I think his response to someone suddenly "owning" the company is odd. Here's what my response would have been:
----
Hi, Billy. Thanks for telling us about your other company with your friend. I'm a little disappointed that you weren't open that you're already in this space. And that your existing company is in direct competition with the one we all agreed to start that weekend.
However, I'm flexible. I'm willing to license my code to your other company for a flat fee of $10,000. This includes all intellectual property rights to my software.
That fee is reasonable given my time and experience. I think that the others on the team will have similar opinions about their contributions.
If you choose to not take me up on my offer, I wish you luck finding programmers to re-implement the software from scratch.
Sincerely,
Programmer.
---
... does anyone not understand the legal rights behind IP? Billy has zero rights to use the software in his existing company. He knows that, which is why he's trying to bamboozle everyone.
Instead of arguing about an "existing" company, they need to talk about their code. They own it. They control it. No one else has the legal right to use it.
What's the problem? They don't give Billy the right to use their code, and he goes away.... or gets sued.
Exactly. In fact as a team I believe they have the power to vote him off the team. Since he registered the name and domain they can simply come up with a new name, move the code to their new domain and continue working on the startup. Billy has zero rights to the code and as such should not be allowed to make any use of it.
This pretty much leaves Billy in the same spot he's been for the last 18 months.
If they could bang the thing out in a weekend then he can get somebody else to rebuild it. He is the only one among them that can or will sell it to restaurants. He's the only one with any emotional attachment to pushing this very little idea forward.
I think programmers here are assuming "execution" means coding. It really means sales, pitching, customer development. Also product development - refining the features over time. Billy will screw that up for sure.
"If they could bang the thing out in a weekend then he can get somebody else to rebuild it."
Can he? He incorporated 18 months before Startup Weekend, and had literally nothing to show for that time, except a business plan. Evidence strongly indicates he could not (easily) "get somebody else to rebuild it". Which is why he came to Startup Weekend and defrauded 8 developers out of their time and skill. He clearly couldn't (or wouldn't) pay market rates to get it done, or he would have done so in the 18 months preceding this.
TL;DR: I think everyone is massively underestimating how much Billy has to lose here. The developers signed away a weekend of work for a 0.4% stake. Billy signed away some undefinable chunk of 18 MONTHS of biz dev for a 0.4% stake!
If Billy gets their code, then they compete against Billy using his client list, his price lists, etc. because those were exposed during the weekend.*
And, it's not like Billy has super exclusive access to the restaurant business. They could partner with other restaurant owners in the region who are similarly turned off by people like Billy. I'm sure those people exist, given the homophobic and generally condescending comments on display here...
So, Billy has: a code base he cannot easily iterate on because he's fucked over his entire potential employee base.
Developers have:
* A lot of Billy's biz dev work over the past 8 months.
* The freedom to exploit personality conflicts in the local/regional business scene to score additional business partners.
* Far lower costs. There are probably tons of bugs in a weekend code sprint product, and Billy isn't going to find any free labor to clean those up. Remember a big chunk of software dev is extending and debugging existing code... Billy ain't going nowhere with a static code base.
* Worst case, the "fuck you" factor and access to free skilled labor (their own) necessary to make break-even or even loss leader pricing structures. This is a unique advantage in their negotiations with Billy.
The last two together would totally screw over Billy. Imagine these developers going into a meeting and demonstrating security flaws or bad GUI glitches in Billy's product during a live meeting... the client might not go with these guys, but in the VERY BEST case for Billy, he's got to hire a freelance developer to clean up the code base. Not going to be able to exploit a hackathon for that sort of stuff, and 80% of software developer is maintenance...
* Maybe Billy claims they only get access to his work done that weekend. But that's bullshit; they developers didn't teach themselves to create rather specific types of products in a weekend... to the extent that there's any contract there, if it came out during the weekend, then it counts toward the agreement.
I disagree. I think the circumstances point more clearly to Billy being an equal partner in a group of 9, who own the entire codebase collectively. Absent any pre-existing business agreement between them, the partnership decisions would have to be unanimous, rather than a majority vote.
Billy could block the other 8 partners from using the code written at that weekend. But they don't need it. They would just need another weekend. Conversely, any one of the other 8 partners could block him from using it. He would still need a cooperative coder.
Billy might be able to make the argument that if he used the code, and no one specifically objected, it was implicit consent from the other partners. Any one of the 8 should be able to send him a cease and desist letter, and he would be stuck.
Billy didn't code anything so he doesn't own shit. SW clearly states that no contractual agreements can be made during the weekend the work is preformed. Any work conducted after the weekend Billy owns, but nothing during that weekend.
In situations like this it's very clear that whatever you make, you own.
Startup Weekend would be a lot better if it required all participants to sign waivers releasing all IP generated over the weekend. That way everyone knows exactly what they are getting into.
People would go because they understand that their weekend of work is not worth 10% equity in a 10M company.
If you really think a weekend of coding is worth something then why would you go now? It allows complete strangers to join your team and pollute the IP ownership.
>> People would go because they understand that their weekend of work is not worth 10% equity in a 10M company.
10 percent of the effort is worth 10 percent of the equity, no matter how few days that effort is provided.
>> If you really think a weekend of coding is worth something then why would you go now? It allows complete strangers to join your team and pollute the IP ownership.
Strangers yes. But they self selected into groups.
At the end of the weekend, the code is owned by someone. If there's someone interested in it, the author should be as well.
I would agree that one should not have high expectations going to such and event, but one should expect not to be exploited, and if something does emerge that has legs one should be entitled to his share - and if fact (s)he is entitled to it by law unless someone cons them out of it. Copyright goes to the author.
I don't think you understand. If you join my startup team and spend one weekend working on it and then disappear for a year while everyone else keeps working then you didn't build even 1/2% of the effort. Anyone that thinks a weekend of work can generate 10M of value is delusional. It's better to keep them filtered out of the process from the start.
And just to clarify - if everyone on your team signed away their rights then you would still be free to take your code and do whatever you want with it. You could build the business on your own if you didn't like any of the other teammates.
It's not the legal definition of a partnership. It's more like a nine-way joint tenancy.
An actual partnership would probably have contracts and articles that make it easier to do business. Notably, many allow for ratification of business decisions by majority vote of the partners, weighted by their ownership share. There may be a conflict of interest if you try to make your partnership buy something you already own individually, but as long as you disclose your interests up front and recuse yourself appropriately from conflict decisions, that's rarely an issue.
> I think the circumstances point more clearly to Billy being an equal partner in a group of 9
That's shitty for Billy; he just signed away 18 MONTHS of business development for a 0.4% stake. Or else he doesn't get access to the code. The sure thing is that he doesn't get it both ways...
Does the 0.4% "handshake deal" potentially cause issues with this, though? Couldn't that be construed as an offer for the work that was produced that weekend?
If I was being uncharitable, I could say that the reason the 0.4% offer came up in the first place was specifically to deal with this problem - by offering a trivial amount of equity, Billy has an argument that the other programmers were compensated for their time in a form that they mutually agreed to. Why else would Billy bother making this arrangement?
The 0.4% deal applies to Billy, as well. As I understand it, everyone is entitled to 0.4% of whatever venture follows from the work they'd collectively do over that weekend. It wasn't Billy who offered it, it was a friend of OP, one of the devs. Any of the devs could start a company as well and all of the other team members including Billy would have a 0.4% share in that, too. In fact the most sensible thing to do is for the 4 members to say 'let's start this thing up, take nearly 25% each, give Billy 0.4% and do our best'. They'd likely beat Billy in competition as they can iterate on the codebase, Billy can not without hiring a new team. If the devs aren't interested in running that startup then they'd still be entitled to 0.4% of what Billy is going to run.
(edit ignore the exact percentages, they ended up with a team of 8 devs than 4)
No, the relevant copyright law does not accept a 'handshake deal' to transfer copyright ownership as work for hire. Quoting from http://www.copyright.gov/circs/circ09.pdf :
> A work created by an independent contractor can be a work made for hire only if (a) it falls within one of the nine categories of works listed in part 2 above and (b) there is a written agreement between parties specifying that the work is a work made for hire.
What sort of IP are you talking about? There's no trademark infringement, there's no patent. I didn't see mention of any trade secret, or anything that sounds like a trade secret (eg, "information which is difficult for others to properly acquire or independently duplicate").
From what I read Billy didn't make the arrangement, one of the developers did. The idea was that if the entire team of 9 didn't stick around to when the startup becomes successful then they at least get 0.4% equity for participating at startup weekend.
If you're working on a hack project like this then insist on all copyright notices in the code and site being assigned to a made up organisation with all the names in it. So put
@copyright SmithJonesZuckerbergOrg
in all the source files and html.
Those files would be a record of the interaction and activity on the hack weekend and would allow for a neat place for lawyers to start in negotiating a smooth buyout in this situation. Because I would rather accept $1K than work with that type of individual.
Or just push it to GitHub. Git records the author of each commit with it, assuming you've set up your .gitconfig correctly. In the absence of a contract stating otherwise, copyright remains with the person who wrote each part of the work. 'git blame' will show exactly who wrote what. GitHub gives you a third-party, subpoenable, record of who committed when.
Can you give me a reason for "subpoenable" as a requirement? I mean wouldn't the github data be authoritative and easy to check? Or do we really need to be forcing githubs lawyers to get involved to provide answers to a subpoena if there's a lawsuit?
Anyway, you make a great point about the commits being clear assignment of copyright, and thanks for that!
The subpoenable requirement is because you can rewrite history in git. If you just have a local copy of a repository on your hard disk, your opponent's lawyers might argue "Well, you might have used git commit --amend or manually altered the bits of the repository", and you can't show otherwise. Once you push to GitHub, the repository has become public, and a copy exists somewhere where you can't just manually alter the bits or run git commit --amend.
You don't have to actually subpoena GitHub and get their lawyers involved. The fact that you can means that opposing council will know that you're not bluffing or lying when you say "I authored this commit, and I have the commit logs to prove it". Or if they think you are bluffing or lying, they can certainly subpoena GitHub themselves...but if you aren't, that works in your favor.
To be fair the commit time and the authorship time are not the same. You can author something at work and wait to get home to commit it and vice versa.
Yeah, you can, but that's more of an issue when proving "Does my employer own my work or do I?" For the startup weekend case, time doesn't matter, you only need to prove authorship - and while a git commit that says "Bobby Boyd <rboyd@gmail.com>" doesn't necessarily mean Bobby Boyd wrote it, that plus Bobby Boyd saying he wrote it, plus a GitHub log showing that the authorship attribution hasn't been tampered with, is pretty good evidence that he wrote it. If Billy NoLastName had written it, why didn't he claim credit for it when he pushed it?
> plus a GitHub log showing that the authorship attribution hasn't been tampered with
Unless Github has some backup logs somewhere, that entire log can be wiped out and replaced with whatever someone wants with a simple `git push -f`.
Which is why it's so important to sign commits. You sign your commits, and keep your private key private, and as long as any copy of the repo exists anywhere you can access, you can prove authorship/ownership.
Commit signing is also very useful for vouching for code integrity.
You still can't prove authorship. You can prove that at some point you signed that particular commit. But I could easily take a repo including signed commits from you and rewrite and resign the commits with my own private key. This only works if the one doing the signing is a trusted third party.
That's a good point, but if you combine signing with an indelible timestamp, like one of the blockchain services or other trusted legal timestamping services, you'd be in pretty good shape.
I assume you're suggesting something like including such a timestamp in the commit message? If that's the case, that makes a lot of sense to me. It would be cool to have a tool to automate this. Or something like GitTorrent[0] might do the trick if it had wider adoption.
No, for this to work, you'd really need to timestamp either the git tree hash or (preferably) the hash of the GPG signature (or the signature itself).
Most timestamp service hashes are necessarily public (for trust reasons), so an attacker could grab one and go back and include it in his signed commit message.
But if you timestamp your commit hash (which is a cryptographic hash after all -- albeit an increasingly weak one) or timestamp the signed commit, then it can't be forged (since the attacker can't go back in time and use a cryptographically-verifiable timestamp, like the ones indelibly embedded in the blockchain).
Sorry, what I meant was to include a hash of the commit in a public blockchain and then attach this timestamp to the commit. So I think we're on the same page.
I assume GitHub has backup logs of all activity somewhere, if only to prevent the "Somebody guessed my GitHub password and replaced all my repositories with a README saying 'HAHA U BEEN PWNED!', please help!" situation.
It's not a problem for Billy, software gets built by itself if you have the right ideas. Just throw some dollars at an over-seas team. Execution is never a problem.
You might think you are joking, but this blog clearly proved it to be true. All you need is a startup weekend and 8 "fucking nerds" to scam into coding your idea for free.
I would bet that if Billy actually took this code to the "customers" he has lined up, they wouldn't use it. They'd have a bunch of other functionality they'd need implemented first before they even considered it. Then he'd take it to an outsourcing firm, who would collect a fee, throw out the original code (because they can't understand it), and then deliver another pile of code that doesn't work. Nerds can scam back, particularly when they live on other continents. Maybe he'll try another outsourcing firm, or maybe he'll try a naive college student, but I think the chance of him actually delivering a product that people will pay for and that stays at the forefront of the market is about zero.
This method of founding a tech startup doesn't really work. Either learn to code yourself, or build a trusted long-term relationship with someone who can.
His goal is not to get customers with this code. His goal is to get investors. And, I wouldn't be surprised if he succeeds. He helped the team win Startup Weekend with a seemingly effective presentation, after all. Further, I wouldn't be surprised if his plan now (that it's become clear his developer team wants nothing to do with him) is to raise money with the prototype built at Startup Weekend, and then trash it and start over, so he believes he is free of the obligations he agreed to in order to get the code (that 0.4% stake everyone agreed to). Investors always ask who else you have equity and economic obligations to...and I'll wager he neglects to mention the situation with 8 devs owning a total of 3.2% of his company.
Regardless, dude's a douche hat, and I would hope nobody would fund him. Nobody smart would, since he's not gonna be able to deliver a product worth selling.
Yes, unfortunately too many people see it this way.
I think it comes from the fact non-technical people don't necessarely understand what building software is. All they see is some nerds doing arcane magic with keyboards.
The question is, can we do anything to make things better?
Such a startup weekend would be a wonderful occasion.
Why organizers do not draw up a simple legal checklist is beyond me.
Just drafting a paper signed by the whole team at the beginning of the event stating "I am going to put ~30 to 40 hours at my hourly rate of $X and thus my contributions can be bought for $Y", or whatever stock terms float your boat, would set clear expectations. They actually were less naive than most since they had that "handshake deal", but they should have gotten it in writing.
That, and realizing "Applicant tracking system in an original niche" is not a revolutionary idea. They owed that Billy guy absolutely nothing and should probably have kicked him out.
They see SW's (in general) as a way to get free labour, they've just learnt enough nerd-speak to bamboozle them into providing that labour.
I've been in the receiving end of "You know this'll be a commodity soon enough" from a guy who's product still relies on a database from 1992, renormalized of course, and who stores dates in packed 16bit numbers.
My advice is to reply with "Great. Best of luck, but you can't use my IP." Better yet retain operational control at all times - don't give out Heroku credentials, etc.
They usually go quiet when you finally show your cards and it's a straight flush.
And hopefully they don't have the need to take it as far as suing you once you withhold things (as you rightfully should in such a situation).
What would suck is doing everything to protect yourself, and then need to waste money (if you can even afford it) on a lawyer if the idiot tries to sue you.
1. Nerds should run companies. The core problem is this assumption the CEO needs to be a "biz guy" like this seeming frat boy. I don't know why nerds think this, I think it may be some high school trauma.
