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Episode 23 July 26, 2016 | 35min

The DNA of NDAs

Our co-founders on the proliferation of NDAs in the tech world and beyond.

Show Notes

Do we need so many NDAs? This week Paul Ford and Rich Ziade discuss the proliferation of the non-disclosure agreement in the tech world and beyond, and hammer out what’s really necessary in a business contract. They talk about verbal NDAs and frieNDAs, legalese, a dentist who gives great advice, Paul’s parking spot, and the time Rich sang the Google terms of service in the style of GWAR in front of other people. They also read and debate a listener’s letter on universal basic income.

Paul Ford: Welcome back to Track Changes, the official podcast of Postlight, the product design studio in New York City that builds big, beautiful web and technology things. My name is Paul Ford, and I’m joined by my co-founder and co-host —

Rich Ziade: Rich Ziade.

Paul: Hey, Rich.

Rich: Yes?

Paul: Brady Dale tweeted at you.

Rich: Yes.

Paul: He writes for The Observer.

Rich: He’s a tech reporter for The Observer.

Paul: Yeah, he wrote about us, a great piece, actually. Thank you, Brady.

Rich: Thank you. It was really cool.

Paul: Great — great and clear and talked a little bit about Track Changes.

Rich: Yep.

Paul: So what did Brady want to know?

Rich: He put a challenge in front of us.

Paul: What was the challenge?

Rich: Discuss NDAs.

Paul: All right, let’s do it. Let’s talk about it.

Rich: So what is an NDA?

Paul: A non-disclosure agreement.

Rich: Correct. It is an agreement whereby you agree, and usually it’s mutual —

Paul: So it’s a document. It’s a couple pages long.

Rich: It’s a contract.

Paul: Yeah, they send it to you in an email.

Rich: Yep. And they say, “Would you mind signing this?” Which, by the way, everything is getting signed by DocuSign, or…I have an image of my signature that I keep in, in…

Paul: That was a crazy thing when we were starting the company, there were a lot of big contracts going on as we were getting our —

Rich: Yeah.

Paul: Company set up? And you were just, like, hitting the SIGN button and off it would go. And it felt very impermanent.

Rich: Yeah. I think we’re there, now, finally. I think, you know, that virtual signature’s the real deal. So it’s happening. And what we get often is people saying, you know, hey, we want to talk to you more — they’ll talk to us some, there’s always sort of this first conversation where they’re like, “Ah, we’re gonna tell you a little something, and can you help us?” And I’m like, “Yeah, we think we can help you.” Like, “Well, I want to tell you more, but before I tell you more, I need you to sign an NDA.” And…

Paul: This happens all the ti — it happens in ridiculous contexts, too, you’re just like —

Rich: Ridiculous.

Paul: You’d be like, “Oh, hey, we’re doing this thing, and we’re gonna have a spork start-up.” And you’re like, “OK, cool, you guys, that’s, like, the forks that are also spoons?”

Rich: Yeah.

Paul: And they’re like, “Yeah, but before I can tell you more…”

Rich: Yeah, and when you do that, when you decide that the thing you’re about to tell me deserves a cloak of secrecy, right? A veil of secrecy over it. The implication is that what you’re about to tell me is really great, and really valuable. Such that without that document, Paul and I will run and pursue it.

Paul: I’ll just get into the media. I’ll, like, go on the mountaintop and be like —

Rich: “You would not believe what I just heard!”

Paul: “Oh my God, this person is gonna custom embroider your Twitter handle onto their shirt!”

Rich: That’s right. That’s right.

Paul: Yeah.

Rich: So we sign them, and that’s fine.

Paul: We sign them all the time.

Rich: We sign them all the time.

Paul: We sign an NDA every hour and a half.

Rich: Yeah. And, and that’s —

Paul: What’s the difference between an NDA and a frieNDA?

Rich: That’s a terrible phrase.

Paul: Isn’t that the worst?

Rich: That’s the worst phrase. Very often we will be in a meeting and we’ll say, “Hey, um, I want to keep talking right now, because I’m excited about this idea?”

Paul: Yeah.

Rich: “But I don’t have the paperwork and I want you to sign it, but verbal NDA?”

Paul: And everyone goes, “Yeah, sure.”

Rich: [laughter] And everybody sort of looks at each other for like a half a second, and like, “Of course, of course, verbal NDA. Let’s roll. Let’s do this.” And then they just keep going.

Paul: Why can’t we just trust each other?

Rich: Um….

Paul: Like, first of all, I’ve never in my life heard of someone invoking an NDA and suing for damages. At this level, like, not at like, a corporate level, sure, but like, as a, “I talked to this guy because he was gonna, like, write some copy for the website. I made him sign an NDA.” That person never gets sued. Like, it’s kind of pure formality and bureaucracy as far as I can tell.

Rich: It is. You know what it is, too, though, is that it’s no harm to do it.

Paul: But what risk are they trying to stave off?

Rich: It’s just…well, first off, as it moves along, and let’s say the thing matures and becomes actually valuable, and there’s investment money coming in, then they say, “OK, show me all the paperwork.”

