NDAs - Really worth it?

romes

romes

David
Non-Disclosure Agreements are the standard when selling a hosting company. This allows the company owner to give information to people without the fear of someone ratting the company out and potentialy losing customers.

But, does the NDA really work? I have been thinking about it lately and how easy it is to sign one and still rat the company out. Now-a-days on the internet people can mask themselves as someone else and get away with murder basicly. Someone could sign the NDA, make a new account using a proxy and blab to the entire forum that this company is for sale and how would the company in question find out who did it and punish them? It's pretty impossible.

So, if the situation above is possible why do companies ask for an NDA? I would never rat out a company even with an NDA or without one, but whats to stop the other guy?

I welcome all your thoughts on this.
 
NDA's carry the weight of the law, so if you get caught breaking the provisions you've signed off on, you can be held liable. Is it worth the risk? I wouldn't think so, but people break contracts every day of the week. Some get away with it, but those that don't pay a heavy penalty.
 
I know that steve, but people now-a-days can hide themselves so well that it is impossible to find them. Like hackers who attack military servers and are still on the lose. The US is still trying to find them and all they can do at the moment is blame korea for possibly doing it.

Anyways, thanks for your input steve.
 
Can you make a fake account and then out someone - sure, but generally people don't do that. There's a sense of loyalty and honor with many people that actually go through the process of fillilng out an NDA. How bad would it be if you signed an NDA, received the info and posted about it and YOU were the only one that actually got an NDA :)

In the web design world we always had in our contract that prices were confidential and yet every now and then we'd find people disclosing that information either with other design companies or other users. There's not much that you can do about that unfortuantely unless you're able to catch them in the act.

As Steve said, contracts are contracts. Pirating CDs is something people do all the time too, but when they're caught the punishment far out weighs the risk.

I'm a HUGE advocate of contracts, signatures and the like.
 
NDA covers you without one your "naked" you have no protection. There is no enforcing a gentleman's agreement. You should also use reputable third parties to handle the transaction. They draw up the contracts and legalities albiet for a fee.
 
True, people take the risk of being the only person and not knowing it lol

Anyways, thanks for your input guys.
 
I think that its the same with almost anything online in truth. The only world brought around problems with anonymity protecting those who didn't deserve it, and problems with protecting yourself and your creations.

I don't think you can ever win-but you can do the best available to you. If you do nothing, then you're asking for trouble-so yes the NDA is worth it.
 
I'm going to go against popular opinions of Steve and Conor. It is my job too. :) If your hosting company is not worth lets say $10k - 20k or more the NDA is not worth wasting your time. Why?

First, you probably do not have the money and the resources to go after someone if they do leak.

Two, you have to prove they are the one that leaked. With the web and law enforcement it isn't as easy as what you think it is. If they are in a different state or country it really doesn't matter anyway.

Three, you have to show damages where actually incurred and a certain level of damages. If someone leaked the information and you still completed the sale for full price4. You did not incur any damages.

Four, you do not have an overwhelming number of customers. There is a solid chance non of the customers would see or care your selling.

In my opinion, laws, contracts, and NDA's are only to keep already good people honest. If someone wants to destroy you, no matter what the risk is, they are still going to do it.
 
wow Zachary, well said. If one day (will never happn :P ) I sell FH I will of couse ask for an NDA from people but as Zachary said, if someone wants to hurt you they will.
 
oh damn, Conor agreed with me. Now I have to work on something new.

It is like credit card fraud. Unless it is committed within our local jursidication there is no defense against it. Unless it reaches over $2k and you can have a federal gency investigate it or there is $20k from a single business.

The whole Internet thing has created a handful for current legal and law enforcement issues. That is why there is a very profitable black market for credit cards. It sucks and I hate it but it is the truth. Contracts are not what they use to be.
 
romes said:
wow Zachary, well said. If one day (will never happn :P ) I sell FH I will of couse ask for an NDA from people but as Zachary said, if someone wants to hurt you they will.
Click to expand...

