Ask HN: Making a Product out of Client Project Is Ethical?

https://news.ycombinator.com/item?id=8027886

by devdilemma • 12 years ago

3 6 12 years ago

news.ycombinator.com

Hello, I am a developer and about 7 years ago my company was contracted by a company to develop a travel solution. There were no exclusivity agreements or other clause binding myself or my company from developing similar software for another client.

Now years later there has developed a great interest in the software developed and my company is now in the process of modifying the original software to be a SaaS offering.

We've spoken to our company lawyer and they've assured us there's no legal ramifications from this.

However, we can't help but to believe the client will feel we are now making easy for new competitors to get the software that is a critical part to this type of business succeeding.

Question is should we continue with our plans of making the software an SaaS or never develop a piece of software similar to that which we've developed.

a3voices• 12 years ago

Continue making it unless your client signs a more expensive exclusivity contract with you.

And what do you mean by "ethical"? Do whatever is in your best interests within legal limits.

MrQuincle• 12 years ago

Normally you put these kind of things in a contract beforehand. Nobody signs here anything in Holland without wanting to have some kind of exclusivity... The game is to get such a contract so they don't benefit direct competition and you have a valuable business model that can operate horizontally over the entire market. Exclusivity for the entire market (all niches, at all times, in all product forms) is extremely expensive, so they never want that. :-) It's even possible to come up with revenue from the SaaS offering feeding back to them thanks to them being one of your first customers in a pilot.

That all being said, I don't know the specifics of your contract and your relationship with your clients or verbal agreements of people in your company with this client.

devdilemma2• 12 years ago

There's no agreement outside of the contract that says we were contracted to write the software according to provided specifications. But you are correct we offered an exclusivity to the client but they were not interested in paying the price.

Ultimately, I believe the company(dev shop) has decided to sit with the customer and offer exclusivity or some kind of partnership on the software one last time this week take it from there.

thezach• 12 years ago

Companies recycle code all the time for other projects... in fact I've seen it written in a lot of contracts the the company that wrote the code owns the code and they just license it to the client.

n9i8k7f46l• 12 years ago

I'll give this a shot, since the only two people that already answered as I'm typing this ignored your question completely. He didn't ask if it is within his legal right, which is what you seem to be stuck on. He even mentioned that their lawyers assured them there would be no legal ramifications. The question (s)he asked is whether or not this is ETHICAL.

As to the person that suggested he "do whatever is in his best interest within legal limits": there are other things in life besides money. This may not be true for everyone, but it's clearly at least somewhat true for OP, since (s)he asked this question in the first place.

Now, as a freelancer, I have been in your shoes a few times before, when I could have easily adapted the client's project and published it as a SaaS. I imagine it may be even easier for you, since you represent a company, that probably has the funds to also properly promote and advertise a SaaS project, not just develop it.

So, it may go against the collective opinion, and the term "ethical" can be somewhat subjective, but I will argue that no, it's NOT ethical, despite you being well within your legal rights. When somebody pays for a project, they are already taking the huge risk that the project will fail spectacularly. For them having to worry that their contractor will also just take their project, repackage it, and come into direct competition with them, well, this is simply not fair. Reusing code is one thing, simply tweaking their project and releasing it on your own is quite another.

Also, not only do I think what't you're doing is wrong towards your client, I think what you're doing is actually hurting all of us. Freelancers and software companies alike. If every software contractor would start repackaging their customers' products, pretty soon no one would have enough trust in any of us, and for good reason.

Now, you may say, as others have already said in this thread, "If they don't want this to happen to them, they should protect themselves in the contract", and this is a valid argument, as formal logic goes. However, the relation between customer and contractor shouldn't be one where both sides have to always stay on their guard, always expecting for the other side to screw them somehow.

Somebody might also argue that it's also not fair towards you if, for every project you develop for a customer, you close a door in your potential future, and this is also a valid argument, but it's not what I'm saying. Again, there is a substantial difference between applying the things you learned about the client's business in a project in a different segment within the same market (I am using very vague terms, I know, but it's only because I don't know the details of this particular project), and using their own project to compete with them, after they paid you to develop it.

We sure love hating on soulless corporations that will stop at nothing for profit, yet when it's us that are doing it it's suddenly ok. How about we treat each other with some basic dignity for a change? If you think a customer's idea is worth implementing for yourself, don't use the guy simply as a way to fund your own projects. Refuse their project if you think you would like to do something similar yourself. And if you already developed it for them, move on, there will be other ideas.

devdilemma2• 12 years ago

Thank you for answering from the ethical point of view. A piece of information I left out was that before beginning the project the option to develop the software with exclusivity was offered however the client insisted they didn't want it as it was too expensive for them.

Additionally the software is not so unique that there aren't alternatives in the market (online etc.) actually there are at least 15 other competitors in the space using other software/solutions.

In any event we intend to meet with the client sometime this week to discuss if they want to purchase the rights to the software as there are existing competitors in the space who wants a similar software.

Some in the company has said that to make it more "ethical" the other clients will pay for "development" i.e. providing us with their requirements and building according to their spec but my thinking is this is just a justification.

Ask HN: Making a Product out of Client Project Is Ethical?

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