Paul: OK.

Rich: Like, how buttoned-up is this thing, right? And when you show that you’ve been very careful throughout, covering your tracks —

Paul: You really own this —

Rich: Because this thing going is actually going to be work, a million, ten million, a hundred million bucks.

Paul: You really have, you’ve made every effort to own and control your own intellectual property and not allow it just…

Rich: Yeah.

Paul: Spread out.

Rich: Exactly. And the thing is, it’s not that big a deal. That’s the other part of it. It doesn’t take two weeks of lawyers to draft it, it’s just a document.

Paul: Sure.

Rich: And so like, you know what, why don’t I just play it on the safe side and let’s sign this.

Paul: Have you ever asked anyone to sign an NDA?

Rich: I don’t think so.

Paul: I never have. I’ve never had an idea that I was like, “This is so incredibly valuable…”

Rich: I don’t think that was my rationale. I think my rationale was, this is not gonna matter.

Paul: Yeah. This is the thing: people don’t know this about our organization, right, but we have the shortest contracts that I’ve ever seen.

Rich: I’m very proud of our contracts, by the way.

Paul: Yeah.

Rich: I think, I think it says a lot about us. Some are two pages.

Paul: Yeah.

Rich: Entire engagements, not small, some —

Paul: Things that are gonna run for six months and cost a lot of money, business to business.

Rich: Business to business.

Paul: Usually these are what, like, 40, 60 page documents.

Rich: They’re usually something like, they’re multiple documents.

Paul: What’s in the 40–60 pages? Like, what aren’t we including. What’s in our document?

Rich: Our, I mean, our document are the terms.

Paul: OK. You’re gonna pay me this over this amount of time.

Rich: What we’re gonna do for you —

Paul: We’re gonna build your thing.

Rich: We’re gonna build your thing.

Paul: OK.

Rich: Usually you own the thing, that the thing we’re about to build is not ours, it’s not our property.

Paul: That’s always, that’s really important to people, and it’s sort of a given, like, we’re an agency.

Rich: Yeah.

Paul: When we write you the code —

Rich: It’s called a work-for-hire provision.

Paul: Yeah.

Rich: And what that means is the byproduct, the work product of our labor, is yours.

Paul: That’s very normal for media, too, like, you just —

Rich: Yeah.

Paul: It is work-for-hire.

Rich: It’s, I mean, it’s a well…and there’s usually, like, other provisions around cancellation, modification, indemnification, governing law, should things go south, what laws of which state are gonna govern. And that’s it. Can you put a seven-page confidentially provision in a document?

Paul: And those are the ones that are like, “Throughout the universe…”

Rich: Correct.

Paul: You know…we’ll…

Rich: Or can you put a non-compete provision throughout the document? And by the way, sometimes we have a one-sentence confidentially clause. We have a two-sentence non-compete clause. I’m a big believer in relationships.

Paul: OK.

Rich: And that a sound relationship is really gonna get worked out, it’s gonna work out, the kinds of things that often are dictated through legal paper.

Paul: You’re a big believer in this, as someone who practiced law.

Rich: Well I saw it, right? When I was in law school, there was actually something happening, and this was in the 90s. It was called the plain English movement. And the thinking was that the law shouldn’t be confusing. That it shouldn’t have words like “heretofore” and have all this fancy legalese. It should be readable.

Paul: OK.

Rich: And there were English professors being hired by the law school who were looking —

Paul: Those are the worst people to make something readable, but OK, fine. Fine.

Rich: [laughter] Right. And there were books that were written about how agreements should be straightforward and simple and digestible, such that they are empowering.

Paul: So the people without lawyers —

Rich: Yes.

Paul: Would know what they were getting into.

Rich: Here’s a, a…

Paul: Why is legalese so complicated, though?

Rich: Legalese is so complicated because it creates power and value for the professional. For the lawyer.

Paul: OK.

Rich: By doing that, and by creating that complexity, right? Which requires the other party to then deal with that complexity, right? You are effectively marginalizing your client and sort of putting them in a fog, and saying, “We’re gonna worry about this stuff because we are the experts.”

Paul: This is why you hire a lawyer.

Rich: That’s why you hire a lawyer.

Paul: Because you can’t deal with other side’s contracts.

Rich: That’s right. Also a lot of the complexity is essentially a series of instructions for when things go bad.

Paul: OK. So that’s a contract. A contract is a series of instructions for when the relationship falls apart.

Rich: Much of it is.

Paul: OK.

Rich: Some of it is the obligations of both parties.

Paul: You’re gonna write me —

Rich: Which is, “I’m gonna pay you a dollar, and you’re gonna give me a banana.”

Paul: OK.

Rich: So some of the contracts, yeah, but oftentimes a huge chunk of the contract is just all of the protections and the positioning that both parties went back and forth on.

Paul: OK.

Rich: And that goes back to sort of my belief, which is when things are not looking so great, pick up the phone. Just talk to each other, and get past it. I had a friend who was going through an awful divorce, and it was killing him. It was practically bankrupting him. And he went to his dentist.

Paul: OK.

