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And started their own software company? I'm not talking a Facebook or a Google. I've made something that's over halfway there I reckon. What made you do it? And how rocky were the first few months/years? I'd be leaving stable employment for a big risk but the pay off could be worth a lot more than I could earn in my current job. Did you take a business loan out to keep you covered until your business was bringing enough money in?
I've got a kid on the way and a mortgage to pay. What happens if things go tits up?
Do you mean as a contractor or you have a product that you are bringing to market?
Can you progress it part time whilst holding down other employment?
It'd be bringing a new product to market rather than contractor work. It kind of conflicts with my current job (it'd be a direct competitor).
Check your contract with your current employer.
There may be restrictions on doing work on the side that is in competition with your day job (i know my last few jobs have had similar caveats). So even having thought of, and started development might raise some eyebrows.
One job even had rules about "stuff" that i thought of being partially company property, if it was in a related field. No idea how enforceable it would have been though!
I’ve done it unsuccessfully.
The key questions you should know the answers to, IMV, are:
Who, specifically is going to be your first paying customer?
What is the problem that you are solving for them?
Why is your solution better than your competitors? Why are your customers going to risk choosing you over an established company.
Why can’t your bigger and more well funded competitor copy you?
How much will they pay for you to solve it for them?
Where are you going to find your next customers after the first one?
What will you measure to know that you are being successful?
How much will it cost you to do this?
How much profit are you likely to make at the right number of sales?
Taken from the Lean Model Canvas.
It’s hard work, and most, like me so far, fail.
However it’s been one of the most rewarding things I’ve done in my life, and it’s taught me so much about myself.
As well as above comments - New product and direct competitor with current job? Make sure your not falling foul of intellectual property rights with your current employer
Friend of mine developed software that hospitals use for ordering drugs. He was a director of IT at a hospital at the time. He had to learn to code and paid sub contractors to code and de bug the hard bits. I think he took a loan out or re-mortgaged his house to pay for the start up. It's worked out very well and he's a millionaire a few times over now after only about 6 years. I guess he knew there was a real need for the software and he most likely got solid feedback from the NHS on his product before he went all in.
If it competes you will have to leave your current job before you start making preparations to trade. So no lining up potential customers etc. until you leave. This is basic employment principles, your contract would have to exclude them.
That is if you are an employee, if you are a contractor the contract terms would be more imporyant.
Came in to recommend the cordless Makita.
I is disappoint.
That is in addition to taking care that your product does not infringe copyright or make use of trade secrets of your employer. Plus, obviously you should not make use of your employer's non-technical informatoon such as customer lists etc. Information you can take away in your head is OK, but keeping paper or electronic copies for the purposes of your new venture could amount to a breach of your duty as an employee or a mis-use of confidential information.
Sounds like it's fraught with complications in several ways OP.
What I did (not with software tho) was leave and make my former employer my biggest customer, I wonder whether that might be a possibility?
It would be very brave to leave and set up from scratch, with no customers and no marketing or sales function in place.
Listen to people like Kramer who have done it. Not those of us who haven't. There will always been loads of people against it, but if someone else can do it so can you as long as the underlying product and market is there.
I am not saying live on blind faith but speak to people like Kramer who have an idea of things you want to get sorted first. Good luck, and if you need a part time developer let me know.
Thanks guys, I'm going to use Kramer's post, answer all the points and then see how I feel. Definitely some potential complications with current employer...
Do look into the IP and your current contract. If you developed this idea whilst employed your current employers may not take too kindly to the competition.
Check your contract and make sure you are not posting anything on the web about it which might be used in future legal proceedings against you. 😉
My OH started a business by buying a franchise. Having children/mortgage makes things a lot more pressured. I was able to support the family but it was still quite tricky as she was working lots of hours for very little pay as you do when you start your own business, so I ended up doing more childcare than was ideal given I was also trying to earn a decent wage. She had a business loan for setup costs, but she had *some* money coming in pretty soon after starting.
If you developed this idea whilst employed your current employers may not take too kindly to the competition.
Depending on how it was developed, the OP may not even own the IP to their idea. All of my tech jobs have had clauses related to invention, anything developed while at the company is owned by the company (obviously the limits would be use of company time and equipment). I wondered if this would even apply to research, e.g. a quick Google of something while on your lunch break.
Stuff you do in your spare time is your's (unless you are a director or senior employee). Subject to express contract terms about it. Proving this either way could be problematical of course.
I know someone who is doing this, but hes gone down to 4 days a week with his current employer and spend the other day on his new product.
