Privacy · Terms and conditions

How do you decide on your product's terms of Service and Privacy Policy?

Himanshu Bhaisare Teach me how to startup.

July 6th, 2016

Hi,

We have created web app to run an on demand massage service. I need to finalise Terms of Service and Privacy Policy for this product. Till now I was using a modified version of a standard template for Terms of Service/Privacy Policy but before I incorporate I wanted to have a solid version.

Should I ask my lawyer to take care of this ? How did you guys do it ?

Thanks,
Himanshu

Brendon Whateley Founder at Kugadi

July 6th, 2016

We certainly incorporated way before we got to the stage you are. For software people, the product development is quite easy. The hard part was developing the demand for the product, sales, etc. The legal aspects are just a distraction.

For ToS, contracts, etc. we use a couple of lawyers who likes to keep things down to the minimum -- under the theory that if you end up in court, the more you have written down, the more there is to argue over. For contracts that we did not get from them, we have used industry standard versions we have purchased from online resources specializing in startups.

In short, I'd not worry about things you can change later when you have the money and resources to both get better versions and also to be the target of lawsuits. But I'd get incorporated as soon as possible, because without forming a proper corporate entity, you personally are exposed to the full liability of your company activities. An excellent resource is David Rose's "The Startup Checklist" which will give you all the nuts and bolts of getting things right when starting a company.

Lauren Harriman Rockstart Pitch Writer, Licensed CA Attorney, CIPP/US, Tech Law Blogger

July 7th, 2016

Brendon's point about incorporating as soon as possible is important - more important even than terms of service (this coming from someone who works in Privacy) - for exactly the reason he said: you're personally liable until you do. I haven't used "The Startup Checklist" but as far as what to write for ToS and/or your Privacy Policy, think about the sorts of things you want to be able to do down the line with your customer data. Then make sure that your customers clicking "I agree" matches up with an agreement to your doing the sorts of things you want to be able to do. For instance, if you think you're likely going to want to be able to sell your company down the line, make sure you incorporate into your ToS and Privacy Policy that your customer data would be part of the sale. Also, it's a generally good rule of thumb to limit access to customer data inside your company to only those who need access to it. Data breaches don't always happen in super exciting Hollywood ways - often someone leaves their computer logged in and unattended, or temp employees are given access to data they really don't need to have access to and aren't given proper security training.

Dimitry Rotstein Founder at Miranor

July 6th, 2016

The first time I went to a lawyer. It took a month and a $500, and the result was awful, nearly unusable. Since then I do these things myself. In my experience, such documents are not finalized until much later stages - in early stages you have to make changes too frequently and quickly for a lawyer to handle. Also, in my experience, lawyers really don't like to check and fix existing documents - they prefer to write new ones from scratch or from their own templates, and they will try to convince you that this is the best way. I wouldn't fall for that trick. If and when the startup really takes off and has a lot of money so that you don't have to think twice about spending a few $K, then you can hire a lawyer (who specializes in just that sort of things) to write the new documents. Yes, apparently it's very important to pick the right kind of lawyer. It's similar to doctors - you wouldn't want a ophthalmologist to give you a heart surgery, would you? And if the startup fails, then you saved a lot of money on lawyers for your next startup.

Himanshu Bhaisare Teach me how to startup.

July 7th, 2016

Thanks guys. 

I have decided to go with Stripe Atlas for incorporation. In case anyone else here is interested in inc.




Joseph Wang Chief Science Officer at Bitquant Research Laboratories

July 9th, 2016

The problem with using a lawyer is that lawyers typically rely on you to figure out what your policy is.  Once you know what your business requirements are then you can talk with a lawyer to make sure that what you have is legally solid, but they have often have no business sense, and worse yet, there are a lot of lawyers that don't realize that this is a bad thing.

One thing that you should start doing now is to find a lawyer.  What you are looking for is someone that you can ask questions for (and one of the more important questions is "do I need a lawyer for this?")  It turns out that what you are looking for in a lawyer is less a "law robot" but rather someone that you trust to have conversations with, and it takes a lot of time to find someone like this and develop a level of trust, so you might as well start now.

As far as what goes into a service or privacy policy.  The basic question you have to ask yourself is what are your customers expecting from you.

1) Do they care if you resell or share their data with other people?
2) Do they care if you use their data to market goods to them?

As far as terms of service:

1) What do the customers expect from you as far as down time?  (For small companies, this is typically easy, you expect nothing from us, and then you just use the standard legal template for disclaiming all liability for providing service.)

Also it will help if you can summarize the policy in one sentence.  Also the ToS/Privacy goes into your business model, and ultimately what your customer expects from you.  Are they dealing with you so that you can spy on them (i.e. I get "free" e-mail from google because I let them spy on me) or are they dealing with you with the expectation that you will keep their information secret.