Rich: He was telling him about how this divorce was wrecking him, and it was getting into arbitration and discovery and interviews and all this crazy — and it was killing, killing everyone, first of all.

Paul: Sure.

Rich: Just crushing everyone, personally and psychologically. But also costing an enormous amount of money.

Paul: Yeah.

Rich: And his dentist paused and said to him, “Do you know what would get this done? So that you’re not thinking about this anymore?” He’s like, “Yeah, I do know, because she’s told me what she wants.” And his dentist said, “Pick up the phone. Call your wife, not your lawyer. And give it to her. Not because you’re losing, but because you’re gonna die at some point, and you’re not young, and it’s time to get on with your life.” And essentially what he did was, he said, “You know what? The money that you think you’re fighting for here is actually first of all going to a third party, the lawyers. And secondly, you’re life, it’s just gonna take two and a half years. It’s not gonna be wrapped up in a month and a half. It’s gonna go on and on and on.” And he did it, and he really, really, he said it’s the best advice his dentist ever gave him, other than floss.

Paul: Can I ask you a question?

Rich: Yeah.

Paul: Where the hell do I get a dentist like this?

Rich: I know, right?

Paul: Where do I get the dentist —

Rich: I know.

Paul: Who’s also a rabbi and a lawyer?

Rich: My dentist said, “Enough with the coffee.”

Paul: Yeah, that’s what mine —

Rich: You’re building plaque.

Paul: My dentist was like, “Your teeth are great but your gums are garbage.”

Rich: Yeah. Exactly.

Paul: Yeah, that’s why my dentist says. He doesn’t say, “Look, let’s live life for the day. Get rid of this enormous financial burden and make peace with the things that distress you.”

Rich: He was seeing his patient every couple months literally falling apart in front of them.

Paul: Oh, the teeth were like, coming out.

Rich: [laughter] I don’t know if it was directly related to divorce?

Paul: Pulling teeth out, this guy’s just basically a walking skull. He’s like, “What’s wrong? I see you in here all the time.”

Rich: Exactly.

Paul: “Your tongue is a stump.”

Rich: Exactly. And so I have to say, there are lawyers out there who pause and look at their clients and say, “You know what? I could eke out another $75 grand out of this person, but for Christ’s sake, this is misery. Everyone’s unhappy. Let me actually give good advice and give everyone some relief and get them to a happier place.”

Paul: Can I make an observation about the world that I’ve found myself in since we started this business?

Rich: Absolutely.

Paul: All right, so what I’ve noticed is that there really are basically two separate spheres of commerce in the world, and there is the sphere of commerce which is big legal agreements, everything takes forever, and everyone is constantly extracting value.

Rich: Yeah.

Paul: In some way. They’re going, like, “I got to do the legal stuff,” and it’s a lot of the work that just isn’t really work.

Rich: Yeah.

Paul: Like, I’m gonna be, I’m gonna create a new analytics tool on top of the current analytics tool.

Rich: Yeah.

Paul: Because that’ll be more compliant with blah blah blah.

Rich: Yeah.

Paul: Like, just stuff that doesn’t happen very —

Rich: Closing on a house.

Paul: Yeah. There’s —

Rich: There’s all these characters that show up —

Paul: People show up.

Rich: And you write 40 checks.

Paul: Yeah. No, it’s terrible.

Rich: It’s the most bizarre thing.

Paul: It’s like Game of Thrones, suddenly, in a little room in the back of a legal office.

Rich: [laughter] Exactly.

Paul: And you know, somebody’s got a raven.

Rich: Someone I’d never seen before was like, “I need a check for $600.”

Paul: That’s, and you just write it.

Rich: And you just, well, the house is right there.

Paul: Yeah.

Rich: It’s like four feet away from you. You’re gonna write a stupid $600 check.

Paul: And your lawyer’s like, “A guy’s gonna show up and ask for $600. Just give it to him. That’s Charlie.”

Rich: Yeah.

Paul: And you’re like, “Fine. Fine.”

Rich: And I’ve known, and Charlie grew up down the street from the lawyer.

Paul: Exactly. So that’s one sphere.

Rich: Yeah.

Paul: And then there’s the other one, which I like to at least flatter ourselves and think that we’re in it, but it’s the one where you go, “Look I’m real busy. There’s a lot going on right now. I’m gonna get you this, and I’m gonna give it to you, but you’ve got to just let me do it.”

Rich: Yeah.

Paul: Right? And we actually end up having that conversation. I guess actually partly the initial sales meeting with Postlight, you might think we come in with like a PowerPoint deck. We usually come in a little bit tired. We’re coming from something that is complicated and difficult to deal with. We sit down with you and people are like, “I want to do this and this and this and this.” And then I’ll watch you go, like, “That’s a lot of goals. OK?”

Rich: Yeah.

Paul: “So here’s something I think you could do for that budget by November.”

Rich: Or that timeframe, or whatever, yeah.

Paul: Exactly. And then —

Rich: Understanding their constraints.

