
Fucking Sue Me - pud
http://pud.com/post/10103947044/fucking-sue-me
======
grellas
Contract reviews done by lawyers need to follow good-sense guidelines.

Some contracts are routine and don't need any form of customizing. The review
in such cases is minimal and can even be skipped if the routine nature of the
contract is obvious or if the entrepreneur is seasoned enough to identify a
clean situation without lawyer help. Most such routine contracts cover simple
cases, such as a simple nda or a recurring situation in which a basic template
is used with no material variation apart from non-legal business items that
typically get customized in an exhibit.

For most cases, though, the whole key to doing a contract right is to
customize it properly _on its material points_. This means it should be clear,
it should accurately reflect the intent of the parties, and it should contain
basic legal protections for each party. It is vital to this process that both
the lawyer and the entrepreneur understand what is material. Why? Because that
determines the proper cost-benefit analysis for how it should be reviewed.

For example, say a startup is negotiating a 1-year office lease for only a few
hundred square feet of space at a modest rental rate. That sort of lease needs
very little lawyer review because there is not much at stake (the money is
small, the location itself not particularly important to the startup, etc.). A
quick read-through by the lawyer is the max that this needs and then only to
see if there is anything wildly out of line in the document. What about a
3-year lease with more square footage and a higher rent? In that case, maybe a
good high-level review is in order, with comments and mark-ups on a range of
important points but little or no attention paid to boilerplate clauses that
may be highly unfavorable to the tenant as worded but that are also highly
unlikely to occur. And what if the lease is for 5 years with two 5-year
options to renew, with a location that is very important to the business
involved, and with risks (such as potential environmental liabilities) that
can far exceed even the value of the lease itself if mishandled? In that case,
lawyer review is normally vital and needs to be pretty thorough (including
even haggling over much of the boilerplate language) because it is far more
likely that contingent risks can come about over a lengthy period, the amounts
at stake are greater, and the lease itself may be important to the business
(e.g., a restaurant that depends heavily on having a particular location).

This same sort of approach applies to a whole range of contracts. What if your
business is getting acquired or if you are buying a business? Well, if it is a
little business and the purchase price is very small (say, $50,000), you can
very likely be well-served by a canned form used for small business sales
(brokers who do these deals use these all the time). Such a form will have
basic provisions covered and will usually contain the most important
warranties and representations but all of it will be bare-bones. This normally
works fine for a small sale. Again, lawyer review can be skipped or done at
the quick read-through level. But what if the business you are buying is going
to cost you $1,000,000. In that case, you still are in the small-business
category but the money is more significant. This likely warrants an
intermediate level of lawyer review (contract needs to be customized for the
deal, with proper account taken of whether it should be structured as an asset
sale, stock sale, or merger - each having different tax consequences - and
with careful attention paid to reps and warranties, to conditions for closing,
and to collateral matters such as non-compete, etc.). This might take $5K or
$10K or sometimes more in lawyer time but it is money normally well spent (it
certainly is if you are a small business owner and $1M is a lot of money to
put at risk for your situation). And, of course, once you start talking about
acquisitions in the tens or hundreds of millions, you need major lawyer time
to make sure the complex aspects of such deals are handled properly.

What about a license agreement? A small deal, with non-exclusive rights
concerning routine IP needs little or no lawyer review. But a core OEM deal
involving the licensing of IP that is at the core of your company obviously
warrants significant lawyer review, especially if it involves joint
development efforts, sweeping indemnification clauses that might trigger major
liabilities, or other complications that require sophisticated handling of IP
and other rights. Of course, there is also the issue of weasel language and
its nasty impact if it is not caught and deleted from any major contract.

In short, lawyers and entrepreneurs need to be guided by good sense in
handling these matters. It is not good sense simply to act as if lawyers are
not needed. It takes only one really bad instance for most entrepreneurs to
realize how bad a mistake it is to cut corners in really important matters. On
the other hand, letting lawyers run wild with their reviews is foolish as
well. Their time must be managed and managed well. It should be used where it
matters and curbed where it doesn't.

Let the barbs fly, then, but this is one lawyer who will insist that the
advice given in this piece may have a grain of truth in it but is too
simplistic to cover most serious business affairs. It may work in a number of
cases but it can easily get you into trouble.