But being the CEO is a lot easier for a nerd than it is for a biz guy-- biz guys at best are going to not touch the product development side, and more likely are going to undermine it... while nerds can easily manage a VP of sales, a VP of marketing, etc.
So first solution- don't work for biz guys. Only work for nerds. (and for purposes of this discussion, I consider Tim Cook to be a nerd- his nerd area is global manufacturing, but he's not a "guy who owns a restaurant" and thus has no relevant skills for a tech startup.)
2. Biz guy ideas are not better than nerd ideas. I don't know if SW doesn't allow it, but they should have come up with an idea that they, as engineers, were passionate about and worked on that. I think the results would have been better.
3. Focus on bootstrapping. The way biz guys get in is that they have connection to money or money and they use that money to take over and exploit the nerds (VCs and the bad angels are nothing other than these exact same biz guys--only VCs are incentivized to get you to bet it all on a longshot to be a unicorn because it's better for their portfolio, even though it diminishes the likelihood your company will be a success. )
Sorting humanity out into "nerds" and "biz guys" might make sense from 20,000' if you squint hard enough but like any form of tribalism it does way more harm than good when used to make in-the-moment decisions about real problems affecting real people.
It's a sometimes useful generalization, but it can also be a shortcut people use to trick themselves into thinking that they are part of some wise and good group of people (who coincidentally are just like them!) and gives them carte blanche for othering anyone they decide they don't like or don't want to work with.
It's almost impossible not to do this, it's kind of a necessary evil when you're constantly dealing with lots of different types of people and don't have much information about them to make more nuanced judgements. Not a problem as long as people don't start mistaking the mental shortcuts and generalizations we all employ for reality. Most of the time I behave as if pi is 3.14 because that usually works fine, but I never allow myself to start thinking that it actually is 3.14, which is the vibe I get whenever anyone starts talking about how everybody is either an "x person" or a "y person".
I'll respectfully disagree with your characterization--being a CEO isn't easier for anyone.
Diving in a bit better: a tech person may well obsess over implementation details (because they understand, or think they understand) them better than whoever is on the dev team. They may rabbithole working on a rewarding intellectual work that has nothing to do with the success of the business.
They may not even know how to deal with a veep of sales or marketing, because they may not have any idea how that world works. I have a friend who is a CEO that, for the longest time, thought marketing was basically lies, and so saw no reason to invest time in it. They've since reconsidered their position as their business intelligence has caught up with their technical intelligence.
As developers, especially ones who haven't really built and scaled a business, we always love to think "Hey, I build the product--how hard could the rest be?"
I agree with most of what you say, but let's be honest in that most "biz guy" types are far better salesmen than engineer types, particularly in niches like this. Having a network of influential family members, college buddies, and relatives of buddies is a powerful sales tool. Not saying it's fair, but it's reality.
Now, that doesn't mean they'd make a good CEO, just a better sales person, which is also a critical skill for most startups (although I do like the "growth engineer" movement, which puts some of this power back into the hands of engineers, in marketing if not in sales).
> software gets built by itself if you have the right ideas
And for those that read everything in the literal sense: this is a joke because of the /s.
I've seen some really scary situations that started with throwing things over the wall- like having investors and board ready for the finished product in a few months, while it's just some wannabe CTO and maybe a family member helping holding the pile of shit code with some seriously rich and powerful people expecting that they will be in production soon, for large companies they've already talked with and planned to sell it to.
Steaming piles of shit become rolling tumbleweeds of shit doom become ticking plutonium-enriched time-bombs of every-kind-of-animal feces...
This is a nice platitude, but doesn't hold up to scrutiny. For example: I'd suspect most ideas aren't that good, so it logically follows that execution would not be THE problem in most cases.
But then how else can we continue the narrative that it's the Engineers (because we're not programmers but Engineers with a capital E) who are the end-all-be-all of any tech startup, and it solely on our shoulders that the company lives or dies?
As a programmer, I can promise you that engineers are not the be-all-end-all. It's sales.
This is why engineers should not be afraid to sell, or at least, not be afraid to be out in front. The power in any organization comes from who sells the product.
Sales is not the be-all-end-all. It's engineering, and sales, and product/UX, and finance, and sometimes even customer service/marketing/PR/legal too. Salespeople need a product to sell, which has to be built, which requires money.
Good businesses understand that all their functional areas are important, and don't try to preference one over another. You may need to focus on one at first to make progress with it, though I'd argue that when you first get started, that one area should be none of the above (it should be customer development in the Lean Startup sense: talking to people to get a sense of what they need and how they do things).
Expensive and underperforming products are sold for millions every day in the enterprise software industry. That's not due to their engineering or UX, and certainly not to their customer support, it's mostly professional sales in action...
I suspect that engineers who work in enterprise software would strongly disagree with you. I've done consumer stuff for the last 8 years, but I started in enterprise software, with 2 different jobs and a few internships over the first couple years of my career.
The big challenge in enterprise software engineering is that your "customer" is the person who forks over money, not the person who uses the software. Pretty much all engineering effort is devoted to pleasing them. Engineering requirements for enterprise software are often insanely complex and sometimes even conflicting, and most of the engineering effort is devoted to satisfying them.
If you look at product/UX debacles like Taleo or Lotus Notes from the perspective of a department head buying them (rather than from the recruiter, job applicant, or ordinary worker who will be using them), a lot of enterprise software makes sense. There's a lot of effort devoted to reporting requirements, to making sure the buyer has visibility on what all of his department is doing and conversely can make that "productivity" visible to his boss, to covering one's ass with regulatory requirements, and not much effort devoted to making things pretty or productive for the end-users. That's because the end-users are not the buyer of the software.
Indeed, a lot of the investment thesis in consumer/smallbiz Internet is this idea that software should replace middle managers entirely, and so the end-users should be the actual buyer of the software who need it to make money, basically replacing management with markets.
I wish it wasn't true, but strong sales staff can sell crapware all day long. Again, I'm a programmer. I had to learn this the hard way so I could insert myself higher into the process.
This is my exact thought. It seems "Billy" here won because he paid $200 for something worth a whole lot more? adekok's response is perfect and really shows how to deal with this situation. Be clear about your rights, don't let people like this get away.
No the startup weekend awarded a roughly $200 prize to each member of the winning team. Billy didn't pay anything, he simply started a company without discussing it with anyone, in which Bobby has the right to 0.4%. OP then forfeited it seemingly for the reason of simply being disgusted and not wanting to be associated with Billy anymore.
Billy doesn't exclusively own the codebase or product. Any of the devs could reasonably start a company, use the product, as long as they award 0.4% to each of the members in his venture. That's what the handshake deal seems to have been all about.
It makes sense for the devs to either say 'buy out exclusive rights to the work and we forfeit the 0.4% share and be on your way, or keep the work, we'll compete with you (and grant you 0.4% in our venture, too, according to the handshake deal) and we'll see who can iterate on the codebase faster and run a successful business.'
The devs still have the power despite Billy's asshole move.
If someone offered me 0.4% for getting their company off the ground, I'd tell them to get lost. That's absolutely insulting.
If your goal at a startup event is to have fun, jam on something, see what comes of it, then it's easy to succeed.
If your goal at a startup event is to make something valuable, you've already lost. There is no winning. This is the worst possible environment to create a new business in, and there are way too many variables. Everyone will feel cheated no matter what the arrangement is.
> If someone offered me 0.4% for getting their company off the ground, I'd tell them to get lost. That's absolutely insulting.
I think you've flipped the situation around a little bit here.
The point is, it is startup weekend, it's time to have fun, to learn, collaborate and do something interesting and a lot of the guys going aren't necessarily interested in ditching their jobs and going full-time startup. In fact most people came to the weekend without any ideas they actually wanted to launch, simply interested to join an existing team and have fun.
So one of the developers who is like this basically proposed the 0.4%. You make it sound as if Billy said 'hey guys work for me for 2 days for 0.4%'. When in reality it was a developer who said 'Hey look, this is going to be fun but let's agree on something simple, if any startup actually does come out of this, let's all have a 0.4% share even if you're not interested to invest anything in the startup apart from this weekend's work. This way everyone is rewarded without having to exchange any money, and only if whatever we built this weekend actually ends up having value'. And the others agreed with that.
This may not make sense in every situation, but I think it was pretty sensible here and I don't think it was insulting either, particularly when the dev proposed this reward himself, for himself, not as some kind of payment to others for getting his company off the ground.
What they should do is work an equal split. Five parties? 20% each. If the "leader" wants to run with the project and pursue it in a more serious capacity they can make an offer to the team that will result in dilution.
I'd argue that they'd need to make a case, and the additional share would be conditional. Like "If you can close $100K in financing then you will get another 40% stake."
Likewise if team members really do want to quit their jobs and chase after this, they'd be accommodated in a similar capacity. Adjust the share balance when events happen, not by padding it heavily up front with the expectation that they will happen.
Otherwise you're valuing your contribution vs. some future unknown, yet saying with certainty your contributions are worth 0.4% of that. The chance of that being fair is basically zero.
> What they should do is work an equal split. Five parties? 20% each. If the "leader" wants to run with the project and pursue it in a more serious capacity they can make an offer to the team that will result in dilution.
Exactly, that makes total sense. Why then did one of the developers, OP's friend, another developer that agreed, propose 0.4%? This is where I get the feeling OP isn't telling the whole story.
Knowing nothing else and asked to speculate, I'd say that they proposed 0.4% knowing that Billy wanted to work on his own idea and wanted to turn this into a company, while they just wanted to have a fun startup weekend working on someone else's idea and then go home and go back to their normal lives. As a reward, they propose 0.4% of whatever company arises out of the startup weekend, without wanting to be part of anything else later. Billy said he's happy with that arrangement and they go forth.
Why 0.4% and not 100% / n team members? Because it makes no sense for the team of 9 people ultimately for each to have 11% equity in a company that perhaps only Billy will be running. That would mean if a company is formed and everyone gets an 11% share, but nobody actually works there except Billy who works 80 hours a week the next 10 years and turns it into a success, he has the same 11% share as any of the other guys who merely spent 20 hours over a weekend on this. That's why, if you're not interested in running this company beyond StartupWeekend, you'd propose 0.4%, a small percentage for a weekend contribution that is still significant if the company ends up worth a lot (e.g. $10m, means $40k for a weekend of work). A more granular valuation of the work is to simply value it as a fixed amount of money, say $1k per dev, but then you're getting in the realm of 2-day work-for-hire which doesn't make much sense in the context of StartupWeekend, it requires money transfers, investments and risks, and it just doesn't make much sense in a 2 day context to hire random stranger devs. Saying let's see what is possible, if it has any value well let's each have 0.4% even if we don't continue past this weekend, is more practical.
This is why I suspect that the article is only part of the story and that perhaps everyone was aware that Billy wanted to turn this into his own company and that the rest just wanted to work at it over the weekend for fun and get 0.4% in case their weekend work turned into a valuable enterprise. Why else would you agree to 0.4% and not just say 'let's see what we can come up with this weekend, and after incorporate it on an equal basis if we want to, or buy out the work by those who aren't interested in pursuing it further'?
True. But whether it holds up in court or not is a different matter, but they agreed. And contracts do not need to be signed to be valid and enforceable. Handshake deals and verbal deals are just as valid and have indeed held up in court (even on cases worth more than a hundred million dollars). The issue is that without signatures contracts are very difficult to prove and thereby rarely hold up in court unless e.g. there are witnesses, or statements made in reference to the agreement etc, which can serve as proof.
Did they agree? It didn't look like Billy actually did, and in fact it says there was no actual handshake, they just started working and the reader is left to guess whether Billy ever agreed (unless I'm missing something in the article of course).
We don't know, it says Billy was 'happy with the handshake deal'. I doubt Billy actually literally said said "I'm happy with that', before moving on, but rather said something like 'sure, that works', before moving on, which would be agreement. But that's just speculation on my part, I really don't know and you can't tell from the article.
From what I understood, Billy didn't pay Bobby $200 for the code, he just paid out a portion of the prize money they received from Startup Weekend. From the tone of the emails, I'm almost certain Bobby didn't sign over his rights in exchange for that $200.
He still owns all the code he wrote. If Billy uses that code in his own business that would be unauthorized and legal action can be taken.
Out of curiosity: You're feeling free because you're another member of the team or have prior knowledge of the situation, or because you Googled it and just want to?
Exactly what I've been thinking. Like yah Billy is definitely giving the asshole vibe from the story given (granted it is one perspective) but regardless of that, and how the programmers conducted themselves during the weekend, Billy has no rights to the software that the others created without having established a contract, and based on the current evidence, there wasn't a contract to begin with other than a gentleman's agreement that they would have ownership stakes if it went off the ground.
Because the non-programmers didn't write it. That's how copyright works, and it's why big companies are so careful about this, and make you sign reams of papers.
This is also why it's such a pain in the ass for open source projects to changes licenses -- they have to get permission from everyone and anyone who contributed code, or rewrite that person's contributions.
You write it, you own the copyright for whatever part you wrote unless you formally transfer your copyright via contract. You don't even have to file any papers to get copyright, it's automatic.
thanks for the clarification - the part about not having to file any papers is something I didn't understand at all.
So in this example of startup weekend, whoever writes a piece of code owns it, whoever writes website copy owns it and so on and so forth to the extent that the startup weekend ip policy doesn't setup something different for participants.
All of them can and all of them have to buy in to licensing it. Similar to when an open source project wants to change licenses (for some licenses), they need to reach out to every contributor and get an agreement from them.
How do teams address the issue of IP/ownership?
As with any startup, the team decides. Startup Weekend doesn’t support or take part in the signing of any legal documents at the events themselves, and while Mentors with legal backgrounds are often present and able to give general advice, they are not permitted to give specific legal counsel.While it doesn’t hurt to be clear about your individual expectations from the start, we’ve found that teams who don’t spend time addressing this issue until it actually matters (i.e., there is a tangible product to have ownership of) are much more productive and successful than those who do.
No you can't ...not if someone else has a claim on the work you do. I can't put "copyright <my name>" on the code I write at work ... its "copyright <my company>"
EDIT: re license vs copyright : I also can't just unilaterally decide what license I use for code I write at my company. I think its reasonable to think the same would hold true given that FAQ item.
> That's not how copyright law works.
That was from the SW weekend FAQ.
But I think that FAQ holds weight -- just like my statement above. If the rules for the weekend are the "team decides" you can't just go claiming ownership of stuff you did for the team.
You seem to have a deep misunderstanding of copyright law. Just because you created work as part of a group does not mean you have surrendered your copyright unless you have signed a contract to the contrary.
Without surrendering copyright, you absolutely do have the right to unilaterally license your code in whatever way you want. The entire reason that companies require you to sign IP agreements before starting work is to ensure that you don't run off with the code.
The developers wrote the code and never signed a license to Billy's company. They own it. End of story.
That's because you signed a contract surrendering your IP to your company. If no contract is signed, then ownership of IP you create defaults to you, as it should.
If he is an employee acting within the scope of his employment when he writes the code, the copyright belongs to the employer because it is a "work for hire". There is no need for a contract that states the employee surrenders his rights to the company because the employee doesn't have any rights to surrender--the employer is legally the author and it is in the employer that the initial copyright vests.
exactly -- and arguably some weekend hackathon or similar event where you arguably surrender your IP to the group.
so the "you can always license any code you wrote" isn't always at all
EDIT:
so, my "exactly" above is a wrong. I see your point about signing a contract vs not. got it.
I'm sticking with my arguments about "always" ..its all I have left :)
Yeah, to be clear, I'm in favor of surrendering IP to the group for an event like this, because if you split everything up at the end it'll be worthless.
