> should we go to their competitor? That this option is on the table at all suggests that what you are developing is a feature that is lacking not only in X's

> should we go to their competitor? That this option is on the table at all suggests that what you are developing is a feature that is lacking not only in X's product but in other products that compete with X. So one alternative is to try to become the specialist feature Z within that product space and your product integrates or plugs-in to all the major players. You become positioned as the niche guys who know everything about Z. That could be a very sustainable business or eventually lead to a nice profitable acquisition by a bigger player. Another possibility is that the talk of owning the technology and cutting you off and shutting you down is bravado talk and only one possible scenario from within Big Corp. Someone higher up might decide that this is not strategic and just walk away from it even after making a bunch of noise and plans. Happens all the time. Or, upon further analysis they might decide that you have already taken development risk out of the equation by the good progress you have made. And, that it makes much more sense to just see if they can acquire your team and IP than to run through the same cycle of development risk and potentially turn out a product that is both worse and late to market. I guess in the end, I lean toward making some comments that let them know that there is a possibility of working out an acquisition or licensing deal. If at that point, Big Corp seems determined to just redevelop it themselves and cut you out, then I would approach the competitors. Just realize that Big Corp may respond positively about acquisition and then just keep stringing you along, all the while doing their own thing. Tough calls to make