By the way, I am not saying give an open ticket to lawyers. If your lawyer
can't make good judgments concerning what is important and what is not, and
can't manage time wisely, it is time to get a new lawyer.

~~~
willyt
Why aren't there more standard contracts for the situations described in the
article? E.g Construction contracts are generally standard documents with very
well documented procedures in the UK even with large (say £50M+) contract
sums. But this seems to be an exception, not many other industries do this. I
wonder why?

~~~
fabjan
Here in Sweden a lot of contracts are standardized. Extremely so in the
construction industry.

We have a standard contract called "Avtal 90" (lit. Contract 90), that a lot
of industries use.

------
tptacek
Ugh.

At one extreme: giving your counsel veto power over what contracts you sign,
and allowing them to bill time ping-ponging contracts until prospects give up.

At the other extreme: just signing everything and saying "fucking sue me" when
things go sideways.

You should be somewhere in the middle. Contracts more often than not have
provisions that are silly for you to accept verbatim. And, contracts more
often than not have provisions you'd _rather not_ accept, but that are baked
into your prospect's own processes and not changeable.

No matter what you do, if you're being sensible, there are going to be tough
decisions to make every once in awhile. If there aren't, you're probably doing
something wrong. Like, for instance, signing tens of different contracts from
giant companies without any legal review.

~~~
nirvana
I think the point to "fucking sue me" is that you don't "fucking sue" someone
over something trivial. So, if the dollar value of some provision in the
contract is not worth the cost of a lawsuit, in a way, it is kinda immaterial
to the agreement because it would cost more to collect.

So, I think the article is trying to hit the middle road you're advocating,
though didn't make it as explicitly clear as it could have.

~~~
Confusion
You're assuming companies act rationally and won't sue you if it costs them
money. That is a dangerous assumption: one guy that you pissed off is enough
to send you down a dark hole.

~~~
Tichy
Also some companies have lawyers as employees. They have to do something with
their time.

------
owenmarshall
> Then there was the time I wanted to hire my first full time employee. I was
> apprehensive to do it because I only had enough money to pay him for 2
> months, unless I got another client fast.

> “Worry about that in 2 months,” Dad said.

Speaking from the perspective of that employee, _fuck you_.

OK, for the serious point: you may be not give a shit about risk. Good for
you, you crazy risk taker! The world truly needs more people like you.

But for me? I've got a mortgage and a car payment and a wife who is trying to
go through graduate school. I need to know that my ass isn't going to come
into work on the 61st day and hear you say "Well, looks like we're outta cash
-- sorry buddy..."

If, on the other hand, you share that risk with me up front, thanks -- you're
a good boss.

~~~
nirvana
Pretty much all employment is risky. It doesn't matter that you have a car
payment and a wife going thru graduate school. Those are financial risks _you_
took.

Your employment could end at any time. The company could be seized by the
government as part of some investigation and shut down, the CEO could be hit
by a bus, you could screw up in a big way and get fired. You could be hit by a
brain aneurism and simply not be there to provide for your car payment and
your wife's schooling.

Every employee is taking risk that their employment might end for any number
of reasons.

This is one of the reasons that, when something like that happened to me, I
said "That's it, my livelihood will never be in someone else's hands again"
... and have been self employed / doing my own startups since.

~~~
semanticist
The difference is that most of those things are risks you can't reasonably
plan for. If you know that the start-up you're working for has x months of
runway, then you can plan for looking for a new gig, ensure you have savings
to carry you over, or decide to work elsewhere.

But you can't plan for it if the company's owner hides it from you. If you
think you need to lie to your staff about the company's finances, then you're
an untrustworthy prick.

And if you get lucky, no one will ever know. And if you don't get lucky,
everyone will know that you can't be trusted, and that could affect your
ability to get contracts and employees at your next venture.

~~~
nirvana
I agree with you, but I'd like to point out that the article was expressing
apprehension at hiring the guy (e.g.: he was concerned as to whether he'd be
able to keep him employed for more than 2 months)... there's no indication
that the financial state of the company was hidden from the employee.

