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Ask HN: How to validate a startup idea whilst employed?
297 points by jackfruit2 on Sept 18, 2022 | hide | past | favorite | 148 comments
Hi HN,

Everytime I read articles and consume all other content around attemping a startup, I see no consideration for those whom are employed under employement contract to assign both moral rights and intellectual property to their employer. I have read Lean Startup by Eric Ries and consumed a ton of Y combinator content.

Under these circumstances, how can one validate the market using a minimal vialable product, for something truly novel? Futhermore, the're contractually unable build an MVP as result of assigning their full intellectual property rights for anything loosely related to their job.

What can one do under these circumstances, and let's face it, its found in the majority of employment contracts within the tech industry?

Anyone any thoughts on this? Moreover, I'm considering leaving a very well paid software developer job to free myself of this obligation, with the intention of building a product to offer real value to both me and others alike.




Don't overthink it. You can validate the idea using SEO tools, check if the competitors have traffic and do some detective work to see if they are viable companies.

Check the SEO space, and see how many people are running ads on the main search terms, how hard is it to rank for the the main keywords. Check if forums exists, and discount coupons for similar products in marketplaces, check for similar products on product hunt and all the other product websites like Appsumo, Capterra, etc.

Look for blogs, Youtube channels, Facebook groups, subreddits. Join the communities and post there, ask questions. Interact one on one with at least 15 or 20 people and ask them about their needs.

You can do all this in a couple of weeks in the evening, without even writing a single line of code, and validate your idea.

Regarding the legal part, unless you are directly competing with your employer, they couldn't care less.

And even then, a lot of companies are created by people that learned the industry by working for other companies.

Your boss does not care about your side project, as long as you get the job done. But for you to feel better, don't put your name on it until you have quit your job, it's the internet you can still be anonymous.

No company is going to waste their time and expensive legal resources gratuitously suing you for a side project, unless it's something blatant that directly impacts their bottom line.

I wouldn't tell your boss about your side-project either. He will likely just see it as a sign of lack of dedication, that your priorities are elsewhere, and a tell sign that you will leave soon anyway.

So if they are on the fence on keeping you, that might trigger a decision.


> Your boss does not care about your side project, as long as you get the job done. But for you to feel better, don't put your name on it until you have quit your job, it's the internet you can still be anonymous.

> No company is going to waste their time and expensive legal resources gratuitously suing you for a side project, unless it's something blatant that directly impacts their bottom line.

Don't be so sure. Some jurisdictions allow companies to own the IP you create outside of work hours if it's explicitly in your contract or you're using work resources.

They may not sue you... until you have profit - then they'll want to collect their rightfully legal share.


So…when you then own a large successful company you’ll have to deal with 1 additional lawsuit from someone who thinks they have some ownership stake?

You should be so lucky.


I dunno, Elon has large successful companies and I am not sure he feels lucky to be involved in a 44B lawsuit


> I wouldn't tell your boss about your side-project either. He will likely just see it as a sign of lack of dedication…

This.

Some people are either too naive or too trustworthy of their boss. You should never disclose your side gigs yo anyone remotely connected to your work unless they are also part of your side gig.


Not a bad place to start, but this hardly works in B2B where high touch selling is required on a normal basis


It absolutely works in B2B. Why would it not? Nothing prevents you from talking to potential customers about an idea you have with a slide deck.


And when are you supposed to do it? During office hours when you should be working on your regular job, or after 6pm when no business will be open for your sales call?


>During office hours when you should be working on your regular job,

Yes. Take a half day or duck out for a few hours.


Time zones are a thing. Unless all your customers will be in the same city you can always be in someone else’s “business hours”.

Comment below about taking a half day is good too. If you aren’t willing to use some PTO on this… how committed are you?


Yeah, during the day. Work from home and sneak in an hour or two here.

Building a company requires an incredible amount of hustle, if you can't figure out how to sneak in a couple of hours here and there to talk to people/pitch, sorry but that indicates a total lack of hustle.


Forgive my ignorance, can you tell what these SEO tools are?


> Interact one on one with at least 15 or 20 people and ask them about their needs.

How do you actually do this? Message random people to hop on a zoom chat for 30 min to discuss their problems? How do you word this? Am I weird that I can't think of anything that someone else could come up with that I would want to chat with a random stranger on the internet if they approached me for this?


I've built WunderGraph (https://wundergraph.com) as a side project until it was ready for real "startup mode". I've asked my employer to give me an IP exclusion for the project in writing. Then I dedicated 1-2 hours in the morning and maybe at night as well on the weekend, depending on my energy level.

I've developed the product until it had a certain maturity. I've then onboarded two co-founders who also helped part-time. One helped with marketing, one with develoent. I've found them through YC cofounder match and the dev from GitHub OSS projects. Together, we've landed our first paying customer. With a few more leads in the pipeline, we were able to start the fundraising process.

We then slowly transitioned from side project to full time. The complete team is now full time for 2 months and we're very happy how things are going.

I can say that it was a damn struggle to get all this up and running with 2 young kids and without ruining the family. I'm thankful that my wife is very supportive. It's weird when your partner accepts that you work 3 hours per day on the weekend while the kids sleep. But there was no other way. It needed to be done. Of you really believe in what you do, it's possible, even with a family. If you have questions, please ask.


I've managed to get specific exclusions for IP I've worked on as a side project, and more recently got my employer to include the majority of the github "balanced employee ip agreement" [1] in our employment contracts, which states quite clearly "If you create IP outside the scope of your employment or contract or before or after your employment or contract ("Your IP"), the Company doesn't own it" [2] (UK based company)

[1] https://github.blog/2017-03-21-work-life-balance-in-employee... [2] https://github.com/github/balanced-employee-ip-agreement/blo...


> “If you create IP outside the scope of your employment or contract or before or after your employment or contract ("Your IP"), the Company doesn't own it”

Forgive my ignorance, but is this statement required in any of the jurisdictions in the world? In a post-slavery world, an employer cannot own what I choose to do with my own resources outside the scope of my employment.


Prior to this the contract let the employer claim rights over all IP I created unless specifically exempted.

From this: https://www.russell-cooke.co.uk/insight/briefings/2020/intel...