BUT! Terms like this need (both legally and ethically) to be explicit, and should have provisions for both "person X stays on-board" and "person X leaves after the weekend."
No. See http://www.copyright.gov/circs/circ09.pdf . "A work created by an independent contractor can be a work made for hire only if (a) .. and (b) there is a written agreement between parties specifying that the work is a work made for hire." (Emphasis mine.)
> If the rules for the weekend are the "team decides" you can't just go claiming ownership of stuff you did for the team.
That's a nice opinion. But as you say, it's a "rule". It's not the law.
And the law disagrees with you. If 5 people write code with no legal framework in place (such as a written contract), they each own their individual contributions.
it would interesting to see something like this tested in court.
Do you know what qualifies as a legal framework when entering a weekend hackathon? Is there a different bar for something like this vs a standard employment situation?
The problem for them is: we are the powerful ones now.
...
We built this internet.
...
Actually, we are in charge now. You just haven’t realized it yet. Automate or be automated. If you don’t know how to map out complex systems. If you never got grounded as a kid for taking things apart. If you are too lazy or unwilling to learn our ways. If you don’t work for us yet, you soon will.
The above lines are absolutely cringe-worthy and take away from what is for the most part a decent account of the events. I can understand if someone temporarily holds onto such feelings due to the emotional shock of being wronged by someone else they consider a 'bully' (but really just sounds like an immoral/unethical businessman). However, if you actually hold onto this mindset day-to-day, I would say that is problematic.
That part made me cringe too. "Actually, we are in charge now. You just haven’t realized it yet." is a complete joke. Whom ever pays the bills is in charge, and if you work for anyone that ain't you.
I believe the entire ecosystem of "hackathons" to be a scam for Billy like people to exploit naive developers. In fact, if one reads the terms of many corporate sponsered hackathons, the corporation (I'm lookin at you Intel) backing the event claims usage rights to any ideas pitched.
That combined with the frequent references to Billy being in good shape and going to the gym just felt like a really heavy handed attempt to get "nerds on board against the jock".
Indeed. Some very smart people built the Internet over a few decades. Appropriating the work and effort of so many other people is disingenuous. Building a website does not equal "building the Internet."
I read this piece as a rejection of the author's entire line of thinking. Being taken advantage of is something that can easily happen no matter what your technical skills are, because your people reading skills are still lacking.
This isn't just about "Billy," this is about the startup CEOs that champion "hustle" for their programmers who are on an options plan to earn at best a hundredth of what their bosses will get.
In the end it's all about value: the value you expect to get out of your work, the value you put into yourself, the value you project to the world and the people signing your checks.
Right. The moral of the story shouldn't be "the tech people are in charge, fuck people that can't code." There is some value to what Billy did (or would do). The problem is that this particular Billy is an asshole.
The moral of the story is "Don't work for/with people who don't respect what you do." Billy wanted a few code monkeys, and saw Startup Weekend as his way to get a few code monkeys to build shit for free.
If there's value in what someone like Billy does, then software developers should learn those skills; business, negotiation, finance. Then we wouldn't have a story like this at all.
Seems to be lot of morals of this story. I hope young developers have read this and taken it to heart...every hackathon I have ever been to has had at least one non-technical person pitching their business idea, and often they're looking for suckers to work for free. And, the real WTF is that they often find them (then again, it is usually inexperienced developers who can't deliver much in a weekend, so it probably just serves as a learning experience for all parties involved).
The author of this piece doesn't really sound like a much better person than this Billy character. He sounds extremely entitled and arrogant. Just because "we build the Internet" doesn't mean we own the world. Billy's handling of the situation and his open homophobia are deplorable, but so it thinking you're superior to everyone can't hack. This kind of attitude is a big problem in our industry
I've known Bobby for 20 years now, and while this makes me biased, this also makes me informed.
Bobby is not entitled or arrogant. He works hard and preserves friendships. He has a strong sense of fairness, and it's my perception it was extremely riled by the actions of Billy.
Bobby's assertions about the software development being more important than the good-old-boy networks and the braggadocio are generally celebrated in this forum, I don't see why there's a minority backlash.
I believe it's clear from what I read that this situation had a non-technical "co-founder" try to screw over technical co-founders, and Bobby is calling him out on it and using it as a teaching moment.
The way I read this article, Bobby does not come off very well in this episode (though he may be a great person in general). He's the one who said Billy would throw them under the bus. And he's the one who drops his tone to calling Billy an asshole.
Billy is way off base thinking his company owns the code. That is clear. And his demeanor... I dunno, maybe he's not the kind of guy I'm gonna grab a beer with. But he seems to genuinely believe what he is selling, which to me just means he is misinformed. But all that takes is standing up for yourself, explaining... maybe rallying the troops. If the troops cannot be rallied... well I dunno. There seems to be an implicit acceptance of this agreement which seems odd to me. The reaction seems to be "Why didn't you tell us about this llc and your plans?" versus "Your llc has absolutely nothing to do with this team or our product. We'll happily switch to another domain. Everyone else aboard?" Yes, he has some power because he has forged the sales and has the relationships. But they mean nothing without the product. Just as the product means nothing without sales.
Anyway, having done a couple of these types of fast startup events, I think they're just rife with these types of situations. Nobody has gotten sleep, people are pushing themselves to the limit, and everyone feels emotional. Just not worth it.
I don't understand this. I read the entire thing and even though it is from the authors point of view, to me he come across poorly relative to the business guy. The only thing I can see the business guy is accused of is that he didn't make it clear enough that he has been working on this idea for 18 months and has an LLC. The author acts as if it is obvious this guy is an asshole but aside from going to the gym and having blond hair and saying "gay shit" (without any clear reference to homosexuality) what did he do that made him an asshole? Even the joke he made that was supposed evidence of his being a bully was in response to the author's joke about remembering to throw the team under the bus.
The author on the other hand comes across as a guy with a chip on his shoulder. Based on this article I would be reluctant to work with him.
I had the same impression. The constant "we built this internet" and "we run the show now" displays so much ignorance and insecurity about our field its not even funny anymore. These people usually can't explain the first thing about how the internet actually work, even if they can build websites every day.
I couldn't help but be reminded of the Dunning-Kruger Effect while reading this article.
I might be off a little on my facts here, but Bobby left high school early to come work at GlobalCenter, before it was bought by Frontier, before it was bought by Global Crossing. He worked on early MPLS and helped grow the Internet very substantially. Bobby helped turn up one of the first 10G Internet links. So, it's easy to cast arrows, but in this case Bobby actually did real work in making the Internet grow back "in the day."
I have no doubt the author is a good developer. He does seem to undervalue all the hustling Billy is doing. Sounds like he has customers lined up. I would kill for a startup founding partner like that
"The only thing I can see the business guy is accused of is that he didn't make it clear enough that he has been working on this idea for 18 months and has an LLC"
Which is more than enough to make Billy a grade-A asshole.
Startup Weekend terms are clear. Hackers show up to build something new, with everybody on an equal footing in whatever results. Billy wanted free code for "his" business, and so he defrauded 8 developers to get it.
I've never been to one and was unaware of this rule. If this is true it should have been the focus of the article and made very clear. It wasn't. It also isn't clear to me that Billy gets free code. If the other guys refuse to sign up why does Billy end up with free code? it isn't stated in the article and doesn't strike me as obvious
"I've never been to one and was unaware of this rule. If this is true it should have been the focus of the article and made very clear. It wasn't."
I only know it because the article covers it, even quoting the Startup Weekend rules. Admittedly, the article is rambling, and the anger and passive-aggressiveness of the author somewhat distracts from the basic facts, but it's definitely covered in the article.
"If the other guys refuse to sign up why does Billy end up with free code? it isn't stated in the article and doesn't strike me as obvious"
That's a valid question. I certainly wouldn't sign over my copyright in these circumstances, and I'm surprised the author would, either. That said, if Billy were to pursue the business and keep using the code, the legal hassle of preventing it is probably not worth the trouble for the developers (unless the business actually becomes something).
I think if I were in the author's shoes, I would simply send off a contract requesting a formal agreement on the 0.4% stake in exchange for a license to use the code (I'd also want my share of the winnings from startup weekend). If Billy doesn't agree, he doesn't have code. He still cheated people out of a fun experience, by being an asshole and taking advantage of the Startup Weekend; effectively stealing these developers' weekend. They signed on for one thing, and found it was something entirely different. But, at least if the "handshake deal" is fulfilled, then nobody is being fiscally cheated.
But, it's better to just steer well clear of assholes like this. I guess it takes time to develop radar for them. I usually spot'em within 30 seconds of talking to them (and, being a nerd my whole life and involved in the tech industry for ~20 years, I've talked a lot of them).
I don't have any issue with Bobby standing up for himself, that wasn't the part of the article I was discussing. The biggest problem for me was the way he kept creating this "us vs. them" mentality of engineers against the world. It seemed over dramatic and again, entitled. I believe you that this isn't the kind of person he is, but is the image I, and other HN readers, got from reading this article.
It kind of is, though. Engineers, especially good ones, will autoexploit themselves given an opportunity, and produce value that they themselves will never recapture.
It's not unreasonable at all to be observant and complain about an exploitation that's gone on for decades, perpetrated by MBAs and good-old-boys.
It's because Bobby is an adult and is still fighting the battle against the jocks that everyone else gave up years ago, and can't deal with people who do not toe the party line on what he considers acceptable language with fortitude or maturity. This colors whatever good points he may have with an aura of something like entitled peevishness.
Bobby is entitled to his own work, and an aura of 'peevishness' is more than appropriate when faced with someone who is trying to dishonestly bully him out of it.
Adults don't get bullied, kids do. Adults don't complain about how they were bullied, it's pathetic to hear an adult say he was "bullied" by another same human being.
Do you think that this sentence: “Haha, yea. I’ll say, ‘all I had to do was find a bunch of fucking nerds to build it.’” has anything to do with Billy's attitude towards engineers?
In this case, the analogous "jock" is exhibiting bad behavior. Another poster talked about how this sort of behavior is not supported at hackathons. Another person said that Bobby was 'tricked.' I don't think you're suggesting it's okay to trick people at hackathons to work for you? Regardless, I think Bobby is imperfect, but I have huge respect for him. He went through an experience that was unpleasant with an unfortunate outcome. This is a good example for people to read and learn about so they can avoid similar situations.
I wouldn't be surprised that Bobby has a pleasant demeanour in real life, but ElComradio's point is also valid. The nerds, when they harbour resentment against the jocks, are playing the same power game as the jocks ... and as such are, ultimately, no better than the jocks themselves (except for the jocks being more successful). As Eric Fromm said: "There is perhaps no phenomenon which contains so much destructive feeling as 'moral indignation,' which permits envy or hate to be acted out under the guise of virtue."
Bobby comes off as a child. Those guys who go the gym! Those entitled CEOs who are useless! And they call stuff gay! And I name things "anarchist"!
Seriously, it is impossible to separate the story from the source here. Nobody should trust this is an accurate conveyance of the tone of what happened.
If it makes you feel better to knock the author down a peg, by all means.
But don't equate the two. The author built software and expected professional discussion about a business opportunity. Billy attempted to take everything using his 'existing' incorporation that was against the rules.
These actions are not equal, and the author highlights that there were plenty of warning indicators he should have, but did not pay attention to.
I didn't write this to comment to "knock the author down a peg". From the facts of the story, my sympathies totally lie with the author. But the way he comes off is as entitled and arrogant. There is no reason that I can't feel that Billy was in the wrong, but I also dislike the author's attitude.
Entitled to what? Entitled to ownership of IP he produced? Entitled to the 0.4% equity stake that they agreed upon at the beginning?
The backlash in this thread is mindboggling. The author's "attitude" seems pretty appropriate for someone who was very recently betrayed by a team member. I understand if you don't like the "nerds vs jocks" imagery but frankly that's not arrogance, it's colorful storytelling.
I agree with you, what did the author think was going to come out of a Startup/hacking weekend? You are basically giving away your talents at those events. One has to manage expectations better, and also avoid the Billys of the world.
An even bigger problem in our industry is that, somehow, a lot of us think we are unworthy, lowly enablers of "the business"'s genius ideas. Enabling tirelessly, preferably over a weekend, for a 0.005% share of the company
Grow a pair, people.
BTW, I treat all human beings (coders or not) with equal respect, but I also learned to avoid the "Billy"s of this word like the plague.
you're both right, IMO. because there's a whole world between being a jerk and being a push-over. and btw, opposites typically have way more similarities than differences. (it actually says so in the definition of opposites in classical logic, but nobody seems to pay attention to that.) meaning, both attitudes sometimes come from the same place.
I think the author (or his friend at least) entered in the event to test his Speculative Stock Warrant. (It is a ways to get a small kick-back if startup goes big 10 years later)
So he already entered in the event to only get an shadow option of a potential good company.
He complained that Billy did not valued enough their weekend hacking and put an outside parter in the company. But he already only had 0.4%. If I was Billy I wouldn't think of someone who had this kind of deal with me as a cofounder.
The SSW only activates the 0.4% if the participant decides not to stay with any business that evolves out of the weekend, otherwise separately negotiated terms would drive the equity allotment. I actually rather like the idea since it seems to protect the interests of people participating in a startup weekend from a Billy (and even protects Billy).
I think him writing this after what happened accentuates this, as he was writing "angry." That being said, his preconceived notions of Billy are almost as bad as Billy's of "nerds."
Am I the only one that thinks Bobby the poster is acting oddly, with odd expectations?
Maybe it's because I'm not familiar with norms around "Startup Weekend" type events.
I have no doubt Billy the pitch man is an asshole (almost all restaurant owners are, for one thing). I also think he's being completely reasonable being confused about why this guy he just met thinks he should own a piece of Billy's company.
But I confess I've never understood why anyone would want to go to a 'startup weekend' kind of thing and code for free on someone elses business idea, someone you've just met, in the first place.
I must be missing something about the general cultural expectations of such events.
But it does seem odd to have an event focused on starting businesses (and creating teams likely to work together in the future on the business?) among people who have just met, with no written contracts involved (even prohibited!) based just on cultural expectations which may or may not be shared, and no time to discuss them or get to know each other in advance. Do successful teams actually get created from this process sometimes?
The idea of the event is to get people to work together for the weekend, see if they like working with each other, expand their network etc. Its not to do work on someone elses startup. I've seen many teams that randomly formed at Startup Weekend go on to build a real startup afterwards.
No, you're not the only one. The guy wants 40 basis points for 10-20 hours of work. In real companies, you would have to work 4 years to get that kind of equity. He thinks he's a founder of the internet when he's actually a guy in backwater Texas giving himself way too much credit for modeling a basic CRM schema.
To paraphrase a former governer of Texas, he was born on third base and thinks he hit a triple.
"In real companies, you would have to work 4 years to get that kind of equity."
When Billy builds a "real company" he can make those kinds of deals with developers. Right now, Billy has nothing like a real company. He has an idea, no ability to execute by himself, and a 50% partner who also can't execute said idea.
Startups are not real companies, and equity for working on a startup is very different than equity for working on a real company.
A real company also expects to pay market rates for developers. So, by that metric Billy should have been paying these developers $50-$150/hour (depending on market, experience, etc.) for these 20-30 hours worth of work, if they were contractors rather than employees. It sounds like at least some of the team has enough experience to be on the high end of the rate scale, and if they actually delivered some sort of working prototype in that time, they certainly delivered value.
They agreed on 40 basis points in advance. That's a contract. If 40 basis points was "way too much credit" then Billy-the-idea-guy shouldn't have accepted those terms.
Also, saying that X% of something is "a lot" independent of stage or size is absolutely inane.
> "How do teams address the issue of IP/ownership?