At least in my experience, while I haven't known the exact financial state of
startups I've worked for, I've generally known the level of risk I was signing
up for.

~~~
semanticist
If you're completely up-front about the financials then there's no reason to
be apprehensive, surely? After all, the employee is deciding their own level
of risk then.

------
mmaunder
Two things:

1\. They will sue. Medium to large - in fact any mature business, considers
lawyers and the threat of lawsuits and litigation as a cost of doing business.
They don't get emotionally involved, they just do it. FYI, looking at lawyers
& legal as cost of doing biz is a healthy attitude and may save you a heart
attack.

2\. Telling someone to just "fucking sue me" or simply "sue me" makes it
combative and I made this beginner mistake early on in being a CEO. I actually
simply asked their lawyer if he thought his case "actually has any merit?" in
a cocky tone in a phone call. Turns out he thought it did. Once I had capable
council on my side she had to work hard to make nice with the other side and
bring it to settlement hours before we were irrevocably committed to
litigating the issue.

Lets put it this way: Wouldn't it be awesome if everyone you signed an
agreement with "just signed it"?

~~~
GeorgeTirebiter
That's right, they will sue. My company has been sued several times - so far,
we've prevailed, but it takes time and money to defend a suit. MUCH better to
avoid if at all possible.

I have a corollary: you're not a "real business" until you've been sued. (!)

------
tjmc
This poor advice is like saying you can save money by not paying insurance
premiums. Of course you can - until something goes wrong.

A better lawyer would have been able to amend that contract with minimal fuss.
I used to get a legal briefing on the dodgy parts of the contracts I was asked
to sign, along with sensible suggested changes that often benefited both sides
(eg. termination clauses more appropriate to the length of the gig) I'd then
send through the amended contract and discuss all the reasons for the changes
with the client. Never had any problems.

------
mathattack
I think his dad is a good advisor.

The reason he was hard to sue is that he's so small. If things went really
South on a small project, what's the worst thing that happens? He's 22 and
talented in New York - he declares bankruptcy, and gets another job or stays
on Dad's couch. This is a situational thing - you can accept liability when
the downside is so low. This is why legal departments in small firms are much
gentler than legal departments in the Fortune 500. Of course this doesn't work
for a large firm, or someone with 3 kids and a mortgage. His dad would have
said, "Go get a real job" or something like that.

Similar on the hiring - when you're that small, you invite someone to take the
risk for you. You can take more risk when there's limited downside. And in
this case it was the other guy's downside - if there was no work, he'd be the
one in trouble.

~~~
mikealle233
Exactly.

Put another way:

Odds of getting sued: 1%

Max downside if he gets sued: What? 50k before he declares bankruptcy?

Ok, so risk adjusted cost of the "just fucking sue me" approach: $500.

$500 vs. $350,000...hmmm...tough choice.

You might say, well, it's not as though it's one or the other. You can request
reasonable changes and not jeopardize the 350k.

Well, ya, I suppose so, but what are the odds that any request you make will
kill the deal? If it's also 1%, then the expected cost is $3500.

That's still more expensive than the "just fucking sue me" approach. In
reality, the odds of killing a deal over contract disagreements are much
higher than getting sued.

------
dctoedt
Here are some specific contract provisions that can cause real-world problems
for your business. (Shameless plug: These are discussed, and illustrated with
true stories, in my short e-book, _Signing a Business Contract: A Checklist
for Greater Peace of Mind_ , at [http://www.ontechnologylaw.com/before-you-
sign-a-business-co...](http://www.ontechnologylaw.com/before-you-sign-a-
business-contract-a-five-point-final-checklist-for-business-managers-and-
executives/))

* Most-favored customer clauses

* Exclusive-rights provisions

* Indemnity obligations

* Automatic renewal

* Confidentiality obligations (or _no_ confidentiality obligations)

* Termination for convenience

* Unilateral amendment rights

* Best-efforts obligations

* Assignment-consent requirements

* Non-compete / no-hire / no-solicitation clauses

* Tax consequences

------
nandemo
> Then there was the time I wanted to hire my first full time employee. I was
> apprehensive to do it because I only had enough money to pay him for 2
> months, unless I got another client fast.

> “Worry about that in 2 months,” Dad said.

This seems really dishonest. Yeah, everybody knows that startups are risky,
but if you can't afford to pay more than 2 months of salary, then don't hire a
full-timer. Either find a co-founder or hire a contractor instead.

~~~
pud
Not many companies could afford to pay their entire payroll for a quarter, if
sales were $0.00 for that quarter.

~~~
xorglorb
Most companies also have steady revenue streams.

~~~
mkopinsky
Or at least revenue forecasts.

------
revorad
I once rode a motorbike drunk, with a stranger sitting behind me. We didn't
die. Lesson learnt: I got lucky.