"The general position under English law is that IP rights created by an employee within the course of employment automatically belong to the employer; where there is any doubt as to whether an employee or their employer owns IP rights, the relevant legislation largely favours employers."

"If material which includes IP rights is created outside office hours and/or using the employee’s private resources this may give rise to arguments that the rights belong to the employee rather than their employer, but that is not decisive. The fact that work is done outside normal working hours does not necessarily mean that the work is not done in the course of employment as, for many employees, there is often no clear demarcation of the hours of work."

"The key question to be asked is whether the work was the kind of work which the employee was employed to do i.e. whether it was within the scope of their employment. Could the employee have been ordered to do the work and would it have been a breach of contract for the employee to not do it? The terms of any contract of employment and job description will be relevant, however, these (and duties more generally) often evolve in the course of time and it may therefore not be appropriate to rely on them exclusively."

IANAL, but my reading of that is that if I wrote a novel about unicorns and rainbows, that wouldn't be owned by the company, but if I wrote software, it would.


> Prior to this the contract let the employer claim rights over all IP I created unless specifically exempted.

Makes more sense now. Even in that case, I have many questions regarding the quoted parts in the article. Especially regarding the “demarcation of hours of work”, why would the burden of proof be on the employee? Employer is supposed to keep track of hours of work. If they cannot prove that employee developed the IP during company time, then it shouldn't belong to the company. But then, law and justice are very different things.

> if I wrote a novel about unicorns and rainbows, that wouldn't be owned by the company, but if I wrote software, it would.

I would say that software is too general to be applicable, and yet there's this anecdote somewhere else on this thread [0].

[0] https://news.ycombinator.com/context?id=32885772


It is pretty common in most US states to own ip developed outside work hours. The concept is pretty simple: by default, your employer is paying you for the ideas you generate, and this could happen at home.

Imagine you work in cold fusion research and you spend your days performing tests and reading papers. If you have a dream and wake up with a solution, this is part of what your employer has been paying you for, and the time of day is irrelevant.


In case I couldn't make it clear so far, I defend that either of the following conditions should hold for employer to claim rights: (a) IP is developed using company resources (time, equipment, etc.) or (b) IP is within the scope of company's business.

> your employer is paying you for the ideas you generate, and this could happen at home.

If employer's idea is about company's business, then yes, I would say that the company owns the rights. If not, employer owns the rights.

I'm not sure if ideas count as IP though. If I had an idea at work about a business that is outside the scope of my company's, to whom the rights belong?


Then you have to negotiate that.


Sounds good! One thing I'd like to add is that some people might be afraid to ask for an IP exclusion. Think about it from an employer perspective. Should they let you go just because you have a side project you'd like to work on? Probably not. If you'd like to sell it, your side project will teach you need skills.


> Should they let you go just because you have a side project you'd like to work on? Probably not.

I'm thinking out loud from an employer's perspective: Will this employee leave for his side project, if we not let him work on it? Probably not. Will they leave if this side project succeeds? Probably yes. Will they be less interested and more distracted in our job? Probably yes. So, why risk it.


Very good food for thought. Developers usually never succeed with side projects. They have no clue how to create a business. They love to code. They love to tinker. Let them tinker around. Will they be distracted? Yes! But who cares if your employees browse Hackernews and reddit or build side projects?

Will they leave if it succeeds? Maybe. If it's the case for one of my employees, I will help them, be their Angel, invest into them and help them with my network. I started with a side project myself. It was so hard. We need more smart entrepreneurs and I want to support them.

Will they be less interested? It's possible. At the same time, it's the employers job to offer interesting work.

That said, I don't disagree with you. It always depends. But don't worry so much about the success of side projects. Less than 1% of your employees can turn a side project into something successful.


This is very much how I would reason about the case. My take on how an employer would approach the problem was cynical on purpose, because that's how “business professionals” think. Unfortunately, the corporate world is riddled with such “professionals” who have no clue about how knowledge work works. And, again unfortunately, laws favor corporations in expense of individual liberty.


looks like a great project! Found a typo: "Less then 1 minute"


Thank you


Don't tell your employer. Don't incorporate until after you've quit your job. If you want to launch before quitting your job, consider using a merchant of record (e.g. Paddle) so you don't even need to incorporate.

I'm assuming you're not competing with your employer, nor are you building your startup on your employer's time or with your employer's resources, in which case there's nothing wrong with this approach ethically.


Nearly everyone I know doing side projects from YT channels to ebooks to WP plugins to mobile apps to games has started without being incorporated. None of them use Paddle or ever encountered problem that required them to.

Paypal has supported personal accounts since the 90s. Stripe supports personal accounts. Google/Apple/Amazon/MS/Steam/Gumroad and others will all work individuals as well as businesses.


Depending on the jurisdiction (EU), you may be asked by the tax authorities to open a company after certain transaction volume.


In some jurisdictions you won't even be asked, but fined. It's seems wild how much simpler is it for Americans to try out a business idea when you read comments like this - just start selling, and pay your income tax (unless I'm getting the wrong impression).

Where I'm from, you're required to incorporate upfront and deal with the legal, accounting, VAT and social security hassle before selling anything to anyone - few days to a week of stress added.


> It's seems wild how much simpler is it for Americans to try out a business idea when you read comments like this - just start selling, and pay your income tax (unless I'm getting the wrong impression).

This is likely by design and is both a prerequisite and consequence of America's lax attitude towards businesses. It is likely one of the pivotal reasons why America has many more businesspeople (even just counting Silicon Valley companies) than Europe.


FWIW almost all entrepreneurial efforts I’ve started were while living in east Asia.

I did start a house painting business in America when I was 19, though. Due to liability concerns and the fact that I franchised through a chain, I did have to form a company for that. It cost about $150 in fees and took a week.

It was a bit of a pain but ultimately not that hard compared to getting a loan, buying a truck, buying ladders, getting volume deals on paint, marketing and selling to customers, etc.

Online businesses are definitely quicker and simpler to start, but I’ve never felt that big of a difference in terms of jurisdiction-induced hassle. Maybe Europe is an exceptionally difficult place, but I can’t speak to that. I’ve never done business from there.

