Mob Wars, the million-dollar-a-month independent Facebook app, may legally belong to SGN

http://venturebeat.com/2008/08/26/mob-wars-the-million-dollar-a-month-independent-facebook-app-may-legally-belong-to-sgn/

by comatose_kid • 18 years ago

53 31 18 years ago

venturebeat.com

jtj3• 18 years ago

Something similar happened.

I initiated, built and launched this application over a weekend. I evangelized it within the company (so that I get time and resources) and grew this application on facebook to a strong user base ~.5 M in 2 months. The company even changed track from their original business.

The founders refused to spare even ~half percent stake in the company. I quit. David Maestri did otherwise.

The application got acquired for couple of million dollars. And I made $1000. The size of deal was definitely because of the strong founding team. But I am confident I would have driven it to a self sustaining business or sell it for may be a million or close.

The company definitely deserves a lump sum. I used their resources. But I was the one who really bet big and convinced everyone when people actually opposed on time being spent on a facebook application. I largely contributed to the vision - which they eventually are getting to. All I expected was some gratification for myself.

How does one deal with such a situation?

ryanwaggoner3• 18 years ago

You do what you did: you quit.

You will never get rich working for someone else. You may make a few million over the course of years, but without ownership, you'll never build true wealth.

Chalk it up to learning, start your own thing, don't look back. Or come and work for me ;-)

jtj3• 18 years ago

:) Thanks Ryan.

I never regretted that decision of mine. I believe the dots will connect going forward. If things go well I should be bootstrapping my firm by Oct-Nov.

But this incident disturbed the faith in me about work, people and trust. It has been hard to get over it completely.

jamiequint• 18 years ago

"You will never get rich working for someone else. You may make a few million over the course of years, but without ownership, you'll never build true wealth."

Except for on Wall Street

snorkel2• 18 years ago

You spend another weekend and write a competing application that solves all of the problems of the original application.

jtj3• 18 years ago

I probably could have done that.

Unfortunately I was burnt out and just went into recluse at the end of that episode. The traction on these quick evaluation startups (apps) had died down too. Somewhere something did not work.

(launched early June, decided to quit in Aug, quit in Oct after mandatory transition period)

TY• 18 years ago

This is precisely why I quit my corporate job - so that I can work on my application and not worry about them owning intellectual rights to the product when it is done.

Eventually, you'll get over the burn out phase. I took me 2 months to shake it all off (read some good books, played a lot of COD4) and now I have plenty of energy and energy to pursue my own project. Good luck to you on your future endeavors.

Tichy• 18 years ago

That's what I don't like about being employed, no chance to get rich with a good idea. Conclusion: never get employed.

ryanwaggoner3• 18 years ago

That completely sucks. I can't believe that some company thinks they're entitled to what a developer built in his spare time, using no company resources (assuming that's the case, of course). Fuck being owned by some piece of shit corporate machine.

I feel like I read somewhere that these types of agreements are usually not enforceable in California, but Freewebs looks like they're headquartered in Maryland (though SGN is in CA), so it might depend on where he was working when this occurred. Regardless, it sounds like bullshit. Hope he fights and wins.

snorkel2• 18 years ago

I predict SGN doesn't want the application but is instead looking for an out of court settlement to grab a piece of the pie.

ryanwaggoner3• 18 years ago

It comes down to petty greed. But it's even worse than greed. It's unbridled greed with no integrity whatsoever. Why build something solid that adds value when you can steal it from someone else who toiled and risked to do so?

gojomo• 18 years ago

There are too few details to judge yet in Maestri's favor. Developers don't clock in-and-out 9-5, and there are many ways Mob Wars (hereafter MW) development may have appropriated Freewebs' resources.

All of this is rhetorical speculation; I have no details beyond what's in the VentureBeat article:

What if MW-developer had a company-issued laptop, and did Mob Wars development on that laptop in off hours?

What if MW-developer answered support emails or forum posts for Mob Wars from the Freewebs office?

What if a few lines of trivial boilerplate code are the same in Mob Wars as earlier Freewebs work, by MW-developer or other Freewebs employees? What if those lines are arguably not trivial boilerplate code but rather clever optimizations?

What if Mob Wars is substantially similar to undeveloped-but-planned concepts discussed while at Freewebs by MW-developer and others?

keefe2• 18 years ago

I think the legality of this depends on the exact details of the contract he signed. If they are a gaming shop and he releases a game, they may have some kind of a claim here. A few months ago I decided I wanted to complete a web research application I had started back in graduate school (and continued after that). This is a completely different area than my company's, but I still had to go through a long series of discussions maintaining this job (for paying the rent while finishing...) and working on this in my spare time. This lead me to my currently insane 70-80 hour weeks which will maintain for uhm... more months than I'd like.

As I understand it, if you do not use any of the company's trade secrets or intellectual property and you develop on your own time with zero company resources, you should be OK. By releasing this game under an alias and in what appears to be a related area, it seems like this guy actually may have been violating some kind of a contract.

I think the moral of the story is, document everything you do as outside of work hours and if you can pull it off, get your company to send you an email stating they know about your work and know it is not related.

cstejerean• 18 years ago

Depends on the employment contract. Some companies specifically state that they own any idea you have while working for them. Be especially careful with working for large companies that seem to have a product in any market you can think of, and are planning to enter the others.

keefe2• 18 years ago

The applicable statute:

2870. (a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

   1. Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

   2. Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

iamdave• 18 years ago

Almost any tech company makes its employees sign agreements guaranteeing the company the rights to any intellectual property they produce while employed.

That sort of nonsense should be outlawed. It runs COMPLETELY against the grain of free enterprise, as a person who works and toils over a product has to suffer losses when their employer wants to take their property, claim it as business owned and grab the difference? BULLSHIT

drusenko• 18 years ago

I certainly don't know what happened in this situation, but there are also quite a few scenarios where the company may be justified.

Would it be fair to companies if any employee could create anything they wanted to, on company time, and screw the company over? Would it be fair to the company if the employee could use all of the trade secrets and intimate knowledge of the company's product to build a competitor on his/her own time, and screw the company over?

It's obviously not a completely black and white situation.

samson• 18 years ago

"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.

mwerty• 18 years ago

You're usually ok if you do not produce a competitor to your day job's business in your spare time.

From the sparse info available, the issue here is that he built something that could have been part of the core business of SGN.

nickb• 18 years ago

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.

orib• 18 years ago

Ask first and get the answer in writing. Most of the time places will be quite reasonable about it.

vaksel• 18 years ago

thats why I'm a proponent of doing your startup full time, it eliminates this type of BS.

pluviosilla• 18 years ago

You created the initial version of this game in a weekend, but I assume a lot of development has been done since then. How much venture capital would have been required to create the final version of this game? (pluviosilla@gmail.com)

startingup• 18 years ago

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.

mariorz• 18 years ago

I would draw the line whenever he stops doing his job right. No difference from someone who watches TV on his free time.

binarycheese• 18 years ago

You pay an employee to do a job ... not for his imagination, except he is on a professional contract for you 24/7

Mob Wars, the million-dollar-a-month independent Facebook app, may legally belong to SGN

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