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From the startup who allegedly stole software and raised $2M with it

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From the startup who allegedly stole software and raised $2M with it

#1
My name is Frederick Hutson, and I am the President and CEO of Pigeonly. I was recently made aware of a post made here:

https://news.ycombinator.com/item?id=8227225

In light of the defamatory nature of the poster’s statements, I felt compelled to respond. Well over two years ago, we entered into a work-for-hire agreement with the poster to write aspects of the software code for a beta version of our initial e-commerce platform. Our agreement with the poster makes it clear that we own all work product produced pursuant to the agreement. In the end, however, we were very unhappy with the quality of the poster’s work so we terminated the relationship and requested a refund.

In addition to my own assessment I consulted with several independent sources including a founding member of the CakePHP project (the framework the poster used). Everyone who evaluated the code said the same thing, to sum it up (in their professorial opinion) the framework was not utilized correctly which resulted in the numerous bugs and browser incompatibility issues. The truth is even if we wanted to work with the code the poster provided we couldn't because it was flawed. So we were left with no choice but to start from scratch with a new developer.

The bottom line here is that through hard work and determination, we indeed built the Pigeonly platform from scratch and in no way incorporated any of the code produced by the poster. We are very proud of what we have built at Pigeonly, our mission is to build great products that solve the type of problems most would overlook.

Re: From the startup who allegedly stole software and raised $2M with it

#2
I think you're going to have a hard time here trying to convince a developer community that a "refund" is something a client is entitled to in a work for hire situation.

You ask a developer to do work for you, they do the requested work, and you pay them. If you don't like the work, you end the relationship. But you still have to pay them for their time.

I don't envy the next few weeks for you guys, but you definitely brought it on yourself by stiffing a developer on an invoice. I suspect you'll come to regret having done that.

As an ironic way of reinforcing the message, you're probably going to employ a lawyer on a work for hire basis in the near future. He's not going to deliver a result that you like. Try asking him for a refund and see how that works for you.

Your best course of action is to pay the developer's invoice in full today. Then edit the above post into an apology.

Re: From the startup who allegedly stole software and raised $2M with it

#3

I think you're going to have a hard time here trying to convince a developer community that a "refund" is something a client is entitled to in a work for hire situation. You ask a developer to do work for you, they do the requested work, and you pay them. If you don't like the work, you end the relationship. But you still have to pay them for their time. I don't envy the next few weeks for you guys, but you definitel…

> I think you're going to have a hard time here trying to convince a developer community that a "refund" is something a client is entitled to in a work for hire situation.

Depends entirely on the contract. Many contracts include terms giving the client recourse in the case where unsatisfactory work product is delivered, especially if it's a pay-for-deliverable rather than pay-for-hours-worked contract. (But some don't, and some have more complex partial-payment or third-party mediation clauses.)

It does sound like regardless of the contract dispute over that payment, the original post's accusations about the code are still false, if the post here is not lying about what code they're using. That post claimed that Pigeon.ly is using stolen code to run their product, while Pigeon.ly claims they are not using that code in their product. Which would still leave a payment dispute but not a copyright issue.

Re: From the startup who allegedly stole software and raised $2M with it

#5
> Everyone who evaluated the code said the same thing, to sum it up (in their professorial opinion) the framework was not utilized correctly which resulted in the numerous bugs and browser incompatibility issues.

How using PHP framework may result in browser incompatibility issues? Whole processing happens in the server side for PHP, not in browser...

Re: From the startup who allegedly stole software and raised $2M with it

#6
Requesting a refund is different from a charge-back via PayPal. Working with any contractor be it an agency or a freelancer there is always a risk you wont be happy.

The correct way of dealing with it is to find an agreement you can both deal with. Not use shitty Paypal tactics to reverse the charge.

If you go for dinner and don't enjoy the food, you do not pay, leave and then call Amex and tell them your card was stolen.

Re: From the startup who allegedly stole software and raised $2M with it

#7

I think you're going to have a hard time here trying to convince a developer community that a "refund" is something a client is entitled to in a work for hire situation. You ask a developer to do work for you, they do the requested work, and you pay them. If you don't like the work, you end the relationship. But you still have to pay them for their time. I don't envy the next few weeks for you guys, but you definitel…

Depends what the contract is for. If it's for "programming", then you have to pay, no matter what program you receive. However, if it's for "complete and functional product", then unless they produce that, you don't need to pay. Like in a restaurant, if you order pizza, and get steak, why would you pay?

Re: From the startup who allegedly stole software and raised $2M with it

#8

I think you're going to have a hard time here trying to convince a developer community that a "refund" is something a client is entitled to in a work for hire situation. You ask a developer to do work for you, they do the requested work, and you pay them. If you don't like the work, you end the relationship. But you still have to pay them for their time. I don't envy the next few weeks for you guys, but you definitel…

> I think you're going to have a hard time here trying to convince a developer community that a "refund" is something a client is entitled to in a work for hire situation. Depends entirely on the contract. Many contracts include terms giving the client recourse in the case where unsatisfactory work product is delivered, especially if it's a pay-for-deliverable rather than pay-for-hours-worked contract. (But some don'…

True. It absolutely depends on the specific contract each of them signed. If the contract were to say "Not satisfied? Full refund!" or anything like that, they technically are not under contract to NOT use the code.

They would literally have legal basis, in that case, to run a startup from the very code they refused to pay for. Albeit unethical, it would be legal.

Either way, the contract would clear this up. It's still bad press. With $2M in funding, just pay the dev and move on with a stable image of doing the right thing even if it isn't legally required to do so.

Re: From the startup who allegedly stole software and raised $2M with it

#9
Firstly, there are bugs. In everything, all the time. It's definitely not valid reason to not pay someone. Secondly, it's YOUR responsibility as the client to make sure what's being delivered is what you asked for.

Developers are not mind readers, you need to put yourself in a position where you are regularly reviewing progress, you don't need to be a developer to do this, just sit down with him/her each week and ask them to show you how the functionality works for the user. Sounds like a case of poor product management to me.

Re: From the startup who allegedly stole software and raised $2M with it

#10

Since both parties are in agreement as to what actions were taken, why don't you show us the contract so that we can determine who acted appropriately?

This sounds like a bad idea. We are not King Solomon, nor should either party want his help. For simplicity's sake, neither party should take the opinion of anyone other than a lawyer on this.
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