Another thing to keep in mind is than many, many non-US residents open US LLCs for online businesses. Most my friends in Taiwan starting international-facing tech-related businesses start under their own names and then either transition to US or Singapore-based entities. Mostly this is so they can use Stripe (which isn’t available to TW-based companies).


Unrelated but since you're big into Elixir, any thoughts on Gleam? Personally I like it because I like the concepts of Elixir but I can't do dynamic typing anymore after being burned too many times by it. And I'd much rather have a full statically typed language than something bolted on later like type hints in Ruby or Python.


I’m not that interested in Gleam.

I’d embrace the language for what it is and try to discover why it is so many people who generally prefer typed languages still use Erlang/Elixir. After getting to that point, maybe try Gleam if you still feel the need.


Interesting. I wonder what the motivation for doing that is. It seems like it would be less of an accounting burden to just treat the revenues as personal income (which it is).


Can you explain a bit about the Paddle thing and not needing to incorporate?


Merchant of Record services mean that when someone "buys" something from you (e.g. subscription or other product) they're actually legally interacting in all ways that matter with the MoR. Effectively you can think of it as a mostly transparent re-seller. The MoR (e.g. Paddle) is buying the subscription from me and selling it to you. Because I'm never actually interacting with the customers for payments I don't need to deal with regional taxes, refunds, etc – that's all handled by Paddle.

In exchange they take a heftier cut than what you'd get if you used a service like Stripe.


Is this like Gumroad as well?


Yea


Don't you still need a company to sell it to Paddle?


In many countries you can issue invoices without having a company or being a freelancer up to a certain amount. That should be everything Paddle needs.

Also, once upon a time, I checked with FastSpring (another alternative) if they could just withhold payouts until incorporation and they told me they can do that.


Not according to Paddle's signup form: https://vendors.paddle.com/signup

"Business type" options include Individual, Company, Partnership, and Non-Profit.


Yes, and Paddle will ask you to prove it.


Don't tell your employer.

This may make it less likely that your employer will take you to court, but if you do this and your employer does choose to pursue a case against you after you leave the court will see it as intentionally deceptive and it definitely won't help your argument.


My reasoning is the opposite. If one tells their employer about their side project, the court is likely to interpret this as an admittance by the employee of potential conflict of interest. Otherwise, employer could defend by stating “Why would I seek approval from my employer? This is clearly outside the scope of my employer's business and of my employment contract.”

Above reasoning is in line with why companies don't search for existing patents when developing new technologies. If they search for prior work and are found guilty of infringement, that's considered willful infringement, in which case damages are tripled.


> Above reasoning is in line with why companies don't search for existing patents when developing new technologies. If they search for prior work and are found guilty of infringement, that's considered willful infringement, in which case damages are tripled.

The (US) patent system is so fucked up (granted you're talking about the US), where if you try to lookup patents, you might be fucked. If you don't try to lookup patents, you might be fucked as well. Damned if you do, damned if you don't


Depends where you live. In California, there are limits to what your employer can force you to assign to them. Roughly speaking, if you do it on your own time and with your own equipment, and it doesn't relate to your employer's current/predicted business, it's yours. [1]

Whether or not you're in CA, you should consider speaking to an employment lawyer in your jurisdiction to find out the relevant details.

1: https://law.justia.com/codes/california/2011/lab/division-3/...


Washington State carves out exceptions too.

In addition to regulatory exceptions, some companies have policies where you can check in with the company to see if they would like to assert their IP rights over your work.

If you work at a computer chip manufacturer and you decide you'd like to moonlight developing robots that make nacho-cheese chips, there's a pretty good chance that HR will be willing to give you a written document waiving their IP assignment in a narrowly-tailored way.

I have successfully taken that approach in order to preserve my IP rights to continue my academic work and collaborations as I entered industry in an unrelated field.


One of the weaknesses of this is that if you work at a company like Microsoft or Google that does pretty much everything, you’re fucked


Many consider the only way to validate is by having someone pay money for it. Lots of people (myself included) will say they will pay for something but when the time comes to buy they don't.

The book The Mom Test also points out well that lots of people will say your idea is good even when they have no intention of buying. They don't want to be assholes so they lie to you to make you feel good.

The real question is, how often are you signing away all of your intellectual property to your employer. Honestly, I've never had that in a single contract.


Ive signed away all intellectual rights for every tech job Ive had. To the point of rediculously un enforceable like any thought I have should be written down as a letter for review and explicit inclusion/exclusion.


A long time ago (in the 90s, and in the UK) an engineer who worked with my Dad wrote a book that was something like "Hit Singles of the 1970s". The company, which made communications satellites, took him to court and claimed the IP and all the profits from it, and won.

Dont assume things are unenforceable just because they sound stupid.


Oh wow. That sounds crazy that such slave-like contracts are enforceable. Do you know what their reasoning in court was? I can't imagine the connection between these two topics (satellites and 70s music). Was it just a predatory "all you do belongs to us" type of contract? Could he have counter-sued them for... I'm not sure what, breach of human rights?

Also, are there laws against abusing the legal system like this? There should be, if not


> That sounds crazy that such slave-like contracts are enforceable

That's Angloamerican common law for you. A derelict of feudal law with its hodgepodge of precedents, statues and laws that descend from medieval traditions, feudal lords' decrees and opinions. Its geared for asserting the rights of the lord.


AIUI, that's an unfair conclusion. I'm happy to be corrected, of course.

tl;dr: unfair outcomes are more caused by local implementations than by the legal structure.

IMO the unfairness in the American legal system comes from the expense of civil litigation, and a criminal justice system with no upper bound on how long defendants can be remanded. Those are not inherent in the English legal system. It is extremely rare for criminal defendants to be locked up for weeks before trial in England. Even Benjamin Mendy has been released to house arrest; he was denied bail but had to be released after a year.

In England, there's the legal concept of "odious contract" which makes some provisions unenforceable. IDK if it would apply in this scenario but it seems at least work a punt. Precedent could work for our against; it's not a given that precedent would favour the big corp.

The defining characteristic of English and American law is that it's adversarial; two parties debate before a supposedly-impartial judge, who then rules based on the evidence provided by the litigating parties.

The primary alternative system, used in many European countries, is the inquisitorial system. A judge directs questioning to establish the facts as they see fit.

