sign these stupid NDAs I'd drawn up before they got the privilege of "Advising" me on it. It was absurd. I think I realized it almost right after, and I stopped doing that. Since then, I just don't talk about what I'm doing-- mostly because, I'd rather do something, then talk about it, and if you've not shipped it feels like bragging about what you're gonna do-- we all know the guy whose "gonna do" this thing that's so great. Don't want to be that guy. If your business or startup is worth working for, it doesn't need candidates to sign NDAs. Asking them to implies you're just an idea.
wccrawford 14y ago
I once refused to sign a contract that was basically an NDA, but not labeled as such. It had a clause that said if I leaked information about the project and the project failed, I'd be liable for all damages. When I refused to sign it, the owner started screaming at me that I was trying to sabotage his business, and I'd sign it if I wasn't. I refused to sign and left. Later that day, I returned with their CD with all their source code. They had lent me to the CD to determine if I'd be able to do what they wanted. I didn't have to sign anything to get that CD, and they didn't ask for it back when I left. It was quite an eye-opener for me, and I'm vary wary of NDAs to this day. At the very least, they need to have a termination date and be very specific about what they cover.
chrisbennet 14y ago
Once when I was asked for an NDA, I stood up, stuck out my hand (to shake) and said "THIS is my NDA." I got the contract.
chrisbennet 14y ago
"I have this idea for an awesone house design. If you build it I will cut you in for half the profits!"
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220 points by jplarson 14y ago

In some industries, NDAs are essential. You can ruin a production by releasing important plot details before the product is released.

JamesLeonis 14y ago
This isn't a rant against NDAs. He carves out a point where they are actually beneficial when specific operating details are discussed. But when your "idea" is still vague, then the signer now has to navigate a minefield because of how much overlap there can be in what that "idea" could mean.

exratione 14y ago

Related: the abysmal state of IP clauses in developer contracts. This and the NDA bandwagon all stem from the same root sickness in society - the delusion that someone can own an arbitrary piece of information in the same way that they can own a physical object. http://www.exratione.com/2011/11/the-miserable-state-of-intellectual-property-clauses-in-developer-contracts.php http://www.exratione.com/2011/11/the-miserable-state-of-inte... The topic for today is the sorry state of affairs that the intellectual property behemoth has brought to contracts between developers (programmers, coders, pick your word of choice) and companies that hire developers. The standard legal boilerplate incorporated into every consulting, contract work, or full time hire paperwork I've seen in my years in the industry included one or more of the following declarations: a) All intellectual property I produce during the period of work belongs to the company, regardless of its nature, regardless of whether it has anything to do with the work I am performing for the company, and regardless of whether or not I produce it on my own time. b) All intellectual property I produce during a period of time (commonly some months) after the work ends belongs to the company. c) All intellectual property I have ever produced in my life belongs to the company, barring that which is listed in an appendix to the contract. d) I may not create intellectual property on my own time and be remunerated for it by anyone other than the company during the time I work for them. e) The onus is on me to prove that I own any of my own intellectual property. I sent back every single one of these contracts with edits to remove the obnoxious and grasping provisions, replacing them with some variant clause to say that "what I produce for you while working for you on your software is yours, and everything else is mine."