Paul: There’s a moment where if they are not in the — if they actually are empowered to do the work themselves, like if their job is to, like, get this done, they go, “OK.” If their job is to kind of contribute back into that world of complete value-free insanity…

Rich: Yeah.

Paul: They’re like, “Ah, that’s bad news. I’m gonna have to go give that number to somebody.”

Rich: Yeah.

Paul: And they kind of, you just see them, they slump a little bit.

Rich: Yeah.

Paul: Whereas the other people are like, “OK, well this, we just moved an inch and a half towards getting this done.”

Rich: Yes.

Paul: What we see is the people we work with better are those that, who are like, “OK, I don’t if I’m going to hire these guys. I don’t even know if I like them. But they just moved me about, you know, a half a centimeter closer towards the actual thing I have to do. I’ve gotta ship my app, I’ve gotta make my boss happy, I’ve gotta, like, get 100 million new viewers,” or whatever.

Rich: Whatever, yeah.

Paul: It feels like the two-page contract is the signifier for us that says, “We’re in that world.”

Rich: Yes.

Paul: We’re in the world of, like, we’re a little tired, we have a little too much going on…There was a great thing a friend of mine once said, this is an old…he’s just like, “If you want to get something done, look for the busiest person in the room.”

Rich: Yeah.

Paul: I think about that a lot.

Rich: Yeah.

Paul: Like, the busiest person in the room is the person who also is like, “Here’s a contract. Just…can we just…let’s go.”

Rich: You’re touching on something here that I think is actually one of the things I’m most proud of about Postlight. Because we are professionals. Lawyers are professionals. Doctors are professionals. We are professionals. You could come into our offices with a whole idea and then we could confuse you, we could throw technologies at you, we could throw all sorts of acronyms at you, so that you feel like, you feel helpless, and you’re going to rely on us to get you all the answers.

Paul: And there’s more money in that. Let’s be clear, like.

Rich: There is. There are business that —

Paul: If you do that right, we could grow a 500-person company that does that.

Rich: Absolutely.

Paul: People would be glad to see us do that.

Rich: Yes.

Paul: And we can extract value that way.

Rich: That’s right. But I am a fan of, and I believe in, simplifying, being clear, empowering — when you do that, do you ever, you know what a really great doctor does? They sit you down and they talk you through what’s going on in a way that you understand? They use analogies. They don’t just say, “Hey, don’t worry about it. Here’s a prescription. You should be better. I don’t know. I need to see you in three weeks.”

Paul: No, you want that doctor who’s like, “You know, you’ve ever seen a hinged bus turning a corner? That’s your knee right now.” [laughter] You’re like —

Rich: Exactly. But that dialogue that happens, and that feeling of, like, OK, I’m not in a fog here, because I’m gonna run home to Google anyway, right?

Paul: Right.

Rich: So — by the way, worth noting, we compete against proposals that are five times the size of our proposals, because we don’t want to give you a pile of nonsense. We want to simplify this problem or this challenge that you have in front of you. And we want to be your partner in this, not your expert in this, such that you feel helpless and you don’t know when the next change order is coming, because sorry, it was more complex, don’t worry your pretty little head, it’s going to be another $50 grand.

Paul: We tell people a lot about things that we don’t do, that we can’t do, that we don’t know about, yet, like someone asked us if we do all sorts of, like, 3D stuff, and the instinct as a person who’s selling is always to go, “We’ll figure that out.”

Rich: Yeah.

Paul: And we have people who might even know a little bit about it.

Rich: That’s right.

Paul: But I just don’t…I can’t in good faith go, like, “Yeah, we’re good at that.”

Rich: Yeah.

Paul: We have people who ask us, who clearly are kind of angling to see if we’ll get them, like a nice 200-page document?

Rich: Mmmm hmmm.

Paul: And we’re just, we’re just never gonna do it.

Rich: And look, that’s unusual. That is unusual. Like, the big consulting firms, like, the McKinseys of the world and the like, they just pummel you with charts and graphs and statistics and studies and all this stuff.

Paul: Well there’s the cynical thing about consulting, where the deal is, what is the job of the consultant? The job of the consultant is to sell more consulting services.

Rich: Right.

Paul: Right? And honestly, we should probably, we could probably do a better job of that, except that the market demand for technology services that actually ship is so high —

Rich: That’s the thing.

Paul: That we don’t have to go in and sell all the time.

Rich: Well it’s also not who we want to be. I don’t think —

Paul: If the market was —

Rich: We’re building a particular culture that wouldn’t be happy with that.

Paul: If the market was down, we probably would have to do more. We’d have to be a little more conscious about like, oh, that one’s gonna end in about two weeks. We’d better get in there.

Rich: Yeah.

Paul: Better get some lunches going. For right now, we’re just really letting the work speak for itself, because things are moving so quickly.

Rich: I mean this turned into a long infomercial about Postlight.

Paul: And how we will tell you that your project is impossible to do.

Rich: Yeah. But I actually think that this speaks more broadly to professionals and how professionals deal with non-professionals.

Paul: Well I think, look, the listener is hearing — could be hearing an infomercial, but what they’re hearing is, like, kind of a statement of ethics that we’re trying to work from.