I don't drive drunk any more :-)

------
SomeCallMeTim
I still show my contracts to my lawyer, and sometimes really fight for certain
clauses, but I'm realistic: Sometimes having a signed contract is more
important to me than certain categories of unlikely risk mitigation.

If you have the luxury of leverage -- the ability and willingness to walk away
if the contract isn't perfect -- then yes. Hammer it out to protect your
interests.

But if the contract is critical to the company's survival, then he's right:
Just sign it. It's better to have an income from an imperfect contract, then
no company at all because you've run out of money.

~~~
epo
My experience is that the people who jerk you around with contracts are
usually bad payers. If it's a bad contract then the prospect of income is very
uncertain.

Business ultimately relies in trust, if they give you a poor contract then it
is a strong reason not to trust them over anything.

~~~
SomeCallMeTim
I went back and forth with one client for about five months on a contract
worth about $300k.

They actually started PAYING me on milestones well before the contract was
signed. We didn't nail down a final version until just before the last
milestone payment.

They paid in full, no delays -- they even paid extra for when they wanted
additional changes out of scope. In my industry (games), it's actually quite
common to start work on a contract before it's signed.

They were a rather large company, granted. But yes, don't DO a lot of work for
someone you neither trust nor have a solid contract with.

If the contract allows them to weasel out of giving you any money at all after
you've put significant time and resources into it, then that would be qualify
as "I sometimes really fight for certain clauses". Ownership of IP is another
critical nonnegotiable for me: If I have a library that I own and I'm using it
in someone's product, it's going to be spelled out in the contract that I
still own it (work for hire notwithstanding), or I'm not signing.

But if you're talking about unbalanced boilerplate legalese (nonreciprocal
indemnification or nondisclosure, or clauses that otherwise aren't ideal
according to your legal counsel), then I still agree with the article.

------
shawnee_
The lesson here: it was 1998. "The industry" was still a little fledgling, so
the legal territory was still largely unchartered. But it grew into an ugly
duckling, quickly.

 _Sent the contract to my lawyer. She marked it up, sent it to the client.
Then the client marked it up and sent it back to my lawyer. And so on, back
and forth for almost a month._

Garbage in, garbage out. During the "ugly duckling" phase, the legal machine
is just learning that it can spew garbage. It tests its limits. Just how much
garbage can it spit before something happens? When the garbage is between
private parties? Apparently, a lot.

 _I charged my first client $1,400. My second client paid $5,400. The next
paid $24,000. I remember the exact amounts — they were the largest checks I’d
seen up til that point.

Then I wrote a proposal for $340,000..._

The Bust was just growing pains.

It probably could be reasonably argued that the industry is still in an ugly
duckling phase (multi-Billion dollar valuations, _really?_ )

But this is part of growing up.

In _Code and Other Laws of Cyberspace_ Lessig writes:

 _It is a lack of a certain kind of regulation that produced the Y2K problem,
not too much regulation. An overemphasis on the private got us here, not an
overly statist federal government. Were the tort system better at holding
producers responsible for the harms they create, code writers and their
employers would have been more concerned with the harm their code would
create. Were contract law not so eager to allow liability in economic
transactions to be waived, the licenses that absolved the code writers of any
potential liability from bad code would not have induced an even greater
laxity in what these code writers were producing. And were the intellectual
property system more concerned with capturing and preserving knowledge than
with allowing private actors to capture and preserve profit, we might have had
a copyright system that required the lodging of source code with the
government before the protection of copyright was granted, thus creating an
incentive to preserve source code and hence create a resource that does not
now exist but that we might have turned to in undoing the consequences of this
bad code. If in all these ways government had been different, the problems of
Y2K would have been different as well._

[source: <http://www.code-is-law.org/conclusion_excerpt.html>]

This is dated (1999), but interesting. He was wrong about Y2K, of course, but
not about the underlying issues and problems with contract law and IP.

~~~
fleitz
Why would a coder ever be held responsible for something not specified in the
requirements doc? If people wanted Y2K compliant software in the 70s and 80s
they should have specified it.

As for multibillion dollar valuations, what's wrong with the valuations on
MSFT, AAPL, GOOG? If you think the PE is crazy on LNKD, just short it. As for
what VCs are willing to invest for particular companies those investments are
more anecdotes than data.

