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From a legal point of view, this is actually really good advice. It adequately stresses the importance of making really, really sure that you are not bound by a

From a legal point of view, this is actually really good advice. It adequately stresses the importance of making really, really sure that you are not bound by any anti-compete or IP clauses or what have you, or get released from them by your employer. To non-legal people, the advised measures may seem ridiculous; let me assure you, they are not. They are well within the minimum you need to do. For your startup, it's not about if the courts will, after several months or even years, uphold your IP rights. It's about ever getting sued and game over.

pw0ncakes 17y ago
Stupid question: if your startup gets sued over something like this, why not have the company declare bankruptcy, dissolve it, and start a new company in the same idea with some of the same employees? (If you have investors who'd get burned in this process, tell them that they can avoid this fate if they commit sufficient resources to win the lawsuit; if they do, then this is the best possibility.) It seems like it wouldn't be that hard to hide enough in the way of resources (relationships, ideas) to get a good start on Act 2. You'd lose your office and a few months of salary, and need to find new investors, but this doesn't seem as severe as "game over". It seems like 85% of startup time is figuring out what works and what doesn't, so you can "kill" the code (i.e. shunt it out of view, and then use it as a reference in a comprehensive rewrite, possibly in a different language so there's no doubt as to your new code being yours) and your cost is only the 15% of the time necessary to implement the ideas that you now know will work.
- alain94040 17y ago
  Because the lawsuit would include you, the defendant, personally, and not just your shell company? [quick legal advice: if a trick sounds too easy, it probably won't hold in court]
  - pw0ncakes 17y ago
    Because the lawsuit would include you, the defendant, personally, and not just your shell company? I don't know if this would work, having never had to do it, and it's extremely unlikely that I ever will, but then I'd hire someone to put severe pressure on decision-makers at the plantiff and make it very clear that they don't want to dance this way. Hiring a "pro negotiator" of this sort is expensive, but cheaper than losing a company, a livelihood, and having future wages garnished. When legal action becomes unaffordable and favors the rich, people will resort to illegal action. And I don't fear death enough that I'd let someone disrespect me in such a way without taking his own fall. [quick legal advice: if a trick sounds too easy, it probably won't hold in court] This I doubt, given that the vast majority of white-collar crime never leads to an indictment, and the penalties are so minor relative to the rewards that it persists in spades. (This is not to say I'd advise white-collar crime, the vast majority of which is utterly unethical and dishonorable scumbaggery. I'm only saying that the vast majority of criminals in our society get away with it.)
- alexro 17y ago
  It's pretty much how it happens in the real world. Remember how facebook started with the connectu code base?
  - dsplittgerber 17y ago
    Not exactly. It comes down to the other party not being able to prove that it was their code or that they were in violation of the other party's IP. The longer the other party waits with suing you, the more chances you have of getting off the hook. It happened with the German (code+design) clone of Facebook as well. FB waited for far too long before suing, now they basically lost the case.
- dsplittgerber 17y ago
  Investors most probably won't invest in your company at all if they know you probably will have significant IP trouble. Law suits are money-dumps, which is why the small guy never seems to win. They drop out earlier or stop from the beginning because they just don't have the funds. No investor will invest in you if e.g. 50% of his funds are going to be used for law suits. Also, if your employer has IP over your idea/process/whatever, he will sue your next company as well.
  - pw0ncakes 17y ago
    Wouldn't the adversary need a patent first to own a process? Code can be re-written, and I'd argue that it absolutely should be in such a case. And obviously, using company resources for the side project is both idiotic and unethical. I'm not talking about that. I'm talking about the case where someone writes something entirely on his own time and gets sued because of a coves-all-hours contract that effectively placed him in indentured servitude (and that shouldn't be allowed to exist in the first place).
    - dirkstoop 17y ago
      It's not so much about whether they're right or whether they'd be likely to win a lawsuit on merit, more about whether they're likely to sue.

pw0ncakes 17y ago

Stupid question: if your startup gets sued over something like this, why not have the company declare bankruptcy, dissolve it, and start a new company in the same idea with some of the same employees? (If you have investors who'd get burned in this process, tell them that they can avoid this fate if they commit sufficient resources to win the lawsuit; if they do, then this is the best possibility.) It seems like it wouldn't be that hard to hide enough in the way of resources (relationships, ideas) to get a good start on Act 2. You'd lose your office and a few months of salary, and need to find new investors, but this doesn't seem as severe as "game over". It seems like 85% of startup time is figuring out what works and what doesn't, so you can "kill" the code (i.e. shunt it out of view, and then use it as a reference in a comprehensive rewrite, possibly in a different language so there's no doubt as to your new code being yours) and your cost is only the 15% of the time necessary to implement the ideas that you now know will work.

alain94040 17y ago
Because the lawsuit would include you, the defendant, personally, and not just your shell company? [quick legal advice: if a trick sounds too easy, it probably won't hold in court]
- pw0ncakes 17y ago
  Because the lawsuit would include you, the defendant, personally, and not just your shell company? I don't know if this would work, having never had to do it, and it's extremely unlikely that I ever will, but then I'd hire someone to put severe pressure on decision-makers at the plantiff and make it very clear that they don't want to dance this way. Hiring a "pro negotiator" of this sort is expensive, but cheaper than losing a company, a livelihood, and having future wages garnished. When legal action becomes unaffordable and favors the rich, people will resort to illegal action. And I don't fear death enough that I'd let someone disrespect me in such a way without taking his own fall. [quick legal advice: if a trick sounds too easy, it probably won't hold in court] This I doubt, given that the vast majority of white-collar crime never leads to an indictment, and the penalties are so minor relative to the rewards that it persists in spades. (This is not to say I'd advise white-collar crime, the vast majority of which is utterly unethical and dishonorable scumbaggery. I'm only saying that the vast majority of criminals in our society get away with it.)
alexro 17y ago
It's pretty much how it happens in the real world. Remember how facebook started with the connectu code base?
- dsplittgerber 17y ago
  Not exactly. It comes down to the other party not being able to prove that it was their code or that they were in violation of the other party's IP. The longer the other party waits with suing you, the more chances you have of getting off the hook. It happened with the German (code+design) clone of Facebook as well. FB waited for far too long before suing, now they basically lost the case.
dsplittgerber 17y ago
Investors most probably won't invest in your company at all if they know you probably will have significant IP trouble. Law suits are money-dumps, which is why the small guy never seems to win. They drop out earlier or stop from the beginning because they just don't have the funds. No investor will invest in you if e.g. 50% of his funds are going to be used for law suits. Also, if your employer has IP over your idea/process/whatever, he will sue your next company as well.
- pw0ncakes 17y ago
  Wouldn't the adversary need a patent first to own a process? Code can be re-written, and I'd argue that it absolutely should be in such a case. And obviously, using company resources for the side project is both idiotic and unethical. I'm not talking about that. I'm talking about the case where someone writes something entirely on his own time and gets sued because of a coves-all-hours contract that effectively placed him in indentured servitude (and that shouldn't be allowed to exist in the first place).
  - dirkstoop 17y ago
    It's not so much about whether they're right or whether they'd be likely to win a lawsuit on merit, more about whether they're likely to sue.