saryant 14y ago
FWIW, I just signed an employment agreement with a major development firm which included similar clauses. I was about to reject it and ask them to send one without such onerous restrictions when I got to the end of the section which included a large caveat "This section shall only apply to work performed on company time with company equipment," just in more legalese. As a graduating college student I've heard others getting similar wording to allow for the employee to work on personal projects outside of work and retain ownership. Maybe things are getting better?
- rscale 14y ago
  As a counterpoint, I recently wound up refusing to sign a contract that was an absolute mess. The prospective client wanted absurd things, like for me to indemnify them against any future IP litigation, whether I infringed on a patent knowingly or not. And they wanted ownership of every piece of code I typed, according to their contract I couldn't even hit backspace unless I committed the mistake first. We never reached any middle ground. This happened months ago, and they're still looking. I assume they'll continue to have this problem, because they're trying to hire a senior level person, but they want that person to make junior level mistakes wrt to the contracts they'll sign.
  - crdoconnor 14y ago
    I've come across that contract before. I think it was actually a $20 download-a-contract-from-the-internet and they had no idea what they were actually handing me. When I pointed out what it was that it said and asked for it to be changed, they were fairly happy to comply.
    - rmc 14y ago
      Hanlon's razor. "Never attribute to malice that which is adequately explained by stupidity."
  - netdog 14y ago
    A few years ago a potential client produced a similar contract, wherein they wanted me to indemnify them against any future litigation regarding possible copyright/patent infringement. I explained my position this way: You want me to produce a work for hire, which you will own. Since you will own it, you will also own all the potential profits you may be able to derive from the work. Therefore, it is appropriate that you also own all the potential risk of losses. You are asking me to carry a share of the potential risks, but without any share of the potential profits. They decided to look for someone else.

shantanubala 14y ago

This is very anecdotal, so your experiences probably are very different (especially since I'm in Arizona, a lot of people here just aren't nearly as hacker-friendly as the Bay area). Out of the ~15-20 project ideas that people have talked to me about, I've been asked to sign an NDA 4 times. I found something interesting about the people who asked for an NDA: they weren't very good at following up. For most of the other "pitches" (I use the word pitch loosely, because I'm not a VC or anything like that -- just a college student who likes to help friends and acquaintances with projects), I'd get follow-up emails and a lot of lengthy discussions in coffee shops about the idea. The times I signed an NDA? Maybe a phone call once. Maybe a small conversation. The discussions always fizzled out. An NDA almost directly indicated (in my situations) that the person asking had a vision of grandeur without any idea of the work that would go into making that vision a reality. If the idea doesn't make me gasp when you tell me, it probably isn't worth an NDA. And the NDA always indicated that the person is just "looking for a techie guy" to crank out code. The people who asked for an NDA were never really interested in what I had to bring to the table, because it seemed like they assumed that their idea was enough to make a product regardless of the team they assembled. I'm fine if I'm not qualified to build a product (I'll be up-front about the limits of my skills, because I already have enough work!) or a good match for the team they are looking for. I run as fast as I can if I meet someone who doesn't care who they're hiring. I'd rather be rejected than work for someone who doesn't appreciate my work. If I'm going to partner with someone who isn't a hacker, I want them to at least appreciate the difference between good and bad execution on a technical level. If they can't effectively evaluate my work, the relationship is automatically dysfunctional. And that starts with the NDA -- if they prioritize the value of the "idea" over the value of the people, they are already headed in the wrong direction.

joshu 14y ago
> a vision of grandeur this sounds about right. "MY IDEA IS EARTHSHAKING, I can't possibly just TELL it to you. I am totally going to revolutionize the ..."
- joshu 14y ago
  I can't believe this is getting so many upvotes. As an active angel I get emailed about 4 of these a day. Deletia, unfortunately.

joshu 14y ago

Indeed. What if you sign an NDA, and then they tell you some completely obvious idea: Are you now bound from it? Etc.

salimmadjd 14y ago
Some NDAs are worded to excluded any information available publicly attainable from third party or if the client makes it public.
- joshu 14y ago
  So? I make you sign an NDA to hear my TOTALLY REVOLUTIONARY idea. You sign it. And then I tell you, we're going to do [incredibly obvious thing related to your current business]. If you then go and do it (like I said, it was obvious) I sue you for taking my idea. Oops?

babarock 14y ago

I recently turned down a freelancing contract where the client asked me to "kindly keep this confidential". Nothing legal more than this (does it have any legal validity?). The reason why I turned down the job offer is exactly because of this irrational "fear of disclosure". I am not saying that there aren't cases where NDA can come into play. But what I'm trying to mention is that, just like the author of the blog, I'm very put off by people trying to protect their ideas. My reasons are very similar to the ones mention in the article, I'll add this: By asking me not to disclose your idea, the client gives me the impression of someone undervaluing the execution part. She's establishing a framework where the "idea" is the core value and "execution" can be applied by some random code monkey she heard about through a friend of a friend; code monkeys are a dime a dozen, the "idea" is unique. Who in their right mind would want to work under these conditions? I backed out, clearly. My point is, if you have an idea, and are looking for someone to help you code something, secrecy and NDA won't make you come off good.