It seems to me that, if you want to favour vested interests, you'd implement an inquisitorial system.

I don't know what you'd call the alternatives to common-law, but I don't see why there's a benefit to vested interests from it. It grants the judiciary some room for interpretation of laws made by lawmakers - whom I'll warrant were landed gentry more often than not, in Western history.

Historically, English law did allow serfs to challenge their landlords in court. I'm pretty sure there are cases of landlords being found guilty of dereliction of noblesse oblige. I mainly know what I remember from /r/AskHistorians though so please feel free to correct me.

Serfdom was abolished in England in about the 13th century, which is also when the Magna Carta became law. I suspect that English peasants had much greater legal protections and recourses than in most other European countries in the late mediaeval period.


> tl;dr: unfair outcomes are more caused by local implementations than by the legal structure.

Nope. In your defense, you went into intricate details to defend common law. Which is a blunt demonstration of how this framework shapes perspectives of people. That in some detail, something can be found to demonstrate some argument. That's common law. Even that type of thinking is something that is shaped by it because it relies on not actual, written and concrete laws, but interpretations and arguments.

Moreover...

> The primary alternative system, used in many European countries, is the inquisitorial system. Sorry, but you don't seem to have too much insight into this topic:

To start with, what is called in Europe is called civil law. Its not 'inquisitorial system' or whatever you had in mind while phrasing that.

It descends from Napoleonic code. And that descends from French Revolutionary principles.

And its not an 'alternative'. Its de facto legal system of the ENTIRE world except a number of Angloamerican countries. In fact, even the US mixes common law with civil law. Common law in pure could be found mainly in England.

Furthermore;

> A judge directs questioning to establish the facts as they see fit.

You're flat out wrong. Sorry to be telling it this bluntly but this is just too far-out to be responded to without being blunt.

Common law IS the law in which the judge plays the role of the omnipotent feudal lord and establishes 'facts'.

There is NO such thing in civil law. I repeat: There is absolutely no such thing in civil law.

In civil law, the laws are written in a clear, concise manner. All the 'facts' that can be 'established' are explicitly specified. You cannot 'establish' anything in the court as the judge, the defender or the prosecutor. There isnt room for interpretation. In that sense, civil law is much like software engineering - it has clear definitions and a process. You just cant go out of the process, and you cannot ever set a 'precedent' that will ever be able to change anything, less override the law into the future.

> I don't know what you'd call the alternatives to common-law

There are no 'alternatives'. There is the civil law which the entire world uses. There is the common law which a few countries in Anglosphere use. There isnt a world with various 'alternative' systems.

> Historically, English law did allow serfs to challenge their landlords in court. I'm pretty sure there are cases of landlords being found guilty of dereliction of noblesse oblige

A few cases in which the higher feudal lord stomping down on the lesser feudal lord for any motive do not change the nature of common law. No need to go to reddit to ask - I can firmly telly you that the majority of history has seen the serfs getting butchered or executed whenever they challenged their feudal lord. Leaving aside that no higher lord would want to establish any 'precedent' in which they could be sentenced for violating their 'noblesse oblige'.

> Serfdom was abolished in England in about the 13th century, which is also when the Magna Carta became law

That's factually wrong.

https://en.wikipedia.org/wiki/History_of_serfdom#Great_Brita...

Sorry, but at this point I have to disengage from this discussion since the basis that you have for this topic is way too shaky.


Thank you! I really appreciate the effort and thought that went into this response. Great job!


Thank you!


Which reqion and field? Trying to get a bearing how common this is. I've also seen some very aggressive contracts, even for non-tech jobs in NZ and Canada. Default template contracts can be very aggressive in this sense.


> I see no consideration for those whom are employed under employement contract to assign both moral rights and intellectual property to their employer.

When I got hired the contract was apparently not up to standards (but very nice). After a few years they got some lawyers to write up a new one, and it included such a "we own everything" clause.

I refused to sign it. The boss explained the intention was only on company time or with company assets. So I got them to change it to include that wording.

I'd never sign a contract with an all-encompassing "we own everything" clause, my spare time is mine. I know it probably wouldn't have held up in court where I live, but I feel it's about respect more than anything.


I've done the same thing in the past.

Also regarding "availability". One contract said something like "The employee must be available for emergency work at any point" which also felt a bit abusive. When asked about it, they said "in extreme emergencies, and not after working hours of course, or when you're on vacation" so I refused to sign until that wording was added to the contract.

At first they claimed it was just "standard" wording and maybe they can't change it. But after refusing to sign the contract, it was apparently possible to change.


Lots of folk forget: you don't need to sign! You can rewrite and send back, seek counsel to evaluate what you're signing and reword things. Negotiate or ultimately refuse to sign.


Regardless of if a court would side with you, if there was no consideration when you signed the new contract, the contract may be void anyway.


Isn't next month's salary the consideration?


Not in contract law in my jurisdiction. It may be for others though.


That's very strange to me. Then why is anything else in an employment contract binding?


Your original contract is binding. The new one without consideration may not be binding (in your jurisdiction).


Hmm. So what is the consideration?


I think that's jurisdiction dependent. It could be $1 is some places, whereas other places a judge might require fair value


A lot of times you can validate whether a market exists without writing any code. You can engage in communities that would use your potential product and see if there are problems there that exist for a decent number of people.

Once you're convinced and ready to start building I think you just have to quit like you're saying. I did exactly that about 6 months ago because I had the exact same type of contract (despite what other folks are saying, they're EXTREMELY common, pretty sure all FAANG has them).

Good luck!!


> you can validate whether a market exists without writing any code

This is true, but it's possible that even this act could indicate that the founder has developed valuable IP that his employer could claim. It would seem ridiculous to think that even just having an idea could make it assignable to your employer, despite not having actually written any of the code.

However, there are some circumstances where it could seem reasonable. For example, if you work in Industry X and come up with an idea related to Industry X and your employer's specific niche in that industry, it seems less unreasonable that your employer would care if you struck out on your own and started a startup in that niche. They would argue that your knowledge of that niche derived from your work as an employee, and they would try to tie your creation to proprietary information that you were privy to as an employee.

This isn't to say they would win — but they could cause you quite a headache if you built a successful company.