Rich: Yeah. And —

Paul: Right, like this is, we are trying to live this every day.

Rich: And we’re not alone. I’m sure, I have no doubt in my mind, there are good design studios, there are good…

Paul: Yeah, I mean, there really are. I don’t want —

Rich: Yeah.

Paul: You want to get, you want to avoid —

Rich: I just buy into that. I believe in that. Like, I’ve been in meetings where we’re going to be paired up with other places, and they’ll just, they’ll go on for seven minutes, and I’ll pause and say, “I don’t understand what you’re talking about.”

Paul: Right.

Rich: I have to say, it’s an incredibly liberating feeling. A lot of people won’t do that.

Paul: It’s really…

Rich: They’re like, “Shoot, I can’t look like an idiot here.”

Paul: It’s really hard to ask the dumb question, because —

Rich: Of course.

Paul: You know, I spent years in those meetings, and I was afraid to ask the question.

Rich: Yeah.

Paul: Absolutely. Now I’m just like, “All right, look.” I’ve hit a point now in my life where I’m like, I’m a pretty smart guy.

Rich: Yeah.

Paul: I won awards.

Rich: Yeah.

Paul: So the fact that I don’t know what the hell’s going on means that somebody could take a minute and just tell me.

Rich: Yes.

Paul: And then if somebody thinks I’m an idiot, that’s OK. I get that all day.

Rich: Mmmm hmmm.

Paul: I…I have a family.

Rich: Some of the smartest people I’ve ever met will stare right into my eyes and say, “I don’t understand what that means.”

Paul: Yeah, that’s, that is true.

Rich: It’s a strength.

Paul: But that’s another, like, little way that the network of people who aren’t doing nonsense identifies itself.

Rich: Oh, totally.

Paul: The person who after, like, the half hour meeting asks the really dumb question?

Rich: Mmmm hmmm.

Paul: There’s a certain kind of dumb question where you go, “All right, I need to talk to her.”

Rich: You used to share a deck with me. It was a website that had, I think a deck or a slideshow, that was just bananas. It was impenetrable.

Paul: Was it military slideshow graphics?

Rich: No. It was, it was some start-up, not start-up, it was a consultancy, but it was off the wall, like you couldn’t piece it, it was circles inside of circles with arrows and it was just all these weird words…

Paul: I collect a few of those. I love it. I love —

Rich: It’s — we should make sure we drop some of those links connected to this podcast.

Paul: Here’s my favorite thing in a pitch, is when they show you any diagram that is circular with arrows, like where arrows —

Rich: And it goes endlessly.

Paul: It goes endlessly, because you’re like, “That’s how they’re going to bill me.”

Rich: Yeah. [laughter]

Paul: They’re going to bill me in this circle. We’re going to go around a track and every time we get, like, a quart way along…

Rich: It’s so strange.

Paul: Someone’s going to ask for $35,000.

Rich: Right.

Paul: And it’s just, and it will never end.

Rich: It will never end.

Paul: And people go in and they pitch that. They will basically pitch like, we will continue to take money from you until you fire us.

Rich: Yeah. Yeah, exactly.

Paul: So NDAs.

Rich: NDAs. Contracts.

Paul: Sign ‘em.

Rich: No, I mean, whatever.

Paul: Look, there’s a lot of people out there who are like, “I will [very deep voice reminiscent of Christian Bale’s Batman] never sign an NDA.”

Rich: There is some of that.

Paul: There’s a lot of that, there’s a lot of, like, in the nerd community, they’re like, “Aw, NDAs are nonsense. Forget about it.”

Rich: Yeah.

Paul: And you’re like, “Eh, forget it.”

Rich: I have to say, I’ve been around people who seize up when you put any sort of legal agreement in front of them.

Paul: Sure.

Rich: They view it as an adversarial thing.

Paul: OK.

Rich: And they really, they go into another mode. They just go into a very, like, “OK. This is just a thousand knives coming at me, and you know, I must defend myself.” It just goes bad. And I think that dialogue, and they call it redlining, right, when lawyers go into, there’s that mode. It’s the name of this podcast.

Paul: Track Changes.

Rich: Track Changes.

Paul: They go in and they search — yeah, they change…

Rich: Yeah.

Paul: …those red lines that appear throughout the document.

Rich: And it’s coming green from this guy and blue from this woman, and red from me, and it’s just, it looks like this document just got, just graffitied all over it, right. And what it is is just everybody making sure that they’re not getting screwed, right? That dance that occurs, it’s fundamentally cynical. It’s through a document, it’s very odd, right? It’s not us over coffee, it’s through a document.

Paul: Well I think it sort of externalizes, like, you and me over coffee, that’s sort of tribal. Like I’m literally looking at you as another entity.

Rich: Yeah.

Paul: You’re another primate, and I’m looking at you and I’m just kind of, like, “Hey, you and me are um….we’re gonna figure this out together.”

Rich: Yeah.

Paul: Like, it’s real old school and…

Rich: Yeah.

Paul: And I think people feel that if they externalize all that into a document?

Rich: Yeah.

