Ask HN: We're about to enter into a partnership with a company / Advice needed
16 comments
At this moment only acceptable structure for you, is to give to other people big seller discounts, if they could do large volume sells.
All other models are not viable for you at this time at this market, because you are too weak to struggle.
If you will accept other company to access your internal data, it will be very easy for them to just copy all you do, and then say "you don't need anymore, we could do all this stuff without you".
Even if you technically could copyright your stuff, they will learn how you done it and could very fast repeat all parts as clean room.
All other models are not viable for you at this time at this market, because you are too weak to struggle.
If you will accept other company to access your internal data, it will be very easy for them to just copy all you do, and then say "you don't need anymore, we could do all this stuff without you".
Even if you technically could copyright your stuff, they will learn how you done it and could very fast repeat all parts as clean room.
Yeah but the product is not ready to sell yet for more generic use cases. There is more work that needs to be done and we're estimating that right now on how much effort is required to make it production ready, and if we can bootstrap ourselves or to look other ways.
Thanks for your response.
Thanks for your response.
I said, beware of give access to internals of your technology. Because, this is your value NOW. Later, when you will have many customers, they will be additional part of value.
Sure, you should decide yourself, to whom you could trust, but for me now, all looks too clear - they just want to assimilate your technology, or if lucky, assimilate all your command with technology. I cannot decide, if this is good for you from what I know now.
Sure, you should decide yourself, to whom you could trust, but for me now, all looks too clear - they just want to assimilate your technology, or if lucky, assimilate all your command with technology. I cannot decide, if this is good for you from what I know now.
I've received another response from
Blind platform since I've posted the se question there as well. It says "There are 200+ LCNC platforms and this is a very competitive sector. Keep your day jobs and bootstrap until the product is ready. Have them refer you to one of their customers and pay them a flat one time referral fee. Make money and grow your own customer base and work on getting real investors - partners will follow."
What do you guys think about this as well?
I think if you can't answer this, you're likely to face other issues down the road. If they're offering to pay you they'll no doubt want you to sign a contract which will give them all your IP. You won't have a business after that.
Yep, thats correct. We're considering another way of approaching this after receiving good advice from the communities that I asked the question and also brainstormed this with my co-founder. Will share more details soon.
The ownership of the IP/product will be most contentious topic I'm guessing.
Be very very careful about the legal side of things, work with a lawyer that knows this topics. Being on their payroll can give them rights to the product/your work depending on the laws of your country.
Make sure the include every detail in the contract.
Be very very careful about the legal side of things, work with a lawyer that knows this topics. Being on their payroll can give them rights to the product/your work depending on the laws of your country.
Make sure the include every detail in the contract.
The company is actually registred in US through Stripe Atlas. Will try to find a lawyer that we can consult on this.
Thanks for your response.
Thanks for your response.
You might want to explore case studies or success stories of similar partnerships online to gather insights. Additionally, open communication and setting clear expectations from the beginning can contribute to a fruitful collaboration.
Best of luck with this exciting new venture!
Best of luck with this exciting new venture!
"We certainly need to give ownership of the company to the other part, but we want to keep the decision-making of the product mostly to ourselves but with the flexibility to align with the requirements of the clients that they're bringing."
Yea, this rarely, if ever, happens long term.
Yea, this rarely, if ever, happens long term.
Thanks for your comment. At least short term, until the product is in a more stable point.
What do you think about other parts?
What do you think about other parts?
I'd worry about the legal side of things, so finding a lawyer with experience would do you good. All the best mates.
Thanks man!!
Pardon me for being a bit vulgar, but it is a bit necessary because you're headed towards being bent over and used and made to pay for the spit; I can tell because you're even considering certain things. You're operating from a thirsty position and believe that they hold .
>They have demand for their services
How do you know? Do they have demand for their services or do their clients keep asking them for something similar to your product which they don't have which lead them to you in the first place?
>they want to sell our solutions, after polishing it
What polishing exactly is there to make and who does the polishing? I bet that the first and probably the only polishing is to slap a big logo or "Provided by X" company and removing any sent of yours.
>They want to see the option where they would take care of these expenses, through a payroll from they're existing company.
:D :D :D Obviously don't become their employee.
>We however opened a company and want to keep it, but try to involve them in our company with some kind of equity structure or something
Why are you even talking about equity here? If there' any conversation, it should be about you considering hiring them to sell your product, and comparing them to many other organizations who can do that for you. On commission, or something like that. Think of them as a sales organizations, or a recruiting agency and so far they haven't made any sales or provided you with any successful hire yet (job to be done). They claim to have many clients they can sell your product to, your reaction should be "Show me". Start with one sale and see where it goes.
>they are interested in helping us with business development, bringing us clients, and the sales part, so we can focus mostly on implementation/tech parts
Helping? OK, then tell them to bring you a client.