FWIW, IIAL and have seen folks argue over less!


Careful with this approach.

Some communities are too nice, so what they say will be biased and inaccurate. Especially the most vital question of whether they will be willing to pay for it.

The need might be real, your solution might be an excellent fit and it would clearly save the target audience a headache or two. And the audience would agree. They will like what you do, they will want to be supportive and encouraging. Up until the point they need to start using it. And then they all will ghost you. Whoops.


Monish Pabrai talked about this exact topic recently, see https://open.spotify.com/episode/66DUjiw7nQK6hgk91qNXz9?si=f... or https://youtu.be/gE48QKFGEhI

Monish Pabrai used to be a software engineer and launched a company while he was working. This company grew to a few million in annual revenue. He‘s also the author of two investing books and sat down for a lunch with Warren Buffet and regularly has dinner with Carlie Munger.


Thanks for the link as it was an awesome. Quite inspirational in fact.


IANAL.

Make sure you put in a carveout for every repo you have in GitHub. It helps to have a lot of public ones, then roll in your private ones into the list. Even if you have to pivot one of your private accounts, you get legal cover for working on it. Odds are the legal team won't bother checking on the contents of every single enumerated repo, and it would be insane to not hire you when you have those repos. I recommend claiming that you might have to do some work on any of these repos because other people might ask for support for those libraries. You can also make that claim for a private repo, too.

Insist that your employer provide a work only laptop. Obviously, never put any of your private repo code on your work laptop.


I wonder how this would work if you have a bunch of shell repos where you can add whatever you want later. That is, your employer surely wouldn't be fine with you creating a competing product based on trade secrets that you were exposed to as an employee, just because it resides in a repo that existed prior to your employment.

> it would be insane to not hire you when you have those repos.

My hiring at a large software company was delayed for weeks because of two enumerated carveouts related to software that had nothing to do with the company's business. And this was when I was being hired as a lawyer! I can imagine for devs or PMs they would be even more sensitive.


I was also delayed for weeks, but it's worth it. If they really put up a stink then you don't want to work there.

> And this was when I was being hired as a lawyer! I can imagine for devs or PMs they would be even more sensitive.

Really? Doing this as a dev is pretty normalized, I would have guessed a lawyer asking for it would be more scrutinized (do you notice a dog in the room if it's brown or if it's purple)


IANAL

My understanding of this, even in states that aren't as protective of California, is that: 1. Companies aren't interested in your IP, unless it is very closely related to their core business 2. The burden of proof is on them 3. Courts are sympathetic with the individual over the company for this kind of thing

Because of these points, companies try to paint the picture like they own all things you do, as a deterrent, or so that you give them your ideas for free. In practice, their position is at best tenuous / hard to prove, and at worst simply invalid (e.g. in states like California).


This is not an endorsement of what Joel says but his take is the polar opposite to yours: https://www.joelonsoftware.com/2016/12/09/developers-side-pr...

Lawsuits are expensive and will probably kill your business or time to work on your business either way.


IANAL but have a side business and other projects.

List existing side projects and hustles, in generic terms, on the paperwork when you start a new job.

Use your own time and equipment for all side projects.

Don’t be a jerk about things — keep up your obligations at your day job and work on truly unrelated things for your side hustle. Or quit.

Your job doesn’t actually want to sue you. They want to retain you as a productive employee and move on when you’ve found something new to do.


> Your job doesn’t actually want to sue you.

Yes, if your employer is a reasonable one. Not all are.


A model I've uses is one of risk. Whatever your idea is there are going to be a number of potential reasons it might not work out.

For some ideas the biggest risk is the market, does anyone want this? For others it might be the technology, is this even possible?

In a lot of cases you can do things to reduce those risks and give yourself more confidence to jump ship and go all in. That might be talking to people, it might be reading academic papers. In some cases, but honestly pretty rarely, it will be building something. Most of the time that can come later.

Not dismissing any of the great advice in here already around non-compete, company IP etc. most of this kind of work (research, conversations etc) isn't something your employer can "lock down" as concretely as an MVP. Plus if it is tangential to your current job and your idea doesn't work it, you may still end up better off from having learned something new.


Most cases are the first: does anyone want this. With Customer Development before Product Development one can get the answer before building anything that may be covered by employment contract.

Lean Customer Development by Cindy Alavrez is a book that has details.

Edit: some jurisdiction these restrictions don't apply. That is: your off clock works cannot be claimed.

Not a Lawyer.


That's depend on your contract, I would suggest you reading it with competent Lawyer. And then decide. If this won't violate it, then go ahead. Otherwise negotiate with employer or quit.

For example my current contract explicitly allows me to do whatever I want in free time. It ewen explicitly allows me to work on other job/contracts, unless it is made from corporate equipment, in this case work is considered owned by company. And we don't work using regular github accounts, everibody have created gh accounts with corrporate naming schema.

Only exception is, that you shouldn't work on concurrent products, etc. But it was really narrow.


You'd be foolish to start a company with immediate liabilities created due to ip and employment contract violations. Those are headwinds you might not overcome. If you think you can get away with it, then that's your call.

That said, everything is manageable. If you really believe in the effort, I would hedge by finding a well enough paying contracting gig (without any legal entanglements), then leave your current job and start marketing your offering.

At some point you have to start. It never happens if you don't. But always cover risk. Good luck


If you’re trying to find something truly novel, it might prove extremely difficult. In Outliers, Malcolm Gladwell talks about finding something truly novel and extremes of success are a combination of experience, network, and time period. If you’re working 9-5, you can imagine that it’s tough to develop experience outside of your area of expertise, develop a network, or time something perfectly.

I’m not saying this to discourage you. What I mean is, maybe move the bar to create something that’s already been validated, or semi-validated. For example, a problem that you need solving that someone else hasn’t solved yet is semi-validated.

I’m wishing you the best, coming from someone who’s validating a niche product myself after building it and raising a seed while working a full-time job.


Do you have a blog? Would be super interested in your story and how you’ve reached this stage


I do, haven’t written about the company portion yet because I’d like to learn more myself. I feel like I have a lot to learn. [username].com for maybe one useful article. :)


I don't understand, how could a company own your IP if you work outside of business hours on your own computer?