As with any startup, the team decides. Startup Weekend doesn’t support or take part in the signing of any legal documents at the events themselves, and while Mentors with legal backgrounds are often present and able to give general advice, they are not permitted to give specific legal counsel.While it doesn’t hurt to be clear about your individual expectations from the start, we’ve found that teams who don’t spend time addressing this issue until it actually matters (i.e., there is a tangible product to have ownership of) are much more productive and successful than those who do."
Oh, but it's more "productive" during the weekend. OK...
> we’ve found that teams who don’t spend time addressing this issue until it actually matters (i.e., there is a tangible product to have ownership of) are much more productive and successful than those who do.
OMG! i was just about to ask what's up with that "no contracts" policy. this is incredible! they should rename to Exploitation Weekend.
40 basis points is an insanely large grant for 10-20 hours of work. They wanted 160 bps: 40 per person. At any normal company, you would have to work 4 years to get that amount. If you work at a company as engineer number 1-5, prior to any funding, you might expect 50-300 points, over 4 years, after working for a small salary, and under highly uncertain conditions.
These expectations are ridiculously misaligned and totally unreasonable.
Why exactly would you take 0.5-3% to work for a startup with no money under highly uncertain conditions, when you can take 33-100% of equity to found a startup with no money under highly uncertain conditions?
> Why exactly would you take 0.5-3% to work for a startup with no money under highly uncertain conditions
Because you believe in the team, the idea and the opportunity.
> when you can take 33-100% of equity to found a startup with no money under highly uncertain conditions
Those who can, will.
But this guy wants to do neither. He wants 0.4% for 20 hours, and then he wants to walk away and let someone else build up the value of the company. Assuming his total stake is ~12%, that's equivalent to a demand for a 4 month vesting schedule with no cliff, for what? A weekend?
He doesn't want to found a startup -- he wants to spend one weekend building a shitty prototype. He's not talking about being there when the thing goes live, fixing the broken deployment, troubleshooting the errors -- you know, the actual work which keeps the customers satisfied. He's talking about writing a model one time, and letting someone else take all the risk.
Well, if you can find someone who believes in your idea that nobody will pay for, the opportunity that you can't prove exists, and the team where some folks are taking 90%+ and others are getting 0.5-3%...more power to you. This is why startups find hiring, hard, though. These folks are a.) hard to find and b.) prone to leaving when they realize they're slaving away for virtually nothing.
And IMHO, pretty much everything in this story is set up for failure. This is not how startups get founded. Actual startups get founded by a team working for equal or nearly equal shares, who do all of the work necessary to build something that people want, and then either take funding or use revenues to hire people once they can pay market-rate salaries. Startup Weekend is for meeting people. 0.4% equity deals with no salary are for wasting time on a lot of drama.
> and the team where some folks are taking 90%+ and others are getting 0.5-3%
I'm not sure how you keep missing this key part of the argument: 0.4% over 20 hours. I've italicized the part which I find ridiculous, so that you can better understand where I am placing my emphasis. Him wanting an equal share for an equal amount of work -- no problem. Him wanting to get a full, post-funding engineer's grant for 20 hours: wild overestimation of his own contribution.
I'm missing that point because of this part of your original comment:
> At any normal company, you would have to work 4 years to get that amount. If you work at a company as engineer number 1-5, prior to any funding, you might expect 50-300 points, over 4 years, after working for a small salary, and under highly uncertain conditions.
It's not normal to work 4 years to get 0.5-3% equity, prior to any funding, under highly uncertain conditions. If the company is funded, growing quickly, and paying you market-rate salaries, sure, that might be fair. But if it's just a bunch of guys with an idea, you're pretty crazy to take that deal, and even crazier to keep working on it for 4 years.
It's also not normal to take 0.4% for 20 hours of work, but that's largely because it's pretty crazy to actually expect to start a startup at Startup Weekend. Go use networking events to meet people, and then if you like & trust the people, make a commitment to working with them for a longer period of time for normal founder equity stakes.
> It's not normal to work 4 years to get 0.5-3% equity, prior to any funding, under highly uncertain conditions.
What is that based off of? I've seen that plenty of times to know that it's quite common. I've never seen employees #1-5 being treated like a cofounder, so from my experience, what you're describing is way off base.
> But if it's just a bunch of guys with an idea, you're pretty crazy to take that deal, and even crazier to keep working on it for 4 years.
A bunch of guys who are paying you (admittedly below market). And yeah, if you keep the same salary after 4 years, after multiple rounds raised, after various milestones met, yes you're woefully underpaid.
I know a number of guys (roughly a half dozen startups) that have taken the "Let's get college students to work for us for cheap, or recent grads who are really excited about breaking into the startup scene." Their startups have all failed, without exception. The best outcome was a talent acquisition that netted the founders slightly less than they would've made working for Google over that time period (they were both ex-Googlers).
I also know 2 guys who have exited for ~$80-110M after taking $5-7M in funding, plus the founder of a unicorn who once asked me if I was interested in being employee #2. They all followed the same pattern: the founders built the initial product, they found customers willing to use it, they got funding, and then they hired people. (For completeness, I know an additional half dozen or so people that have followed the same pattern without success, usually getting absorbed back into a big company or other startup that's already gotten funding.)
A dozen data points isn't a statistical survey, but I know which strategy I'd rather follow (and am following).
There's a big seedy underworld in the startup scene that's filled with people working on bad ideas, with minimal funding or just their own savings & credit card loans, who try to get anyone they can to work with them for really cheap rates and small equity promises. Usually these startups end in drama, as they go belly-up and people realize they've spent years being underpaid. If you'd like to be a part of this scene, more power to you, but I'd rather steer clear.
If you want the argument-from-authority perspective, here's Sam Altman:
I think we're talking past each other at this point. I've seen enough deals happen (I used to work in VC) to know that nobody pays the first employees 40 basis points for weekend. Teams cofounding a company together is a different situation, and that's not what we're talking about here. I've consistently been making the point that expecting a 0.4% chunk of a company for building a first prototype is delusional. Your stories of people agreeing to start companies together and waiting until they find P/M fit before they hire up are all great and agreeable, but totally non-sequitur.
I think 0.4% was just for the weekend worth of work. Like just think of it as everybody vested that much over the weekend so the company still had 96.4% unvested equity with very unclear ownership. That makes it seem a little more reasonable although not any less confusing.
Here's how I understand it. OP's buddy proposed the 0.4%, they ended up with 5 members in the team, OP, 3 other engineers and the guy who pitched the idea and is depicted as the asshole fitness biz guy (Billy), so 2% of the ownership of the startup the idea would potentially evolve into would end up in the hands of these initial team members regardless of who runs the startup.
i.e. if after the weekend 4 members said 'that was fun, now let's go home', and 1 member said 'oh guys, can I use all the code and make it into a company?', then the other 4 guys would each have 0.4% ownership in that company even if they didn't put in any money or any time beyond the weekend, on the basis of their work that weekend. I think that's a sensible idea: 0.4% is not a lot, but it's a weekend of work, and if the startup ends up worth $10m or $100m then it's a nice kickback for a weekend's work. If it ends up being worth nothing, no biggie, after all you just worked there a weekend and didn't do anything after to make it a success.
In short, the 0.4% is a reward for anyone who decides 'I don't want to be part of the process of continuing this idea, but I want a small reward relative to what the idea I helped initialise could one day be worth'.
The issue is that when it's all said and done, the process to decide who'd want to turn this into a startup and who didn't looks to have been really authoritarian. One person turns it into a company and splits it 50/50 with a friend of his who wasn't even part of the startup team, and then declares himself to be the owner and leader of the gig which is absolutely ridiculous. A fair process would either be 'alright let's sit together as equals, decide on how we launch the startup, who becomes the leader, equity, salary etc, and anyone who isn't interested gets the 0.4% regardless'. Instead it was 'I'm the leader, I'm half the owner, the other half is someone you've never met, you can still be part of the startup but it's under my conditions and if you don't like it you can have the 0.4%'.
In short I can see the problem OP has with this, added to implications that Billy was being a condescending asshole.
Fact of the matter is however that (1) OP and the team can decide to use the code and run a similar project themselves if they want and iterate on it faster than Billy ever could given the former have all the expertise of not just development but the codebase as well and (2) if they were never interested in that, they'd still get 0.4% of Billy's venture (as long as the handshake deal is upheld i.e. which didn't seem to be put into question).
I think the handshake deal was sensible and I see absolutely no legal basis for Billy to be able to appropriate the work exclusively to his startup. In short I think OP had the power, met an asshole, still has the power. They still have just as much right to the work, still can run a startup without Billy and still can own 0.4% of Billy's venture.
edit: they ended up with a team of 9, billy and likely 8 devs, rather than 5, billy and 4 devs. Can't be bothered to adjust the percentages etc but the same story applies.
Billy ended the weekend co-owning the codebase with 8 other partners. Absent any pre-existing business agreement (forbidden by the competition rules), the future disposition of that codebase requires unanimous assent of all 9 owners. No single member can use any of it without permission from all the others.
If Billy already was 50/50 owner with another person on a completely unrelated LLC, it would have to license/purchase the code from the entire group of 9 to use it. As the 0.4% deal was agreed to at the start, it is unlikely that licensing/purchase agreement would be accepted without including that provision.
Ideally, each member of the team (including Billy), gets a 1/9th split of the prize winnings. Billy-the-LLC buys the code from Billy-the-team-member at a reasonable price, and each member gets 1/9th of that. Additionally, Billy has to grant each other team member 0.4% ownership stake in his LLC, or they never agree to sell their code.
The team members, of course, surely realize that 0.4% is going nowhere if Billy is trying to run a tech-based business without respecting the nerds, so they might just sell it right back to him while he is still full of himself, and before he realizes that he is dead in the water when the first customer makes its first feature request.
The end result is that the 8 nerds get a nice paycheck for one weekend, and Billy gets a stale codebase that he can still monetize through excessive schmoozy salesmanship. It should be a win-win. The only hitch seems to be that Billy seems to think his LLC already owns the code, rather than his informal partnership-of-nine.
I've always had the impression that whoever writes the code owns it, unless there are agreements in place that say otherwise. If Billy didn't create the codebase, and never contributed to it, does he still have partial ownership of it?
The writers of the code do own it. Clearly, a team was formed for the purposes of submitting an entry into a competition. Since they intentionally commingled their efforts, they own it as a partnership rather than as individuals.
Each one of them owns the whole code. If they want to do anything with it outside the existing nine, they need all nine signatures on the agreement. For practical purposes, that means Billy does not have much leverage. He needs to get all 8 of his partners to cooperate, and none of them need him in the slightest.
If he chose to block any partnership agreement, they could just reconvene as a partnership-of-8, and spend another weekend re-creating a better codebase from scratch. He would be left with nothing. The reasons they would not do that are because the idea itself is rather lame and unoriginal, they could probably come up with something better on their own, and having proved themselves as a team, they might want to try something new anyway.
I agree in a normal or typical context, but the 0.4% thing muddies the water a bit and it makes me wonder if Bobby is telling the whole story.
The 0.4% proposal that was agreed on implies to me that they may have known that Billy was interested in turning this into a company and that before-hand they'd agree that each member has a 0.4% stake in whatever venture comes out of the work they do that weekend regardless of who uses it.
Why else strike such an agreement? Without this proposal, naturally every member would have a 100% / n share if they formed a company out of the team, and no single member could, as you describe it in your post, simply appropriate all the work without consent of the rest of the team. The 0.4% suggests that one member wanted to start a team before-hand, the rest didn't, but that this would be their compensation for the weekend of work regardless of who ended up using the weekend's resulting work.
Again this is all just speculation, but I'm having a hard time understanding a potential rationale for the 0.4% proposal, which was a developer's proposal of OP's friend, not Billy's idea to do a bait and switch or exploit the devs.
> If Billy didn't create the codebase, and never contributed to it, does he still have partial ownership of it?
I would say so yes, but only insofar as him being a part of the team. Some members of that team wrote code for that team's goals, not on their own in private hours for their own goals. Therefore the code is owned by the team which Billy is a part of.
That also means that all the sales contracts Billy landed or they pitch they did, is also owned by the devs.
That would indeed suggest however that Billy going off on his own creating a 50/50 with someone else, using the team's work, is like Eric Schmidt (supposing hypothetically for a moment he was a business-oriented member of the pre-Google team on day 1) taking page rank and starting a new company, i.e. total bs that wouldn't hold up in court.
The whole 0.4% thing muddies the waters. It may be interpreted to say that whoever uses the produce of the team's weekend work, must give 0.4% of their venture to the rest as a reward, and having given that reward, no other remuneration is necessary to use whatever the team came up with that weekend. That makes sense in the context of a single startup arising out of this deal, or even competing ventures who both use the software and each award each member 0.4% in their respective ventures, it starts to fall apart when you look at the non-software stuff, i.e. who can appropriate the sales contracts, the logo etc which can't simply be used by two companies. It's a muddy deal that could probably go either way in the courts, which is why Billy's move is so asshole-y and why Bobby probably wanted to wipe his hands of it right away, forfeiting a 0.4% for real other reason other than wanting to disassociate and taking his $200 in the prize share he has a right to regardless.
Of course, I'm not a lawyer so what makes legal sense to me is pretty meaningless :)
> 0.4% is not a lot, but it's a weekend of work, and if the startup ends up worth $10m or $100m then it's a nice kickback for a weekend's work. If it ends up being worth nothing, no biggie, after all you just worked there a weekend and didn't do anything after to make it a success.
How can you say this with a straight face? A $100M company takes years to build. You think in 2020, if these guys walk away from the table with $400k each for ~20 hours of work they did in 2015, that's reasonable? That grant would be bigger than anything any subsequent engineer would earn, and it's beyond dubious to think the contribution of this guy -- who's patting himself on the back for figuring out a CRM schema -- is worth more than the guy who stays for 4 years and actually helps brings the product to maturity and exit.
In reality, each of these guys did at most $1,000 of work. If you wanted to express it as equity, they're off by at least one decimal place. Them coming away in 2020 with ~$20-40k is a much more reasonable valuation of their contribution.
> A $100M company takes years to build. You think in 2020, if these guys walk away from the table with $400k each for ~20 hours of work they did in 2015, that's reasonable?
Yes?
It's a lottery ticket with less than a million-to-one odds. The expected value of the hypothetical payout is arguably lower than 20 hours of contract work.
Ok -- at 40 bps per 20 hours, assuming that their total stake is ~12% (there's 8 of them dividing the whole pie) their vesting schedule is a little short of four months.
There's a lot of big talk on HN about being a tough guy negotiator, earning your keep in this harsh Darwinian landscape, looking out for number one, etc. I'd like to meet the person who's negotiated a 4 month vesting schedule with no cliff.
Once you put actual numbers to the proposition, it's instantly obvious that these badass negotiators are suddenly full of shit. Reminds me of being elementary school recess, where everyone's dad was the strongest man in the world, and this one time he picked up a car and lifted it over his head.
That grant would be bigger than anything any subsequent engineer would earn, and it's beyond dubious to think the contribution of this guy -- who's patting himself on the back for figuring out a CRM schema -- is worth more than the guy who stays for 4 years and actually helps brings the product to maturity and exit.
If I've learned anything since I got out of graduate school, it's this: what you're "worth," what you "deserve," are meaningless concepts. You get what you negotiate, no more and no less.
Someone who thinks that 40 beeps for the founding team is too much probably shouldn't invest in this startup. For me, if I thought that the company would be worth $100M in five years, the $1.6M the SW team would be getting would be the least of my concerns, well behind 'how do I get in on this?'
> Someone who thinks that 40 beeps for the founding team
Not the founding team. Some guys who contributed 10-20 hours one time.
