5 ms·

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 creat

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?

kika 12y ago
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.
- raverbashing 12y ago
  Yeah, you got lucky But the part about them not understanding what you did doesn't surprise me in the least
crdoconnor 12y ago
Please name and shame when the NDA expires. Preferably with the name of the not so nice bigwig.
- LargeCompanies 12y ago
  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.....
  - mfitzerald 12y ago
    This sounds snarky but isn't my intent: your weak point is selling, which is different than networking or connecting with people.
    - danieltillett 12y ago
      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.
yourapostasy 12y ago
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.
- LargeCompanies 12y ago
  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!
  - softbuilder 12y ago
    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.
throwawaykf05 12y ago
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.
- LargeCompanies 12y ago
  Yeah we filed our provisional 30 minutes prior to this meeting. It is now a patent-pending.
  - analog31 12y ago
    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.
    - Perdition 12y ago
      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.
dctoedt 12y ago
> 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/12-1074.Opinion.6-27-2013.1.PDF http://www.cafc.uscourts.gov/images/stories/opinions-orders/... [2] http://scholar.google.com/scholar_case?case=16810614390244449913 http://scholar.google.com/scholar_case?case=1681061439024444.... Disclosure: I was part of Rockwell's trial team in that case.

kika 12y ago

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.

raverbashing 12y ago
Yeah, you got lucky But the part about them not understanding what you did doesn't surprise me in the least

crdoconnor 12y ago

Please name and shame when the NDA expires. Preferably with the name of the not so nice bigwig.

LargeCompanies 12y ago
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.....
- mfitzerald 12y ago
  This sounds snarky but isn't my intent: your weak point is selling, which is different than networking or connecting with people.
  - danieltillett 12y ago
    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.

yourapostasy 12y ago

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.

LargeCompanies 12y ago
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!
- softbuilder 12y ago
  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.

throwawaykf05 12y ago

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.

LargeCompanies 12y ago
Yeah we filed our provisional 30 minutes prior to this meeting. It is now a patent-pending.
- analog31 12y ago
  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.
  - Perdition 12y ago
    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.

dctoedt 12y ago

> 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/12-1074.Opinion.6-27-2013.1.PDF http://www.cafc.uscourts.gov/images/stories/opinions-orders/... [2] http://scholar.google.com/scholar_case?case=16810614390244449913 http://scholar.google.com/scholar_case?case=1681061439024444.... Disclosure: I was part of Rockwell's trial team in that case.