jacquesm 14y ago
> "kindly keep this confidential" Turning down freelancing contracts for such silly reasons is not going to go very far unless you are swimming in work. Really, as such requests go that's about as nicely put as I've seen it, and even if it wasn't said I would think that you would do that anyway, so where is the loss? Of course you don't go around disclosing the details of the work you do, that would make you absolutely unemployable as a freelancer. Confidentiality is assumed by default between an employer and an employee, unless you're flipping burgers. Any serious freelancer should take that to heart and if and when you do decide to talk about what's going on at some employer or business relationship please remember that it is a small world and you only get one reputation to mess up.
paulhauggis 14y ago
"By asking me not to disclose your idea, the client gives me the impression of someone undervaluing the execution part." This isn't my impression at all. Execution is the most important part. If you discuss the idea with someone who happens to have more resources than you do, they can execute the idea faster than you and possibly hurt your chances at gaining traction. The funny thing is, I've done just this. People have discussed their ideas on forums and I beat them to the punch and made money. This is why I know it's important to keep your idea a secret until you are very close to launching (so your competitors have at least a couple of months before they could come out with your idea). You don't really care because you are just the coder. You will get paid whether the app is a success or a failure. So it's you that isn't really taking the business aspect into consideration.

huhtenberg 14y ago

Frankly, I am getting tired of this "ideas are worthless, execution is golden" mantra. Of course, "let's build a online shop" idea is useless, but it's not really an idea to begin with. An idea that is worth discussing with others would typically include some minimal validation, an execution and marketing plan and, in general, some amount of thought put into it. Because otherwise it's not an idea, but a random brainfart. Moreover, the value of a good idea is in that extra thought that was put into it, something that is well worth a bit of protection. This is not an abstract MBA point. I am involved with a project that can be fully described in just 4 words, and these are plenty sufficient to tip off the competition and loose the first-to-market advantage. Should we not have been careful with how we talked to other people about the idea, we might've lost it to the established players already. (edit) I am not disagreeing that a lot of people asking for an NDA upfront are lunatics, because they are. It's the black and white take on the value of ideas that I have an issue with.

shasta 14y ago
Is one of the four words "awesome"? But in seriousness, I agree with you that in many endeavors the ideas are as important as the execution. Hell, in software, much of good execution is just good ideas on a smaller scale.
jaysonelliot 14y ago
If this idea that needs protection can be fully described in just four words, what, in your opinion, has prevented the "established players" from coming up with this idea already?
- huhtenberg 14y ago
  Lack of lateral thinking skills? Not fully understanding niche segments on a larger market, segments that add up to something substantial? Plenty of reasons.
- j_baker 14y ago
  "A design is not finished when you have nothing left to add. It is finished when you have nothing left to take out." I'd imagine narrowing the idea down to 4 words took a lot of work.

TomGullen 14y ago

The thing that confuses me about all this is that an NDA is a non DISCLOSURE agreement, not a non COMPETE agreement. Therefore and NDA is pretty worthless when it's at the 'idea's stage. Most people seem to think it will prevent you telling anyone about it AND copying it. Or am I missing something?

mdda 14y ago
If you built the idea for yourself, you'd have a hard time launching it on the web without disclosing the idea to someone (i.e. any prospective customer).

ditojim 14y ago

great. we'll never be able to do business with you since we can't disclose information about our customers to 3rd parties without one. way to limit your options.

greiskul 14y ago
The type of people this article talks about don't have any customers yet.

