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The Cult of the NDA
Anonymous Coward writes "After looking at hundreds of business plans during the tech boom of the late 1990's, and starting my own company two years ago, I've long been bothered by the near obsession with secrecy shown by many tech startups. This is especially striking considering how few startups are actually pursuing unique ideas. I finally wrote an article about this, The Cult of the NDA, where I argue that too much secrecy can actually hurt a company's chances. Open-source startups, anyone?"
It's called a bluff. By denying something, changing the topic, etc. you can make people think you have something. It's comparable to taking the 5th at trial. People KNOW what's going on, but it can't be legally used for or against you.
It's just like UFO's. At first the Govt said experimental aircraft were just aliens. Then it bit them on the ass. It still worked though. People weren't talking about the SR71 or the U2. They were too busy building a better tinfoil hat to protect them from martian rays.
The company I interned for over the summer had everyone under NDA: Our subject experts, recruiters, even us low level interns doing the real work. Our NDA was more for the fact that any of us interns couldnt run out and do the same thing, not that i'd want to. While It seemed like nothing at the time, even telling people what i did over the summer becomes a process of "umm, well, i can tell you that i programmed..." and them not understanding. But it was fun, and i wrote mountains of PHP that are being shown at trade shows.
"Something's wrong with you...and I hope we never do meet again." - Deftones When Girls Telephone Boys
Which is exactly the route the startup i interned for followed. While the Funds were low, it was enough to cover my 40 hour pay check, so i was happy not to tell anyone what i was doing. It wasnt really that interesting anyway...
"Something's wrong with you...and I hope we never do meet again." - Deftones When Girls Telephone Boys
The idea is somewhat linear, just applying software on a large scale to an area which has never had it before, but the execution is vastly more difficult.
Through luck and creativity, it appears that I've found various ways to execute this. Two and a half years to build one part of the software, another couple of years of building and testing, two years of working for "the man" to pay off my debts run up during the first four years.
Now I've got this fairly decent product which I've just started to roll out to some large customers. And I've had many people sign NDA's along the way. If they are violated, would I have the money to pursue the violators? No, of course not. So that makes them worthless, right?
No, they're not, because people don't know that I don't have the money to fight. So NDA's are just a harmless bluff for me and probably everyone else. But in the interests of thoroughness I should use them.
Yes they're useless. Yes you should use them. Not everything has to be useful to be used.
The baby's fine -- please stop sending business cards.
>I've found that for the most part, people like their own ideas, and just aren't much inclined to steal mine
I can't remember who said this:
"Don't worry about people stealing your ideas. If your ideas are actually good and helpful, you'll have to cram them down people's throats at gunpoint."
Don Lancaster has made the same point about secrecy as the article did. There's only one smartest person in the world, the odds are overwhelming that it's not you, your idea will have occurred to someone else, and the way to make money is to kill bad ideas quickly.
The Case Against Patents
What does he say about NDA's? Publish your ideas in trade journals ASAP!
He's a wise old man. Go read his whole site. It will do you, and the economy good.
"Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats." -Howard Aiken
I often have to sign an NDA, sometimes just to get a job interview. If the terms are reasonable, I have no qualms about this: the agreement is just a written form of an implicit agreement I see as part of my professional ethics. If somebody trusts you with sensitive information, it is simply wrong to be careless about passing that information on.
It occurs to me this argument is partially about the attitude gap between the open-source (or "free") software community and the closed-source (or "commercial") software community. Thing is, these two communities don't have to be enemies. Yeah, some OS people think that commercial software is evil, and some commercial software people think that the OS movement is economically clueless. But the reality is that no one model is the best possible one for all kinds of software. Some projects will prosper if they're driven by volunteers who just want to advance the state of the art. Others will only succeed if they're driven by well-capitalized entrepeneurs out to make a buck. Neither model is likely to go away, and I predict that more and more companies will come to rely on both.
If you can express your whole "special" idea in a concise enough way that someone who hears it can "steal" it, your idea wasn't worth anything.
Fedex "delivers packages around the world in one day", Starbucks "sells 'gourmet' coffee", and Amazon "sells books on the internet". That's all pretty trivial stuff and, on paper, easily copied.
But how can Fedex do it? Their hub system and computerized inventory system are key to the idea but aren't obvious from simply hearing "Deliver packages". And selling books online is easy but building a community of people to review all the material and offering referral bonuses aren't obvious from hearing about the idea yet are crucial to the company's success.
If your idea is simpler than that, and thus more easily copied, it's probably not an idea to base a business on, it's probably a sideline for an existing business with the resources to exploit it quickly. A product idea, not a business idea.
Summary: "Selling Ice to Desert Nomads" isn't intellectual property, it's not a business idea.
Well - I have tried a few times to get funding for ideas that was partly based on Open Source. The problem is not the engineering side but the VC side of it. I have yet to find a way to convincingly explain to a VC that by using open source I can cut the development cost down to 1/10th of what it would have been if I was to develop everything from scratch, and that it actually will lead to a better quality "version 1" product. But VC's seems completely focused on the IP of the product. Without that it seems that even a good business based on knowhow and delivery of services are unworthy of investment.
I for one would love to hear some good arguments that could convince VC's to invest in Open Source based projects.