Can consultants survive nondisclosure agreements?

Sept. 1, 1997
Q:As a consultant I sign nondisclosure agreements with clients who compete with each other. Sometimes I have to exclude myself from some very specific aspects of a project because of work I do for another company. I fear my effectiveness as a consultant may suffer as a result. Any thoughts?
1304qa Chang New

Q: As a consultant I sign nondisclosure agreements with clients who compete with each other. Sometimes I have to exclude myself from some very specific aspects of a project because of work I do for another company. I fear my effectiveness as a consultant may suffer as a result. Any thoughts?

A: The nature of your involvement in a project and the information you cannot use in your work depends on what you agreed to. It`s important to have a good lawyer help you understand the trade-offs. Here are my thoughts about what`s fair: (1) the skills you use to make a living as a consultant can be applied to any work you do, (2) the client`s product idea belongs to the client, and (3) what you invent while you are being paid belongs to the customer. You also need to pay attention to intellectual property rights. If your invention gets a patent, it will be assigned to the client unless you negotiated shared rights. Trade secrets are much stickier to deal with. So you`ll want to clearly establish in writing what`s considered proprietary by your client. For sure, you`ll want to put a time limit on anything you sign away.

Q: What`s the best location to start a biomedical laser product company?

A: There are both business and personal issues here. On the business side your question reminds me of Holland and the flower industry. Holland is successful even though it`s at a big disadvantage in terms of weather conditions and cost of material, labor, and real estate. Over the years the flower growers have developed the infrastructure to make this industry competitive. You, too, must think about infrastructure. For technology, you`ll want to be close to a university with a strong biomedical research focus. For people and services, you`ll want to be close to similar biomedical companies or laser/optics companies. You`ll also want to be in an area where people such as bankers are accustomed to dealing with start-up companies. Then, after satisfying these business considerations, you`ll want to check off the personal preferences of your team.

Q: I have a government contract to develop a new optical material system for telecommunication. The technology is not proven but I am determined to succeed. Any business strategy advice?

A:You must first develop an understanding of the commercialization process that relates to your kind of product, specific to the industry you want to tackle. You could start by studying a few case histories of other material systems. You could also talk extensively to knowledgeable people. Device lifetime is a particularly critical issue in telecommunication. The experiences of people supplying optical material, laser diodes, and fiber amplifiers can provide valuable insight. Most entrepreneurs are optimistic, so you`ll want to temper your enthusiasm by throwing stones at your own plans, looking for the weak spots. Given that the gestation period can be long, I`d be inclined to form a strategic alliance with a company that`s in it for the long haul.

Q: I am a new Ph.D. in laser physics. How do I find a job in the USA?

A: Companies usually hire overseas only if local talent cannot be found, so you`re at a disadvantage. A shotgun approach like responding to random job postings would be low yield, so you should target specific individuals, companies, or industries. A number of people have succeeded by taking on a post-doc appointment first because those positions are hard to fill. You can identify professors who may be interested in your work by searching through current literature. I`d be happy to help, but you`re more likely to find opportunities that satisfy your total needs. If all fails, please feel free to contact me again.

Q: I understand that starting a business is hard on the family. Any advice?

A: You`re right. It takes almost blind dedication to succeed, especially in the early days of a company. A supportive spouse is extremely critical. In my experience, the feeling of love and caring is more important than physical presence. Thanks to business trips, I don`t believe I took my children Halloween trick-or-treating more than once or twice ever, yet that did not seem to leave any emotional scars.

A high percentage of the successful CEO`s I know who are now in their early fifties seem to have a stable family life and normal children. Most of them work extremely hard and have experienced financial hardships, but they make an effort to take on some bonding activities with their children. I believe quality counts more than quantity when comes to time spent with the family. We have a wide range of tolerance and are willing to make some sacrifices when we know what to expect.

About the Author

Milton Chang

MILTON CHANG of Incubic Management was president of Newport and New Focus. He is currently director of mBio Diagnostics and Aurrion; a trustee of Caltech; a member of the SEC Advisory Committee on Small and Emerging Companies; and serves on advisory boards and mentors entrepreneurs. Chang is a Fellow of IEEE, OSA, and LIA. Direct your business, management, and career questions to him at [email protected], and check out his book Toward Entrepreneurship at

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