BobertK 14y ago

I love this: boy it's true... It’s a well documented phenomenon how idea-havin’ first timers just need a programmer to bring their vision to life, as though the idea is somehow half the battle (or 90%, as folks like me often get offered sweat equity deals–10% seems to be a popular number).

emp_ 14y ago
Not exclusive to first timers, I have a friend that for 10+ years shows every 1-2 years with this game changing idea that just needs a 5-10% "just convert this 1-page spec into code" founder.
paulhauggis 14y ago
The idea is half the battle. If it wasn't, you could write a hello world app and make a million dollars. I'm a developer and from my experience, coding=50%, timing+idea=50%. The reason most idea guys are worthless isn't because ideas are worthless. It's because they usually only have a very general picture (I want to write a Facebook clone that does X) when the details are what really matter.
- BobertK 14y ago
  The idea is huge. The vision and ability to execute it is huger. Point is I won't even work with people who think think "I just need a programmer" - they will not value your contributions and try to chisel you out of as much a s they can. After all, you're just a programmer, THEY had the idea. This w/o getting into the fact that: product == original idea == never happens ....

nostromo 14y ago

I could put it in a single sentence: because I don't want to increase my exposure to lawsuits.

alasano 14y ago

I have a friend and partner who is building the back-end to a project I talked to him about. I presented every aspect of it, built a comprehensive wireframe and I'm working on the design. He has plenty of work and talent, all I tried to do is explain myself clearly and try to spark his curiosity a bit. Then I built something on my side to be able to present to him and show that I'm also bringing something to the table. I don't want him to feel at any time as if he's working for me rather than with me. Of course it helps that for him the task is <britishaccent>"Really fuckin' easy!"</britishaccent>. I'd deal the same way with someone I don't know as well and I think that openness and equally perceived work load are key elements to a successful working relationship where you might feel as if the other has a more useful skill set.

joshfraser 14y ago

I don't sign an NDA unless there's something I want on the other side. For example, I sign them all the time with potential customers before they'll tell me their traffic numbers. In this case, I skim and sign. The same goes for potential partners who want to share their roadmap or confidential business information. I've also asked people to sign an NDA before sharing financials. No, I won't sign an NDA to hear your business idea, but if it's the only thing between me and the information I want, I'll keep my thoughts about NDAs to myself and just sign it.

sjwright 14y ago

Not only wouldn't I sign an NDA, I've also started getting very careful about when I might contribute my own wisdom and experience. Far too often, I've found those sorts of meetings to be as much about trolling for free advice as anything. I explain to these people that consulting is one of my services, and the price is on my rate card.

wpietri 14y ago
Personally, I've always been happy to give modest amounts of free advice. My standard rule when I was consulting was that I was happy to meet with anybody for lunch. The overhead of signing a contract isn't worth it for an hour or two, and it was fine free advertising. It's no bad thing to have a lot of people know you as that smart person who really helped them out in a pinch.

angrycoder 14y ago

When I am asked to sign an NDA or non-compete contract I explain to the client that I understand that their ideas have value, but so does my ability to work once their project is complete. I tell them I will read over their contract but will not sign it unless they agree to pay me 70% of my billing rate for 30 hours per week until the NDA/non-compete expires.

salimmadjd 14y ago

I do share the OP's sentiment and have refused my share of NDAs and have lost potential clients. That said, NDAs are important when protecting one's patent prior to filing. So if you have something novel that you want to patent, be sure to get NDAs before disclosing it.

desireco42 14y ago

My rule was to ask people who ask for NDA, yes, I will sign it, but, you have to write EXACTLY what ideas are new and never seen before, explain what is protected in very specific terms and how this can't be found elsewhere. If it can, then we don't need NDA. Most people will send you NDA they found googling online and expect you to honor it and obey, even though they most likely didn't read it. I agree with author of this article fully and completely. People who wrote even small business plan usually don't ask for NDA, yet they already have something tangible.