If it takes off he'll look to reduce working for his current company down to zero. If it flops he still makes plenty from working 4 days a week.
I know someone who is doing this, but hes gone down to 4 days a week with his current employer and spend the other day on his new product.
If it takes off he’ll look to reduce working for his current company down to zero. If it flops he still makes plenty from working 4 days a week.
That’s what I’m doing too. It does mean making some sacrifices, but it’s not all in. However that approach does have its advantages too.
Depending on how it was developed, the OP may not even own the IP to their idea. All of my tech jobs have had clauses related to invention, anything developed while at the company is owned by the company (obviously the limits would be use of company time and equipment).
This is exactly what mudered dead my one opportunity to begin a career as a coder. To be fair they offered to put me through further education to get up to scratch on the skills I lacked. But that carrot wasn't enough for me to give up coding things I was interested in for things which frankly didn't interest me at all 🤣 If I did any open source coding in my spare time they wanted it run past them first. They heavily implied their paying of my education meant anything I implemented thereafter that was enabled by said education was their IP too (or something to similar effect).
I know someone who is doing this, but hes gone down to 4 days a week with his current employer and spend the other day on his new product.
As the OP's product is likely to be a direct competitor to his current employer's, they may fall foul of non-compete clauses if doing 4 days. Won't stop the OP developing the software 1 day a week but they won't be able to sell to customers until out of their current employer's contract.
OP you could move to another company in a different sector, do 4 days a week there, eventually tapering off if all goes well?
As the OP’s product is likely to be a direct competitor to his current employer’s
If this is the case its going to open up a huge can of worms around anti-competition clauses and IP ownership.
Ive done it, although we were always half consultancy, half product development. TBH the consultancy always paid more bills than the software side. I don't see how you can do the software side without a big buffer in terms of cash in the bank if you don't have income from elsewhere TBH. We got to around 30 staff at the peak, but it was hard to maintain.
Business loans don't exist for new businesses in reality. Some will loan against assets, all will demand that you secure it with your assets, and it's normally punitive interest rates. You're better off with a personal loan (unsecured) loaned into the business by you. You should obviously take that out before you leave your current employment. You might find better with your local enterprise partnership.
If I was to do it again I would get a buffer for my finances using a loan or savings, then go for equity crowdfunding to fund around 1 year of further development.
I think possibly the most important thing you can do next is read your employment contract carefully OP.
Yeah the competitor part rings alarm bells, is it an app that does similar things to an app you work on developed by your current employer? If so I assume they could tie you up in the legal system long enough that it wouldn't be viable for you.
Outside of that though, the government agency I'm contracted to uses a couple of one-man-band applications that whilst not critical are certainly important to them and they pay 6 figures for annual support and we only need to contact the developer once every couple of years (usually in line with support for new operating systems). So even if you just have one customer it can be a great gig if you end up in that position.
I’ve run my own business twice. Once was basically because there were no jobs (I moved out of London and was surprised to find that my particular skills weren’t so great for Yorkshire). It was a great idea with quite a few fans but made me minus money. The second time, I was made redundant and just ended up working as an independent consultant which has been pretty good for paying the bills. I’m now on no. 3 as the independent consultancy has thrown up an idea for product that I would like to take to market. It’s quite hard work juggling keeping the money coming in from consultancy and getting something to market but it’s more secure (particularly as manufacturing has required quite a lot of costs up front and protecting the design from the outset is costly too and I can keep all that separate from the salary I pay myself).
Can you contract for someone else part-time as part of your route-map to launch? All the IP things being ok.
WRT early funding, agreed about business loans being non-existent if your business doesn’t have assets.
WRT grants, most are so convoluted to apply for, IMV, your time would be better spent bootstrapping and getting your MVP to market.
I'm an IP lawyer. It's worth saying that the IP ownership angle is potentially quite complex here and might not be resolved solely by looking at your employment contract due to the impact of statute and the varying IP rights that might be in play for a software product.
For instance, in respect of potentially patentable inventions, s39 of the UK Patents Act 1977 provides a statutory test for determining situations where employers will own inventions created by employees, and employment terms that further limit an employee's ownership rights are non-enforceable.
You probably need professional advice, or a written agreement/waiver from your employer about ownership of the IP rights in your product (unlikely, I know!). As with many of these things, it's not always a case of who's right, but can be about who's willing to fight - so it's worth considering the likelihood that your employer would bring an action if your product is going to be damaging to their business.
I love this place. Got a question on anything and along comes someone whose job it is. IP lawyer, farmer, builder to astronomer, you name it someone is doing or has done it.
Fantastic