Mentors 10/18: Hold Information In Confidence

As we continue deconstructing the Techstars Mentor Manifesto, today’s item is about keeping information confidential.

Techstars operates on a FriendDA concept. It’s not official, but it’s understood that the entrepreneurs are going to bare their soul, be completely open and transparent, and not ask anyone to sign anything. In exchange, mentors will hold information in confidence.

This can be tricky. It’s hard to know what is confidential, a secret, something someone is merely pondering, a brilliant new idea, something that conflicts with something else you know about, or, well, something that is going to make someone upset if it gets around.

There’s a simple approach to this. Use your judgement. If you are uncertain, ask the person who you got the information from.

We operate this way at Foundry Group also. We don’t sign NDAs. If you don’t trust us, don’t share something with us. If you don’t want us to know something, that’s fine. If it’s important to you that something be held in confidence, feel free to say so. But assume we are respectful, conscientious about what we can and can’t share, and fundamentally default to holding information in confidence.

It’s kind of that simple. Remember my fuck me once rule. It’s my responsibility to tell you that I’m unhappy with what you did and it’s your responsibility to own it. That generates a second chance. There is no third chance.

  • Years ago I was working w/ Sony and asked if they wanted us to sign an NDA as most clients want you to do when they are sharing confidential information. Sony said no. They also said – if you screw us over, then don’t worry. They continued – don’t worry because your company won’t be alive to benefit. They would have no problem killing us cold. Scorched earth and all. Moral of the story is: sharing confidential information will cost you – it will cost you big time. So don’t. You don’t need an NDA to tell you that.

    • Rick

      However if I’m not mistaken in the US the courts decide what is warranted to make a person or entity whole again. Sony doing anything to harm you outside the courts is illegal and can result in you bringing a suit against them.
      It can be hard to prove but any intentional harm or even sometimes unintentional harm brought to you or an entity does allow for the courts to get involved and remedy the situation.
      Even just the threats made by Sony might be cause for court action. In fact those threats, if known by others, might not require you’re involvement to cause an action.

      • Rick

        Oops… Forgot the legal disclaiimer.
        I’m an not a lawyer. Talk to a lawyer to be sure of you rights.

        • Ha ha, I like how you felt compelled to add a legal disclaimer. This is the world we live in.

      • You have never sued a big company. Unless you have millions of dollars or are a lawyer with nothing else to do you will lose. Even then you still lose.

    • RBC

      Wonder if that is Sony’s approach to their hackers … or perhaps vice versa.

    • Thanks for sharing, it’s an interesting position for Sony to take. I guess they’re so connected in most big industries that if you screw with them, they can pull the plug from you no matter what you try to do in any vertical.

    • well…dealing with big co’s is a different ball of wax than dealing with VCs.
      you are a lot more likely to get screwed by a big co. than you would by a VC.

  • I never had a precise metric on it in the past, but I’m seriously considering adopting (or I think I just did) the “There is no third chance” rule.

    It would seem it forces you to lay that standard down early in any relationship so it’s not a surprise.

    And it reinforces the authentic, no BS persona of the one who lives by it.

    In short, it makes complete sense, thanks.

    • The problem with having a strict rule for this is that social relationships is a sticky business. Someone might do things that are ok to give a second chance, but there migh be some behavior that show such a desalignment with my ethics or company culture that I just can’t find it in me to give a second chance.

      • I agree, boundaries are another factor — lines that can’t be crossed.

  • Rick

    Remember: Judge not lest ye be judged.
    If you don’t have an agreement spelling out what is and is not confidential then you can’t act as sole judge in determining what can and cannot be talked about. That applies to both sides of this story.
    That is a major reason NDAs exist. It’s not only to provide recourse. It is to spell out what can warrant recourse. My own view is if you feel it is confidential then don’t make it know to people outside the group that is bound by an NDA.
    As far as chances go. Brad are you sure you want to go there? No one is perfect and you can’t know everything about a situation. Wouldn’t it be better to grant a pardon based on each situation. Picking an arbitrary number like 2 doesn’t sound like an intelligent and civilized way to approach relationships. It is good for the courts because they have other things to take into consideration. But saying to someone “hey you only get 1 chance” is like saying “I really just want to hate you anyway so I can tell you up front I’m gonna’ wait until we have 2 issues between us then I’m coming for you.”

    • concerndcitizen

      NDA’s exist for two reasons:

      1. To protect the non-disclosure of non-public information for future patent filing.

      2. To generate lawsuits.

      Unless you have things that are about to go into a patent filing, NDA’s are a waste of time and a red flag. If something is sensitive and you don’t trust the person, don’t tell them.

  • RBC

    Good post and clicked through on the FU rule link. fyi a bit of comment spam in there which i’ve flagged with disqus. Annoying that gmail can work out what is spam, and neither disqus nor wordpress can ….

  • Rick

    Brad, I want to let you know I had another hacker or whatever problem. I’m gonna’ have to wipe all my machines again. As you know I’ve slowly stopped using web stuff, like email, over the past few years and now I’m going to the minimum.
    So I won’t be here to take the opposite side of the argument anymore. Enjoy and thanks for the chats. I’ve had enough. I don’t want to spend my days as a PC security analyst.