No offense romes; however, I use to say I will never sell Biz Hosting Network, it is my baby and I love it. You want to know what, there is a certain point in time in every hosting companies life where you finally get sick of the four am phone calls and the stress of dealing with this industry. While you may think now you'll never sell it, I bet within the next five years you'll scream and get out like many of the rest of us did.

This industry is a brutal industry and unfortunately this is an industry with customers who do not understand value. In addition, many of the companies who are involved are ok with selling packages well below their market value in order to gain new customers. This industry has such a low barrier to entry and everyday there is a less expensive reseller program and another web designer who is willing to sell a design for $10.00 coded. There is going to be some point where it breaks.

Conor and I have had lengthy conversations about this actually. Steven points out a lot about how you need to find a niche that will allow you larger profit margins. This industry is cruel and will make you want to cry somedays.
 
I have been learning this trade since I was 15. I will turn 20 this x-mas. I know how stressful it is and I do not get calls at 4am becuase I don't offer phone support (yet). I offer ticket support which works out great and I plan to use that for a long time.

I understand that there will be a time where you will break but you have to realize that if you up and leave everytime you "break" then you will get no where. This is my career and I plan to stick with it till I am old enough to retire and have my son take over one day. (Don't have a kid yet)
 
romes, like I said, I said that once before. It isn't about breaking and someday you will get four am calls. It's not calls from clients so much as server alert calls. We have all been there.

I'll bookmark this conversation so I can send it to you when you end up saying enough is enough. Business isn't passes on for generations anymore especially in this industry. You don't even know where this industry is going to be next year little lone eighteen years from now.

Your young, you'll understand someday.
 
lol I do understand. But, from what your saying is that I am gunna break; that I will sell my company. I've spent hours dealing with clients and their issues. Not to mention clients that submit tickets at 3,4,5 or 6am in the morning. There is still stuff I do not know but I am learning it one day at a time. I have techs from all over and are friends so that helps as well. They know how I work and I know they work so it takes the stress off of having a tech who you do not know if their gunna insult a client or try to ruin you.

All I can say is sit back and see how I do instead of saying in a passive way that I will break and end up selling FH.
 
I am not saying your going to break. It is not about breaking. It is about realizing that there are better things in life then dealing with 4 am server alarms or client conflicts.

I would love to see you succeed buddy. It isn't about a success or failure its about realizations. Like I said, I'm book marking this thread. lol

Maybe, you'll sell for a lot of money to explore the world. At a young age, it seems like web hosting is the only way. I assure you, there are nicer and prettier things out there for sure.
 
Look, there are better things in life but when it comes down to your career your supposed to do what makes you happy. I love being a webhost and this is what I want to do. Handling 4am calls may seem like a problem for you but I don't mind handling tickets, spending a couple hours talking to my DC, etc.


Anyways, only time will tell what will happen.
 
A big enough bank roll makes all the commitment disapear :) When the 6 figure calls come, you blow them off as it's not enough to do anything with. When the 7 figure calls come, and they do, you get to thinking about what you would do not with the money, but what you would do differently if you were to restart a hosting company or similiar company. Then when the 8 figure phone call comes (and it does), you really need to sit down and see just how things are headed. Do you stay in, and HOPE the hosting industry and your company survive, or do you get out, take the paycheck and become financially stable for a while (and invest in other companies).

As Zachary said, we've had a few lengthy conversations on this between ourselves, and there always comes a point. Not necessarily a "breaking point" where you give up, but a point where you have to make financialy smart moves.

All our hosting companies are our babies. Mine is finally growing up and almost an adult (15 years old), and as committed as I am to the business, there's only so far that I can take it before I need to have someone else step in and give it new life and a new direction.

Are there plans for me to leave Hands-on? Nope. BUT, should the 8 figure phone call come again, I will be giving it a little more serious thought than I had before. Years ago you could actaully sell with 6+ times anual income as the sale price. These days, the average seems to be 8-16 months revenue price.
 
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