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Marrying a gorilla...?

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Mike Jokec

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Dec 27, 2017
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Hello everyone.

For the past few months I've been working on a side project with a friend of mine. Long story short, tomorrow we have a presentation at a really big multinational on potentially working together. Great right? Or is it...

See, my intention is to build a replicable business. Something I can sell over and over again, which can potentially bring me millions. The market is there, it's a niche market, but it's there. Yet, to get access to the market, I would need a partner who is already working in the niche and basically sell them digitalisation of the said business.

Enter the multinational. It just so happens that my partner in this project landed a job there. Very quickly it turned out that they have a need for what we have. We agreed that we have common interest to join forces and "work out the details as we go".

Then they sent me a contract draft which from my perspective is a joke and I really didn't even read through, as it was simply not worth my time. I have my vision and I'll continue to go my way.

Anyway, my partner who works there is telling me what is and what isn't acceptable to them*. Apparently they want IP rights on the product (not gonna happen), or at least market exclusivity.

The thing is, they are a gorilla. They currently need me for this one project, and they want to be price aggressive, and they want to control the product. Seems like a really, really bad deal to me. Yes, they could open some markets, but it seems their pricing is not aligned with my vision, essentially slashing the market price and even killing the market in the process.

I really have no problem of walking away from this. Somehow I'm under impression that if I take that route, I will forever be their monkey, with no control over my own work. And worse, they could just put the thing in a drawer once the current project is done, forget about it, and I could do nothing about it.

So I'm inclined to play it hard, and even say no. I'm not heavily invested into it. I'd much rather recognise the market is going to shit and walk away as to be someone's monkey.

So unless they could bring me to the fastlane, my plan is to say no. It sounds crazy, because well, plenty of people would kill to be able to present to such clients. But at my current position, I just don't care. Any thoughts?

Thanks

*My partner is suddenly in panic mode as what is and what is not acceptable to the multinational, essentially advocating them instead of our business. I guess playing it hard with his employer made him nervous, but it's got really ridiculous, as he's only taking about them and their interest and 0 about our. Worse, I figured what is bad outcome for me is still god outcome for him, so we now have a conflict of interest. Fun times. I guess there is a lesson there, just not sure yet what it is.
 

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Hello everyone.

For the past few months I've been working on a side project with a friend of mine. Long story short, tomorrow we have a presentation at a really big multinational on potentially working together. Great right? Or is it...

See, my intention is to build a replicable business. Something I can sell over and over again, which can potentially bring me millions. The market is there, it's a niche market, but it's there. Yet, to get access to the market, I would need a partner who is already working in the niche and basically sell them digitalisation of the said business.

Enter the multinational. It just so happens that my partner in this project landed a job there. Very quickly it turned out that they have a need for what we have. We agreed that we have common interest to join forces and "work out the details as we go".

Then they sent me a contract draft which from my perspective is a joke and I really didn't even read through, as it was simply not worth my time. I have my vision and I'll continue to go my way.

Anyway, my partner who works there is telling me what is and what isn't acceptable to them*. Apparently they want IP rights on the product (not gonna happen), or at least market exclusivity.

The thing is, they are a gorilla. They currently need me for this one project, and they want to be price aggressive, and they want to control the product. Seems like a really, really bad deal to me. Yes, they could open some markets, but it seems their pricing is not aligned with my vision, essentially slashing the market price and even killing the market in the process.

I really have no problem of walking away from this. Somehow I'm under impression that if I take that route, I will forever be their monkey, with no control over my own work. And worse, they could just put the thing in a drawer once the current project is done, forget about it, and I could do nothing about it.

So I'm inclined to play it hard, and even say no. I'm not heavily invested into it. I'd much rather recognise the market is going to shit and walk away as to be someone's monkey.

So unless they could bring me to the fastlane, my plan is to say no. It sounds crazy, because well, plenty of people would kill to be able to present to such clients. But at my current position, I just don't care. Any thoughts?

Thanks

*My partner is suddenly in panic mode as what is and what is not acceptable to the multinational, essentially advocating them instead of our business. I guess playing it hard with his employer made him nervous, but it's got really ridiculous, as he's only taking about them and their interest and 0 about our. Worse, I figured what is bad outcome for me is still god outcome for him, so we now have a conflict of interest. Fun times. I guess there is a lesson there, just not sure yet what it is.

DMDq5DL.gif
 

Supercar

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@Mike Jokec -- If you think they are IBM and you are Bill Gates, you will do just fine with or without them.

With them (on your terms, of course) will be much faster and more profitable for both of you.

Without them will be harder. Eventually, they will either have to adopt your product or make their own and compete with you, which will cost both of you a large chunk of your profits.

Do not give away your IP. Of course you can price your company like a startup and let them invest. Or you can even sell your company to them, although it is not likely they will pay anything for just an undeveloped idea at this stage.

P.S. Go read the rules and post an introduction.
 

Mike Jokec

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Dec 27, 2017
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-- If you think they are IBM and you are Bill Gates, you will do just fine with or without them.

Good story to mention. Most of all, I don't want to be the Seattle Computer Products.

That said, IBM was short sighted and let Bill Gates just license MSDOS to them, rather than buy it. My gorilla doesn't seem to be making this mistake.

With them (on your terms, of course) will be much faster and more profitable for both of you.

