Sales · Pre-Sales

Can your current company be your first customer?


July 19th, 2016

I work for a consulting firm, the largest in my niche industry. I have a created a clickable mockup of a SaaS prototype that addresses many of the pain points that my colleagues experience. I've shared the mockup with colleagues and received raved reviews and got great feedback.

I am not a programmer and would prefer to not risk my own money building something that firms might not buy. On the tech side, I am interested in a managed service agreement. I'd manage the SaaS firm while focusing on Sales/Account/Product management. I've received referrals and some pricing from some great local firms.

What should I do to get my client/current company on board? In a perfect world, I would start a company with my firm as my first client and branch out from there. I want to be an entrepreneur and work on this company exclusively and having my current company on board would surely get me more customers.

Should I:

A. Share my idea with upper management and ask them to purchase the product now at a discounted fee for the first year (which would cover the initial build). Ask them to also consider paying my salary for 1 year as a consultant to implement the solution company wide and perfect the product. 

B. Ask them to invest in the company, fund the initial build, perfect it and be a silent partner as this new company sells the SaaS solution to competitors. Ask them to also consider paying my salary for 1 year as a consultant to implement the solution company wide and perfect the product. 

C. Focus on presales to competitors (difficult, but I'm trying), raise enough money to fund the build and come back to my firm when the product is in Beta Stage. I worry they might be turned off that I didn't come to them first.

*I would caution my company against building and maintaining it in house. They benefit more if the cost of this service is in effect crowdsourced.
**I haven't signed any agreement where the company would own my work. It would be a project management tool web application customized to our work. Right now we all use Excel.
***My guesstimate is this might be too small for VC so that is not an option I am considering.

Roger Smith

July 19th, 2016

I mean have addressed this in ** disclaimer, but are you sure you have not signed an agreement where the company owns all IP created by their employees?

Peter Bray CEO at Bray & Co

July 19th, 2016

Be extremely careful, you probably don't own the IP even if you created it outside working hours.

Joanan Hernandez CEO & Founder at Mollejuo

July 20th, 2016


Some useful answer here, so I'm not going to repeat them. I'm just going to comment on this critical sentence:

I am not a programmer and would prefer to not risk my own money building something that firms might not buy.

If you're not willing to take risk, don't expect any benefits from it. Let alone let others take the risk of your idea, after all, ideas are just dime a dozen. Specially if the creator of the idea it's not willing to put his persona on front of it. Nothing wrong with the previous, just be aware: No pain, no gain.

Best of lucks!

Robert Honeyman Financial Consultant at Michigan Small Business Development Center

July 19th, 2016

Let's assume you have no issues with technology rights. What do you think your company's response will be if you approach them while you're still on the payroll and ask them to give your idea a spin? If you were working for me, I'd first show you the door (since for sure I'd have a clear understanding that no moonlighting is allowed without express permission) and then I'd check with corporate counsel to make sure you have walked off with IP that I by all rights should own. 

Unless you have been open with your current employer about your outside activities, my advice is to resign, perfect the idea, and come back to them after a suitable period of time (and after you've gotten clear guidance from a labor attorney) to test their interest. But no matter, you need to be very honest in your assessment of your relationship with this employer and try to gauge their response, especially if you are essentially announcing that you haven't been a fully dedicated employee - i.e., you've been moonlighting at best, diverting attention while on the clock at worst.

Cliff Hirtle

July 20th, 2016

Let's take a step back here. Beyond the usual IP stuff that would be outlined in your hire docs, the challenge here is that your idea appears to be directly related to the work you are doing at your current employer. If you are seen as working on a competing solution while on the payroll for them you should speak with an attorney ASAP to clarify your rights in your current contract. 

For ideas entirely unrelated to your 9-5, this is usually just a quick chat with HR to clarify things. 

If the idea is merely a better workflow for a process your current employer already has, a progressively-thinking employer might simply keep you as employee, grant you time to develop the idea, offer some level of incentive (bonus, whatever) if it truly improves efficiency. 

A less progressively-minded employer might simply take the idea you presented to them as their own IP, then can you, build it into their own process, and save any investment dollars into you or your idea. Sure they just canned a concept's biggest advocate, but they saved money so it's all good for the shareholders. 

Legal issues that you should speak with an attorney with aside, you yourself, are in the best place to understand how your company would react. Understand the legalese, then use that understanding to choose best. 

Good luck.

Christoph Ranaweera validate early, pivot and kill fast instead of feeding a zombie

July 20th, 2016

As Joanan stated, you need to take a risk to do your own company. You try to secure your salary by a consultant contract but I doubt that will work - at least I would be surprised.

It as well depends how open minded your relationship with your employer is. I did that once offering to create a company and offer them actually a product they need which I would do with another person who was working for the company. The company did not take it but took a competitor product but it did not harm any relationship between me and the company in the end. 

The bigger the company, the more corporate, the more difficult this might be. So you need to know.
The IP might be an issue but as it's not something that is part of your work but just a tool to make your work more efficient then I would be surprised if it would be an issue.
And even if, you just need to change a few things later to make it a bit different to the original idea - that will happen anyway when you receive feedback to your product.

Of course you can ask for a consulting contract but only if it's feasible. Nobody will give you the money for a consulting service where the purpose is just to get your income for one year. 

And about your options:
B. is only valid when you work for an investment company that invests into startups otherwise this won't work.
A is a good option but you won't get the consulting but with an LOI you might have good chances to get external money.
C is a viable option but of course you need to raise the money. I would probably go for an accelerator in that case - from what you write it sounds to me that you need as well advice along the way building a company. - I might be wrong though.


July 21st, 2016

They might be your first customer - or they might sue you. Why take that chance? Besides, if your friends/family/close colleagues are the only customers with whom you have validated your idea, you haven't tested it in the harsh light of the market, and you just might be fooling yourself. Sell your concept to a stranger. If you can do that, there's a better chance you've started to find real demand.