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16 Comments

Should I tell my boss?

Hi fellow Indie Hackers,

I would greatly appreciate your advice here!

I'm the MD of a company of 30 employees. The owner is focussing on other things and I'm updating him on business operations once a month.

I've had my own business in the past, and I'm currently trying to establish a new start-up as a side project, which I hope will lead to full self-employment again.

The thing is this:

  • According to my contract, I'm not allowed to perform any commercial side-activities. This has been an issue with other employees in the past, and I know it's a sensitive issue for the owner.
  • The idea I'm trying to bring to market, is in the same branche as where I'm employed. I've had the idea for years, before I joined the company, but my boss actually has been pitching a similar idea to me recently. However, with my background I'm able to realize the idea, for him it's just an idea that he can't realize himself and imho not worth much (I didn't "steal" it from him).
  • I'm trying to sell the MVP and got some commitments already, but am very careful reaching out to prospects that I know might have a relation with the owner.

How should I pursue?

This is the best job I've had in years, and I can't risk getting caught and lose it (wife, kids, mortgage, and so on). On the other hand, I've found that the thing that really makes me happy is to build my own business, and it's starting to get traction (sales, positive responses, and so on).

Should I tell my boss at this stage, or wait till my business is more viable?

Pros:

  • In this stage of the company, I can't be replaced (well, I could of course, but there's no successor and we're in the middle of a lot of things that aren't easily transferred).
  • My boss could become one of the first customers.

Thanks for your advice!

  1. 5

    Yes, you should tell your employer. You are currently doing the #1 thing that is forbidden in a common employment contract: Starting a commercial side-activity in the same market as your employer. That's a no-no to keep hidden, ethically and by contract.

    The best thing you can do is to tell your employer that you are looking to do this, and see the reaction. The best thing that could happen to you is that you are getting the support of your employer or a few restrictions, the worst thing that could happen is that they tell you not to engage in that activity, in which case you could look to finance your side-hustle another way, such as a different job or consulting.

    The worst thing that can happen here is that your business takes off, your employer hears about it, fires you, sues you and according to your contract there you will absolutely lose everything you have built (and probably more).

    1. 1

      Thanks for sharing your thoughts, I'm a fan of transparency too.
      I'd like to add that I'm actually co-founding this together with an independent software developer, as I've just mentioned in a comment, but I guess that wouldn't make your answer any different.

      1. 1

        I am not the GP but this wouldn't matter. Think about it this way. What if you were the current owner and one of your employees started a competing business on the side. This is not only wrong ethically but you wouldn't be allowed as per the terms of employment contract.

        Best you can do at this point is to bring it up immediately and work out a deal with the owner. If your startup does take off, you will be in trouble later on.

  2. 2

    I wouldn't do anything until you have validated the idea first are are sure this is something you want to pursue before creating issues for yourself.

    You need to be careful, do you have any intellectual property clauses in your employment contract?

    If you do go ahead, you should be open with your employer but be careful with your choice of words, you don't want to indicate that you have already generated IP that could be owned by the company.

    1. 1

      Thanks kylegawley for thinking along. IP-wise I'm safe, but good to keep in mind.

  3. 2

    In my experience professional communities are much smaller than we realize. I worked with a guy who was fired simply because his company found out that he had filed articles of incorporation for a business he wanted to start. He and I worked for different companies that were subcontracted to a larger company, were working together on-site at that larger company, and an employee at that larger company went digging because she was suspicious because of some other circumstances (it would take paragraphs to explain the whole scenario).

    Anyway, I think you're at a higher risk of losing your job than you think. If you signed a contract that prevents you from performing commercial side activities, but you continue to do so, then don't be surprised at the end result.

    If you really want to build your own business I think you have two approaches:

    1. Abandon your idea, come up with a completely new one that isn't related to the field you're working in, and then talk to your boss about your idea and ask if he would mind if you worked on that on the side (emphasizing that it doesn't compete with his business, and your work for him would take priority).

    2. Talk to your boss and tell him you had a similar idea as his, and tell him you would like to partner with him outside of work (i.e. you would form a separate company) to turn the idea into reality, but that you only want to do it if you can have equal stake in the profits. DON'T tell him you've already been working on it! If he's entrepreneurial, and doesn't think he'll be able to pull it off himself, then he might be open to the idea. Then give it some time before you tell him you have an MVP ready.

    In both cases I think it's important to talk to your boss and get him on-board with your side projects, and to have your contract amended to allow it.

    1. 1

      Thanks! I like option #2 and I strongly think I should be open about it.

      I think my boss would be so interested that 1) he'd like to become one of the launching customers, which is nice, and 2) he'd like to get a stake in the company. The latter would not be ideal though, because I'm actually co-founding with another person and we decided to bootstrap it as long as we can. Quite a puzzle...

  4. 1

    You are Breaking rules which are written down in your Own contract on purpose.

    Sure you should. Otherwise he will find out later and you may be beaten down on purpose as well.

  5. 1

    Absolutely. What you are doing is morally wrong.

  6. 1

    Sorry to only post this now, should have been included in the original post: I'm actually co-founding, partnering with a self-employed developer. He's working on the project fulltime and currently making the MVP after we got some prepayments, whereas I'm getting the product in front of potential customers.

  7. 1

    I’ve done 3 conflict of interest determinations with a previous employer. Regretted none.

    1. in 2010 I was making a mobile app totally related to my work and they were like “yeah, no problem. You can even talk to people at work about it off hours”. I don’t think they realized how big of a market mobile apps would become.

    2. fast forward I was on a project that really needed a work around for employees who’s contracts were coming due but they could re-sign for complicated reasons. I was thinking about starting a business and was happy to employ some of the key folks myself and contract them back. My boss’s boss thought it was an interesting idea but the lawyers said “nope”.

    3. I was re hired by a company but still had shares in my related start up that I was leaving. I had to do a conflict of interest that scheduled how I would divest and some other caveats. It was reasonable.

    In all 3 cases, I never regretted being transparent. I think the first COI was actually a career boost for me because very senior people had to sign off and saw the ambition I had in wanting a side hustle.

    If you have business ideas your company may like, consider intrapreneurship. Lots of fun, little risk.

    Also consider all the things you can do that is none of their business like training yourself in skills you’ll need when you start your own business someday.

    1. 1

      Thanks 80dstudio, very helpful feedback. I too think that transparency could lead to even nicer things. Will give it a serious though over the weekend.

  8. -5

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    1. 2

      This sounds like fraud.

      1. -2

        This comment has been voted down. Click to show.

  9. 1

    This comment was deleted 3 years ago.

  10. 1

    This comment was deleted a year ago.

    1. 1

      Agree on your thoughts Primer, thanks!

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