> For me, if I thought that the company would be worth $100M in five years, the $1.6M the SW team would be getting would be the least of my concerns, well behind 'how do I get in on this?'
Nobody would be complaining about how difficult fundraising is if investors were all so amenable.
You've posted this all over the thread and I don't understand it.
It doesn't matter what you or I think of 0.4%. They all agreed to 0.4%. Either that agreement is honored, or all IP remains with its creator--and Bobby takes his code and goes home.
I have a feeling this will be downvoted like hell but objectively speaking, if this Billy guy really wanted to, couldn't he just drop the software and let these "teammates" do whatever they want with it, and hire another developer and start from scratch? I'm saying this because I don't believe there's much value in some software built over a weekend which doesn't have any users yet. (Maybe it does but the users probably came and will come from this Billy guy's sales and marketing due to his expertise). Compare this with for example GroupMe, which is a pure consumer app, which blew up over a hackathon weekend. In this case it was the app (which was built by the team members) that brought users. If one of the founders wanted to go build another groupme clone after the event, he could, but it wouldn't get enough users anyway that way. I am not saying I am rooting for this Billy. He's an asshole and everyone knows that. I'm saying this Bobby guy is not so much better either. I couldn't help feel disgusted reading the entire passive aggressive thread, plus the fact that he posted this on Medium in an attempt to "bully" Billy.
Billy had 18 months, 18 months to work on the idea. Obviously he couldn't find designers/coders/PM for the cheap to build it so he went with the bait-and-switch route. I can almost imagine the conversations he had giggling with his partner as the 'fuxxing nerds' were pounding away on the keyboards.
Like, "oh my these stupid fuxxing nerds. They may know code but they don't know shxt about business and using people."
I prefer passive aggressive over passive passive (aka slave).
If the story is true, Billy deserves the 'bullying'. Did you read the shxt he tried to pull on the coders?
"I had the idea for 18 months and filed for LLC, so I own it." Really?
Bobby never said he owned it. He didn't have hidden agendas going into the competition.
Billy says he owns it. Billy did have a hidden agenda.
Bobby at least owns a lot more than 0.04% of the company.
Had Billy hired the coders to do the work and say I own the company, I have no problem with that. But here, Billy tricks people to work on a project without fully disclosing his intention for virtually free, and than he claims he owns the company.
Unless Bobby has fabricated the emails and slack conversations (and there are 8 other people in the world who would be able to refute them if they were fabricated), I think we've heard it, at least partially, from Billy's side, as well. What has been included is more than damning enough; the email detailing "ownership" is all I need to see, given the terms of Startup Weekend (which are easily verifiable by looking at the website).
Billy came into the weekend with the intention to commit fraud on Startup Weekend and on any developers he could sucker into working with him.
I said "I am not saying I am rooting for this Billy. He's an asshole and everyone knows that". Please read the entire comment before going on a rant and a downvote for something we agree on.
One of my college roommates was the tech for a student startup that had worked on getting off the ground for a while. He was like the 3rd or 4th guy to take over tech as previous people left. The founders weren't bad people, they just didn't understand the tech side of a tech startup.
Give people like that enough failure with engineers they try to onboard, mix in a little ethical fluidity, and after a while they'll see no distinction between dedicated teammates and expendable assets who will fold before putting in the "hustle" for "your" vision.
I was in the winning team in SW once and another time in the second team. Story is very familiar. I think the key takeaway is that you should never take SW seriously. Hackathons are not the way the startups are built. It's not a real team and it's not a real startup. That's why Billy character here is wrong. If you have a real business idea and serious plans don't pitch your project in SW. In an hackathon, every team member should have the equal rights on the project, regardless of their contribution level. Just have fun during the weekend, share the prizes equally if you win. And after the weekend, just throw away all the code, the brand identity or any other IP. If some of the team members want to further pursuit the idea, they are free to do whatever they want starting from scratch. If you want to make a handshake deal before start, agree on these principals. I know its hard to think like that with all the adrenaline in your blood but this is the only way it would work out. So I think the 0.4% deal at the beginning was the first sign that this story won't turn out so well.
"Hackathons are not the way the startups are built. It's not a real team and it's not a real startup. "
I could not agree more. It's a curse of the Silicon Valley mentality; anything can be hacked together in a weekend!
In real life, businesses aren't built with a bunch of random personalities thrown in a room, cobbling an idea together for a weekend. It demonstrates how much value SV places on "code" over "business".
Just as the restaurant owner sounds like he has a tendency to take credit for more than he actually did, the software engineers here sound as if they have an irrational belief in the importance of their own contribution relative to that of others. And an ego problem. "A dream team of developers"? It's 2015 and you built a simple website in Python.
Both sides in this story need to grow up if any of them ever want to launch a successful business.
Do you understand how hard it is for an 'idea guy' to recruit a technical team? There's a wonderful Dilbert where the boss says "I have a great idea; I just need a technical team and investors". Alice replies "The economic term for what you have is 'nothing'"
>"Do you understand how hard it is for an 'idea guy' to recruit a technical team?"
I just read an article where a guy walked into a Hackathon and convinced a dream team to build his app, for free. The "ideas are worthless, execution is everything" is a curse. It's perpetuated by "technical" people to assert their value. The truth is both the idea and execution are extremely valuable. Don't believe it? Go look at all the beautiful apps in the app store that make nothing. Execution of terrible ideas.
It isn't difficult to recruit a technical team. Like it or not, with a good idea it hardly takes a "Python Dream Team" like in the article to get something done. Most applications aren't pushing technical boundaries. What it takes is money.
You know what is difficult? Convincing your banker to give you that money. That takes an idea and sales skills (both of which, apparently, Billy had).
That is a succinct validation of that 'curse'. App store full of beautiful, worthless apps? Because nobody can tell which idea is a good one. Thus, marginal value of 'idea' is pretty near zero.
Go to any 'meetup', its almost all 'idea people' and no tech talent. That means, its very hard to find that talent.
It doesn't take a 'dream team', no, but it does take some team at all. To get that, you have to convince Engineers your idea is good. Almost as hard as convincing the money men.
So lets reword: its hard to get the money, and hard to recruit the talent. That leaves the ideas, which are a dime a dozen. Clear?
>"Because nobody can tell which idea is a good one.
Maybe because none of them are?
Again, you're assuming that these are all "great ideas", that just can't be discovered. I'm claiming the opposite. Go grab an app at random. I'll bet you it's an attractive, functional app that's utterly pointless. Thousands of people have executed their terrible ideas.
>you have to convince Engineers your idea is good
Exactly. The idea is important. As is the execution.
>That leaves the ideas, which are a dime a dozen. Clear?
Ideas are a dime a dozen. So are technical people. Good ideas are not, just as good technical people are not.
If I were starting a business, I'd take a great idea and random technical people over great technical people and a completely random idea.
> Do you understand how hard it is for an 'idea guy' to recruit a technical team?
Not hard at all. The first one takes time because you have to be really careful, from then on it's just a matter of contacting a recruiter and specifying exactly what you want, interviewing and making offers that are at market rates.
> Do you understand how hard it is for an 'idea guy' to recruit a technical team?
It's really easy. You pay them.
Which is the crux of the issue here; Startup Weekends aren't meant as places to get/recruit cheap/free labor, so when they are used in that way, bad feelings happen.
the author might want to tone down the pretentious comments about ruling the world. sorry, but world rulers don't get screwed like this.
although i believe that the Billy guy is a jerk (but no, BTW, does not really seem a bully), i kinda had a harder time sympathizing when comparisons with google started flying, while what they were developing was a seemingly usual web app, whose only distinction was the actual business idea, and even that was not original. and why enter into something like this with unknown people, sacrifice family time, work like an ass day and night, all without any contract - i'll never get that. the whole event is simply preposterous.
Neither side made their expectations clear at the beginning. I can't find either blameless. I also don't believe that engineering is the most important factor for the kind of product being described. For what the author calls "secrets", yes. Early Google was just so much better than the competition that it won. However, a lot of tech history shows that marketing trumps tech in many cases. Windows wasn't technically superior to OS/2 for example.
Honestly, the OP is trying to be a bit ingenious trying to push the example of PageRank into the argument. Google's core advantage is its tech. The PageRank algorithm was so much better than anyone else on the market that it was bound to win.
In this case, there is no real innovative, patent-worthy tech. It's just an idea with some very basic tech any developer worth his salt can put together in months if not weeks.
I see this all the time: developers confuse pure tech companies (like Google or SpaceX) with tech-supported companies.
Google won, because it was fastest and had good links.
Fastest was more important than better links. How did they get
faster than their competitors? They bought cheap servers all over to beat the transportation times to the clients. Also their page was smaller, not overloaded, so the results could be presented faster.
Their bot was also more aggressive. A more aggressive bot contributes more to the link quality than the algorithm, because you get deeper and new stuff more timely. People are searching for new stuff.
That's how Google won. Not because of PageRank alone. PageRank was a contributing factor. But renting out cheap servers in every datacenter out there and keeping the page small and fast and dealing with the consequences of cheap servers (HD fails, fallbacks, ...) was more important.
Eh, I remember the early days of Google, their results really were a LOT better than the existing competition (AltaVista? other?). Whether that was mostly due to the PageRank 'secret' or not, I couldn't say (and we all know at this point Google's relevance algorithms are orders of magnitude more complex than a 'PageRank secret'), but people didn't just start using Google because it was fast, but because they found what they were looking for much better than in existing solutions. In my memory.
That's absolutely correct. AltaVista wasn't slow (until they filled their page with garbage; they were originally as minimal as Google), but you'd have to hunt through pages and pages and pages of results. Google usually found what you were looking for right away. This is what I remember from 1999 - I had been using AltaVista as my primary search engine for several years, and once I found Google I started using it almost exclusively because it was so much better.
Speed was certainly a factor. I remember I used to use a desktop application[1] for web searching, and after using a little while always noticed how the results from google were returning about 30 seconds before any of the other results.
It wasn't long before I dropped that application and just used google, I wasn't waiting around for any of the other results anyway.
[1] Copernic - Long since pivoted into desktop search
Another reason Google won was because their minimal page. People like me, who was managing large corp networks in the latter half of the 90s set Google as the default home page for all machines because yahoo was (is) a hideous pile of shit as a main landing page.
This helped get users used to google as it was the first page on every machine I had control of as it manager...
I think you missed the point. He said that the starting idea was not important, and made examples of actually important starting ideas (page rank). His point is that the execution mattered way more, given that the idea was not really mind blowing.
Bobby needs to learn how to deal with people in a productive and non-passive-aggressive fashion. If you got fucked over, it's through your own doing.
The "we are the nerds, we built the blah blah" is terribly cringey. Awful stuff. There's no reason that a 'nerd' can't have an interpersonal and business acumen.
I've no idea what the licensing agreement was before they sat down to write the code, but if it was as informal as the handshake-that-wasn't, I'm gonna put forward the following idea:
By default, code belongs to the author of that code. Unless another agreement is in place, Bobby owns his own contributions to that project.
With that thought, the potential outcomes of this become a little clearer.
If no contracts were signed, I wonder if that would be the default, anyways. If it were to go to court, the absence of a contract would signify that no change of ownership has occurred, and since the work was done for free, there would be no implicit agreement of work-for-hire. Therefore, deciding ownership would be a simple (ha!) matter of examining the commit logs.
I was in a business (music publishing) for a number of years that dealt heavily with copyright law, but IANAL, so I could be way off here.
1) Pre-weekend: why would you only accept 0.4% equity? Given there was nothing but the idea the company was worthless. So why wouldn't the guys building it demand a much higher slice?
2) Post-weekend: given the company was basically just the code at this point, the devs could have just said "no" to this guy and set up their own company. Why wouldn't they have done that?
1) Because it was just one weekend of work. Not everyone might continue working on/at the startup after the initial weekend. Would be weird if a fifth of your startup is owned by some guy who helped out one weekend, even if that weekend was the very first weekend.
2) They totally could, and Bobby did, right? There is the question of IP though. What parts of the IP are of Billy's LLC? I'd agree that the code made that weekend is not, it's bound under whatever the team agreed to. But the idea of the company might really be Billy's, even if that conflicts with the competitions rules or spirit a judge would still have to rule on that.
Dick move by Billy, but the end result is only a wasted weekend.
Serious question- does the team then negotiate new terms after the weekend for those that do want to stay on-board? Who holds the 98.4% in the meantime?
The impression I got was that the 0.4% was a guarantee for what you walk away with. If you stayed you would work out ownership of the whole thing with the rest of those who stayed to build the new startup.
The guy didn't belong in a startup weekend. The team at the weekend is supposed to own/share the results. Not some guy who can't recruit engineers and uses startup weekend to defraud the real talent to promote himself.
It was a web application in Python. It was at a startup weekend. It was 2-3 days of work. Can we let it go? Do we have to go to the internet to post about it with screenshots of chatlogs and all?
You're NOT being fair at all in saying, "It was [just] 2-3 days of work."
Why disregard the full scope of opportunity costs the author mentions?
He's not banking on a lucrative outcome. He's sacrificing time with the family AND rest on the weekend. Now, multiply that by the size of the team.
Taking what the author says at face value, he got stuck with a duplicitous character who single-handedly dragged a team into violation of the hackathon's terms. The event explicitly asked for relevant disclosures.
As others mention too, his documentation's a valuable urge to caution.
You feel awkward because it's uncouth to talk about this kind of thing in public.
Unless it's spoken about publicly, this kind of thing will just keep happening. Which is why it was made uncouth in the first place. If everyone has to learn the hard way, there are more warm bodies pumping through the system.
I want more people to understand what they could be getting into when they enter into events like this. So what it if requires a bit of akwardness to get there?
think you're missing the point. whether it was cringeworthy or not, it's a lesson in learning to stand up for the software you've written and the rights you may have. just because it's not a 100 million dollar business doesn't mean you can't take anything away from this
Sorry you had a bad experience on the weekend. I've been a volunteer for 4 years so I have seen all permutations of teams that come to startup weekend (been to at least 30 events).
People who come to SW and look at is as a free way to get something built for their startup are not the target. It makes it a bit predatory and you get the reactions that you experienced. I try to warn people of this but some folks have their own ideas.
Coming with a team already formed also isn't ideal. The point of the weekend is not to start a company, its to work alongside other people and go through the exercise. With that mindset, you won't be disappointed when you "lose" but you'll gain some experience and grow your network. Thats the main point of going to the event.
If someone already is thinking about equity and contracts while doing a SW, run the other way. Its the wrong attitude for starting a company in general and in my experience generally ends up badly as they focus on the wrong things at the wrong times in other ways as well.
I went to a SW just as a developer, and the first few teams I talked to already had their MVP and were essentially feigning that they were a new idea. Basically just wanted some free labour for the weekend...
Ended up making a team with nothing but devs and we built a silly hardware prototype. We ended up winning, then stuck with our day jobs. We were all taken our of our comfort zone, would definitely recommend SW despite the few that try to take advantage of it.
As a shy dude who just writes code all day, it basically forced me to become a better communicator.
I went to the same SW as the one mentioned in this post. Our team ended up being almost all devs and 1 biz guy where we created a way to edit neural networks with a web interface, a.k.a. no potential business/profitability. We had a lot of fun (got an honorable mention) and I got to network with some people, basically what I think to be the goal of a SW.
P.S. It was pretty obvious that Billy was looking for cheap devs when he gave his pitch. The warning flags were there if you talked to him 1-on-1 at all.
So, what are you doing about it? I'm not trying to sound accusatory in asking you, but from my position you risk losing the attitudes towards the weekend that enable a culture where people collaborate instead of just showing up to find cheap labor.
