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Starting a mISV

Started by OmegaHelm Jul 12, 2008 at 8:50 PM 13 replies 2.3k views
Original Post
OmegaHelm
OmegaHelm
mISV == Micro Independant Software Vendor I've been working at this company for a few years and we license this software product from another vendor that is complete crap. Since this particular product occupies an obscure niche the vendor charges A LOT of money for it. I'm convinced I can create a similar application that is several orders of magnitude better in both usability and functionality. So I'm getting ready to take a leap; quit my job to develop a competing product. I have about a years salary saved up and I'm planning to give notice at my job next week. I'm scared as hell, this will be the first time I've been unemployed in a LONG time. There are certain aspects of the software that will be very difficult, but for other parts I plan to use open source solutions. What's really scary is: once I get a product 'finished' I have to start marketing the thing and doing all the business related stuff. The only thing that makes the proposition seem doable is pricing of these 'vertical' apps is such that I really only need one client to become self sufficient. So has anyone else done something like this? Advice? Warnings? [Edited by - OmegaHelm on July 12, 2008 9:10:52 PM]
Mantrid
Mantrid
i assume there's no contract clause saying you can't create a similar product for x amount of time after leaving?

OmegaHelm
OmegaHelm
In this case I don't think that's necessary. The product in question isn't 'our' product. We license it from another company so it's not something I'm paid to develop.
Yann L
Yann L
Be very careful with that. Besides a possible non-competition clause in your contract, I assume you signed an NDA when you worked at that company (maybe as a part of your employment contract). If you develop a competing product directly after leaving them, they can (and probably will) press charges against you for using knowledge you gained with their technology while you worked for them. These kind of lawsuits can be extremely expensive, and possibly ruin you entirely.

NEVER do something like this without consulting a lawyer first !

Quote:

In this case I don't think that's necessary. The product in question isn't 'our' product. We license it from another company so it's not something I'm paid to develop.

This doesn't matter. It's not about who owns what technology, but about knowledge you possible gained and abused (according to your contract). This can even include things like customer lists and contacts, etc.
OmegaHelm
OmegaHelm
Really? I have to say I'm a little surprised to hear that. So for an example suppose the product was something like Microsoft Visual Sourcesafe with that level of general functionality. If I worked for a company that licensed Visual Sourcesafe I couldn't quit and develop Subversion?

Edit; the idea here is that the product in question has absolutely nothing to do with my employers main line of business. I've never seen the source, I've only used a gui frontend.

So are you saying that I'm beholden to IP contracts the company I work for signs with it's vendors?
Yann L
Yann L
Quote:
Original post by OmegaHelm
Really? I have to say I'm a little surprised to hear that. So for an example suppose the product was something like Microsoft Visual Sourcesafe with that level of general functionality. If I worked for a company that licensed Visual Sourcesafe I couldn't develop Subversion?

It all depends on how exactly your employment contract (and any other contracts you possible signed) are worded. It is perfectly possible to add a clause to an employment contract that would make this illegal for you, for a certain amount of time. It would most probably also be illegal for you to sell to the same customer(s) as they sell, as they could argue that you gained this information solely due to your employment with them. Especially since you say that this is a very small niche market.

But since we don't know how your contract looks like, and since we aren't lawyers (well, most of us aren't), you should check this with an actual real-life lawyer.

Quote:
Original post by OmegaHelm
Edit; the idea here is that the product in question has absolutely nothing to do with my employers main line of business.

This has no legal relevance.

Quote:

So are you saying that I'm beholden to IP contracts the company I work for signs with it's vendors?

No, you aren't. But you're bound to the termination conditions of your employment contract, which can extend past the time you work for them.
OmegaHelm
OmegaHelm
Thanks Yann! I think I better call a lawyer before I tender my resignation...
coldacid
coldacid
Quote:
Original post by OmegaHelm
mISV == Micro Independant Software Vendor

Shouldn't that be µISV?
khawk
Well, definitely contact a lawyer, but I also did research on something along these lines..

One of the things I've found out is that courts tend to rule in the entrepreneur's favor as long as said entrepreneur does not target the same customer base as his/her former employer. A strong example I was given is the haircut/salon business, where people go off to do their own thing all the time. The hairstylists just aren't allowed to take customer lists or directly target their former employer's customers, basically demonstrating an attempt to harm the former employer.

But yeah, contact a lawyer. It's the only safe way.
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Codejack
Codejack
Is there no way you could develop the software after your work hours? I don't think I could take that kind of risk; not now that I have a mortgage.
OmegaHelm
OmegaHelm
Quote:
Original post by Codejack
Is there no way you could develop the software after your work hours? I don't think I could take that kind of risk; not now that I have a mortgage.


Yann probably knows all about this, but my understanding is that any software you produce while working for a company, the company owns. You can argue that it was created on your time with resources, but when you're salary, what is 'your time'? I have researched this aspect and in my state the law is very ambiguous. And since I had thought to approach my (soon to be) former employer as a possible customer, I would like to keep good/great relations.

Not to say you couldn't do things on the sly. Personally, I'm not even going to make my first commit to svn until after I'm officially unemployed. I have spent the past couple of years researching and studying the required fields in CS so I think I'm ready to crank out some code.


Oluseyi
Oluseyi
Quote:
Original post by OmegaHelm
Quote:
Original post by Codejack
Is there no way you could develop the software after your work hours? I don't think I could take that kind of risk; not now that I have a mortgage.

Yann probably knows all about this, but my understanding is that any software you produce while working for a company, the company owns.

You really should read your contract. And, in the future, should you sign another employment contract, you should be much more proactive about negotiating which clauses are inserted. Most companies include a boilerplate clause about any software developed while employed with them, or using their resources, being their legal property. However, you can - and I have done this in the past - negotiate an amendment to restrict the applicability of this clause only to software that is similar or highly relevant to the employer's core business.

Ultimately, though, Codejack's concern is ceasing paid work for an unspecified duration to develop this software from scratch. You can probably find some form of menial/nominal work with plentiful spare time to ensure you have some measure of income - a desk attendant or security position, which you can bring a laptop to, for instance.

Thoroughly consider all your options before you make a leap, and best of luck! [smile]
OmegaHelm
OmegaHelm
Actually, I didn't sign a contract when I accepted my current position so I fall under what ever the default is by state law. I do appreciate the input though.
coldacid
coldacid
No contract? State defaults? Yeah, call a lawyer. Like, yesterday.
jfclavette
jfclavette
IANAL, but if 1) You didn't sign a contract when employed, 2) the software is licensable by anyone and 3) your company didn't sign an NDA with them (Which shouldn't be a problem if 1 and 2 are true and they didn't tell you anything about it), there's very little reason there should be any legal problems except possible patent issues. Consult a lawyer but I wouldn't be too worried.
I teleported home one night; With Ron and Sid and Meg; Ron stole Meggie's heart away; And I got Sydney's leg. <> I'm blogging, emo style

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