Unless it's in direct competition with trade secrets of your employer's business I don't see how they could claim ownership over anything. They can't enforce ownership over generic things like writing a user management system, a billing portal or creating a searchable and sortable data view?

Loosely related is way too ambiguous. You could make a case that almost anything is loosely related to programming because it's general problem solving applied to a specific context. Any time you spend doing this process can help you in other skills. That would mean you wouldn't be able to do anything.


Some employment contracts are like this.

I've ran into this a couple of decades ago interviewing with the EA (Electronic Arts). The guy literally said that if you work "properly" for them, you will not have any time left for side projects or any such nonsense. But this seems to be more of an exception than a common thing. The vast majority of companies are far more reasonable. In some places (Cal?) your right for side projects (and the off-hours IP) even protected by the law.


>employed under employment contract to assign both moral rights and intellectual property to their employer.

This is usually when you're on company time with company assets. If you're at home/coffee shop and off the clock and on your assets/pc its your IP.

Do you have a contract with current employer that has this specific language? I would understand a term for a non-compete agreement, but what you're saying does not sound right/legal from my perspective.

> I'm considering leaving a very well paid software developer job to free myself of this obligation

Do it!

It might take 6 months, a year or longer to make a profit. Can you afford that? Do you have other revenue streams? Does your current employer contract bind you to any terms if you quit?

Questions I don't need to know, but you should.

Good luck!


> This is usually when you're on company time with company assets. If you're at home/coffee shop and off the clock and on your assets/pc its your IP… what you're saying does not sound right/legal from my perspective.

Employers need to know what their assets are, what they own. It greatly simplifies things for them if you have a contract that assigns them ownership of any invention you come up with while you’re their employee. This is especially true in early stage companies, where the business model might be evolving, and employees are working all hours from all over the place. Contracts like this are very common.

The best approach in this situation is to use your own computer and network to develop the core ideas for your business, but delay any formal business activities until you’ve left your job.


What would you consider formal business activities?


You missed IANAL, and it’s obvious that you aren’t. Your claims here may be true where you live, but they certainly aren’t universally true.

IANAL either. But I do know that in most states it doesn’t matter if it’s your own time and your own PC. In California there are exceptions, I if your work has nothing to do with your employers business. Washington State has fewer exceptions but there are some, IIRC (but remember IANAL).

Also, if this project does relate to your employers business then quitting won’t solve your problems. You will need to quit and then do no work on it for six months, typically, to be free of the their legal ability to claim they own it. And regardless, they can still sue you: the six months break just gives you a better negotiating position.

If this project has any value, consult with a lawyer.


The answer to this depends on where the poster is located, which they haven't stated. Laws vary by state/country on this topic, and employer agreements vary as well.


Yeah my contract is very wide in my opinion, given there is always some level of overlap when developing software. Unfortunaly I signed it unchallenged when needing employment during the pandemic :(

Below is an excerpt from my contract:

We understand that lots of our employees have tech related ideas that they work on outside of working hours. In a case where your idea overlaps or conflicts with the work of said company, you agree to the following:

1. You will promptly provide to said company, and otherwise keep confidential, full written details of all inventions, copyright works or designs originated, conceived, written or made by you, alone or with others (“Intellectual Property”), and work relating to Intellectual Property that you have worked on at any time during the course of your employment with said company which relate to, or are reasonably capable of being used in, the business of said company ("Employment IP"). Unless otherwise agreed in writing by the CEO, you are assigning said company absolutely all rights, title, benefits and interests in the Employment IP. The reason for this clause is to protect the Intellectual Property of the Company from infringement or misuse that may damage the position of said company in the market or our ability to serve our clients.

2. You hereby assign to said company with full title guarantee by way of assignment all present and future copyright, database and design rights and other proprietary rights (if any) for the full term of such rights throughout the world in respect of all Intellectual Property and you waive in favour of said company all moral rights conferred by Chapter 4 Part 1 of the Copyright Designs and Patents Act 1988 and all similar rights in other jurisdictions.

3. You irrevocably appoint said company as your attorney to execute any instrument and do any such thing for the purpose of giving to the Company the full benefit of clause 1.

----

I could probably last 3 years or so with no other revenue streams. There is no rent or mortgage payments needed as I bought a cheap property that is now paid in full. That was part and parcel of the preparation for leaving fulltime employment, to give the startup / product development an attempt on my own and ensure that my runway could go further if needed.

I do have a lengthy notice period, but that is priced in. Also if this venture fails, I will re-enter the market as freelancer to pick up where I left off. Also forget asking the CEO about it or personal assistent, the're far to busy to be concerned with a "tin pot / pie in the sky" idea / product.

I just don't understand why founders, and those advocating for the startup life don't provide advise in this thorny area as it affects so many of us?

Do folks go dark, build in secret, pretending they had executed their plan outside of the course/term of their employment?

I have advised others is to perform research round their ideas by upskilling in areas that they'll need to prove out their ideas. This I hope will minimise the time to build (once departed) without establishing real intellectual property whilst employed. Perform spikes and mini experiements with the technology, without building the final idea and upon departure begin the actual build.

Wondering if folks consider that a sensible strategy or could iterate on it?

Keen on your thoughts.


> In a case where your idea overlaps or conflicts with the work of said company

IANAL, but it seems pretty clear to me - as long as your idea isn't related to their work, you are in the clear. Keep in mind that the software you write is not the "work of said company" - it is just a tool. The solutions they solve in the markets to which they sell are their work. Do side gigs in other industries and you should be fine.


Keep in mind a lot of BigTech companies will claim a very broad swath of topics are "related to their work". If one of their 30,000 employees are working on X, they can claim your X is related to their work and therefore subject to their broad IP assignment policy.

I was warned during onboarding of my last few jobs that most software side projects would fall under their umbrella of "related business" and that their lawyers regularly aggressively pursued side projects. Who knows, maybe they were bluffing but I'm not willing to go toe to toe with 2,000 corporate lawyers to find out.


It really depends on who you work for. When I was working at a startup, most of my side projects weren't related, but when I was working at Yahoo and Facebook, well it's hard to do something interesting on the Internet that's not related to Yahoo, and maybe Facebook (they're not as broad as Yahoo was, but they could potentially claim a lot). It doesn't matter if it's something way outside of your job area, or even if it's something they would never let you do at work, if it's in their sphere.