Paul: And I feel this as a writer. People feel that there’s like a, something kind of sacred about the text.

Rich: Yeah, I mean, I got that clause in.

Paul: And that’s just people. The text is just, like, crappy people doing their crappy stuff. There’s nothing magical about it.

Rich: Yeah. I’ve been in business for 20 some-odd years, mostly my own businesses, and I’ve never been in front of a judge, talking through a clause.

Paul: Yeah.

Rich: It’s just never happened. It’s never happened. It’s just…

Paul: Well, and if somebody wants to sue you, they’re gonna sue you.

Rich: That’s the thing, right?

Paul: Yeah.

Rich: You don’t need grounds to sue, right?

Paul: Right.

Rich: You could just sue.

Paul: And so there’s, there’s this whole thing, like, obviously contracts help, but it doesn’t feel that having that 60-page contract and then the lawsuit lands…

Rich: Correct.

Paul: It really is gonna save your life.

Rich: Yeah. And look, it’s worth noting, in the transaction, what’s at stake is a million-dollar house? You need to do something to make sure certain stuff’s buttoned up. You want your protections. That’s reasonable. So…

Paul: Well there’s also a little bit of boilerplate there that’s actually —

Rich: Yeah.

Paul: It’s just like, this is —

Rich: It’s almost, some of it’s actually legal.

Paul: Like this is how the industry works.

Rich: Legal requirements. Yeah.

Paul: Yeah.

Rich: There’s statutory —

Paul: Our real estate lawyer, I got, like, a 30-page contract, and he read and skimmed and recognized patterns in it in like a three-minute period?

Rich: Yeah, yeah, yeah.

Paul: And spotted these tricky little changes that people had made.

Rich: Interesting. Yeah.

Paul: Because he was able to just like…

Rich: He had seen it.

Paul: That boilerplate is encoded in his brain.

Rich: Exactly. Exactly. And so I get that. I get that you need those protections, because I need to know I’m actually owning my house. Like…

Paul: Yeah, that’s true.

Rich: [laughter] I need it buttoned up.

Paul: No we had, the owner of the building tried to — we bought a garage space in the basement of our condominium.

Rich: Yeah.

Paul: And he was like, “Look. Let’s just do this a handshake deal.”

Rich: Yeah….

Paul: We’re gonna write — it was pretty much like all the money that I had was going to go towards a chunk of concrete in the basement?

Rich: [laughter] Right.

Paul: And I was like…it was great that I had the money, I felt really good about that part, but.

Rich: Yeah.

Paul: It was just like, “Uh…no, we need to actually own the deed to…”

Rich: [laughter] This piece of earth.

Paul: He was just, didn’t want to deal with all that paperwork. It’s just…

Rich: No, that’s not gonna fly. Right. But I’m a big believer in working through things in a relationship context. Like, I believe that. I mean, look, sometimes there’s a lot at stake, and you do need your protections. I’m not, I don’t want this to be read as advice, like, “Eh, just high five people, just go through life.”

Paul: No, I mean you and I set up quite a bit of paperwork when we created this business.

Rich: Yeah.

Paul: It was a long contract about…uh…how we….

Rich: How decisions are made…

Paul: How we share ownership. There’s a few things where like…

Rich: Sure.

Paul: Tie-breaking. All that kind of stuff.

Rich: Yeah, yeah. It’s necessary. I mean, it’s good to have those things, right? But, in my experience, hopefully you never go back to it. If you handle your relationships right, you never say, “You know what? Let me go dig up that clause and see what’s up.”

Paul: You know, people are very —

Rich: Who the hell wants to do that? I don’t even know where that file is.

Paul: People are very mysterious about lawyers, right? Like it’s one of the good things about having somebody who practiced as a lawyer as my co-founder in this company, is that things that I would normally be really scared and worried about, I’m just not worried, and it’s not because I see you over there applying your legal mind. You’re just literally like, “Yeah, if they’re gonna sue us, they’re gonna sue us. We’re gonna make this contract really short and readable, and then we’re just gonna go.”

Rich: Yeah.

Paul: What it is is not you going like, “We’re gonna get this all buttoned up and have it completely in control in every way.” It’s you going, “Let’s not pretend we have control over the entirety of the world.”

Rich: Exactly.

Paul: Let’s just, like, make sure we have set up the foundation for a good and effective relationship that people can end or walk away from with clarity.

Rich: Exactly. Ultimately what that relationship’s gonna get built upon is how it went between the two of us. Like, they’re not going to be angry about a clause. They’re going to be angry about us not shipping, or…

Paul: Yeah.

Rich: Not doing good work. [laughter]

Paul: We didn’t send any, if we don’t send the engineers that we say we’re going to send….

Rich: Right. We’ve got a problem.

Paul: Then we’re in breach of that agreement.

Rich: Yeah.

Paul: So here’s the thing: this is my issue with NDAs, is that they’re meaningless, because they don’t actually ask you about it. They’re just like, keep all the secrets.

Rich: Yeah.

Paul: They just say like, we’re gonna —

Rich: They’re sweeping.

