Ask HN: I want to propose spinning out my work from current employer. How?
The company I work for is in the middle of "modernizing" our backend tech stack. As part of this, a few years ago I was assigned a task that could not be completed with anything we had or could find in the marketplace. I designed and implemented a tool that allowed us to move forward (I'm intentionally not describing it); it has now been part of our production process for 6+ months; Somewhere between $15-20 million ARR depends on it and yes, it has been rock solid and dependable.
But, nobody wants to dedicate time or resources to maintenance tasks or feature requests. It seems destined to die of neglect unless I can take it outside the organization. This isn't a unicorn idea, more like a few dozen millions of revenue per year.
Has anyone tried to do this? How did you approach it? Basically what I want to say is "I want to quit and take this tool with me, and I want you to give me $500k for X% of this new company". Or am I way off base?
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[ 3.6 ms ] story [ 44.5 ms ] threadYes, and everyone who did got served a cease-and-desist. Not everyone however asked for 500k from the aggrieved on top of stealing their IP. That's some next-level ballsiness worthy of a true pioneer.
OP problem is predicated on this being a thing that is useful to tech in general not a particular market
1. “I am leaving the org. If you’re interested in selling this part to me, I would be interested in buying it.” Absolutely be prepared for that to be your last day and for them to say no.
You should have financing lined up and a business entity prepared to acquire the IP, pay for infra, etc in the event they entertain the offer. You’re an insider who wants to perform a divestment and M&A transaction. Include the cost of a good M&A firm to advise you in your cost estimate. /r/fatfire has some recommendations here.
2. Quit. Build it yourself. Compete against your old employer with what you know. Be prepared to grind and still fail.
Your first (absolutely mandatory) step is to talk to an attorney. Explain the situation, and bring your employment docs with. Which path you take will be governed by what you agreed to when you were hired, your risk tolerance, your jurisdiction, and your resources available to you. Expect to spend ~$500 to have the conversation.
Good luck! No risk, no reward. Everything is negotiable.
https://www.pon.harvard.edu/daily/batna/translate-your-batna...
I believe it is something that would be the basis of a sustainable and profitable business, but instead they are killing it with neglect - because it is a non-core thing.
If it's a non-core feature to their business as you say, then I'd leave and build it myself from the ground up.
I don't have personal experience here, just working off stories from others, but the benefit to starting as a Consultant on X is that you 1) force yourself to stand up your business entity and have a "First Customer" relationship started, and 2) "help" them to externalize the maintenance burden/risk on X.
I've heard (again, not something I've personally done, just stories I've heard of other successful people), that some companies love the chance to move opex to external consultancies and shift it to a different "more transparent" account in the budget if given the right opportunity. ("More transparent" because unlike opex spent on salaried FTEs, consultants have to bill their hours and that becomes auditable.) Especially for risks/opex outside of core business.
After you've established yourself as the go-to Consultant on X that builds up leverage to then bootstrap into the M&A with a conversation like "Since we are now the experts on X, would you consider selling X to us and further externalizing it from your expenses?" The company externalizing that maintenance risk/cost of labor that they've been spending on X should have a better idea by that point of what X as an asset is truly worth to them and possibly how much risk/burden they still expect to spend on it in the future.
Lots of ways that approach can backfire too (again, you're just as likely get fired as to get a consultancy). But also overall it looks a lot less like a "hostage negotiation" than some of the other suggestions and gives you a longer built-in "runway" for take-off than outright quitting first. Not that that runway is entirely safe as a business plan either (if your focus is on buying the IP of your first client you likely aren't busy diversifying your clients).
Otherwise you could do what the founder of Roku did. Roku's founder made Netflix as his investor when Netflix decided to scrap the internal project he was leading.
Will be the only parts they hear. Oh, also that you plan to steal their IP. You made the tool as their employee, on their time, it is their tool, not yours.
You’ll be shown the door promptly.
It describes employee-owned companies and frames the type of spinoff you described as a positive investment, mutually beneficial, to re-leverage debt and provide growth for leaders that are blocked.
Obviously I don't know the situation and the mindset of leadership, but I wouldn't ridicule what you suggested as stealing their IP. They're getting a % ownership in a company in hopes of it becoming a valuable asset -they'd be making a choice.
I don’t get it. I cannot just quit my company and tell them “BTW, I’ll take with me all the code I wrote for you. Pay me X for it if you want it”. Lol. They already paid me (salary) for the code I wrote for them.
The company had a problem (which was probably some idiosyncratic self-inflicted thing), and they hired you to solve it for them. They could have hired any one of thousands of other people to solve it, but it happened to be you. You solved it, and now it's done, which is great (mainly for them).
> Somewhere between $15-20 million ARR depends on it and yes, it has been rock solid and dependable.
Does any of that ARR in any way depend on other things too? Like a brand, marketing, sales people, some product, etc?
Not trying to be too snarky, and you don't provide too many details, but generally there isn't actually much value in tooling/optimizing backend or operational things. These things are only valuable in the context of the rest of the company, which they own, not you, so they can just keep on doing what they're doing and hire people to solve the rest for them when they need to.
Probably your employer doesn't see the value of what you built, which means they're unlikely to give you much for it anyway. What if you wrote the new version and then offered it to them with a discounted support contract?