There's no need to guess here. Outline the work you want to do and ask them to sign off on it. They should already have a formal process for handling these requests, which are pretty common for people who consult on the side. I've done this half a dozen times and even had it approved once when the technology was directly competitive, by a US defense contractor of all places, because I was targeting a market they didn't care about. You never know until you ask.

> Do folks go dark, build in secret, pretending they had executed their plan outside of the course/term of their employment?

JIT does seem to be more common than AOT. People do the early work in secret and delay the hard decisions until they absolutely have to be made. Most of the time the whole thing unravels before that point anyway, and all the agonizing about quitting was pointless.


My non-lawyer take:

"Unless otherwise agreed in writing by the CEO"

This sounds like a conversation.

If they accept you go through the red tape of having your idea declared as exempt and you are fine.

If they don't accept you need to choose between your current employer and your ideas.

I tend to choose employers and contracts based on whether this is doable or not.


About the CEO is too busy:

Usually there is a business process to declare outside interests that involves approvals from your direct manager and his manager and doesn't require you to talk to the CEO directly.

They keep a central register of declarations that the CEO rubber stamps.

Maybe you can ask HR/Legal about getting that instituted.

If this doesn't work it might be a clear signal that your current employer might not be aligned with your long term goals.


You know the answer. You'll need to sacrifice things, so make a list of priorities. You'll need to make your own time, so create a schedule. You'll need support, so talk to the people you need.


I would say that you should build the MVP, as a side project only. Take care that what you do won't use any company resource to build. Don't quit until you are sure this will work, or you are going to burn a very well paid bridge.

Unless you are building a deep-tech product (blockchain, AI stuffs), try to put together your project using pre-made parts. I'd recommend taking a look at Low-code/No-code tool. When you have validated your product against the market, you can then quit and focus full time on the project.

I have personally help a few startup firms build their MVP using those pre-made parts to validate their idea. Some of them works, but for those failed, they didn't waste too much time and money on it. Those ideas that work, they quickly turned to a full-fledged solution and ditched the MVP.

About the legal aspect, I think that unless the contract really specifies the IP laws, I think it's gonna be alright. Maybe consult a Lawyer about it?


> and let's face it, its found in the majority of employment contracts within the tech industry?

In my experience that is something you just tell your place of deployment beforehand. I never had such a contract, and many of my colleagues run small businesses next to work as well. That is Switzerland tho.

I communicated that I need maybe 1 hour per week for random issues from work time and that was ok.

I think what I am trying to say is that you can always talk to your employer. Reduce working hours to 80%, take less money and give it a try (if they allow it)

> Moreover, I'm considering leaving a very well paid software developer job to free myself of this obligation

I would also think about what we'll paid means for you. You can always get paid more if you agree to less free time and freedom. If youre pretty and young you could make bank with OF, but at what price? Is it actually a good job if it doesn't allow you what you want to do in your free time?


> I see no consideration for those whom are employed under employement contract to assign both moral rights and intellectual property to their employer.

There's your problem.

On one hand you can do whatever you want and see what happens, on the other hand, if you live in a litigious society or have a legal-trigger-happy employer, they could mess with you just for the sake of signalling.

I'd say: either get some sort of exemption, or change the contract. Quitting is a form of contract change. (but quitting in itself might be a whole different problem since you probably still need the salary for normal living etc.)

Personally, I don't sign contracts that would grant a potential customer or employer such rights. Granted, that can limit your options, but that is a choice (and sometimes, luxury) you have to make for yourself.


What you should do is take your specific employment contract to a lawyer to understand the limits under the case law of the state/country in question. California, for example, places strong limits on what they can stop you from doing. But yes, quitting your job may be your best bet.


A bottleneck of startups is approbation in the community. The idea is to spend time only in case other people like it as you like. But other people are also employed and have a lack of time. When I test something, I reserve some limited budget in the time I am planning the idea. Then I am calling my friends, asked if they wished to help me to do some parts of work for a small budget and told them about my goal. Some ideas are rejected before start and I not pay in this case. Some ideas cost something bigger when I think before. But for some ideas all agree to run for 4 months for example. At the end of the probe period you can estimate, you can return money you've already spent or you should forget it as passed.


Like lots of folks in the replies I have had previous employers write up letters explicitly excepting named projects from any ownership implied in the general employment contract. Of course it helps to have a good relationship with your manager/CEO. gl!


You can test B2C ideas using a landing page with a basic funnel, performance Marketing and manual reach out (e.g. FB groups).

It's much harder for B2B. Here, you usually need a good professional social network to get in touch with your target group.

Also, even if you had the perfect product, it's really hard to sell to a big company as long as you're a tiny one. So, get partners who sell for you to their existing contacts. So, if you're for example building a search engine to be integrated in company websites, pitch to larger digital agencies.

Regarding the legal stuff: your parents/ girlfriend/ best friend can be the business "owner" until you get relevant traction.


Ive been running ads to get targeted traffic to my landing pages. Anyone have thoughts on that?


If you have no market signal, I can tell you now this idea will probably fail, so I would just get on with it and learn from the experience. You’ll be in a much better place to move forward. In general, don’t get hung up on stuff like this.


I see a few potential options:

1. Discuss with your employer to get the clause revised

2. Validate anyway

3. Change jobs to one without the clause

4. Give up on the idea

If you speak to your employer and they don't budge, make clear it's a quitting matter, unless you'd rather just forget the idea.


horrible advice. there's no where on earth this will be accepted and defeats the OP's requirement of being employed WHILE validating an idea. 1. would get you sued


That’s not necessarily true. Many founders end up selling products or services to the companies they previously worked for. I know of more than one person who left a previous company to pursue something that started as a side-project that many of us were aware of long before their departure and wished them well. There are plenty of places where if you’re getting your work done people are actually reasonable and nice, at least my experience with startups has seemed this way.


Many founders seem like a doubtful choice of words. There are even more founders that have landed themselves in legal waters because they just assumed their employer would be understanding like them.

High risk of failure, high risk of litigation if we took your questionable anecdotes without any proof at face value and suggest to OP to do the same.