All the hungry guys at "hackathons," "jams" and whatever else they're called have slowly put me off from participation in anything but work weekends at a hackerspace full of existing friends.
I handle it by speaking about it at the events that I facilitate and speaking directly to the folks who are behaving outside of the parameters of what the weekend is about.
This type of situation is pretty rare for me, though as on average theres probably one group out of 20 at the events I go to who have this type of setup/issue.
I think SW's stance on contracts is hugely short-sighted.
SW should require that teams sign a (written) contract laying out who owns what at the end of the weekend, and offer several templates to keep the process painless.
You could even just put something into the FAQ saying "if no contract is signed, then all team members acknowledge that each member owns all IP he or she produces, following United States copyright law."
But "don't think about equity and contracts, just code" is exactly the attitude that leads to lawsuits, hurt feelings, and people taking advantage of each other.
Contracts are not a red flag, they are a way to avoid assumptions and assure that everyone gets a fair deal. Avoidance of contracts on the other hand is a massive indicator of either ignorance or bad intentions.
Its not ignorance or bad intentions. Its not a startup factory, its a fun weekend to push yourself and learn some skills. Stories like these get voted up on HN but they are not the norm in my experience.
With Techstars now being involved, I can see them putting in more clear language about what the outcome of the weekend is as there will always be people who miss the point.
I completely understand, but reading and signing a simple contract takes 5 minutes. Preventing (yes, rare!) cases like this is worth the small overhead, IMO.
Your comment makes me think that startup weekend runners should be more aggressive about preventing people like Billy from participating - those who think they already have a company, or an idea, or ownership of something.
Words do not offend me per se, but to me such utterances are a huge warning flag - they indicate a certain personality that I usually do not wish to associate myself with
I think that folks have widely varying tolerances for language ("oppressive" is a good word for it) of this sort. Context matters, too, but it doesn't mitigate in this case because it is directed at Bobby and his peers. It would be a little different, for example, if it was directed at hypothetical competitors, or at Comcast; but to insult your teammates (or as Billy saw it, employees) to their faces is something else.
I've personally grown to be fairly intolerant of screed like this, and language of this sort has been a factor (among other factors) behind me leaving at least one job now. But it's costly (in dollars) to vote with your feet like that. At the end of the day, we all need to pay the bills.
I'm a bit curious. How much less have you kicked people out of hackathons for? I'm not really into insulting people, but I never know what the limits of speech are nowadays. I also don't attend hackathons but just in case.....
Haha, to be honest, I was exaggerating. I've never kicked anyone out for less. I did kick someone out (for the day, not ban them) for a similar - arguably slightly worse - comment.
If someone starts throwing slurs around, kick them out. I'm not saying ban them, but say, "Hey, you can't say that here. I need to ask you got take a walk and get your shit together. Come back after lunch and try again."
Then maybe that night send an email saying "We've all said stupid shit, but I can't have people telling a copy editor to put 'stupid gay shit' on a page. We're going to lose people that way. Just be a little more sensitive to your surroundings and you'll be fine."
But the "fucking nerds" thing? No, I don't think I'll kick someone out for that, but I will most certainly pull them aside and say, "Listen, dude. You've got some talent and some experience around this table. We're all people - our goals as humans are basically the same - to be healthy, socially active, highly collaborative friends with good careers and hobbies and whatever. Nobody is here to be your nerd. If you're part of the team, be that and show that. Most of all, if you have something to say about the structure of this team, do not - EVER - do it in 'half-joking' way. That shit is toxic and it's not welcome here."
So yes, in both cases, I think that an intervention was required and I'm surprised that one didn't occur.
You mean offensive not oppressive and as with everything it depends on context and really Bobby doesn't come off as straight as an arrow to me, he's as shady as he claims Billy to be and if he got his way and Billy paid him off, I bet my right arm we wouldn't have heard about those slurs at all but it's in his best interest to stir the pot and defame Billy.
What?! I mean 'oppressive language' as that phrase is used in various systems of communications modeling, such as NVC and Active Listening. Why are you saying that I mean something else?
> he's as shady as he claims Billy to be
This is, at best, a tu quoque fallacy. Why are you doing damage control?
At the end of the day, this isn't even about Bobby and Billy, but about all the Bobbies and Billies you meet in the tech scene generally.
@jMyles, sadly, "oppressive language" is probably as jargony as "NVC" and "Active listening" are for most people. If you aren't aware that a cultural clique has changed a few characters in a common phrase to coin a phrase that means something only slightly different, it just looks like a typo. I will have to google "tu quoque"...
"NVC" and "Active Listening" are jargon, and not terribly impressive jargon - I'll warrant that.
But "oppressive language?" That just seems like a good descriptor of a communications style that we all encounter from time to time. That's the reason these "systems" have picked it up.
The text you quote is not in the article. Perhaps you mean this?:
> Actually, we are in charge now. You just haven’t realized it yet. Automate or be automated. If you don’t know how to map out complex systems. If you never got grounded as a kid for taking things apart. If you are too lazy or unwilling to learn our ways. If you don’t work for us yet, you soon will. Because software is eating the world.
These are things that software engineers tell themselves after they have been bullied in the business world to remind themselves that they are valuable and that they should be respected, despite encountering people sometimes that place no value or respect in either them or the work that they perform.
Perhaps you could try and share what about the text feels evil to you, though? Why does it feel threatening to you?
Not OP but if you can't tell how vindictive that sounds, I guess we just come from different worlds. I certainly wouldn't trust someone who said that in a position of power over others in the slightest.
If somebody is going to get upset at some offensive language he's almost certainly the sort of person who will continually get walked on, since acceptance is the primary component of the worldview.
I hear what you're saying but didn't interpret things the way you did. Here's my guess as to your thinking. Please correct so I can see where I'm misinterpreting.
IMO, you think that everything that Billy did was clear and above board. That the engineers should have _understood_ that Billy was the one in charge by what he said and what he did. That he owned the idea and that they were there to implement his vision as they best interpreted it in order to get things off the ground. His "payment" for this would be: the win, the .4%, and the good times. The .4% especially made that explicit.
Also, it was clear that there was not necessarily any connection between Billy and the rest of the team after the event unless Billy thought they jelled and decided to keep things rolling. Otherwise they would part ways with everyone having had fun and the coders having gotten a reasonable "taste" if things did take off. Because of Billy mentioning the LLC and his partner.
My sympathies to you - I am going through something similar - I just kicked out my partner (and shutting down one of my companies as a consequence) who was supposed to handle business side of our e-commerce company that I almost-100% automated as he started to express exactly the same attitude as Billy. He had 50% profit share yet became lazy to the point of refusing to deal with customer returns and customer communication unless those are fully automated as well (the company has 100 seller rating on Amazon, dozens of 5-star feedback only, significant revenue and was profitable for what amounts to 5-10 minutes of effort a day).
Funny thing is I can respawn such a company in a week, yet all I got was some stupid power game with very little work from his side and behaving like he was my boss and I was his slave, working on his "ideas" (while he was invited by me into this company based on the ideas I already executed in other companies I created prior to this one and his task was to get the business-stuff load off me so that I could focus on creating "intelligent" automated systems instead of dealing with the boring business side).
Fail fast, kick out people that went full retard, they aren't worth your time nor effort, seriously. You can do way better on your own.
I also worked in a similar situation. The "business guy" who was also handling customer emails, for a while became so slack he ignored people complaining that an important feature of the site was broken. I happened to be scanning through the emails when I found it. He also had a tendency to blame customers for bugs and not even pass their feedback on to me some of the time. He expressed the same attitude of "this is my company and you're lucky I let you work for me (without proper pay)". He wasn't really even doing the business part well, just riding on good Google rankings that he'd got from doing some SEO years before. Turns out though that by not being his employee, most of the code remained my IP. When we parted ways, I started up a new company in direct competition and am now doing much better by keeping 100% of the profits instead of the small share he'd been "generously" giving me before. He's kind of stranded without a developer and not enough revenue to hire one at market rates.
Good for you! Good luck with your own company! ;-)
I only license my software to all companies I have in order to avoid being stripped of my IP and I recommend it to anyone with a brain. Business guys aren't your friends, and their view of us that have both ideas and capabilities do execute is not very flattering. Usually they just want to ride someone and once we serve our purpose, we are disposed of.
What is perplexing to me is that I offered him a very generous 50% share (the intent was to motivate as well as to have the need to come with real solutions when we hit some problem so that we are forced to agree on something and view the issue from multiple angles to avoid tunnel vision) in exchange for him doing the business stuff and customer side for the company (meaning arranging suppliers, building supplier relationships, handling customer returns and communication etc.) and having the ability to be plugged into a company that requires very little work (the closest to the definition of "easy money" as I could get) in super competitive environment of Amazon utilizing bleeding edge tech I invented that gave us highest Amazon ratings, both internal as well as customer satisfaction. Yet there was always enormous frustration of not having that single dominating % more than me, worsening attitude to do the required work, secretiveness, and once it started to manifest itself in not working on customer issues in timely manner and alienating supplier relationships that took a lot of time and effort to build, I had enough and kicked him out. Funniest thing was him coming back and demanding my SW as well as credit for his "ideas".
Well, you learn as you go, next time I will prepare stronger rules for business guys.
Guys, to all of you, creating your own company costs you like $1000 in the US, it's a fixed amount of additional stress you need to handle, you'll get used to it quickly, and you don't have to waste your precious time with people that have no clue what they are doing just want to use you to get rich for nothing.
Let's not throw out the baby with the bathwater. You're talking about a bad person, not a "business guy." If you partner with a person who doesn't care about how he interacts with the people around him and has a faulty moral compass, it doesn't make a difference if he's a developer or a business guy.
This is really a warning to make sure that you know who you're getting into bed with when creating a company. Don't just work with someone so that you can say you have a co-founder, find someone with whom you have a mutual respect.
It sounds like you managed things pretty well and stayed in control. So good for you too! Being in a position to split up without losing everything is something we don't all prepare for. In my case it was by pure luck. I had to go scrambling for the copyright laws and eventually worked out that my code would belong to me (according to definition of employee, work for hire, etc.). It could easily have gone the other way because I didn't consider things going sour when I started, and by the time I became concerned, I was already too heavily invested in it to want to risk starting a fight.
Having a written agreement about copyright ownership like you do is absolutely essential if the code is something of value. Without that you can never really be sure who it belongs to.
I think people irrationally get offended by swearing. There's a big difference between "you're gay" meant to insult somebody and "whatever gay shit you want" indicating that they think the content might be too unimportant, pretentious or touchy-feely. None of them have anything to do with actual homosexuals and doesn't sound like homophobia at all, just misunderstandings of different cultures.
That said, it can be a clue that the person might be generally disrespectful of others and to be on the lookout for real harm they may do. Though it's a dangerous slide from "does what bad people do" to "is a bad person" which is a kind of discrimination.
I think the issue in the article was that someone in the group took offense and called out said speaker on his language, and the speaker just fumbled around instead of apologizing. Even a quick "Yeah, sorry," would have at least been a gesture at respect.
With the number of people and experiences out there, we're going to offend people. What matters is how we behave when we're called out.
So you're absolutely right in that "it can be a clue that the person might be generally disrespectful of others."
You know, I don't know what to do on the spot when somebody shows offence at my jokes. Apologizing indicates you think you did something wrong and makes an implicit promise to change your behavior (forever!). Not something to instinctively respond with or you end up apologizing for all kinds of genuinely harmless things and people will take advantage of that.
The problem with people being offended with swearing is that some people use it as carte Blanche to "feel triggered".
When I contracted at salesforce, I swear it is probably of the most gay friendly companies I have work for...
I felt like 40% of the people I met were gay. The thing though was there was one guy that was an asexual, and he was pretty damn good at his job, but so high-strung that anything seemingly could trigger him...
I swear. A lot. And when you're in a small team/startup that's fine... But in the larger enterprises... Not so much.
Recently, I said the word "bullshit" in my new office and turned a bunch of heads...
If my shit doesn't launch properly I'll say "fuck" and for me - it's appropriate.... Some people don't like it. For this reason alone, I don't like the open office idea... But only because I am tired of triggering people who are offended by swearing.
> I think people irrationally get offended by swearing.
American people do, yes. At least for the last few years. Rest-of-world is more relaxed about it. And here in the UK it can be a sign of affection to call a friend a 'daft cunt'.
Yep. Austrialians I know are notorious for calling things "gay". I don't think the concept of gayness is going on in their heads, that's just the word they grew up using to make complaints with. This Billy even said that all his friends were assholes and he likes them that way. They probably "insult" each other as much as they did the programmers and it'd just their culture.
I think people irrationally get offended by swearing
As you said, there is nothing particularly offensive about what the person said (it certainly doesn't seem to be homophobia. It doesn't discount it at all, but by itself is essentially nothing). If it was made into some tense, awkward situation, well that's on everyone involved.
Having said that, everyone should avoid those sorts of statements, however benign, because under the lens of reconsideration, where people are looking for a narrative, it's easy to make them look much worse than intended.
I love the corporate passive-aggressive replies from all involved. Wonderful.
Not legal advice: I would wait it out, see if the business is a success, then sue the hell out of the guy ala Winklevoss@Facebook. Better than a shit-tier 0.4% equity stake any day.
"dude, no one seemed interested in working on this after the weekend. I, on the other hand, have been working on this for 18 months".
Well.. WTF. NO ONE KNEW THAT BECAUSE YOU DIDN'T TELL ANYONE. Or... intentionally hid it, because you knew it was a dick move, or you're trying to skirt rules you clearly knew about ahead of time.
"Dude... I don't know if you're committed, therefore you get < 1%. I know I'm committed - it's taken me 18 months of planning my idea! 18 months I've worked on this! That you can build it in 24 hours just proves that MY 18 MONTHS is worth a lot more." (to the degree there's a thought process going on, that's part of the justification). It takes MONTHS to get investor meetings set up (especially when you don't have a product yet!) - that's HARD WORK. Sitting at a computer for 2 days? WTF?
The labor theory of value is so quaint. 18 months without a viable product, then 8 guys who had never worked together before, who just showed up at an event that sounded like fun, bang out a prototype in one weekend. And for them, it was recreational.
Do you know what it looks like to me when someone who believes he is committed and working hard for 18 months gets outdone by people playing at business for one weekend? It looks like someone taking credit for both sides of Fischer vs. Kasparov, just because he provided the chess pieces. I can't even begin to understand the cognitive defect that would allow for that.
The world might be better off without people like that, but it might also seem a bit boring if they were gone.
>I’ll be honest: I thought it was a huge longshot and wasn’t that concerned. All advice I read in the startup arena advises to be ready to sacrifice the next 5+ years of your life in the pursuit, and most tech startups have abysmal failure rates. Still, if John thought this was worth going after, sure, umbrella me under your ask: 0.4% each for our efforts over the weekend.
That says it all. "Sure, umbrella me under your ask."
This coder agreed to that, he even was kind enough not to whitewash history in his write-up to us so that we know he agreed to that. After it's taken off suddenly Bobby feels like he is entitled to something more.
That's not the way agreements work :) Bobby is the one in the wrong in this article, he spells it out in black and white. There is no gray area here - absolutely crystal-clear.
If he didn't like the terms, he should have joined one of the losing teams instead. If he thought the terms weren't valid, he should have mentioned this instead of agreeing to them.
Here's a hint if you want to run the world, Bobby: your word - or handshake agreements - actually mean something, and you stick by it.
Reading comprehension 101:
Identify the characters of a story and what happens to them:
- Protagonist, narrator : Bobby, Dev. knows John and 2 other devs, they meet before the week end. Part of team 1.
- Narrator's friend: John. Propose they draw up a contract with whoever they end up teaming with so that everybody that work on the week end project ends up with the 0.4% of the company if the project ends up being a company.