evincarofautumn 14y ago
An example of the “googling…didn’t read” thing: I once signed an NDA that barred several common means of transmitting information about a project, but made no blanket prohibitions—so walkie-talkies, ham radios, telegraphs, semaphore, Morse transmitted by flashlight, &c. were all perfectly admissible. ;)
- desireco42 14y ago
  :)

suresk 14y ago

Unless things have changed since I was an intern at a VC fund almost a decade ago, VCs rarely sign NDAs, especially before due-diligence is complete. There are a lot of good reasons for that, and I've since found it a good personal policy when working with potential clients - the legal liability incurred by signing an NDA that covers something you don't really know the scope of isn't usually worth it. I hate to beat the 'all ideas are worthless, only implementation matters' drum, but a lot of ideas are pretty worthless. If I had a dollar for every time someone tried to get me to sign an NDA for an idea that was literally "Build a web page that we can charge people to list their website on.", well, I'd have a lot of dollars. People are generally a lot less clever thank they think they are. That said, I don't think it is too terrible to sign a limited-scope NDA once you have a general idea of what information you might be coming into contact with and are ready to actually start working. There are very few ideas that are so powerful that you can't at least have some high-level discussion about prior to signing an NDA, but there are certainly a lot of details worth protecting in some cases.

pygorex 14y ago

An NDA really is a "poor man's patent". But thinking in term of patents can be useful. Recently I've determined to only sign NDAs that are severable, that only cover the patentable aspects of a business. If it isn't patentable it isn't NDA-able. Case in point: last year I took on a project for a personal fitness trainer looking to launch a web app where users could enter their weight, height, activity level and exercise goals (lose weight, build muscle, etc). With this input the app would return meal plans, exercise routines and supplements schedules. Nothing I've mentioned so far is patentable - these features are obvious to anyone who has tried to lose weight and already exist online. So what was the patentable bit? Well, the client had devised an algorithm that worked the inputs and emitted the diet recommendations & exercise plans. That he had created in an Excel spreadsheet. And I am more than happy to keep that confidential under the NDA.

franze 14y ago

once upon a time i signed an NDA about an NDA, it was probably the second most stupid thing i ever signed (the first one was a "unternehmensgründerförderungsvereinbarung"). nowadays i only sign NDAs that are shorter than one page, prohibit one or two specific actions and have a fixed expiration date (not to far in the future).

ctdonath 14y ago

An NDA should also be dependent upon the signer being compensated in some non-trivial way, as in a condition of being hired or part of terms of a sale. Requiring one prior to that is highly suspect, and signing one, I say, is highly inappropriate. Great point. Had an odd variant: One of my students, enamored of some idea involving the then-new iPad, wanted me involved I his idea but would not give any hints until I signed an NDA. Not one to make spontaneous commitments, I said I'd look over the NDA and get back to him next class about it. He never came back to class. Point: if you're not even going to bother passing my class (much less assuring serious compensation for signing an NDA blind), no I won't sign.

JVIDEL 14y ago

I been at both sides of the table, had every idiot out there with TNFB ("the next facebook") ask me to sign a poorly written NDA before sharing their half-asses ideas. But it stops being funny when you consider how much it would suck to get not only your idea but your entire plan for a startup stolen. I heard this story at TheFunded about how a certain well-known startup began in that way. The original founders pitched it to some investors who liked it, but had doubts about the team, so what they do? they give everything (biz plan, doc, mockups, etc) to their EiRs and they launch an exact copy of it, sans the domain name for obvious reasons. For me it was just another story, until I talked to one of the investors at that fund and instead of flat out denying it he said "how do you know that?" Consider that whatever verbal contract you got with investors or other entrepreneurs is not legally valid, so if they actually copy your ideas you are SOL.

davemel37 14y ago

Quite Frankly, I don't get what the big deal is in signing an NDA. If you believe the idea is in the public domain or the person with the idea can't execute, whats the big deal? The paper is basically worthless in both instances. Not wanting to sign an NDA is probably more about the way it makes you feel that someone thought of something so good they wont share without legal protection. The feeling that this guy thinks he is SO MUCH BETTER THAN YOU that you must sign a contract for permission for him to show you up with his latest spark of genius. This is about ego, about flexing muscles and seeing who can best the next bloke. Bottom line, I most likely wont ever ask you to sign an NDA and probably wont sign yours either, but lets be honest, it is about how you make me feel, not about protecting you or me.

anandkulkarni 14y ago
If the person can't execute the idea, you're still legally bound not to disclose it yourself, which renders you legally liable. Later, you may be sued because you pursue something superficially similar and the other party believes they have grounds because you signed an NDA.
- davemel37 14y ago
  I'd be fascinated to learn of one such experience. I'm not saying it cant happen, I am just saying, people demanding to or not wanting to sign NDA's over sharing just ideas revolves much more around ego than it does around practicality.

