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Comment by taylodl | Hacker News Reader

I treat solo entrepreneurs the same way I treat small companies that have a high probability of not remaining in business in five years: a risk. A risk doesn't mean I'm not going to do business with you, it simply means I have something needing to be mitigated. Typically I mitigate that risk via the use of an escrow service.

If you're not familiar with escrow services they are a mutually trusted 3rd party. You provide your source code, build tools, etc. - everything needed to re-create the distributed artifacts - to the escrow service and they verify that has been done. Should you go out of business or some other event in your sales contract is triggered the escrow company will provide those materials to your customer. My recommendation would be to find a reputable escrow company you like and utilize them. You can have them on the ready when you're creating your sales contract.

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This must be a huge contract otherwise I'd just charge you an insane premium if you asked me to do that, such a PITA

I think the idea is that it is the professional thing to do if you intend having clients that your business' demise will cause issues for.

ie. It shouldn't be at the suggestion or cost of a single customer, it is an accepted business cost to you.

Huge contract? Not really. Especially when many larger clients whom you'd love to have for a reference will demand it. Take care of it up-front and don't wait until you get into contract negotiation. If the client knows you don't have a software escrow service already in place they may ask for the moon. Head that off at the pass and have it ready to go from day one.

In fact having it ready to go might help you clinch the deal. If you're part of an evaluation and you're ready to proceed and your competitor has to go and get this setup - you're more likely to get that business. Likewise if you're the competitor who's been caught with their pants down then you're more likely to lose that business. Every salesman I know is always looking for something to give them an edge for closing a deal!

But I don’t have to please every client and don’t have to jump through hoops for small dollars. It would depend on the product/market if this was the normal expectation then I’d find that out rather quickly and may decide differently. But I’ve never been asked for anything like this and would gladly just say no if it was a small dollar value at stake.

I guess it would depend on the size of the sale.

My former company sold on-premises enterprise software. Sales were usually a monthly fee in the $10k+ range.

Our company started quite small: 4 people, and in Australia but selling into the US and UK mostly.

Basically every one of our customers wanted source code escrow. The cost to use was minimal, both in effort and for the escrow agent.

This is a very standard thing to (a) do, and (b) be demanded in a contract.

It's not zero effort, but it's not that hard. There's plenty of firms provide the service.

Every time my former company shipped a release, we'd bundle up the source code, libraries, build scripts, etc, burn a DVD and send it off to Iron Mountain. Every time you do a sale that wants escrow, you add their details to the list and send that off to Iron Mountain too.

These days, I'd probably ship a Docker or VM image from the CI system: you need to give the customers something they can use to create their own builds.

We had some customers who actually tested the process, and when the company was sold and the product canceled, one customer took the option of getting the source code, and continued to make their own builds for a bunch of years afterwards.

Do you have any recommendations for escrow companies?

I don't. When I last worked for a start up someone else took care of the software escrowing and I don't remember which service we used. Now that I'm on the other side of that transaction I leave it to our procurement group to evaluate the software escrow service.

I've used both a local IP law firm, and Iron Mountain.

The local law firm kinda surprised me that they did it, but it was very convenient for us, and cheap.

As we started selling to bigger companies, we found they were less comfortable with a smaller escrow firm, and eventually one actually demanded that we use Iron Mountain. So we switched to them. They were both a little more thorough, and a lot more expensive, but it still was a pretty minimal cost overall.

(edit: Looks like they've sold that busines -- here's a link I found https://softwareresilience.nccgroup.com/software-escrow/)

so if they die you get their IP for free?

doesn't it put a big incentive to letting them die?

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