5 ms·

Ask HN: Client's project can be a startup

8 points by _benj 8y ago

Hello everybody, So, a client is hiring me to make a project for them (software). It's a pretty sophisticated tool and the alternatives are quite expensive. I'm trying to figure out how can I (if I should) communicate that to the client. Do I reach an agreement in which, for example, I change them less but I keep ownership of the code? Make it an open source project and provide it as SaaS? Proprietary code and equity? Thanks!

Rjevski 8y ago
First of all I would consider it very unethical to steal your client's idea/project or try to extort money from them just because you believe their idea has potential. You are hired to write code. Bill them for the time & effort it takes you to write that code. Doesn't matter whether the code has potential or not (if it does, great, because you're likely to have future business from them, and possibly end up being hired in a senior position, maybe even CTO). You can communicate this to them as your personal opinion, but make sure you don't come across as threatening. Ideally let them know after the deal is sealed and you already agreed on a rate, otherwise it might come across badly during the rate negotiation where they don't really want to pay X amount of money but at the same time feel pressured to accept otherwise they think you might run away with the project/idea/whatever.
- kull 8y ago
  100% agree. Super unethical and a potential legal issues. This is why NDA should be always signed and hiring developers out of the country is something that will make you execute your rights to the code and idea harder.
- kojeovo 8y ago
  > You are hired to write code This is pretty wrong imo. I believe we're hired to create business value. An important question here to OP: Have you signed anything yet.. as in have they hired you yet? Or are you still negotiating? If they're hired on at a discussed rate, and then realized the project has potential - then I agree, too bad. Don't be shitty. But if it's early stages of negotiation and OP believes this is gonna create 1m in business value, and wants 100k for it.. then sure, pitch it to the client. Want the IP after? Ask them. Maybe talk to a lawyer though.
  - gammateam 8y ago
    Everything you wrote is based on the idea of OP not already having been hired Way too many assumptions to decide if anybody is right or wrong Someone already hired doesnt get to imagine how their work for hire becomes something they own
nik736 8y ago
So you want to open source the idea and whole software that you are being paid to write? I would never ever hire you, alone for coming up with such an idea.
- odonnellryan 8y ago
  By default in the US the person paying the contractor to write the code owns it. But, that does not mean there is anything wrong with the contractor asking for an alternative agreement. I do a lot of contracting work and my clients always own 100% of my code: but I could see that if I were to be approached to write something I could then market to my other clients (a lot of them are in finance) maybe I could ask them to develop for free or cheap to do that. I don't see any problem with being honest with your client and asking them.
  - pydeveloper22 8y ago
    Hello, My apologies in advance that this may not be the response you were looking forward to on forum question. But I discovered an older post online on the Hacker News site some time ago for a Remote Junior Programmer/Assistant at Luma. I noticed you were looking to make your first hire and find someone that has some knowledge in technologies such as Python and Linux. Well, I had completely forgot about viewing it and so I was checking out Hacker News job board today and saw it was for a remote Part/Full-time opening available at the Luma in the NYC area. Well I'm someone who enjoys coding and learning with Python as far as learning purposes/hobbies go. Plus, I'm someone who has been going the self taught route trying to break into the IT field/Python Development world. I also have interests in some of the things mentioned in the post such as finance/trading and business. But, more than anything.. I'd looking to further learn and grow in my skills as far as Python development goes. I don't have much experience with Django Web development but feel I can learn and pick up on it as well as with any other technology requirements quickly. After quickly reading your post on Hacker News I was encouraged and interested to reach out and contact you for more info. So with that said, here I am..and I wanted to inquire to find out if this opening is available? Or has it been filled? Also would you allow for training of junior developers to get up to speed? I had to ask because but I wasn't sure if you meant junior or for more seasoned developers. Also, you have a contact number to learn more about this position or information on the things you require in regards to the nature of the job to increase one's chances to be a part of your startup team? Any help in this matter will be greatly appreciated. Thank you Feel free to contact me at: pydeveloper22@gmail.com --K
odonnellryan 8y ago
I have been approached by clients asking for a discount before in trade for equity. If they are willing to pay the legal fees and you can afford to lose the time, sure? It is nice for them for you to have buy-in, nice for them to get a discount, but what do you gain? Can they run a business successfully? Your (probably) small share is not going to mean much in terms of running the company. Do you trust them enough not to get into major legal trouble that is going to cause you crazy headaches down the road?
ecesena 8y ago
If you say "is hiring me" I assume you've not started yet. Given that launching a startup is no joke, if I were you I'd start working on the tool for them, paid in full, keeping your idea to turn it into a startup in background. After a bit, if you're still committed to that, you feel you have cofounder(s) and money, then you can start sharing the idea with the client. I personally very much doubt switching from internal tool to SaaS will be no brain, and as long as you don't reuse their code you should be free to rebuild a similar SaaS. Test their interest in becoming your first customer and/or an investor in your startup (perhaps in exchange of the code you already wrote for them). I'd be very cautious because if there are alternatives that are quite expensive... there might be a reason for that. And I wouldn't be too optimistic about your personal cost (time & money) to switch an internal project into a startup. This said, best of luck, and post it on HN when you launch!
rajacombinator 8y ago
I disagree with others here saying what you’re proposing is unethical. It depends a lot on context and what kind of agreements you’ve already signed. If the client sees it as a core part of their business or you’ve signed something that limits your options, then it’s on the less ethical side. However from your description it sounds like the client see this as incidental to their business and just a tool they want. In that case I see no reason why you can’t have a conversation about other options with them. I think it would be very reasonable to offer them a much lower rate plus some kind of long term SaaS contract options in exchange for the IP and rights to sell the service to others. They may say no but you could discuss it at least.
- ecesena 8y ago
  > you’ve already signed it doesn't seem he signed, and that's I think what's confusing here. People say it's unethical, but he's in fact just asking how to set up things correctly from the beginning... or at least this is my take.
dyeje 8y ago
The answers on this question are naive and harmful. It is common for contractors, agencies, etc to negotiate for keeping the IP of what they work on. Many businesses use this as a tactic to convert from a services company to a product company. There is no straling or unethical behavior at play here. If you can reach an agreement with your client, everything is fine. Just make sure to have a lawyer draw up the contract, as it sounds like you haven't done this kind of arrangement before.