~~~
willyt
Because it's not unreasonable to expect the coder to supply you with something
which will not fail arbitrarily in 10 years for a reason which is 100%
predictable. A parallel example: If an Architect designs you a building which
develops a leak because of a mistake in a construction detail you would sue
for the cost of repairs and damage to property. Either in contract if
available or in Tort for negligence if no contract exists.

~~~
BoppreH
Buildings are expected to last, and cutting corners (on multi decade support,
for example) is not exactly a "mistake" like the one that would spring a leak.
Aside from that, where do you draw the line?

If the software doesn't work with accented characters and it wasn't in the
specs, do you blame the coder? Reading that common-but-not-currently-used-here
file type? IPv6 support?

Maybe it's because I'm a coder, but if you want a building to withstand an
earthquake, you gotta say so.

~~~
joev
Buildings also need to be maintained and retrofitted. Around here in
Cambridge, there are countless residential and commercial buildings that were
built before the days of electricity and air conditioning, and even plumbing
in some cases. The maintenance costs often far outweigh the initial building
costs, even given inflation.

------
AJ007
Linkbait. Some of my competitors write contracts specifically so that they can
sue other companies. How about this, I fucking read my contracts and I don't
sign bullshit.

~~~
barefoot
Thanks for sharing this. Do you have any tips for things to look out for?

~~~
GeorgeTirebiter
The main thing I look for is unknowable downside. For example, when a big
company asks my small company to indemnify them, I always limit the
indemnification to whatever they paid for the work. If they don't like that,
then I get a different client.

ALSO, NEVER let lawyers run the show. Lawyers are your water boys/girls --
they do what YOU want them to do. If they don't, then get a different lawyer.
YOU have to read and understand everything in a contract -- and lawyers can
help you do that. But in general, you tell your lawyer what you want, and she
does it. End of story.

------
radarsat1
Articles like this depress me, because in 1998, I totally knew how to make
websites, but didn't know I could make money doing it. Instead I was 18 and
doing what I was supposed to do, that is I was busy going to school, and now
I'm 31 and still in school not making money. What's wrong with me? Sigh.

~~~
aasarava
It's still possible to make money building web sites, perhaps more so than
ever. If you aren't happy with still being in school, why aren't you putting
the pieces in place to start your own web development practice?

~~~
radarsat1
You make a good point. Mostly the answer is that after 10 years I'm definitely
going to see this through and finish my degree :)

But also, 10 years ago I might have been interested in web development, today
I have developed skills in other areas (robotics, embedded programming, etc).
It would be a shame not to put them to use. Perhaps more importantly, if I got
back into web stuff, I'd be quite far behind in the game; I simply wouldn't
have the skills for someone with my experience level. Probably I could get up
to speed quickly, but I'd prefer to stick to what I know; there just happens
to be so much work in web stuff lately that looking at the job market I
sometimes get this omninous feeling that I've been making a mistake...

Anyways, looking for work now for when I'm done my degree later this year, so
we'll see how it goes. I have an impression that this must be a common feeling
for people at the end of their doctoral studies, so I try not to be overly
worried.

------
TomGullen
I think the lesson is here it's all fine and dandy until someone does sue you.
Then it's a different story.

~~~
_delirium
If you're a 22-year-old with no assets it's probably not much different; you
lose a judgment and declare bankruptcy and that's that.

If you're older and have a lot of assets, you just do it via a corporation and
it's the same, thanks to the magical unaccountability of the corporate veil.

~~~
veyron
Nowadays a lot of companies try to add clauses that pierce the corporate veil
(for example, having personal guarantees)

~~~
learc83
For all kinds of things, like leases and such were the company is too young to
have any credit. But a personal guarantee on delivering a website on time
would be a bit much.

~~~
veyron
For longer projects, you should be asking for some sort of upfront payment (to
avoid being screwed over -- i learned that the hard way).

In that circumstance, companies may demand some sort of clawback if benchmarks
aren't met.

------
jeremymcanally
I agree with the sentiment of this point in general I think. Having counsel
read every single contract and letting them wrestle directly with clients is
probably a bad idea. Your lawyer will have only your interests in mind (or
theirs, who knows?), and it probably won't lead to much productive happening.
And even further, taking a few business law classes would be cheaper than
using up tons of lawyer hours and probably net a better end result.

Anecdotally, At Arcturo, both myself and one of my principal guys have a good
bit of contract reading experience (he much much more than myself). Every time
I get a contract, I toss it to him and let him give me a thumbs
up/down/comment. Having him around to handle reading things over and nit
picking (often times to the point of having their lawyers concede points to us
they hadn't addressed or thought of) has been awesome. If you can find someone
who has a lot of business operations experience and can also hack code,
they'll add a LOT of value to your company.