Paul: Yeah. We’re gonna give you all the se — everything I’m going to say, and it’s like, “Well when you tell me that you have a coffee machine down the hall, is that also under the NDA?”

Rich: Right.

Paul: And you have no idea. You have no idea. And a lot of times they’re insane, too, because people are talking to me and they, like, they kind of want me to go and talk about stuff.

Rich: Yeah.

Paul: You know, I’m a media person, and they want me to —

Rich: That’s weird, right?

Paul: And they’re also like, asking me to please sign the NDA, and I’m just like, well, which is it?

Rich: Right.

Paul: Like I’m not even in a journalist mode, like there’s just, they’re just very confused. What I want, what I’d be happy to sign, is, “This organization is in possession of some really interesting intellectual property, including these three things. By signing this I hereby say that I will never discuss these without prior written or emailed confirmation from blah blah blah.”

Rich: Yeah.

Paul: And I would sign that in a minute, because I’d be like, “All right, cool, I understand why you want to lock this down.” But the NDAs are just, like, it’s just another kind of nonsense document in that world of nonsense, not-real stuff.

Rich: Right.

Paul: That people are doing to ensure that everything’s OK for that moment, when somebody comes in and is like, “Hey, did you button everything up?”

Rich: Yeah.

Paul: Did you do all the fake nonsense work that we need to do so that you can get bought by, you know, Florflurfloft?

Rich: Right.

Paul: And that’s just like, why live your life for that moment?

Rich: Yeah. And again, it takes a second.

Paul: Yeah.

Rich: I don’t have the — I’ll admit.

Paul: No, I’m not going to fight the NDA system.

Rich: [laughter] Well see, now that DocuSign’s in place…

Paul: No.

Rich: I can just hit a button in the email and then we’re on our way.

Paul: It’s also, for us, too, like, it comes to the moment and people are like, “OK, I need to tell you about this thing we’re gonna do. We’re gonna give you some money to build something, but we need you to sign an NDA.” Like, what are we going to do at that moment?

Rich: Yeah.

Paul: Heyyyyy, I don’t…I really can’t communicate with you about the work we’re going to do.

Rich: I need a week so I can review this NDA and then we’ll get back to you. [laughter]

Paul: [vague, incoherent noises] Yeah. Docu — it’s like Tweeting, now, to sign an NDA.

Rich: It’s…[laughter] well signing the agreement is like Tweeting now, pretty much.

Paul: Great. Buy a house. I get the sense that we could talk about NDAs for another 5,000 hours?

Rich: We could…I think we should read them while Pink Floyd’s “Echoes” plays in the background.

Paul: That sounds great.

Rich: We should read an NDA, and that would be art.

Paul: That would be amazing. That’s like — well you know, because people take terms of service now and then they illustrate them as comic books.

Rich: You know, I once, at a talent contest, read the Google terms of service as if I was the lead singer of GWAR.

Paul: Ahhh. What did that sound like?

Rich: It was just [noises that sound like some sort of primeval demon]. Like that, but I was reading the terms of service.

Paul: [tries to do it, sounding also like a demon from Buffy the Vampire Slayer]

Rich: Like that.

Paul: Yeah.

Rich: I lost the talent contest.

Paul: I can’t imagine why you wouldn’t win, did someone, like, sing “More Than Words?” [laughter] You were like, “What happened?”

Rich: Yeah.

Paul: All right. So we get email.

Rich: We do.

Paul: We’ve been getting great emails lately.

Rich: They’re like op-ed pieces. They’re really impressive. Full grammar and capitalization and everything.

Paul: So in a previous episode of Track Changes, we talked about universal basic income.

Rich: Yes.

Paul: The idea that…

Rich: That’s UBI.

Paul: UBI. If people receive —

Rich: Not IBS.

Paul: No, that’s really different.

Rich: Very different.

Paul: Not connected at all. If people received a certain amount of money every month —

Rich: Baseline.

Paul: To live their lives.

Rich: Yes.

Paul: That that would, that would be a protection in society against all the change that’s coming from technology, where people just keep losing their jobs over and over again as more and more robots take over.

Rich: Yes.

Paul: So Padraic Calpin sent us a note. I’m gonna read it. “With a system like this” — meaning universal basic income — ”or with welfare there is of course the potential for a proportion of people who, for lack of a better phrase, do nothing with it. But I have never accepted the assertion that this is or would ever be a significant proportion. It might be naive but I have that faith.

”A lot of my thinking around universal income is based on my recollections of Bertrand Russell’s essay ‘In Praise of Idleness,’ which is a misleading title; he has this notion that, with increased automation, we could reach a period where the amount of obligatory work required from each of us would amount to a single-digit number of hours per week, and that culturally, scientifically etc. we’d benefit immensely from the ability to pursue our interests free from the obligation of paid work. This is verging on the utopian, but I think a universal basic income offers a more plausible vision of this, by removing the spectre of abject poverty.”

So that’s an excerpt from an excellent email from Padraic Calpin.

Rich: He’s making a good point.

Paul: You know, it does, it takes away that sense of, like, I’m over the abyss.