>They have tremendous experience in different industries
How do you know? Did someone there tell you?
>and experience working with big corporations
The pitch started with them selling to smaller clients.
>Also, they have 50 people working for them and they are saying that they can share some of their resources with us.
To do what, exactly?
>For us, it’s hard to find other investments at this point. We will need to bootstrap it ourselves but there is a fear of being late to market because of slow development since we need to keep our full-time jobs for which I get paid 50 euros per hour and my friend \~5000 monthly.
You want clients. They claim they can bring you clients. Talk is cheap; show me the money. You pay them for each client they bring. Payment is tied to a successful outcome: i.e: they make money when you make money.
>We certainly need to give ownership of the company to the other part
I don't have my glasses and thought for a moment that you wrote you needed to give ownership of the company to the other part. I sure hope you are not being serious here.
>Any advice on any known partnership models for this case, or what kind of structure do you guys think that would be the best case for us?
This is not a partnership; this is voluntary servitude. Keep the IP, keep the company, don't be their employee obviously. Any discussion that goes against these should be killed instantly.
It's like you have built a theme park and they tell you they can bring you clients, but you have to give ownership of the theme park, become an employee, and be sent to clean the bathrooms for a paycheck.
Do you have clients and are you generating revenue? Have you already made a few sales?
>They have demand for their services
How do you know? Do they have demand for their services or do their clients keep asking them for something similar to your product which they don't have which lead them to you in the first place?
>they want to sell our solutions, after polishing it
What polishing exactly is there to make and who does the polishing? I bet that the first and probably the only polishing is to slap a big logo or "Provided by X" company and removing any sent of yours.
>They want to see the option where they would take care of these expenses, through a payroll from they're existing company.
:D :D :D Obviously don't become their employee.
>We however opened a company and want to keep it, but try to involve them in our company with some kind of equity structure or something
Why are you even talking about equity here? If there' any conversation, it should be about you considering hiring them to sell your product, and comparing them to many other organizations who can do that for you. On commission, or something like that. Think of them as a sales organizations, or a recruiting agency and so far they haven't made any sales or provided you with any successful hire yet (job to be done). They claim to have many clients they can sell your product to, your reaction should be "Show me". Start with one sale and see where it goes.
>they are interested in helping us with business development, bringing us clients, and the sales part, so we can focus mostly on implementation/tech parts
Helping? OK, then tell them to bring you a client.
>They have tremendous experience in different industries
How do you know? Did someone there tell you?
>and experience working with big corporations
The pitch started with them selling to smaller clients.
>Also, they have 50 people working for them and they are saying that they can share some of their resources with us.
To do what, exactly?
>For us, it’s hard to find other investments at this point. We will need to bootstrap it ourselves but there is a fear of being late to market because of slow development since we need to keep our full-time jobs for which I get paid 50 euros per hour and my friend \~5000 monthly.
You want clients. They claim they can bring you clients. Talk is cheap; show me the money. You pay them for each client they bring. Payment is tied to a successful outcome: i.e: they make money when you make money.
>We certainly need to give ownership of the company to the other part
I don't have my glasses and thought for a moment that you wrote you needed to give ownership of the company to the other part. I sure hope you are not being serious here.
>Any advice on any known partnership models for this case, or what kind of structure do you guys think that would be the best case for us?
This is not a partnership; this is voluntary servitude. Keep the IP, keep the company, don't be their employee obviously. Any discussion that goes against these should be killed instantly.
It's like you have built a theme park and they tell you they can bring you clients, but you have to give ownership of the theme park, become an employee, and be sent to clean the bathrooms for a paycheck.
Do you have clients and are you generating revenue? Have you already made a few sales?
Thanks for your effort on compiling this response for us, I appreciate it. I will try to answer your questions.
>>They have demand for their services
>How do you know? Do they have demand for their services or do their clients keep asking them for something similar to your product which they don't have which lead them to you in the first place?
They use something similar to our product, in this case Microsoft Power Apps, and in some cases for certain clients they want to use our solution as it is easy/fast and affordable to implement for their needs.
>>they want to sell our solutions, after polishing it
>What polishing exactly is there to make and who does the polishing? I bet that the first and probably the only polishing is to slap a big logo or "Provided by X" company and removing any sent of yours.
Mostly complete implementation of some unfinished features such as Connectors and Workflows and also general bug fixes.
>>They want to see the option where they would take care of these expenses, through a payroll from they're existing company.
>:D :D :D Obviously don't become their employee.
Sure, that was only a discussion between me and one of their founders and they mentioned it as alternative.