------
JoeyDoey
Remember watching a vid (1) where Pud explicitly mentioned his mom being said
lawyer and his dad (as mentioned in the article) being the entrepreneur.
Wonder why he left that out this time. I certainly enjoyed the dichotomy know
who his folks were and what role each played. (1) <http://vimeo.com/25489184>

~~~
westicle
Certainly puts things in a different perspective.

His mother tanked the first deal? So his father told him to fire her? I'd love
to be a fly on the wall at that family christmas.

------
toast76
Just change that one line "He was right. I got the job, they paid, things went
well, nobody got sued." to "He was wrong. I got the job, they didn't pay,
things went horribly wrong, everybody go sued".

~~~
gnu6
Even if it were changed to that, the story wouldn't end with "I couldn't buy
food, my macbook pro got repossessed, and I went to federal pound-you-in-the-
ass prison."

If you do get sued and your business collapses you can always start another
one.

~~~
analyst74
Personal liability would be a nasty thing to deal with after your business
failed. And you may not get to start another company with a huge personal
debt.

~~~
gnu6
It's so easy to incorporate it should always be done. I assume when someone
starts working with that kind of money and has knowledgeable lawyers advising
them that they'll be told to do that.

~~~
rprasad
Incorporating without sufficient capital makes it almost trivial to "pierce
the veil" of incorporation and go directly after the company's owners.

~~~
gnu6
That seems somewhat backward, because it would discourage those with limited
assets from starting businesses and trying to improve their situation.

------
compay
"Just be lucky like I was" is rather poor advice.

~~~
nknight
Did you read the very last line of his post? "I’m not sure what the lesson is
here."

I don't see him giving advice to anybody. I see him recounting some rather...
debatable decisions early in his career.

~~~
compay
Yeah, but if you're recounting what has worked well for you in your career,
you're giving advice - even if you qualify it at the last minute with a
totally wishy washy ending like that.

Also, if you've followed Kaplan since his (awesome) "Fucked Company" website
you'll know that the man is no babe in the woods. IMO he has too good a grasp
on the nature and consequences of risk to be "not sure" what the lesson is
here.

------
wglb
Well, your business may well not be like his business. First, it was all new
then, and the first half of the swhoosh to the top.

But being of the conservative sort, I have generally had a lawyer review
whatever contracts people want me to sign, firstly for him to explain what it
really means--what are the actual risks. Even as a very young fellow in my
first one with a contract, I knew enough that it was for me to make the
business decision and for my lawyer to explain what the legal ins and outs
were.

Then there was the fellow who liked to do negotiation by contract. It said
that everything that I did they owned, probably back a year before I started,
and that if I didn't perform the would take my house and my first born, but
then on the second page they said that we are kidding about the house. And it
was from a law firm that was bigger than most buildings, and Very Famous. But
I pushed back and after a couple of cycles got things to be in a reasonable
state.

In another long-term consulting contract negotiation, my lawyer's first
response after reading it was one word "Egregious". Fortunately, I was able to
hammer that into better shape. This was one where the contract was supposedly
non-negotiable. I learned something there.

But in no world that I am familiar with does it make sense for the lawyer to
do the negotiation. They (in all likelihood) don't understand your business as
well as you do.

Even though I have been doing this for a while now, I wouldn't sign anything
without a lawyer's review.

But I have also been at the other extreme, where there was no contract for a
multi-year deal and it worked out well.

Use a lawyer, but use the lawyer wisely.

------
TWSS
The interesting part of this from my perspective is "my dad - a lifelong
entrepreneur."

I recently saw that pud is a year younger than me, and we entered the job
market at almost the same time with similar skill sets. Why did it take me so
goddamn long to pull my head out of my ass and finally start my own company
(at 35)?

Perhaps pud's acceptance of risk has a genetic component, or at the very least
he was brought up in an environment where he learned to adjust to uncertainty.