Rich: Yeah…I think the premise of this is flawed. I think that’s the challenge here, is I think when, with innovation, and as we’ve advanced, and as we’ve become more sophisticated in so many ways, through venture, you know, expeditions that people go on and business ideas and invention and, you know, all that, I think that baseline is changing. I mean, there was a day when abject poverty meant you will never eat meat in your life.

Paul: Sure.

Rich: But today the great majority of people in this country —

Paul: In the United States. Not in the world.

Rich: In the United States, correct, can eat meat. Can go to the movies. What poverty is today is quite, quite different than it was in the past.

Paul: It’s tricky, right, because technology moves the line. Because you —

Rich: No, let me finish the thought.

Paul: All right.

Rich: What I would argue is that that baseline has risen because of those free markets.

Paul: Well, and….sure.

Rich: It’s not because of — and that’s the trap here, is that universal income, I think what you have to be careful with is it’s almost like a sedative. To continue to raise that line, universal income is going to sort of temper it. And yeah, what he’s essentially saying is I can pursue painting and pursue my interests and whatnot. And I think, I mean, I think human motivation is really about making a big impact. There’s a small population that wants to drop a bomb on the world. That’s their hope, that they’re going to make that kind of impact.

Paul: Well there’s a very small population that actually wants to drop a bomb.

Rich: Well there is that as well. That’s true, there is that as well. So I think it’s a more optimistic view, and I think he’s right. I think for some people, if you gave them basic income, they’re going to do some productive things. They’ll write songs and teach children and do some other stuff. But I think what we have to be careful with is that that hill that you have to try to climb and that hunger, I think is a good thing. I think it leads to something that raises the level for everybody.

Paul: It does, but you know, you and I are, we’re people who are able to get over that hill. We were. We were both broke at different times in our life.

Rich: Yeah.

Paul: We were able to get able that hill. A lot of people just can’t — like, it’s great that we could get over, but if your foot hurts and you can’t get to the top of the hill.

Rich: I want to clarify. I want to clarify. If you have, I think based on either your age or condition or circumstances that justify, you should be supported, just to be clear.

Paul: I hate the way that the country lets people just hover over the abyss. You know, they can’t get basic healthcare, or they just, they sit in their apartments and they kind of can’t go out and have a cup of coffee.

Rich: Yeah.

Paul: This system could support a little bit more happiness.

Rich: If you bring up Denmark…

Paul: I’m not bringing up Denmark, but I’m just like, we have, America has created the world’s greatest novelty factory —

Rich: Is…is…I mean, what is the state of happy in this country?

Paul: Pretty bad.

Rich: Is that true?

Paul: I think it’s really tricky, too, because I think that —

Rich: I don’t know what —

Paul: The way that the…the way that, just straight-up entrepreneurial and capitalist culture works is like, you really start to feel like garbage if you’re poor all the time. And poor, because that line does move in a weird way, like, it’s very hard for people who aren’t doing well, because they don’t see a long-term security unless they’re doing incredibly well.

Rich: Mmmm hmmm. This is a deep pool, Paul.

Paul: This is a deep pool. I think that… [sigh] It’s just really tricky. I do like the idea of, like, there being some sense of security from the abyss. That you could still get a cup of coffee and read a book and go for a walk.

Rich: Yeah.

Paul: Even if you’re having a bad couple of years. A lot of people in the country are living on, like, $20 grand.

Rich: Yeah.

Paul: And so, like, something that would help them, from the government, something structured, something that is connected to a little bit of happiness and opportunity and good health, not a bad idea.

Rich: Yeah. I don’t disagree. I think it’s a complicated situation, but I don’t disagree.

Paul: That was a great email. Thank you, Padraic. And we’ll keep, we —

Rich: A cool name.

Paul: It is a cool name. We are going to read more emails, but we’re out of time, so we’ll start working those into future episodes. Thank you, listener, for being here.

Rich: How can you not give five stars to a podcast that focused on NDAs? Search NDAs in iTunes. Will you find another podcast?

Paul: This is — probably yeah, actually, probably. It’s horrible out there.

Rich: Is it horrible out there?

Paul: Yeah. It’s not good.

Rich: OK.

Paul: There are so many podcasts now.

Rich: All right.

Paul: Ours is but one.

Rich: Well.

Paul: But it’s a very well-intentioned one, and we’re glad that you —

Rich: It comes from a good place.

Paul: Yeah, so hey, five stars is a good number of stars, in my opinion.

Rich: Yup.

Paul: I’m Paul Ford.

Rich: Rich Ziade.

Paul: You’ve been listening to Track Changes, the official podcast of Postlight, a product design studio in New York City that builds really beautiful technology things of all kinds. If you want to get in touch with us —

Rich: [email protected].

Paul: [email protected]. Let your fingers just dance over the keyboard and send us an email. We love — love — actually really do love hearing from listeners.

Rich: It’s love.

Paul: Yeah, it’s great. It’s fun. So get in touch, we want to talk to you and find out what’s going on in the world. Talk to you soon.

Rich: Take care.

Paul: Bye.