>>We however opened a company and want to keep it, but try to involve them in our company with some kind of equity structure or something
>Why are you even talking about equity here? If there' any conversation, it should be about you considering hiring them to sell your product, and comparing them to many other organizations who can do that for you. On commission, or something like that. Think of them as a sales organizations, or a recruiting agency and so far they haven't made any sales or provided you with any successful hire yet (job to be done). They claim to have many clients they can sell your product to, your reaction should be "Show me". Start with one sale and see where it goes.
The product is not yet on the final stage (Workflows, Connectors which will be needed for implementing use-cases for them). The idea was to be able to work on this full time, and to take some kind of investment from their side. I thought it as a form of pre-seed funding but separate it on chunks / pay every month.
>>they are interested in helping us with business development, bringing us clients, and the sales part, so we can focus mostly on implementation/tech parts
>Helping? OK, then tell them to bring you a client.
That would be the case if the product is in the final stage. Maybe my bad for not mentioning it in a more clear way on the original question.
>>They have tremendous experience in different industries
> How do you know? Did someone there tell you?
I had a long conversation with them and they told me about their experiences. I double checked that through Linkedin.
>>and experience working with big corporations
>The pitch started with them selling to smaller clients.
Thats correct that the pitch started with them selling to smaller clients. I meant to kind of tell more about their credibility , as that would benefit us in term of growing this into a more solid company.
>>Also, they have 50 people working for them and they are saying that they can share some of their resources with us.
> To do what, exactly?
Mostly business development, that would be their personal time (the owners). They have lot of people that use existing similar tools and we can benefit on terms of product development as well. But we need to clear this up in a more details.
I agree with other points and will consider them if we come to an agreement, and make sure to outline them in writing also.
> Do you have clients and are you generating revenue? Have you already made a few sales?
We have one client already using our finished parts of the platform. They're paying us $250 monthly.
>>They have demand for their services
>How do you know? Do they have demand for their services or do their clients keep asking them for something similar to your product which they don't have which lead them to you in the first place?
They use something similar to our product, in this case Microsoft Power Apps, and in some cases for certain clients they want to use our solution as it is easy/fast and affordable to implement for their needs.
>>they want to sell our solutions, after polishing it
>What polishing exactly is there to make and who does the polishing? I bet that the first and probably the only polishing is to slap a big logo or "Provided by X" company and removing any sent of yours.
Mostly complete implementation of some unfinished features such as Connectors and Workflows and also general bug fixes.
>>They want to see the option where they would take care of these expenses, through a payroll from they're existing company.
>:D :D :D Obviously don't become their employee.
Sure, that was only a discussion between me and one of their founders and they mentioned it as alternative.
>>We however opened a company and want to keep it, but try to involve them in our company with some kind of equity structure or something
>Why are you even talking about equity here? If there' any conversation, it should be about you considering hiring them to sell your product, and comparing them to many other organizations who can do that for you. On commission, or something like that. Think of them as a sales organizations, or a recruiting agency and so far they haven't made any sales or provided you with any successful hire yet (job to be done). They claim to have many clients they can sell your product to, your reaction should be "Show me". Start with one sale and see where it goes.
The product is not yet on the final stage (Workflows, Connectors which will be needed for implementing use-cases for them). The idea was to be able to work on this full time, and to take some kind of investment from their side. I thought it as a form of pre-seed funding but separate it on chunks / pay every month.
>>they are interested in helping us with business development, bringing us clients, and the sales part, so we can focus mostly on implementation/tech parts
>Helping? OK, then tell them to bring you a client.
That would be the case if the product is in the final stage. Maybe my bad for not mentioning it in a more clear way on the original question.
>>They have tremendous experience in different industries
> How do you know? Did someone there tell you?
I had a long conversation with them and they told me about their experiences. I double checked that through Linkedin.
>>and experience working with big corporations
>The pitch started with them selling to smaller clients.
Thats correct that the pitch started with them selling to smaller clients. I meant to kind of tell more about their credibility , as that would benefit us in term of growing this into a more solid company.
>>Also, they have 50 people working for them and they are saying that they can share some of their resources with us.
> To do what, exactly?
Mostly business development, that would be their personal time (the owners). They have lot of people that use existing similar tools and we can benefit on terms of product development as well. But we need to clear this up in a more details.
I agree with other points and will consider them if we come to an agreement, and make sure to outline them in writing also.
> Do you have clients and are you generating revenue? Have you already made a few sales?
We have one client already using our finished parts of the platform. They're paying us $250 monthly.
>We have one client already using our finished parts of the platform. They're paying us $250 monthly.
Nice! I hope you realize that you're in a position few attain: someone paying you, and $250 at that.
I wouldn't think in terms of the "finished parts" of the platform, more users will bring insights into what's worth implementing and what's not. There's already a user who's getting enough value to pay you $250 monthly.
