4 ms·

My company had a significant product based on an early stage startup's product -- before we signed a license with them, we negotiated a code escrow agreement wi

My company had a significant product based on an early stage startup's product -- before we signed a license with them, we negotiated a code escrow agreement with the company. And it was good that we did because about a year later they got acquired by a company that didn't want to continue selling the product we used, but we got the source code so were able to maintain the product. We picked up a couple of the developers that were working on that product too.

Redoubts 3y ago
> we negotiated a code escrow agreement with the company. really curious of the terms of that
- Johnny555 3y ago
  Me too, only a few people in the company knew the terms of the agreement, apparently it was the only code escrow agreement that company made and it was protected under NDA. I don't think we paid a premium for it, but signed a longer term licensing agreement.
swyx 3y ago
woudl love to learn more - what startup was this? why could they not have gone out to market to compete with you instead of letting you whitelabel their product?
- Johnny555 3y ago
  It was a pretty low level product near the bottom of our infrastructure tier and we built everything on top of it. It worked well for our specific use case, but apparently not a general enough need to succeed on its own. It's not like we took their product, added a new skin and sold it as our own.
senderista 3y ago
How many businesses have the in-house expertise to maintain a defunct codebase? And for how many of those that do is it actually an optimal use of resources?
- Rapzid 3y ago
  This is a story about successful CYA, not a recommendation to go balls deep on any hawt sAas that comes your way. But also, a lot of companies have engineers that can.. Engineer. Often it's more an availability issue than expertise.
- Johnny555 3y ago
  When we took over the codebase, it was 50-50 whether or not we'd really continue with it long term or just fix a couple important bugs and work on porting to something new. Then we managed to hire a couple of the core devs from the product and decided to keep it. We were lucky that they did a good job with the escrowed code and had everything we needed to build the software on day one. >And for how many of those that do is it actually an optimal use of resources? That's impossible to answer -- depends on how hard it would be to port to another product to fill the need (assuming you can find such a product), or write a new system from scratch to do what that product does.
debarshri 3y ago
This is more common practice than you think. But it is common in enterprise realm not in SaaS realm where you just self signup and it is Product-led upsell.

Redoubts 3y ago

> we negotiated a code escrow agreement with the company. really curious of the terms of that

Johnny555 3y ago
Me too, only a few people in the company knew the terms of the agreement, apparently it was the only code escrow agreement that company made and it was protected under NDA. I don't think we paid a premium for it, but signed a longer term licensing agreement.

swyx 3y ago

woudl love to learn more - what startup was this? why could they not have gone out to market to compete with you instead of letting you whitelabel their product?

Johnny555 3y ago
It was a pretty low level product near the bottom of our infrastructure tier and we built everything on top of it. It worked well for our specific use case, but apparently not a general enough need to succeed on its own. It's not like we took their product, added a new skin and sold it as our own.

senderista 3y ago

How many businesses have the in-house expertise to maintain a defunct codebase? And for how many of those that do is it actually an optimal use of resources?

Rapzid 3y ago
This is a story about successful CYA, not a recommendation to go balls deep on any hawt sAas that comes your way. But also, a lot of companies have engineers that can.. Engineer. Often it's more an availability issue than expertise.
Johnny555 3y ago
When we took over the codebase, it was 50-50 whether or not we'd really continue with it long term or just fix a couple important bugs and work on porting to something new. Then we managed to hire a couple of the core devs from the product and decided to keep it. We were lucky that they did a good job with the escrowed code and had everything we needed to build the software on day one. >And for how many of those that do is it actually an optimal use of resources? That's impossible to answer -- depends on how hard it would be to port to another product to fill the need (assuming you can find such a product), or write a new system from scratch to do what that product does.

debarshri 3y ago

This is more common practice than you think. But it is common in enterprise realm not in SaaS realm where you just self signup and it is Product-led upsell.