Joe_Knapp 14y ago

Many people fail to realize that NDA's are only valuable if both parties are in the same country. Its impracticable to enforce otherwise.

idan 14y ago

Best line I ever heard about NDA's (not mine): "If you are capable of broaching your NDA in a couple of sentences, you had nothing NDA'able there in the first place." I heard it at an entrepreneurship panel in 2004, so I don't remember the speaker. I think it might have been somebody from Broadcom. Interestingly, the people who (misguidedly) asked me to sign an NDA are usually receptive to this explanation when I tell them why I won't sign their NDA.

espeed 14y ago
Broaching or breaching? -- the line might have been either "broaching your idea" or "breaching your NDA".

nirvana 14y ago

I think its time to stop signing NDAs on job interviews too. (Is anyone still doing this?) I guessed that was what the article was about before I read it. The article is good, and I agree with all the points. But I'll go further. Realistically if there's some piece of information that needs to be kept secret, and that piece of information, if released, would significantly damage your business, there's no way a startup is going to reveal that information in an interview with a job candidate. The reason is, even with and NDA, the info getting out would do the damage long before they might be able to enforce the NDA. Thus NDAs are essentially pointless on Job interviews. Back in the last decade, when I was still willing to work for others for a salary, I would refuse to sign NDAs that had terms that were too onerous (like many companies had a combo NDA & IP assignment, that they'd ask me to sign on interviews! Others had terms in the NDA subjecting me to potential audits, including inspection of my living space, for the next 12 months!) I don't know what common practice out there is, but its time for job seekers to not sign NDAs. In fact, I think being asked to sign an NDA, is a good sign that the people running the company are either of the "idea is %90" type or doing it just out of tradition. I think most of the NDAs I was asked to sign on interviews were out of tradition-- somebody back in the day, made off with a customer list, so now its "best practices" to have candidates sign and NDA. But this is a big clue itself: It tells you management just mindlessly follows "Best practices" without thinking about them and applying them intelligently. That tells you something about how... nimble... management is going to be (and whether they're ready to run a startup.) Many of the startups that failed in my experience-- second only to fights between the cofounders and bad VC advice-- failed because they were started by people who'd gotten lucky and thought that meant they were brilliant. (EG: worked at Microsoft or Amazon at the right time and made a lot from their options, but didn't really actually know much about running a business.) I remember, a decade ago, having such a brilliant idea that I asked my friends to sign these stupid NDAs I'd drawn up before they got the privilege of "Advising" me on it. It was absurd. I think I realized it almost right after, and I stopped doing that. Since then, I just don't talk about what I'm doing-- mostly because, I'd rather do something, then talk about it, and if you've not shipped it feels like bragging about what you're gonna do-- we all know the guy whose "gonna do" this thing that's so great. Don't want to be that guy. If your business or startup is worth working for, it doesn't need candidates to sign NDAs. Asking them to implies you're just an idea.

wccrawford 14y ago

I once refused to sign a contract that was basically an NDA, but not labeled as such. It had a clause that said if I leaked information about the project and the project failed, I'd be liable for all damages. When I refused to sign it, the owner started screaming at me that I was trying to sabotage his business, and I'd sign it if I wasn't. I refused to sign and left. Later that day, I returned with their CD with all their source code. They had lent me to the CD to determine if I'd be able to do what they wanted. I didn't have to sign anything to get that CD, and they didn't ask for it back when I left. It was quite an eye-opener for me, and I'm vary wary of NDAs to this day. At the very least, they need to have a termination date and be very specific about what they cover.

chrisbennet 14y ago

Once when I was asked for an NDA, I stood up, stuck out my hand (to shake) and said "THIS is my NDA." I got the contract.

chrisbennet 14y ago

"I have this idea for an awesone house design. If you build it I will cut you in for half the profits!"

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