How to negotiate your side project with your employer? Any ideas?
Hello IH!
I would like to have your advice...
I created an app (SAAS) as a side project.
The CRM company where I work as full-time programmer wants to offer this app now to their clients under the CRM company name (turning my app to something like a white label app).
To be considered:
- I don't want to sell my app at this stage (I am still in alpha).
- My employer has many customers that could use my app.
- I don't know how to price my app/ I don't have a revenue model yet. My competitors are charging between $20 and $150 per user.
- It is an app for companies.
What would be the best way to negotiate?
what does it say in your employment contract about IP and/or moonlighting?
See if selling your app as a white label app could provide good revenues for you. If it's the case, you have your first customer.
From a legal point of view though, you should verify if you are authorized by your current contract with this company to have this kind of business, especiall if you develop for this project during your work time.
Laws vary from a country to another, but be extremely suspicious on these points. You want to avoid any possibilty your boss claiming any right on your app.
Hey Leo! First of all congrats on having a usable app and congrats on getting a customer-that's not an easy feat.
If you're ok with "white labeling", you could definitely allow them to sell it under their name. One option would be to offer them a discount for using your brand and app name, but if they want to white label it, they pay a higher price.
However, I'd figure out what your goal is.
If your priority is revenue, figure out which option would net you the most income. If you'd rather make sure the app has your brand & name, make that the priority. There are a lot of options, it just depends which direction you want to take it.
Thanks Noah! I think that the brand is very important otherwise it is almost impossible to get new customers...
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Get a lawyer. If you start working on your app during regular work hours, you can risk losing it.
Hello! I work on my project on the weekend. Never during the work hours.
Let's say you get a deal with your employer, and they start selling your product. How will you deal with feature request, bugs, etc?
Don't get me wrong, I'm playing devil's advocate here. I sincerely hope you can make this work, I just see it as a messy situation.
If I were you, I would try to make a deal, try to make it work for a couple of months, and then quit to work full time in your app.
I think you first need to ask yourself what you want to get from this partnership.
If the partnership brings you your first customers and allows you to learn from them, refine and iterate on your app to keep improving it, then you could simply think of it as a Beta period, where the value you get is from the knowledge gained by those using the app.
If you want to go with this approach it might be a good idea to negotiate with your employer to cover your costs (servers etc) and allow you to work in-house on the project every so often, maybe this is one day per week.
Then, when you are ready to start charging for your app, you can reconsider your options, maybe you allow the company to keep their existing clients on the app for free, but new ones have the charge associated.
One thing to consider though is if the company is going to apply a charge for your software to their clients, if so, you should negotiate a commision from them, even in the Alpha/Beta period.
Thanks! What you think would be a good commission?