Please watch Gabriel Weinberg's (DuckDuckGo's founder) short videos, starting with this one (Number 10, Leaky Bucket): https://www.youtube.com/watch?v=r5R6sKfjQJY
Here's the unordered playlist: https://www.youtube.com/playlist?list=PLpNwgXYhL09_afXgVjigb...
I also recommend his book, "Traction", in which he goes over several channels you could test to get traction.
You proved that you had someone pay. The next step is to have many pay.
How did you get your first user? How did they sign-up and how did they pay? Has someone else signed for that purchase/subscription or was it self service? Did you walk them through/onboard them? How much did it cost you? Where did they come from? How can you attract similar users (same sector, same function/role)? Is the user willing to recommend the tool to their network of peers? Does the user go to a conference/events to meet with peers (same role/function or adjacent)? Would it be interesting to target that?
I recommend David Skok's resource ' "Zero to 100" for High Growth SaaS – A workshop on how to build your Go-to-Market': https://www.forentrepreneurs.com/growth-academy-videos/
You're at step 3 (Prove it can be sold), the next step is to "Find repeatable sales motion", etc. You can watch the video and it explains the steps well.
Take a look at Jason Cohen's talk at MicroConf: "Designing the Ideal Bootstrapped Business" at https://www.youtube.com/watch?v=otbnC2zE2rw. It's pretty good.
Feel free to send me an email if you want to talk more.
Nice! I hope you realize that you're in a position few attain: someone paying you, and $250 at that.
I wouldn't think in terms of the "finished parts" of the platform, more users will bring insights into what's worth implementing and what's not. There's already a user who's getting enough value to pay you $250 monthly.
Please watch Gabriel Weinberg's (DuckDuckGo's founder) short videos, starting with this one (Number 10, Leaky Bucket): https://www.youtube.com/watch?v=r5R6sKfjQJY
Here's the unordered playlist: https://www.youtube.com/playlist?list=PLpNwgXYhL09_afXgVjigb...
I also recommend his book, "Traction", in which he goes over several channels you could test to get traction.
You proved that you had someone pay. The next step is to have many pay.
How did you get your first user? How did they sign-up and how did they pay? Has someone else signed for that purchase/subscription or was it self service? Did you walk them through/onboard them? How much did it cost you? Where did they come from? How can you attract similar users (same sector, same function/role)? Is the user willing to recommend the tool to their network of peers? Does the user go to a conference/events to meet with peers (same role/function or adjacent)? Would it be interesting to target that?
I recommend David Skok's resource ' "Zero to 100" for High Growth SaaS – A workshop on how to build your Go-to-Market': https://www.forentrepreneurs.com/growth-academy-videos/
You're at step 3 (Prove it can be sold), the next step is to "Find repeatable sales motion", etc. You can watch the video and it explains the steps well.
Take a look at Jason Cohen's talk at MicroConf: "Designing the Ideal Bootstrapped Business" at https://www.youtube.com/watch?v=otbnC2zE2rw. It's pretty good.
Feel free to send me an email if you want to talk more.
I've been building this SAAS / No Code platform for the past 1 year with my friend, and now we're at a critical point where we have some discussions with a company/founders on collaboration opportunities. And I wanted to see if you guys can give us some ideas on how to collaborate without getting burned. I will provide more details and also feel free to ask me as many questions as you think you need, so you can give us better advice.
To give more context, the platform allows you to create apps without a code, something similar to Microsoft PowerApps or similar. The company that we talked with does BI and services for multiple US clients using Microsoft PowerApps and a lot of other tools. They have demand for their services, and they want to sell our solutions, after polishing it, to these smaller clients/use cases, for which our solution is perfect, and they’re turning down at this moment. The thing is that we need to work on this more to make it production-ready, maybe in 3-6 months, and we have other jobs, I have expenses of 2000 EUR monthly (at the maximum optimization, as I live in Southeast Europe), and my friend has expenses of 4000 Euro monthly. They want to see the option where they would take care of these expenses, through a payroll from they're existing company. We however opened a company and want to keep it, but try to involve them in our company with some kind of equity structure or something In addition to covering our monthly expenses, they are interested in helping us with business development, bringing us clients, and the sales part, so we can focus mostly on implementation/tech parts (as we’re both technical people). They have tremendous experience in different industries and experience working with big corporations, and also they have a strong and large network that would be super beneficial for us. Also, they have 50 people working for them and they are saying that they can share some of their resources with us.
For us, it’s hard to find other investments at this point. We will need to bootstrap it ourselves but there is a fear of being late to market because of slow development since we need to keep our full-time jobs for which I get paid 50 euros per hour and my friend \~5000 monthly. We certainly need to give ownership of the company to the other part, but we want to keep the decision-making of the product mostly to ourselves but with the flexibility to align with the requirements of the clients that they're bringing. Any advice on any known partnership models for this case, or what kind of structure do you guys think that would be the best case for us?