This is especially true for large companies with people who are hired to handle litigation and IP risk management.


If the OP is a valuable employee and the company's options are to lose them or let them do something the company doesn't care about there's no harm asking at all. Don't ask, don't get.

How would discussing your contract with your employer get you sued?


First, ask a good lawyer, don't trust anything on the open internet.

The law and jurisprudence in each country covers what (intellectual property or other rights) belongs to your employer and if you are allowed to work on anything outside of an employment contract. They default is usually that every activity and thought belongs to your employer. Sometimes a well crafted non-compete, non-disclosure or employment contract can override a law, but that is never certain.

Be especially careful with preparations for starting a business or defining a business idea.

So what you can do as an employee is decided by a judge and nothing else is legally sure.


https://www.saastr.com/planning-to-do-a-saas-start-up-dont-f...


> What can one do under these circumstances, and let's face it, its found in the majority of employment contracts within the tech industry?

This highly depends on where you live, what you've signed, and the precedent that exists in your locale.

In California, for example, non-competes are unenforceable whereas in other states they are. However, you may be sued for other reasons.

If you're well paid, go pay a lawyer to look through your employment contracts to learn how you could go about doing it.


You should review your contract carefully. Typically the IP is things created "in the context of your work" and that are related to the company's business or with knowledge gained through your work for the company, using company equipment, time etc. So first, you have to violate the specific terms of the contact, and second they need to find out about it and care enough to sue you. People start side projects at work all the time.


Talk to your customers first. What do they need? Are they willing to pay for it? I wouldn't bother building an MVP until you've done that first.


I don't have useful advice applicable to your case, but we're going to live in very uncertain and adversarial macroeconomic environments for the coming years. If you're going to leave your job, then make sure that you're in a very solid financial position. One rule of thumb: can you live without any income for a year? Will it make your financial position significantly unstable?


Any sources for "adversarial macro environments"? In a similar boat to the poster and considering all my options


> I see no consideration for those whom are employed under employement contract to assign both moral rights and intellectual property to their employer.

(I am *not* a lawyer. I'm not even American.)

Can you set up any intellectual property through a trust? If the trust owns the IP, and the trust does not have a contract with your employer, can you write code for the trust, thus protecting it?

Just a thought.


I’m working on https://atomictessellator.com while employed.

Just be very clear when you interview that you have multiple hobbies outside of work (and show them!) and refuse to sign any non-competes or IP assignment clauses.

If you’ve already signed one it’s probably time to change jobs, that’s the only safe option.


Perhaps too late for you, but that clause in your contract was negotioable and I have never had any trouble getting it scoped to "...property/artifacts produced while performing duties required by the business during business hours". Scoping it to all intellectual property at all times is not even enforceable everywhere.


I've found Hanno's Lean Validation Playbook very useful in the past: https://www.smashingmagazine.com/2016/07/a-lean-approach-to-...


I suggest the book "The Mom Test"... quite eye opening if you are honest with your self and your ideas!


Great comments already on the moral/legal aspects so I'll address something more important, finding an opportunity.

Before writing any code, you'll likely need to do 50-200 customer development interviews to find and hone in on a new unique opportunity. So, why not start here?


Start a newsletter for the audience you’d like to one day serve.

I run a small but growing business (£0.5m) that I started in 2017. But for the first 3 years I had a job.

For most of that time it was largely an email newsletter - completely under the radar of anyone who might be looking.


Create a community/audience around the area you want to build. No one can tell you not to do it, there is no tax on it, and you can leverage it when you do have a concrete MVP.


But would investors care? That was my main motivation asking for permission rather than forgiveness. Am I missing something? nobody has mentioned this


Your contract allows it unless it is related to work your business does. The question is where do you work and what is your business?


you got to yolo to do start ups

if you’re asking questions this early in the game you’re not ready

i was just like this, i’d analyze and analyze.

starting anything involves risk, business, social, legal, and financial. you won’t ever have enough knowledge to know that everything you’re doing is okay.

this means you either go for it with one, maybe both, eyes closed or keep working for someone else.


^^ This is literally the only comment here that matters.

“stop talking about it and be about it”


I disagree. If you can get a few people who are regularly and eagerly talking to you about your idea because they really want it, then it’s much safer to take the dive.


Talk, listen, reflect… Talk, listen, reflect… Talk, listen, reflect… Keep going until someone is willing to pay.


You do it just like you interview at your employer’s competitor when you want to switch jobs:

You don’t tell them.


Get your wife/relative/friend to incorporate a company, and use that to do the validation. Jump ship when it makes sense to do so.

This is assuming you're simply being careful. If you know your employer is in the same field or looking at the same thing, see what a lawyer says.


Seek practical tips from r/overemployed


Get your brother or sister to pretend they are building it , no one is going to verify this. Once it gains enough traction consider quitting.


honestly if you have to ask this question and you can't think of actions to take by yourself, i question whether you are cut out for startup, its super risky and you seem risk adverse not only from asking the question.

i would recommend just keep looking at how to make sales. without customers you don't have a business.


That's absurd. Are startups risky? Yes. But it's about calculated risk. For example, you don't just start a company and say, "Fuck paying taxes, because who cares about the risk that the IRS will find me."

A founder should take a fair bit of risk in terms of product and market, and manage that aggressively. But for things that can be done in a safe, standard way, by all means do that. E.g., you should pick the state and type of legal entity with absolute minimum risk that investors will have questions. You should also choose boring technology except to the extent that you need to do something risky to make the business work. Etc, etc.


> That's absurd. Are startups risky?

98% failure rate seems not only risky but reckless.

> "Fuck paying taxes, because who cares about the risk that the IRS will find me."

cheating the IRS has 100% failure rate unless you are in a position of power and wealth.

Not only is it necessary to know something is risky but to understand as so is key.


Why are you shaming someone for asking for advice? This is literally the thing they thought of by themselves to do as a start. Polling for opinion and advice is a perfectly reasonable skill in business and life. They already identified risking IP starting a company is a big risk to avoid. They seem on the right path to me.


Do what I did. Quit. Don’t get paid. Work for years to build your own business and fail a lot. Be poor but find happiness in the journey. Until you succeed. Then find happiness in that journey. This is the way.




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