- Antagonist: Billy, Business / Idea guy. Pitch the idea to the team, then decline to agree to the 0.4% agreement. Propose a "Handshake Deal", unspecified terms, without shaking hands. Starts an LLC based on the StartupWeekend efforts with "JP", a friend and other business guy, who was not present at the startup weekend. Together, Billy and JP own 100% of the LLC. Says devs might join the LLC, described as being hostile to sharing equity in the company, but might be an option.
What happens in the story:
At the beginning of the story, Bobby and John listen to Billy's pitch. They approach him and say they are interested in his idea.Billy propose they join with another team (Brad's, another 4 dev team). They do.
Billy declines to agree to a 0.4% equity sharing. Offers the "Handshake agreement", terms unspecified, without shaking hands.
All 9 work on the idea over the week end.
Billy end up presenting the idea onstage with his picture on every slide.
The project ends up winning the "startup weekend" presentation.
you're right, I did read quickly. In your reading under the agreement they came to who would own the vast majority of the company? (i.e. all of it ex 0.4% * devs)?
This is what the text says:
>Billy brought along four other developer/designers he was already chatting with: Josh, Clay, Hayden, and another John.
>Our John, Team Paladin John, then went on to introduce ourselves and his idea for us to take 0.4% after helping launch the startup this weekend. That way should anyone go forward with the work product and it become a big success, at least there’s some kickback if this thing goes nuclear unicorn.
Also the way I read
>John explained that he’d spoken with Startup Weekend organizers and was told that contracts aren’t allowed from the event, so he asked for a handshake deal. Billy said he was happy with a handshake deal, and quickly moved the conversation forward without any handshaking actually taking place.
is that this is what everyone implicitly agreed to. I don't find it credible that "I'm happy with a handshake deal" and everyone moving forward isn't evidence of a mutual understanding of what would happen after. The actors acted as if everyone agreed that people would get 0.4% just for participating in the weekend, the terms that were brought to Billy, and that Billy was happy to agree to this.
The fact that these 0.4% terms came from Paladin's camp rather than Billy makes it even more clear that the author is in the wrong.
It sounds to me like you're saying 0.4% has nothing to do with this story whatsoever. It sounds to me like it was agreed on.
I understood that the 0.4% deal meant that at the end, they would together decide what happens with the project. Parties who decided to go forward and create a company would give out 0.4% to the members of the team that would not go forward in exchange for their week-end contribution.
>John explained that he’d spoken with Startup Weekend organizers and was told that contracts aren’t allowed from the event, so he asked for a handshake deal. Billy said he was happy with a handshake deal, and quickly moved the conversation forward without any handshaking actually taking place.
I did misunderstand that paragraph. I thought that as "contract were not allowed from the event" the "Handshake Deal" must have been something different, like they would be all equal partners for example.
If the handshake deal means "we all agree to 0.4% equity if we do no further work" it means at least that, Billy should have mentioned the 0.4% in the message about the company being 50/50 with his friend.
Also, the idea was from Billy but the winning Startup Weekend project was a joint effort, not something Billy hired Bobby, John, Brad, Jason (team paladin), Josh, Clay, Hayden, and another John to do for him.
I think the feeling of betrayal from Bobby is that the company was founded, with a third party, assuming to use the assets he and his friends worked on, _without them being involved in the process in any way_.
The way things should have worked out for him to be happy would have been is if after the end of the Startup week end they had mutually agreed on what to do going forward. Instead, Billy moved forward and then asked the devs if they wanted to join his company that he created.
Oops my bad, Billy didn't decline the 0.4% deal, I should read more carefully.
>John explained that he’d spoken with Startup Weekend organizers and was told that contracts aren’t allowed from the event, so he asked for a handshake deal. Billy said he was happy with a handshake deal, and quickly moved the conversation forward without any handshaking actually taking place.
I think you miss the main point: Bobby was expecting to have 0.4% in the company that was created that weekend. The event was explicitly not for pre-existing companies. So the idea is that after the weekend he can choose to stay with the team they formed and pursue the idea forward together as a new startup, or he could walk away and leave them his contributions, retaining 0.4% ownership in the new startup.
Billy already had a company. He wasn't looking for people to team up with to make a new one, he was looking for free labor and options on hiring people he had already seen work together. Billy's business is his business, but what was created over the weekend belongs to the team, not Billy's business. Bobby's ask was to the team as a whole, not Billy's business.
But the developers did walk away, Billy was the only one who kept with it initially...
And Billy didn't really have a "company" as we understand it; he came with an idea. It had nothing. A legal incorporation is a shell, nothing more.
I'm not the only one who was rooting for Billy while reading this post. Nobody did anything bully-like - it's a complete distraction and red herring, nothing quoted by Billy is "bully-like" - the closest thing in the post is when Bobby suggested ousting Billy from his own idea and leadership, just because Bobby helped write two days of code.
"Thanks for coming up with the best business at this event - I think you should be demoted to soemthing like business development, so someone else can run it."
Ridiculous suggestion, in my opinion, especially given the negotiation that went into the event beforehand.
The developers were bullied out of the team by Billy. He neglected to talk to the team (on slack and Facebook). When he finally did talk he took leadership and assumed CEO roles without the team agreeing. If there could be any fair way of doing this it would involve votes by the team (which is what Bobby basically was pushing for, albeit in an opinionated way).
The 0.4% didn't imply anyone else owned the remaining percent. It implied that if a company were agreed upon and formed by members of the team, everyone would get at least 0.4%.
Billy is a classic tale of 'an idea guy' where they work (hard, incredibly hard) on whatever the fuck they're doing for years and have nothing to show for. To be honest, in this case it's alluded Billy had biz contacts which is (incredibly) valuable. Most of us have been in situations like these and know what and how to recognize if it's valuable to join in or not.
On the other hand, Bobby has some issues going on which are out of the scope of that little venture.
And this is why we can't have nice things - a decent parable about why "startup weekends" are the business equivalent of giving teenagers whiskey and car keys:
For the sake of argument, assume the idea was actually good:
- Legal ownership of the parts of the business are a mess; instead of it being cleanly concentrated in 1 - 3 people, each of whom has a clear "vetted" and "sustained" interest in the business, 8+ people now have options on any success. Recipe for drama.
- The screwed up ownership structure inhibits sane growth. The business is a long way from functional; at least 3 - 4 of the eight people need to show up for work next week and make sustained contributions for months to get a payback. Unfortunately, everyone present at the weekend can muscle in at the end (if successful) and claim a share of that work. So the long term incentive plan has been crippled....
- This team is dysfunctional, at least in the relationship between business guys and tech guys. Billy wasn't open and honest about past work on the concept. He's incapable of controlling his prejudices and working with his team in a respectful manner. This partnership... won't last. Outside the pressure cooker of the event, it wouldn't have started.
- If the business model is truly dependent on technology as the basis of competition, this project is doomed; the business team doesn't respect the value created by the technology side of the effort. Once you view your technical staff as replaceable/exploitable, good luck on creating any value beyond minimum effort results or finding good talent.
- Finally, I think the technical team overvalues their work at this point; there's a large business component that must be completed for anyone to make money. The price that would satisfy them in a cash deal likely wouldn't be feasible for the business team / investors to pay....
tl;dr wrong environment to create a business. More value and more fun would occurred if they spent the weekend developing crazy Youtube animations or JavaScript games....
Several people concluding Bobby could have handled the situation better. I agree, but I sympathize with Bobby because I've been in his shoes.
Folks there are several people that come to startup weekends with pre-planned businesses, looking for cheap labor (aka "fucking nerds") to push them off into profitability. When you enter any kind of hackathon it's on you to recognize these people before you choose to engage in assisting them, and if you dont, you have a bit of yourself to blame after the fact.
No, Billy hid his pre-existing company from the team. Bobby doesn't have himself to 'blame' for this deception. It's perfectly valid for him to respond the way he has.
can't even understand someone goes to work on a handshake deal with strangers. Have problems doing this even with friends. Once money is involved even friends can act strange...
Mind you - at the other extreme I've had someone invest £25K in a startup based on a handshake who turned out to be utterly brilliant and a complete gent.
He only looked slightly sour when he saw we'd stuck a copy of his cheque up on the wall.... :-)
Of course, people like that are rare - but they do exist.
I know a couple of guys like this as well. While it's true that one can go far in business by treading on people and screwing people over, being decent human beings certainly doesn't seem to have held them back in life, at least.
This has happen to me more times then I would like to admit.
<Quote>
You have to be trusted by the people that you lie to,
So that when they turn their backs on you,
You'll get the chance to put the knife in.
</Quote>
http://www.pink-floyd-lyrics.com/html/dogs-animals-lyrics.ht...
Oh, don't get me wrong, I wouldn't recommend anyone go into a business arrangement - even with the seemingly nice guys - without proper safeguards (ie contracts) in place!
Regardless of how well-spoken he sounds in his emails, he still showed up to a startup weekend hackathon with an established business and 50/50 partner that he neglected to tell anyone about. Engineers go into events like that assuming all interested parties are present and equal co-founders. Huge dick move to deceive the engineers and subvert the event like he did.
This it the epitome of Startup Weekends' short fall.
You simply can't start a company in a weekend. Even moreso, you can't expect to start a company with a bunch of random people you just met.
This gets complicated by the fact that not only do the team members not know each other, they inevitably all have day jobs. They all have different level of skills. Not to mention that companies shouldn't be started by more than 2 or 3 people - teams at startup weekend are typically 6-8 as I recall.
And if a team wins, they think this somehow increases their chance of success at starting an actual company.
I'm a big fan of the concept of startup weekend purely to raise awareness of what it's like to start a company. But stop it there. Nobody be looking to start a company out of a weekend event.
I'm not at all shocked at what happened here. And to the poster, it's your own fault. If you actually thought you would start something with a random "idea guy", well, lesson learned. At least read up on IP agreements first.
I don't really understand the concept of this Startup Weekend. People come with ideas, volunteers work their asses off to make it happen, then the idea guy gets all that stuff for free as well as a monetary award for having had the best volunteers donate their code to him?
From where I'm sitting, it seems to be the programmers can start their own company without Billy. Billy would probably add value due to his contacts and having thought a lot about this idea already, but without the code, he still has only an idea.
> I don't really understand the concept of this Startup Weekend.
Very few Startup Weekend companies last more than a few weeks after the event ends - it's rare that they turn into a 'real company'. I (and many other people) view it as an opportunity to meet new people, toss around ideas, work on an interesting project for a weekend, and solve problems that you wouldn't otherwise be exposed to.
> People come with ideas, volunteers work their asses off to make it happen, then the idea guy gets all that stuff for free as well as a monetary award for having had the best volunteers donate their code to him?
I've done numerous Startup Weekends, and the usual result is that winning teams split the prizes. Team members can continue building it if they want to, but usually teams just go their separate ways.
When you grow to a certain size, there are bound to be some unhappy stories. I think Startup Weekend is an awesome event, although I can understand why it wouldn't appeal to some people.
Just curious - why can't the organizers of these startup weekends have some kind of legal agreement to protect all parties, especially developers as they seem to be the ones who get screwed most of the time?
that's a good idea, but on second glance, it's none of their business. people should value their own work, and not throw themselves at the first smooth-talking jerk in the gamblers' hope of earning some hilariously unlikely windfall in the future.
A handshake agreement (not written down) can definitely hold up in court so be careful in not giving any claim you are owed through your claiming of money as it could represent your giving up your potential equity as well.
Doesn't matter if he has an LLC, you may likely have claim if he was not clear that you were not receiving equity (i.e. such as if you were coming in as a contractor).
http://www.backofanapkin.co.nz/ is a brilliant idea for this sort of pre-company-formation thing -- at a minimum it forces you to spend a few minutes thinking about what happens if things don't work out in a team/project/idea.
"“Hey, Billy”, I lead in, jokingly. “When they hand you the first place prize, make sure you find a way to throw us all under the bus and take full credit.”"
I think this is the part of the article that struck me the most odd. So when Bobby implies that Billy is going to throw them under the bus, it's a joke, but when Billy _responds_ to the joke with the line about coercing the "fucking nerds," it's serious?
Okay, so, as far as I can tell, if the team just quits on him, doesn't his "company" just fall flat on its face because that guy that took over has no concept on how to run a software development project?
I would assume that - by default - all members of the team at that weekend have an equal ownership. And not just of the code produced - of the concept as a whole.
Ideas and concepts are not usually considered intellectual property, and cannot receive protection or be assigned ownership.
Barring any agreement otherwise, the code's copyright belongs to the individual developer who wrote it, though in the case of software projects this may get a little weird when multiple developers write and overwrite each other's code.
The following is speculation, because I've read up on the finer points of copyright laws as applied to purely digital property, but by sharing the code the developer has obviously gave the person he's sharing the code with implicit permission to work and use that copy of that code, although, again barring any prior agreement otherwise, he should also be able to rescind that permission as he chooses.
There might be an implied right to use (but without a contract to specify compensation a court might require Billy (et alia) to provide some compensation), but if Billy was to re-license the code to a third party that would almost certainly be a problem.
This is why I don't exactly hold Startup Weekend in high regard. I think it's a good idea, and I think the people who organize these things are (mostly) alright, but unfortunately they more often than not attract creeps looking for some people to build them a free website for their shitty idea.
I still go, mostly because where I live (Albuquerque) we have such a small tech community that I try to make little efforts to grow and support it, but I never work in someone else's team, unless they're a developer like me, they have a cool idea, and they're genuinely thoughtful.
But I have to agree with others in that the way Bobby handled it could have gone better. Contracts aren't allowed at Startup Weekend and violate the spirit of the event. If you want to protect yourself, don't give him the code. If you did give him the code, relax, most Startup Weekend code is so hacky that he'll have to start over. Just breathe, get over it, let this asshole continue with his life. If he's successful and you resent that, you can probably get away with competing against him with a better product. His tech team probably consists of a bunch of college interns who only know Java.
I'm glad he's talking about this though, because this happens way too often at these kinds of events, and more people need to know that despite the cool marketing and the hype, these events can attract the worst. Don't avoid them though, they can be fun, but you have to make them fun. Avoid the people who's sleaziness gives you a bad vibe.
The loser out of all of this is Startup Weekend to me. Seems like you would need to sign on to percentages upfront and legal or if it goes well the shite will hit the fan.
Get all the other coders to agree and license all the code etc as BSD and let anyone use it. Even better, start a parallel business with the software and charge 10% of what the other asshole would charge. Destroy him and his "partner"...
Sounds pretty much like the startup weekend experience I had as well. I pitched and helped built team and the site (am a developer) but the business guys behavior just put me off so much that I walked away (he basically changed my idea ...a pivot ?? and had the team build his one)...then they rode our second place success and hired other devs and got something going again...I dont rue them their business success but he should not have joined our team if he wanted to build his idea ...I sometimes wonder if nice guys ever finish first in business :( My experience on that weekend is one of the reasons I dont go to startup weekends anymore...but it was a good lesson and learning experience for me...not something I could pick up from a book
Hackathons just need to go away. I can't think of any other industry where people give aways thousands of dollars of their own labor (over a weekend), on the off chance they might win a negligible cash prize. Are there law/medicine/MBA-a-thons? Of course not! Those folks have professional conferences and networking events where they can meet new people and explore new ideas. What they don't do is give their time away.
The only times I work without pay is when I'm working on my own projects or for a non-profit. Everyone else pays for my time. I don't work for free. And until the bulk of tech folks have the same attitude, tech folks will continue to be exploited.
Counterpoint: I don't think most people at Startup Weekend attend because of the prizes. I've taken part in many events, and while I certainly tried to win, the prizes have zero influence on my participation. I never go in with the expectation of anything more than a fun weekend and new connections.
