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Employed with a side of startup

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Re: Employed with a side of startup

#11

Post by grellas »

I don't know how many hundreds of founders I have worked with over the years in Silicon Valley who began by moonlighting while working day jobs to get started.

The process is normally pretty safe and, out of the hundreds of cases, I don't know of one that resulted in a lawsuit.

On the other hand, since I also do litigation, I have witnessed a variety of these situations that have resulted in lawsuits and have occasionally defended them.

What is the difference between the safe and the unsafe ones? The standard safe zone is well-known in the Valley: do the side activity strictly on your own time and without using company resources.

Where people trip up:

1. Doing side activity that is related to the employer's current or anticipated business.

2. Failing to comply not so much with the terms of an employment agreement but rather with "company policies" that large employers will periodically require their employees to sign - policies that can require the employee to report all side activity and to sign a form affirmatively attesting either that there is none or explaining what it is. (If you lie on this, you get in trouble).

3. Crossing the line in violating fiduciary obligations that an employee has to ensure that all activity for which the employee is compensated is done strictly for the benefit of the employer.

The really critical area tends to be the last point. I don't know how many times over the years that I have seen founders get tempted to want to: (i) steer current customers of their employer in the direction of their side venture; (ii) sign up key customer or supplier contacts of their employer as "advisors" for their side venture; (iii) talk to co-employees about joining their side venture; and (iv) the worst temptation of all (but thankfully rarely done) use an inside contact at their employer's business (or use their own position) to steer project work toward the side venture.

The simple rule is to play it straight. Avoid conflicts. Make sure any IP you generate in your side venture has no material connection with your employer's business. And then follow the standard rules (own time, own resources). If you do these things, you will normally not incur any significant risk from moonlighting. (Of course, check with a good lawyer in your local area on details for your particular situation).

Re: Employed with a side of startup

#12

Post by starkfist »

grellas wrote: post #11

I don't know how many hundreds of founders I have worked with over the years in Silicon Valley who began by moonlighting while working day jobs to get started. The process is normally pretty safe and, out of the hundreds of cases, I don't know of one that resulted in a lawsuit. On the other hand, since I also do litigation, I have witnessed a variety of these situations that have resulted in lawsuits and have occasio…

It also depends on where you are located. Silicon Valley is a special case and California has laws that are more favorable to employees and the individual. Places like New York Texas do not, and you have to be much more careful.

Re: Employed with a side of startup

#13

Post by zavulon »

I disagree with most of his advice. I really doubt you'll be able to quit your job and get anywhere with your business if you follow it. I don't really want to get into details for obvious reasons, but when I worked on my business on a side last year, let's just say I wasn't following the advice in this article, and I glad I didn't. If I did, I would still be working for "the man" and hating my life.

Everything in life takes balls. Decide what's important for you, and go for it, fuck everything else. You've gotta have the attitude that your business is #1, and the corporation just doesn't really matter that much. Again, I can't post that many details, but pretty much reverse most points from this post and you'll have a good idea of what to do.

Re: Employed with a side of startup

#14

Post by tptacek »

zavulon wrote: post #13

I disagree with most of his advice. I really doubt you'll be able to quit your job and get anywhere with your business if you follow it. I don't really want to get into details for obvious reasons, but when I worked on my business on a side last year, let's just say I wasn't following the advice in this article, and I glad I didn't. If I did, I would still be working for "the man" and hating my life. Everything in li…

The logic you've employed here works for stealing cars, too. If cars are really important to you.

Re: Employed with a side of startup

#16

Post by mattm »

ErrantX wrote: post #7

One reason I love working for my current employer is he really cares not a jot about what we do on the side (and even if it leaches into the day job at times). Actually he'd even part funding a current pet project of mine :) It's at the point where I dont even have a contract any more because of the limitations it actually put on our relationship (note: not generally recommended - before everyone sprays tea/coffee on…

This becomes really apparent if you live in a country with a less-capable legal system. Contracts are basically meaningless. It's the people behind the contracts - and their character - that are more important. That is why if you try to do business in a place like China or Brazil, the hosts will take you out to dinner and events to get to know you first before talking business.