He credits laziness - but we all know that lazy + smart = effective. I wonder
if that's part of entrepreneurial DNA as well...

~~~
gyardley
We don't necessarily need to turn to genetics to explain this.

When one of your parents is an entrepreneur, being an entrepreneur yourself is
a natural and obvious option -- but when no one in your family has ever
started a business, it's anything but.

When I was younger, I simply didn't think 'hey, I could start a business' when
thinking of things I could do with myself.

I wouldn't be so hard on yourself. We're all products of our environment.

------
m0shen
Sounds like the opposite advice to: <http://www.vimeo.com/22053820> (Fuck you,
pay me).

Should have found a better lawyer.

------
EGreg
If you are the small guy, then try to get YOUR document to be the starting
point. Use YOUR law firm to write it. Go to a law firm and tell them to use
something from a similar contract before.

If you expect there will be negotiations, basically try to use and re-use your
standard document. You are going to be in this business for a while,
hopefully. So you only have to pay for your standard document once. Plus
you'll know the ins and outs of it better than anyone else.

I think the right solution these days is to insist on standard documents and
focus on the amendments rather than getting something from scratch. There is a
good list of documents to form startups, for example, here:

[http://www.avc.com/a_vc/2010/03/standardized-venture-
funding...](http://www.avc.com/a_vc/2010/03/standardized-venture-funding-
docs.html)

Similarly there are things at legalzoom and other places. I realize that
sometimes the big company will insist on going with their standard contract,
but if they were really that adamant, they wouldn't let you go back and forth
with your lawyer too much. Just start with your own document or walk away if
you don't want to take the risk.

------
officemonkey
One of my favorite bosses was general counsel for a state government agency.
She once told me that "no contract can ensure performance of someone of poor
character."

Whenever I'm offered a contract, I boil it down like this: "Do I believe
they'll hold up their end of the bargain?" If the answer is no, I do not sign
the contract.

------
tici_88
This sort of advise works great until they actually do sue. One of my biggest
clients got recently sued by a long term client of his - a Fortune 100 company
with all kinds of legal resources. My client had to shut down his business and
then scramble to protect his personal assets like house, properties, etc.

------
ditojim
sounds like your dad had faith in you, above all. don't misinterpret this as
careless disregard for risk.

------
powertower
TL;DR;

"Get lucky"... Then walk away with survivor bias.

------
nhangen
I took something different from this article, which was that if you wait to do
business until you have a sure thing, then you are waiting too long. Take
advantage of opportunities, and figure out the details on thew way.

------
Iv
> I’m not sure what the lesson is here.

The lesson is : you were lucky. You are the prey to some people who look for
people like you to sign a contract and then extort money. Saw that happen at a
company I worked for.

------
EponymousCoward
Not just a way to run a business, but a way to live life. Might not work for
everyone, just as the opposite of whatever this strategy is may not work for
everyone.

------
ja27
The two contracts I spent the most time going back and forth with before
signing were the two biggest wastes of my time. One was a ridiculous NDA with
a paranoid guy with delusions that he had the world's best original idea which
turned out to be worthless and obvious. The other was a decent gig but they
tanked and ran out of cash before I ever got paid. It didn't matter how tight
the contract was when there's no money there.

------
joshfraser
You have to balance your risk and reward and take the biggest risks when you
have little to lose. The riskiest thing you can do is play it safe.

~~~
nicksergeant
I know it feels good to think this, but often times playing it safe is _not_
the riskiest thing to do. Climbing the corporate ladder, being smart with
investments, and doing the right things financially are considered "playing it
safe" and would be viewed considerably less risky than alternatives.

------
taariqlewis
When there's nothing to lose, there's everything to gain, but when there's
everything to lose, there's alot more lawyering that will keep yer nose clean
if something eventually goes south. Get a lawyer when there's really something
to lose.

------
nolliesnom
Congrats on constructing the perfect troll for this community!

------
n9com
This is really dangerous advice

------
nirvana
I wish someone would write an expert system that works like his dad. Something
that had some validation of what was a worthwhile risk and what was a risk
that even if you tried to mitigate the risk really would still be a risk. (For
instance, even if you had enough work to presume you could employ that
employee for more than 2 months, that's not a guarantee. What if the contract
with a customer was for 12 months, but 2 months in, right after staffing up,
they just cancelled it and said "fucking sue me"? Kinda hard for the small
startup to sue... and if they did, and they won, that win would be years after
they had to let the employees go.)

You can't mitigate all risk, and being able to ignore the ones that you can't'
do anything about is an important skill.

This goes for technical risk as well. I try not to over-architect. I spend a
lot of time trying to decide which things need to be handled now, and which
things can just be added later.

------
petegrif
Great post. :)

