Hold That Thought (It May Be Worth Something)!
A lot of really successful entrepreneurs didn’t walk the straight and narrow. Sometimes, you might feel that things aren’t so clear-cut, and sometimes, you need to get your hands dirty. Here are two guys who did just that:
Source: The Technology Cafe
That’s Paul Allen and Bill Gates. They probably need no further introduction. As precocious and relatively well-connected kids, they hacked into their school’s rented mainframe for free computer time. They got booted out but continued to hack into private computing systems well into their Harvard years.
Had they not done what they did, they would never have developed the skills they needed to change the world the way they did. Microsoft simply would not exist.
Warning: you probably don’t legally own all your ideas
Not the ones you worked on during company time. Here’s the thing — ideas for small businesses can come from anywhere. Unsurprisingly, many business ideas come to would-be entrepreneurs while they’re currently employed at another company or are still in school. Also not surprisingly, a lot of entrepreneurs start working on their ideas while otherwise occupied with something else.
Hey, you got to have a safety net, right?
Sure, you do. However, one huge problem that has been continually overlooked by many future business owners currently working in or with other companies is the use of that company’s resources to develop their own products or processes.
Companies (and schools) typically frown on using resources for personal gain, though this might sometimes be overlooked.
In Bill Gates’s and Paul Allen’s case, they were both booted out and blacklisted a few times, so things are kind of a wash. Few companies would ever stand for using their resources for an employee’s pet business- especially if the employee’s developing a business that would compete with it in some way.
Source: realizedworth.blogspot.com
Simply put, entrepreneurs developing their small business ideas on their employer’s or partner’s time is playing with fire. Employment contracts often stipulate that anything an employee develops with company resources (including time) becomes that company’s property.
There have been incidents where employees unofficially developed tools and processes to help them with their current jobs and then resigned, hoping to monetize their innovations—only to have their old company sue them for breach of contract. Some companies have even gone to the lengths of having private investigators sort their garbage to find evidence of malfeasance.
Some companies even include stipulations stating that they own innovations you made on your own time—though this cannot reasonably apply if your job is totally different from the kind of innovation you created. For example, a computer programmer working for Oracle cannot have his novel burrito recipe taken away from him by his employer.
If he developed a program, though, he’s probably done for. The same principle applies to seeking other employment, but this blog isn’t about that.
Another concern is non-compete clauses- parts of contracts prohibit you from going head-to-head against your employer during or after employment. This is far less of an issue in the American setting unless you compete with your old company within the same geographical area.
Let’s say you have a job making gyros and decide to open a gyro store in the same city—probably not going to fly. Another state? That should be okay. Courts have thrown out non-compete clauses in contracts on the grounds that they go against the spirit of capitalism, but they have also been upheld in other cases.
Source: carillonregina.com
So, you’re finally going for it! A few things to consider:
5.) Copyright and registration expenses
While copyrights are relatively affordable at under $50, patent costs are ridiculously high, running upwards of $10,000 just to get everything done, not to mention taking months to process. If you’re a blabbermouth, well… knowing to keep your mouth shut should pay off.
4.) Legal issues
Get a patent lawyer! And take everything in this article with a grain of salt. With legal issues, relatively few things are ever certain. Intellectual Property law is currently being challenged by a host of new technological innovations that weren’t around a generation ago.
3.) Is it worth competing with your previous employer?
Think really, really, really hard if you want to compete against your former employer. Unless you think you’ll have the resources to take them on legally, and if they can grind you down through their sheer size, you probably shouldn’t do it. But if you have to, never leave a single trace of evidence that might be taken to mean that you hatched a plan to compete against your company while employed.
2.) Create an LLC
One suggested solution for entrepreneurs is to set up a shell corporation or LLC and have all your concepts (which you developed quietly on your own time) patented or registered under that company’s name. Opening a separate LLC business bank account is important to maintain financial separation between personal and business assets, providing extra protection and easier accounting. Again, proceed with caution.
1.) Develop your brand BEFORE you launch
In any case, develop a brand identity to complement your concept—this not only helps differentiate your business but also lets people know you actually exist, which in turn makes it a whole lot easier for your ideas to take off once you’ve started.
Business cards, anyone?