I definitely understand all that. Might point is that we can get all that without giving away our time for free. The core of many hack-a-thons is that we are asked to do a quick prototype and validate an idea. We should be paid for that work!
There are plenty of meet-ups and networking events to make new connections, as well as plenty of events where we can code and learn with like minded folks.
I always go for the networking and the chance to be a "fish out of the water". This year I went purely for fun and wound up building a mobile chat app (which I had zero experience with) for my 5 year old daughter. It was a lot of fun!
that sort of hackathon needs to go away. a hackathon used to be an event where people got together and worked on some cool open source project or non-profit initiative, and the main goal was to collaboratively build or advance the state of a project. possibly still is, outside of silicon valley culture.
You get together with some people you know, some you don't, play with some ideas, experiment and fail, come up with some cool things, drink some beer, and don't sleep enough.
The point is risk-free experimentation and a learning opportunity. The point of Startup Weekend is not to be the next big idea.
* I've organized 3-4 Startup Weekends, attended a few more, organized dozens of hackathons, and attended more than that.
I've been burnt by people like this too. It hurts, you think you've done something wrong. You haven't, and I'm glad Bobby has shone some light on this guy.
Everyone - and I mean EVERYONE should read Robert Hare's work on psychopaths. "Without Conscience" is a good introduction.
There's a saying "be afraid when the pretty people show up.". They've shown up in droves, the party is over.
NB: Also, Billy may own the company, But the contributors own their code and contributions. They can and should control this.
I would be interested in a focus group or forum for engineers that got bitten in a similar fashion, or that wants to exchange information on how to deal with rats like this. Does that exist?
Does this really need its own forum? The point the author tried, and failed, to make is that you only have value when you fight for it.
My brother comes to me several times a year with "ideas". He uses all the same lines "I just need someone to build it" "you should be able to whip it up over the weekend", etc.
Most of the ideas are crap, but he has had a few gems. I always ask for 51% ownership and then explain to him that I am inviting him to be a part of the product that I am building. He can leave with nothing, or i could do it myself and retain 100%, or we could work together, or he can get someone else to do it.
Billy is an asshole for deceiving people and breaking the SW rules of no preworked ideas allowed.
Bobby is an asshole for joining a SW with the wrong motivation and breaking the SW rule of no pre-formed teams (and proceeding to whine about being snubbed without any form of self-reflection in the process).
The SW organisers and the facilitator are assholes for breaking the clear SW rule of no cash prizes allowed - ever.
Wow.. what a post ! Those startup bullies clearly seems like a new breed of people engineers needs to avoid.
Actually, I also had a mixed experience after a Startup Weekend: I went to my first Startup Weekend with hope of networking but it grew quickly in a great opportunity to create my first app startup.
Here’s my story
Someone smart I didn’t know pitched a cool problem with an hint of a solution, and ended up having me on this team. During the 72 hours streak I found the name, created the logo/branding, made iPhone mockups and built UX/UI. The team was very nice and thinking very hard , but was basically gathering around me while I was doing the hard work making this app a reality.
We won the 2d place and 3 months in a French Incubator.
3 days later, the pitcher called me about continuing working on the app. Since he had already a startup going, he promised me shares and a salary so I can work on it alone in the incubator. I was thrilled ! Being paid to create a startup, w/ shares, was the best option for me since I was married and had a little boy.
Working at the incubator on an iPhone app was a blast: I learned a lot of things, met great people, while building a great product from scratch. Sometimes the “co-founder” came-by a few hours to show his face, give me feedback, and reassure me on our first handshake deal.
After Two months I already built an iPhone beta, and was iterating on the UI/UX & design for the app. Around this time, we decided to meet to talk more seriously about the deal.
Here’s how it went
I spoke first, offering him 50/50 with no salary or less shares with a salary to complete for the percentage. This deal was obviously better for him, since he could have me work full-time on the project for free while he will be working half-time on his other project.
He laughed at my face, and told me that I don’t know anything about business by submitting a 50/50 deal…
He then told me that his potential investors (Which was his dad and his previous boss btw) were potentially investing a few hundred K€, so I can trade my salary for the shares, according to that totally fake number.
It made around 0,3% in total
I couldn’t believe he was doing that to me and really felt the pain of betrayal. I know I took risks by giving my total confidence to a stranger, but I was really feeling the bond between our minds, and I really thought he’ll be generous by seeing how much I added to his idea.
About a week later I decided to take my cash and go my own way, seeing that I couldn’t bear working for him under those terms, since I built the entire product.
It was 18 Months ago.
In September, he released the v1.0 of the app (It was in beta for 6 months), which is identical to the product I built almost on my own: branding, design, UI/UX and features. It’s so similar I recognize my code through the buttons animation! And seeing this old, made-in-a-rush design makes me think: I could make this product so much better !
While I was away, he did an impressive PR work, and ended-up raising 800K$ which was quite hard to swallow for me, even though I don’t really mind and run a good freelance business. Fortunately, his success is now bringing me really interesting app projects, and I truly value the time spent at the incubator.
I try very hard to get all the positive lessons from this period while pushing back the hard feelings.
I am not a mean guy either, so sorry to be critical, but...
You are exactly the reason why people like Billy exist.
They take advantage of creative, perhaps brilliant people who are shockingly (shockingly, given their intelligence) naive from a life/business point of view.
It may be too long of a wait for the Karma to catch up with them :-)
If you got paid as an employee to build the app, his position isn't as weird as it seems (ignoring verbal promises). After all, he had already borne most of the risk at that point.
In this case, someone did, the strongman. Nobody was willing to accept his leadership though. A rebel leader was born, then, in the fashion of these sorts of leaders, immediately abdicated his responsibility by allowing the would-be strongman to abscond with the group's efforts. Rebel leaders are reactive rather than proactive.
This group was never getting off the ground. Leaders have to be ready to fight for the survival of the group. Where there's a lack of true leadership, strongmen fill the void.
The "Tower of Babel" problem at events like startup weekend is an interesting phenomenon to experience first hand.
I did a startup weekend once ..and came away thinking this:
- better to have a small number of developers : ~2 , maybe 3 max. 1 is probably just fine for the weekend.
- better to have a smaller number of people on the whole team - maybe 3-4 max. The more they can tee up potential customers the better.
EDIT: the nuance here is around the numbers of people. In a normal startup situation its harder to get bigger than 2-3 people at the very beginning. But at a startup weekend like event if you have a charismatic team lead all of a sudden you'll have 8 or 10 people (this was possible back when I attended SW). So, the goal here is, if you're the team lead, resist collecting a large number of people, and if you a developer/doer, resist joining a team with a large number of people.
I had hired Bobby on Codementor.io to quick solve a problem one weekend...paid ~$400 for some code which didnt do what it needed to. I read the article as I read most articles on hacker news and half way through I realized that Bobby was the same tool bag I ran into in the past. I logged back in and re-read my conversation with him and it was shockingly similar...to be clear, I dont think Billy is right, but Bobby is a tool. I thought I was done wasting my time reading his "im never wrong" opinionated excuses and garbage. You know who winners are bobby? Winners are people too busy winning to sit around crafting bullshit and excuses. Shut up and do something if your so special. Ive seen weekend code from you - take the 222 and shhh, you made out on that deal.
I'm not familiar with the epithet 'toolbag'. I take you're not likening Bobby to a bag of tools. In this context, is toolbag a metaphor for scrotal sac?
A tool is an insult for a person who is a jerk with a high opinion of themselves. Appending bag to tool is an enhancer to the original insult, like douche vs douchebag.
You also get things like jerkbag or dirtbag or dickbag. I think I've seen people write "so and so is a bag," so the exact nature of the insult is evolving.
Bag is evocative of scrotum, but I don't think it originally evolved that way. Although scrotebag is a pretty good insult
I am truly sorry it didn't work out in our case, but I don't see how you can expect a refund for my time. Feel free to paste our conversation for others to read.
I tried to deliver the project in a way that maximized the value you were getting for my time and I set you up so you only needed to fine tune some physics parameters, because I didn't feel it was fair to charge you full rate to do work that most anybody could do.
I remember your project because you were my only negative review there. I think codementor may have scrubbed your review though after they looked over chat, because I still maintain 5 star rating on that site.
Remind me how much you were requesting as a refund again. Is there anything else I can do to mend things?
FWIW, I still didn't get a share of the prize money so there's nothing to "shhh" yet.
This experience really highlights one of the major misconceptions of Startup Weekend events. It is really an exercise in building a startup in 54 hours. You learn how to work with a team, validate an idea, the devs hopefully learn some business stuff and the business people hopefully learn some dev stuff. You build a prototype and pitch to the judges as if you were pitching to investors. But that's all it is - an exercise meant to improve your skills, meet new people and improve the startup community in your area. I think it is simply unrealistic to expect an actual startup to come out of the weekend. Validate an idea and meet new people, yes, but a startup is much more than that.
I wondered the same thing after seeing a comment on here that linked to the company and to a news article indicating the event happened this past weekend. I got from the original submission that this was a past thing and the "happy ending" was that Billy failed. But that appears to not be the case as the events were so recent.
The "busy with morning meetings" Billy referred to in his email was him speaking about winning startup weekend at a local entrepreneur group, sans his team.
I think the camera shot is poor though, it probably wasn't that empty. I believe that it was found from twitter or instagram.
Great article; why wasn't the site taken offline though? If the team wrote the code I'm making the assumption they did the deployment and have the keys to the kingdom to yank the rug from off the floor.
As soon as Billy made the "gay shit" comment you should have immediately deleted all of your work and quit. I've been in enough of these situations to know the best course of action is to walk away.
24 years as a cook and chef, greasy spoon and top 10 world ranked level, here. Also owner of two successful restaurants. Billy's idea is neither new nor very much in demand. Large chain "restaurants" have their own, HR cobbled, solutions, smaller restaurants don't function that way, no matter how high or low on the fame ladder they are.
Investing a weekend, maybe, but this won't sell. Looks to me the software talent in this equation made the best move by taking their $222 (or licensing the code to Billy) and moving on.
I can't relate with the author. It seems like most of the software engineers that I work with are not and were not nerds. Maybe some of them were or are but I don't see a connection between nerd and software engineering. Maybe I'm just too much of a nerd myself that I can't see the obvious truth. I've worked at several companies as a senior software engineer from startups to Apple through my career and I never noticed that there were a lot a nerds. I think this is a false stereotype of our industry.
As much as I want to identify with the writer of this, it's hard to. A seasoned dev, especially in startups should know that a Startup Weekend can be amateur hour when it comes to people knowing the rules and norms of business. There are many ways to do startup weekend right, but being the dev for someone else's vision is almost certainly one of the wrong ways to handle that weekend, it just breeds too many resentments.
The author is right, the devs have the power now, so why did they cede it?
Who owns the code? I think it comes down to, who has the github password. Not a good idea to let the business guy run off with all the assets, and no firm deal.
It's a nice gesture but a little silly for OP to redact Billy's name and details when the project can be found by googling "Bobby Boyd startup weekend". It's the second result after the OP, and the redactions probably won't protect him against a libel suit. And this thing happened only 3 days ago? Probably too short of time to cool down and think rationally before burning the bridges.
Don't take the prize and just release the code as open source and call it a day. That way, there's no way this asshole can claim work-for-hire (probably couldn't anyway, but just to make sure) and at least he will no longer have anything proprietary. Or if you really feel like it, sue him if he actually uses the software, but it's likely not worth the additional time and money investment.
The moral of this story to me is that organizers should really be a lot more involved with the financial / legal aspects of a hackathon. "Rules" are not enough, and i think participants should agree beforehand to modalities with which code property and companies shares should be dealt with in various outcomes.
There's gotta be the beginnings of a trashy reality TV show in here somewhere.
The thing I recognized from this though is that hackathon based startups can feel awkward, you have 6 people in the team, all supposedly equal splits in case you take the product forward but completely unbalanced contributions.. can go sour quite easily.
Can't add much to this discussion given all the excellent comments already posted. I've never done a "hackathon," and while I would not be surprised to see a good, working company come out of one, I do think the outcome presented in this tale is as likely as any other, and perhaps more so.
I did a startup weekend thing a few years back. I thought the networking bit of it was fun, but actually working on the project was not that great, and there are some echoes of this: these guys decided to use PHP as a lowest common denominator. Hacking on PHP all weekend long is not my idea of fun.
If at all possible don't do a startup with people you don't really like.
My advice to Bobby would be to stay connected with the developers he bonded with over the event and see if there is another idea they could work together on -- at least then the weekend isn't a waste of time.
This is great stuff, thanks for sharing. I wonder how often this happens and to this level. I am guessing it is more often than people realize. The expectations going into these types of events often vary greatly.
Such a great post, thx for writing it, you inspired me to write about how to stop the startup Bullshit... Startup Weekend has always been neutral and we should remind our community why / what it really mean.
Stop working for startups like this. Either the person with the idea should learn to help with development, or they should pay you market value. The whole startup culture is starting to make me cringe.
I'm sure this guy sneers at people who fall for Nigerian Prince emails, but he basically did the same thing. He allowed his own greed to cloud his judgement.
I haven't participate in any startup weekends / hackathons etc, but these descriptions sound very shady with sharks circling around. Is this really the true picture?
the point Billy and Bobby argue about WRT starting the venture ahead of SW is an interesting one.
When I went to SW a few years ago it was very obvious that many of the ventures coming in already had significant work done ..and we certainly not starting from the ground up over the weekend.
TLDR: Some other developers and I went to a hackathon, met an 'idea guy' there, and won first place. Afterward, he claimed that he and a friend who wasn't there owned "the startup". We then proceeded to write obnoxious emails to each other.
Whether you feel like this is acceptable or not does not matter: If you want to send a message and it ends up in the other side receiving the message AND being uncomfortable, you're pretty bad at sending messages.
I'm sorry, but your world view is very outdated. It's cringe worthy.
It's like hearing my parents talk about 'the blackies' or as my Mum once said about a parade, 'it's nice that they get out sometimes'.
It's the underlying attitude that they're different somehow, that you don't really believe in equality, you're just doing it for show. Using gay as a jokey insult says that deep down you believe there's something wrong with being gay.
Venturing rather off-topic, but: young folks today learn the epithet "gay" as in "loser" separate from the homosexuality aspect. It's nearly a homonym now. Still, the potential for confusion is great enough that one should stop using the word "gay" to mean "loser".
Sigh, everyone here is totally miss-understanding the term. Can used as: dude that shit is totally Gay. Can be interpreted as "totally cool, awesome, far out" has NOTHING to do with being a homophobe. NOTHING.
Source: Live in NYC, and with a linguist.
And "Fucking Coders", etc, implies awesome coders. I'm confused how posts here don't understand the slang being tossed around.
---- Hi, Billy. Thanks for telling us about your other company with your friend. I'm a little disappointed that you weren't open that you're already in this space. And that your existing company is in direct competition with the one we all agreed to start that weekend.
However, I'm flexible. I'm willing to license my code to your other company for a flat fee of $10,000. This includes all intellectual property rights to my software.
That fee is reasonable given my time and experience. I think that the others on the team will have similar opinions about their contributions.
If you choose to not take me up on my offer, I wish you luck finding programmers to re-implement the software from scratch.
Sincerely, Programmer. ---
... does anyone not understand the legal rights behind IP? Billy has zero rights to use the software in his existing company. He knows that, which is why he's trying to bamboozle everyone.
Instead of arguing about an "existing" company, they need to talk about their code. They own it. They control it. No one else has the legal right to use it.
What's the problem? They don't give Billy the right to use their code, and he goes away.... or gets sued.