Ask HN: I want to propose spinning out my work from current employer. How?

There are two ways to approach this:

1. “I am leaving the org. If you’re interested in selling this part to me, I would be interested in buying it.” Absolutely be prepared for that to be your last day and for them to say no.

You should have financing lined up and a business entity prepared to acquire the IP, pay for infra, etc in the event they entertain the offer. You’re an insider who wants to perform a divestment and M&A transaction. Include the cost of a good M&A firm to advise you in your cost estimate. /r/fatfire has some recommendations here.

2. Quit. Build it yourself. Compete against your old employer with what you know. Be prepared to grind and still fail.

Your first (absolutely mandatory) step is to talk to an attorney. Explain the situation, and bring your employment docs with. Which path you take will be governed by what you agreed to when you were hired, your risk tolerance, your jurisdiction, and your resources available to you. Expect to spend ~$500 to have the conversation.

Good luck! No risk, no reward. Everything is negotiable.

https://www.pon.harvard.edu/daily/batna/translate-your-batna...

Thanks. This is very much a non-core thing. A useful tool. If it came from a 3rd party, they'd be willing to pay $1000-5000 per year. I'm willing to bet that there are a lot of others also willing to do this.

I believe it is something that would be the basis of a sustainable and profitable business, but instead they are killing it with neglect - because it is a non-core thing.

Would they sell it more willingly if what appeared to be a disinterested third party made them an unsolicited offer? If yes, consider such a theatrical move. Emotions are the bane of rational business decisions.

Talk to an attorney.

If it's a non-core feature to their business as you say, then I'd leave and build it myself from the ground up.

What do you think of "1B": offer to move into a consultant role?

I don't have personal experience here, just working off stories from others, but the benefit to starting as a Consultant on X is that you 1) force yourself to stand up your business entity and have a "First Customer" relationship started, and 2) "help" them to externalize the maintenance burden/risk on X.

I've heard (again, not something I've personally done, just stories I've heard of other successful people), that some companies love the chance to move opex to external consultancies and shift it to a different "more transparent" account in the budget if given the right opportunity. ("More transparent" because unlike opex spent on salaried FTEs, consultants have to bill their hours and that becomes auditable.) Especially for risks/opex outside of core business.

After you've established yourself as the go-to Consultant on X that builds up leverage to then bootstrap into the M&A with a conversation like "Since we are now the experts on X, would you consider selling X to us and further externalizing it from your expenses?" The company externalizing that maintenance risk/cost of labor that they've been spending on X should have a better idea by that point of what X as an asset is truly worth to them and possibly how much risk/burden they still expect to spend on it in the future.

Lots of ways that approach can backfire too (again, you're just as likely get fired as to get a consultancy). But also overall it looks a lot less like a "hostage negotiation" than some of the other suggestions and gives you a longer built-in "runway" for take-off than outright quitting first. Not that that runway is entirely safe as a business plan either (if your focus is on buying the IP of your first client you likely aren't busy diversifying your clients).

This is not a bad approach, although it carries similar risks to my suggestion. Time is non renewable, so OPs approach will be governed by their time horizon and risk appetite. You can move fast if you’re confident and prepared, but you can derisk further at the cost of time with the approach you mention. It’s also heavily dependent on your relationship with the org and your contacts within.

But you cannot take the tool with you. It belongs to your company (you built it as an employee using the company’s resources).

I don’t get it. I cannot just quit my company and tell them “BTW, I’ll take with me all the code I wrote for you. Pay me X for it if you want it”. Lol. They already paid me (salary) for the code I wrote for them.

> I want to quit… and I want you to give me $500k

Will be the only parts they hear. Oh, also that you plan to steal their IP. You made the tool as their employee, on their time, it is their tool, not yours.

You’ll be shown the door promptly.

> The company I work for is in the middle of "modernizing" our backend tech stack. As part of this, a few years ago I was assigned a task that could not be completed with anything we had or could find in the marketplace. I designed and implemented a tool that allowed us to move forward (I'm intentionally not describing it); it has now been part of our production process for 6+ months;

The company had a problem (which was probably some idiosyncratic self-inflicted thing), and they hired you to solve it for them. They could have hired any one of thousands of other people to solve it, but it happened to be you. You solved it, and now it's done, which is great (mainly for them).

> Somewhere between $15-20 million ARR depends on it and yes, it has been rock solid and dependable.

Does any of that ARR in any way depend on other things too? Like a brand, marketing, sales people, some product, etc?

Not trying to be too snarky, and you don't provide too many details, but generally there isn't actually much value in tooling/optimizing backend or operational things. These things are only valuable in the context of the rest of the company, which they own, not you, so they can just keep on doing what they're doing and hire people to solve the rest for them when they need to.

It sounds like what you built just isn't that critical. Sure you could try to blackmail your old company, but why? If you really think it's that useful a tool, can't you just write it again and rid yourself of the IP entanglements?

Probably your employer doesn't see the value of what you built, which means they're unlikely to give you much for it anyway. What if you wrote the new version and then offered it to them with a discounted support contract?

If that is critical to your employer then it will be a difficult thing to pull off.

Otherwise you could do what the founder of Roku did. Roku's founder made Netflix as his investor when Netflix decided to scrap the internal project he was leading.

I'll look into that story. That's exactly what I'm thinking. My employer has a lot of house-made tools that they would rather get from a 3rd party - so they can pay for a reasonably-priced support contract and then not have to deal with the upkeep. They really don't want to be in the business of making software, they want to be in the business of providing high-value services to their clients (who will never directly use any of the software).

Your description reminded me of a book: The Great Game of Business - Jack Stack

It describes employee-owned companies and frames the type of spinoff you described as a positive investment, mutually beneficial, to re-leverage debt and provide growth for leaders that are blocked.

Obviously I don't know the situation and the mindset of leadership, but I wouldn't ridicule what you suggested as stealing their IP. They're getting a % ownership in a company in hopes of it becoming a valuable asset -they'd be making a choice.

Has anyone tried to do this?

Yes, and everyone who did got served a cease-and-desist. Not everyone however asked for 500k from the aggrieved on top of stealing their IP. That's some next-level ballsiness worthy of a true pioneer.

the only time most companies will do this is if you goto their competitors.

OP problem is predicated on this being a thing that is useful to tech in general not a particular market