I'm not sure about profitable. To them, this does not seem to be a core service, but rather "land and expand" product. Most worrying is the fact that as far as I understand they already have a contract with the end client, and it's unreasonably cheap. Literary 10% of the current market value of such service. And once they nuke the market with such price, there will actually wipe out a large part of it.

Without them will be harder. Eventually, they will either have to adopt your product or make their own and compete with you, which will cost both of you a large chunk of your profits.

Spot on. If they don't go with me, they will be our competitor. But, I could go after the high value market while they are spinning wheels for peanuts.

Do not give away your IP. Of course you can price your company like a startup and let them invest. Or you can even sell your company to them, although it is not likely they will pay anything for just an undeveloped idea at this stage.

This is something where I actually lack experience. Assuming I let them co-invest into my company, how can I make sure they don't put it in the drawer once this project is delivered? I don't want to end up working my a$$ out for one low value project and then end up dead in water with a controlling partner preventing me to sell to their competitors.

P.S. Go read the rules and post an introduction.

Really busy preparing for the presentation, will come back and do that.
 

Supercar

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Assuming I let them co-invest into my company, how can I make sure they don't put it in the drawer once this project is delivered? I don't want to end up working my a$$ out for one low value project and then end up dead in water with a controlling partner preventing me to sell to their competitors.
Do not sell them the 50% controlling interest. You need to price your company (at this time) properly. Then you can sell small chunks to get the money that you need to develop it further. Study Angel Investing, if you need cash to grow.
 

Red

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It just so happens that my partner in this project landed a job there.

First & foremost, I would want to read the employment contract your partner has with his employer. They may already own you if he agreed that anything he works on while he's employed with them becomes their IP.

That's where my big red flags went up reading your story.... If they're savvy enough to be addressing other tangents up front, I would review your partners employment agreement before meeting with them. They may already own you.
 

Mike Jokec

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Dec 27, 2017
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First & foremost, I would want to read the employment contract your partner has with his employer. They may already own you if he agreed that anything he works on while he's employed with them becomes their IP.

No, we had the product before he joined them. Not to mention, I could easily claim the sole IP ownership, as all codebase is actually mine.
 

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Your choices are simple.

Sell out and become their devalued chimp, or keep it and assume the risk for a larger potential reward.

There's nothing new in your dilemma.

Do you want some money now, or risk it for the chance at greater rewards later?

Your assessment of their intentions is likely spot on.

Your friend is more concerned with his paycheck than your future. I've been in an identical situation and it ended with the friend screwing me for his in perceived preservation.
 
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JacobBW

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I could be way off here, but what about only licensing the product to them?
Keep ownership, but they get to use it for as long as they want (as long as they keep paying their licence fees).
You could even have it built in that they’re a licences reseller if that’s what they want - again as long as they continue to pay the licence fees.

Or, as already said - sell less than 50% and keep control.
Or sell all of it, and roll the money into the next project.
 

Mike Jokec

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Dec 27, 2017
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Your choices are simple.

Sell out and become their devalued chimp, or keep it and assume the risk for a larger potential reward.

It's even worse, their "proposal" was for me to work on one off project for peanuts and they get to own the product. I didn't even read through that :)

Do you want some money now, or risk it for the chance at greater rewards later?

I'm not interested in short term peanuts at all. Luckily, I'm in the situation where I don't need this kind of pity money.

Your friend is more concerned with his paycheck than your future. I've been in an identical situation and it ended with the friend screwing me for his in perceived preservation.

Spot on. Only that I'm not interested to be anyone's monkey. I must admit I have not seen this coming though.

Have you drafted a counter proposal?

You have your vision...do they know this?

They will after today.

I could be way off here, but what about only licensing the product to them?
Keep ownership, but they get to use it for as long as they want (as long as they keep paying their licence fees).
You could even have it built in that they’re a licences reseller if that’s what they want - again as long as they continue to pay the licence fees.

Yeah, something like "exclusive license" where they need to commit to certain minimums has crossed my mind.

Or, as already said - sell less than 50% and keep control.
Or sell all of it, and roll the money into the next project.

The last one is also something I would consider. Sell an unfinished product and move on.
 

Vigilante

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My greatest issue I had when faced with a similar circumstance was the fact that my pal advocated for their interests over mine.

The gorilla I can deal with. The friend selling out was a tougher issue for me. And he'd tell you "he was just trying to get a deal done that would benefit everyone."

At your expense.
 

silentownage001

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Apr 7, 2013
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First & foremost, I would want to read the employment contract your partner has with his employer. They may already own you if he agreed that anything he works on while he's employed with them becomes their IP.

That's where my big red flags went up reading your story.... If they're savvy enough to be addressing other tangents up front, I would review your partners employment agreement before meeting with them. They may already own you.

This reminded me of the episode in Silicon Valley when Richard once used a Hooli computer for Pied Piper and they could claim ownership.

My question is that while the employment contract covers his partner, how can they claim ownership over it when OP is not bound by it? Surely there's a limit.
 

Red

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My question is that while the employment contract covers his partner, how can they claim ownership over it when OP is not bound by it? Surely there's a limit.

I'm sure there is, but the courts will decide that. And if the company he's dealing with is the gorilla he states they are, they'll bankrupt him with legal fees until they get their way. It has nothing to do with what's true or "right" it's about who has the legal firepower to outlast the other in many cases.
 

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