8 points by _benj 8y ago

Rjevski 8y ago

First of all I would consider it very unethical to steal your client's idea/project or try to extort money from them just because you believe their idea has potential. You are hired to write code. Bill them for the time & effort it takes you to write that code. Doesn't matter whether the code has potential or not (if it does, great, because you're likely to have future business from them, and possibly end up being hired in a senior position, maybe even CTO). You can communicate this to them as your personal opinion, but make sure you don't come across as threatening. Ideally let them know after the deal is sealed and you already agreed on a rate, otherwise it might come across badly during the rate negotiation where they don't really want to pay X amount of money but at the same time feel pressured to accept otherwise they think you might run away with the project/idea/whatever.

kull 8y ago
100% agree. Super unethical and a potential legal issues. This is why NDA should be always signed and hiring developers out of the country is something that will make you execute your rights to the code and idea harder.
kojeovo 8y ago
> You are hired to write code This is pretty wrong imo. I believe we're hired to create business value. An important question here to OP: Have you signed anything yet.. as in have they hired you yet? Or are you still negotiating? If they're hired on at a discussed rate, and then realized the project has potential - then I agree, too bad. Don't be shitty. But if it's early stages of negotiation and OP believes this is gonna create 1m in business value, and wants 100k for it.. then sure, pitch it to the client. Want the IP after? Ask them. Maybe talk to a lawyer though.
- gammateam 8y ago
  Everything you wrote is based on the idea of OP not already having been hired Way too many assumptions to decide if anybody is right or wrong Someone already hired doesnt get to imagine how their work for hire becomes something they own

nik736 8y ago

So you want to open source the idea and whole software that you are being paid to write? I would never ever hire you, alone for coming up with such an idea.

