“Why not just work on your startup, while still being employed ?”

September 25, 2008

I have had more friends / colleagues asking me this question recently..

“Why not just work on your startup while still in AdventNet and once it start making some decent money you can then quit ?”

That is not the right approach for a few reasons..

#1 : You cannot focus well on your job.
#2 : You cannot focus well on your startup.
#3 : The work which you did during your employment, might belong to your employer and not you.

Read this thread in Hacker News for details on how one employee was ignorant of such issues and now his over Rs.4.5 crores / month earnings from his startup might actually belong to his employer.

Quotes from the thread…

9 points by samson 29 days ago | link
“The tragic part for Maestri, at least is that if he’d just waited until he’d left Freewebs to begin development, his former employer would have a far harder time making the charges stick.”

So legally, the advice that I’ve heard (even here at hacker news) of keeping your day job, and work on your project on the side is usually wrong. And even more so if you work at a tech company already

3 points by nickb 29 days ago | link

That’s a great question!It depends on your employment contract and the law in your state/country. It also depends greatly on the area your startup’s in and whether your startup is even remotely similar to what your employer is doing and whether you might become their competition down the line.

A chance of getting entangled in a lawsuit increases exponentially if you’re going to take on your employer. Also, most emp contracts usually also state that you cannot contact your employer’s customers or people you met through the company’s business engagements for at least a year and usually more. Also, don’t try to poach current employees or you’ll get sued. Never use employer’s computers or any other equipment that belongs to them for working on your startup (that includes take-home laptop that they might have given you). Don’t even use their Word or Outlook for your own stuff. Delineate your startup as much as possible and don’t share your ideas/prototypes with anyone at work since they might testify against you when called in front of a judge.

I know of one entrepreneur who got sued by a former employer and the argument they used was that even though he quit before he started the company, the IDEA was conceived while he was working for them and that he could not have come up with the idea had he not worked for them. Needless to say, the charge was ludicrous but it diverted his focus off startup and it also scared some investors and the startup was stillborn.

PS: IANAL but I know a lot about law and have been advised by many lawyers so take my advice with a grain of salt.

Also, in my personal opinion, the below point is important…

1 point by startingup 29 days ago | link
Let’s also consider an employer’s perspective here. OK, you are a Y Combinator start-up, and you have hired your 18th employee (there are at least 10 that have 20+ employees, I think). If that employee were doing something like this on the side, would that sit well with you? How would you draw the line?

Forget the ownership aspects of whatever the employee is creating on the side. Would you be happy as his/her manager to realize his/her mental efforts are going somewhere else?

Think hard before you answer

My advice to you :

Don’t do something stupid. Don’t say something like “I will make sure it is not known”.

If something is worth doing, it is worth doing well; with all your effort and focus.

Plan and execute it well. All the best !!

What, Why, Where, How and more on the proposed startup

September 23, 2008

Less than 10 days to get relieved from AdventNet and to start working on my new venture.

OpManager OnDemand is almost ready for release. Initial testing and bug-fixing is complete and the team is now into upgrade testing in the local grid setup and if there are no unforeseen issues, there should be an upgrade happening in the IDC grid this weekend ; before I get relieved.

I have started getting questions from friends / colleagues on my proposed startup. I have put them here for the sake of those I did not bump into, in the past couple of weeks.

Decided on what to do (or) what problem to solve ?

The first one I am going to work on will be a SaaS based solution to manage residents welfare association.

Solutions for schools and for clinics will follow later.

Film production management software, may not be taken up in the near term.

Why association software ?

I know of the pain points in managing such an entity and felt that I can easily sell early versions of the software to local apartment associations in Velachery and surrounding suburbs. This is the region which had witnessed major growth during the previous real estate boom and which has a high density of IT professionals, so easy to target them.

Also the essential components and the experience gained in building this software will equip me in targeting other segments (schools and clinics) and by that time, “netbooks” (affordable net enabled notebook computers) would be available in the market from multiple players, at competitive rates, so as to enable adoption of SaaS based solutions.

Are there existing solutions addressing this market ?

When I first searched for existing solutions with the keywords “Apartments Association Software”, I was surprised to not find relevant, useful results. Then, after hopping through multiple keywords, found such software. The problem was with the keywords : I should have used the keyword sets “Condominium Association Software” or “Home Owners Association Software” or “HOA Software”.

Yardi seems to be the big guy with a much broader portfolio and revenue of over $50M, while there are several other medium/small players too; like Buildium, CondoConduit, AssociationVoice, CondoManager, Advantos and more.

Happy, because existing players validate the market and present themselves as targets to beat. This is far easier than a new market and an unclear feature set.

How are you planning to sell ?

My initial market is going to be Velachery (Chennai, India).