This is even true in North America although you don't need to spend as much time getting to know someone as you have a little more safety.

Re: Employed with a side of startup

#17

Post by byrneseyeview »

migpwr wrote: post #3

Great bit from the article: "If they decide to sue, they get to look through your email records (it's called "discovery"). Then they have 100 emails you sent during work hours. You lose." Weird. I submitted this article but my submission has now disappeared and it's now on front page under bhousel? Probably just a coincidence?

They get to look through your personal emails?

Re: Employed with a side of startup

#18

Post by pw0ncakes »

grellas wrote: post #11

I don't know how many hundreds of founders I have worked with over the years in Silicon Valley who began by moonlighting while working day jobs to get started. The process is normally pretty safe and, out of the hundreds of cases, I don't know of one that resulted in a lawsuit. On the other hand, since I also do litigation, I have witnessed a variety of these situations that have resulted in lawsuits and have occasio…

The really critical area tends to be the last point. I don't know how many times over the years that I have seen founders get tempted to want to: (i) steer current customers of their employer in the direction of their side venture; (ii) sign up key customer or supplier contacts of their employer as "advisors" for their side venture; (iii) talk to co-employees about joining their side venture; and (iv) the worst temptation of all (but thankfully rarely done) use an inside contact at their employer's business (or use their own position) to steer project work toward the side venture.

On 3, does this mean you can be successfully sued for hiring a co-worker? What if it's 2 years later?

On a side note, it's pretty damned fascist that relationships can be treated as corporate property. That only passes because the corporations now own the legal system.

Re: Employed with a side of startup

#19

Post by pw0ncakes »

johnrob wrote: post #9

"If they decide to sue, they get to look through your email records (it's called "discovery"). Then they have 100 emails you sent during work hours. You lose." The simple solution that PG has recommended in the past is to rewrite all the code. Does that protect you from the above?

IANAL, and I've never been in that position, but I would use a different language in rewriting. If you rewrite in the same language, a lot of your functions will look very similar, and that similarity might be enough to burn you. Changing languages, on the other hand, will enforce significant difference on your approach to the problem, and possibly improve it. (I have no idea how this would play out in court.)

If nothing else, it's an excuse to learn a new language.

Re: Employed with a side of startup

#20

Post by zavulon »

tptacek wrote: post #14
zavulon wrote: post #13

I disagree with most of his advice. I really doubt you'll be able to quit your job and get anywhere with your business if you follow it. I don't really want to get into details for obvious reasons, but when I worked on my business on a side last year, let's just say I wasn't following the advice in this article, and I glad I didn't. If I did, I would still be working for "the man" and hating my life. Everything in li…

The logic you've employed here works for stealing cars, too. If cars are really important to you.

Ok, maybe I should be more careful, what I wrote could definitely be misconstrued as that. Obviously I'm not saying to do anything illegal.

But - telling your employer in advance that you're working on your own project? Really? What's the advantage in it? What you do in your off time is 100% yours [unless you signed something that says it's not], and letting your employer know about it will not bring you any additional benefits. On the other hand, the disadvantages are huge - everybody will start mistrusting you, knowing that you're looking for a way out, you'll never get promoted, etc.

And that's just one point.. Not doing business phone calls in the day hours? C'mon, how realistic is that? How is anybody going to take you seriously if you don't pick up your phone during the day? Instead, you should FIND time during the day for important business-related phone calls. When I was employed, I always ate lunch at my desk in about ten minutes. At lunch hour, I found a nice quiet place in a plaza 2 minutes from the office, brought a notebook to take notes, and made 2-5 business calls.

My point is, while you should definitely not do anything illegal, if your #1 goal is to quit your job and make your business your primary source of income, you should find creative ways to reach that goal, and stop at NOTHING before you do that.

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