odonnellryan 8y ago
By default in the US the person paying the contractor to write the code owns it. But, that does not mean there is anything wrong with the contractor asking for an alternative agreement. I do a lot of contracting work and my clients always own 100% of my code: but I could see that if I were to be approached to write something I could then market to my other clients (a lot of them are in finance) maybe I could ask them to develop for free or cheap to do that. I don't see any problem with being honest with your client and asking them.
- pydeveloper22 8y ago
  Hello, My apologies in advance that this may not be the response you were looking forward to on forum question. But I discovered an older post online on the Hacker News site some time ago for a Remote Junior Programmer/Assistant at Luma. I noticed you were looking to make your first hire and find someone that has some knowledge in technologies such as Python and Linux. Well, I had completely forgot about viewing it and so I was checking out Hacker News job board today and saw it was for a remote Part/Full-time opening available at the Luma in the NYC area. Well I'm someone who enjoys coding and learning with Python as far as learning purposes/hobbies go. Plus, I'm someone who has been going the self taught route trying to break into the IT field/Python Development world. I also have interests in some of the things mentioned in the post such as finance/trading and business. But, more than anything.. I'd looking to further learn and grow in my skills as far as Python development goes. I don't have much experience with Django Web development but feel I can learn and pick up on it as well as with any other technology requirements quickly. After quickly reading your post on Hacker News I was encouraged and interested to reach out and contact you for more info. So with that said, here I am..and I wanted to inquire to find out if this opening is available? Or has it been filled? Also would you allow for training of junior developers to get up to speed? I had to ask because but I wasn't sure if you meant junior or for more seasoned developers. Also, you have a contact number to learn more about this position or information on the things you require in regards to the nature of the job to increase one's chances to be a part of your startup team? Any help in this matter will be greatly appreciated. Thank you Feel free to contact me at: pydeveloper22@gmail.com --K

odonnellryan 8y ago

I have been approached by clients asking for a discount before in trade for equity. If they are willing to pay the legal fees and you can afford to lose the time, sure? It is nice for them for you to have buy-in, nice for them to get a discount, but what do you gain? Can they run a business successfully? Your (probably) small share is not going to mean much in terms of running the company. Do you trust them enough not to get into major legal trouble that is going to cause you crazy headaches down the road?

ecesena 8y ago

If you say "is hiring me" I assume you've not started yet. Given that launching a startup is no joke, if I were you I'd start working on the tool for them, paid in full, keeping your idea to turn it into a startup in background. After a bit, if you're still committed to that, you feel you have cofounder(s) and money, then you can start sharing the idea with the client. I personally very much doubt switching from internal tool to SaaS will be no brain, and as long as you don't reuse their code you should be free to rebuild a similar SaaS. Test their interest in becoming your first customer and/or an investor in your startup (perhaps in exchange of the code you already wrote for them). I'd be very cautious because if there are alternatives that are quite expensive... there might be a reason for that. And I wouldn't be too optimistic about your personal cost (time & money) to switch an internal project into a startup. This said, best of luck, and post it on HN when you launch!

rajacombinator 8y ago

I disagree with others here saying what you’re proposing is unethical. It depends a lot on context and what kind of agreements you’ve already signed. If the client sees it as a core part of their business or you’ve signed something that limits your options, then it’s on the less ethical side. However from your description it sounds like the client see this as incidental to their business and just a tool they want. In that case I see no reason why you can’t have a conversation about other options with them. I think it would be very reasonable to offer them a much lower rate plus some kind of long term SaaS contract options in exchange for the IP and rights to sell the service to others. They may say no but you could discuss it at least.

ecesena 8y ago
> you’ve already signed it doesn't seem he signed, and that's I think what's confusing here. People say it's unethical, but he's in fact just asking how to set up things correctly from the beginning... or at least this is my take.

dyeje 8y ago

The answers on this question are naive and harmful. It is common for contractors, agencies, etc to negotiate for keeping the IP of what they work on. Many businesses use this as a tactic to convert from a services company to a product company. There is no straling or unethical behavior at play here. If you can reach an agreement with your client, everything is fine. Just make sure to have a lawyer draw up the contract, as it sounds like you haven't done this kind of arrangement before.