Here in Chennai, even with the out-sourcing/off-shoring opportunities, people still earn in Rupees. The benefit of the cost advantages mostly goes to the companies which undercut US rates, while still paying Indian salaries. Such companies usually have very weak presence in Indian market. So, to sell to Indian customers, I need to come up with some “real” Indian rates. My bicycle should come in handy, for my sales visits. Once I have my solution working fine for a decent number of associations, I would then target a bigger market.

Where are you going to have your office ?

I will be working from home, at least for a couple of months.

Are you going to employ someone ?

No, not at once. May be, a little later.

Platform, Language ?

Google AppEngine, Python.

Started coding ?

No, only from Oct 1, 2008.

( Your feedback and suggestions are welcome : Either as comments to this post or to r.rajkumar [at] gmail [dot] com)


September 8, 2008

Felix Dennis on talent..

Anybody wishing to become rich cannot do so without talent. Either their own, or far more likely, on the back of the talent of others. Talent is indispensable, although it is *always* replaceable.

If the talent is trying to make itself irreplaceable – like say, only one person knows how something works and they do not like documenting it or training others. It shows insecurity of the person who does not want to lose the job, which is bad for the organization as well as for the person.

Bad for the organization because, if the person either wants to quit or cannot turn up for work, a crucial piece of work cannot be completed.

Bad for the person because, though the person might think he/she is crucial for something work and cannot be fired, they are making themselves tied up to the work and hence cannot be promoted to better opportunities.

A talent should learn and grow. And then to teach others and make them grow. And keep repeating the process. If there is not much you can learn to grow, then quit and join some place where you can.

Just remember the simple rules concerning talent: identify it, hire it, nurture it, reward it, protect it. And, when the time comes, fire it.
Youth is a factor. By the time talent is in its mid-to-late forties or early fifties, it will have become very, very expensive. Young talent can be found and underpaid for a short while, providing the work is challenging enough. Then it will be paid at the market rate. Finally, it will reach a stage where it is being paid based on past reputation alone. That is when you must part company with it.

Some companies find even more innovative ways to tap the energy of youth. If you can find younger talent (like, just out of high school) who cannot afford college education and spend money to train them in essential theory and practical work requirements (like it is done in vocational schools), you have a lot more time to extract labor out of the youth. Of course, such a talent will initially be paid slightly less (since the company has to spend money to train them), but they would be happy anyway, because they would not have got the opportunity to earn even this much, had they followed their own paths. It is a win-win situation, at least in the short term. Longer term, the talent needs to keep acquiring relevant skills and if required, some certifications, to improve their careers.

The French impressionist Degas once said: “Everybody has talent at twenty-five. The difficult thing is to have it at fifty”. True enough. Most talent does not survive undiminished through its middle forties, although there are some stunning exceptions to this rule of thumb.

Actually talent does not diminish as much as Felix/Degas portrays. Experience counts. But in the IT field, fresher talent is relatively a lot cheaper and one does not need to retain many costly, experienced people. Just a few would suffice to guide fresher, cheaper talent which has better stamina, an urge to learn new stuff, working like crazy to move up in career.

Most older talent prefer to stay in the comfortable zone, to lead a contented life. To keep earning the same salary with small raises every now and then (mostly the salary is just adjusted for inflation – it is not actually a raise). These kind of people are more likely to be less innovative.

As organizations grow very large and at some point stabilizes the employee count at some level, there is a high possibility that most of their employees get into this mode. My guess is that the average age of IBM employees > average age of Microsoft employees > average age of Google employees.

Not all talent enters the comfort zone as it ages, but most do.

Talent is usually conscious of its own value. But the currency of that value is not necessarily a million-dollar salary. The opportunity to prove themselves, and sometimes the chance to run the show on a day-to-day basis, will often do the trick just as well.

Yes, until a point. After which the talent either..

* falls into the comfort mode (very bad) or
* jumps ship for a better salary (and of course with better opportunities to prove themselves and to run the show) (very good) or
* dares to build a ship on its own. (crazy !!)

Just in case you do not already know: I am crazy. 🙂

Ship building commences on Oct 1, 2008.

(The quotes are from Felix Dennis’ book How to Get Rich: One of the World’s Greatest Entrepreneurs Shares His Secrets)

The Man In The Arena

September 3, 2008

Just changed the blog’s title, from the default “Rajkumar’s Weblog”, to “The Man In The Arena”. For those who may not already know the context..

Came across a quote by Theodore Roosevelt, referred to in this TechCrunch post. Yossi Vardi uses it to draw an analogy to entrepreneurs.

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

From the Wikipedia entry related to this quote…

Someone who is heavily involved in a situation that requires courage, skill, or tenacity (as opposed to someone sitting on the sidelines and watching), is sometimes referred to as “the man in the arena.”

In this blog, I will primarily share with you my personal experiences, from the journey of being “the man in the arena”. Hence the title.