Should I show a prototype to BigCompany? How can I encourage them to buy me out?
I have a software prototype that integrates with a product from BigCompany (like really, really big). I predict it would take 6 more months to polish it so that it's of commercial quality. But I'm burned out from working solo and need cash. Ideally I would sell the code to them and possibly make them hire me to work on it more. But how to get them to do this? I'm positive they would take me more seriously after a couple of months of work more, but I don't want to overdo things either - for example selling my project to them before I have any clients simplifies the whole deal.
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How many full time months have you spent on it so far? – David Benson 13 years ago
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I guess it's 12 months of full time work of a dedicated competent programmer on a high salary. I'm not that guy so it took me more. But I spend lots of time on things I wouldn't have to do if I worked for BigCompany. – Robert Lee 13 years ago
6 Answers
Let's assume you can get a meeting with Bigcompany (which may not even be possible). And assume that Bigcompany hasn't already thought of your idea.
Put yourself in Bigcompany's position. Someone, out of the blue, brings you a barely functional product that integrates with your software and does something. Do you even care? If the idea seems worthwhile, why not assign a couple of the thousands of software engineers you have to do it yourself? Why would you buy a non-functional (if it's not commercial quality it is non-functional) product from someone?
You essentially have nothing to offer them but an idea and a bad implementation of that idea. That alone would get you kicked out of many companies.
If you want your project to succeed, finish it and get some paying customers. Then you have something to show Bigcompany.
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"barely functional", "bad implementaion", "nothing to offer". No disrespect, but are you answering my question? :) Knowing what I know now, if I were them, I wouldn't hesitate buying out and hiring... me. That would be economically sound decision. The project is not something you can finish just by throwing in more manpower. I imagine just finding the people with the right skillset must be very difficult and costly. – Robert Lee 13 years ago
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You stated it would take six months to make this a commercial prduct. How is what you have now **functional** if it can't be used commercially? Ideas are a dime a dozen, and half finished products are not far behind. – Gary E 13 years ago
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Robert, you asked the question and anyone with experience will agree with Gary. When you go to the big company you have to not only have the product, but also the sales of that product. – David Benson 13 years ago
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We can engage in a discussion of whether an early beta is worth something or not, but the fact is, the longer I wait, the more probable it is that they will set up a team to do what I do. – Robert Lee 13 years ago
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First you said that you think finding people with the right skillset (to finish the project) would be difficult and costly, then said that the longer you wait the more probably it is they'll have a team set up to do what you're doing. You have a product that isn't ready for prime time; if you think they'll buy it, have a meeting with them and see if they're interested. It may already be in their roadmap and they won't take kindly to someone trying to get hired with a half-implemented alpha version. – Bart Silverstrim 13 years ago
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On the other hand, no one here knows what software you're talking about, the company you're trying to get an interview with (or what that company's culture is like,) etc. If you're REALLY confident in your alpha software and your abilities, you would have to contact the company and arrange a meeting with their people. There's no magic answer here. One company might laugh in your face. Another might hire you on the spot. Your best chance comes from finishing the software first. – Bart Silverstrim 13 years ago
I have been in a similar situation. We had a team of 3 engineers working, some on equity, some on part salary, and we needed something that a so-big-you-heard-of-them company had. We approached them, gave our spiel.
They basically told us that we couldn't possibly have accomplished what we had already accomplished in the time we claimed to. (We had.) Nor could we, with their tech, bring our completed product to market. They didn't quite laugh at us. They just didn't get how slow a big company moves and how fast 3 hungry geeks can move.
About a month later, they announced a product directly competing with ours.
We eventually kicked their *ss in the marketplace, which sometimes felt better than our own success.
The moral is, you gotta be careful.
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+1 for the ass kicking warning :) – Herr K 13 years ago
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It was fun having them complain to second-big-company-youve-also-heard-of that we were lying. Then we proved our claims. That was sweet. – Paul Cezanne 13 years ago
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"Vote Up requires 15 reputation" – Robert Lee 13 years ago
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@RobertLee There you, +5 for the question and +1 for the funny comment. – Paul Cezanne 13 years ago
Your bargaining position is weak. Ultimately it sounds like you can only sell it to them. If it's a big big company, they have a lot lot of software engineers. If one person can do it and it's such a good idea, they can drop 5 engineers on it and have it finished before you do.
When pitching to large companies, you need something with a sale price in the millions. If you can't manage that, you should be pitching to another much smaller company that is more in the range for a buy out.
This seems applicable.
7 Tips For Getting Acquired Specifically (1) Start Early and (2) The Three Most Important People
I'd expect that if you plainly explain that you're out of money or energy, you have no leverage. Perhaps you should get a lawyer to accompany you on any such demos with BigCompany. The lawyer can help you protect information that would reduce your chances of success or reduce the value of any such deal.
Also keep in mind that, while BigCompany may have lots of money, they may be risk-averse. They have a reputation to protect. They may be facing difficulties in the economic downturn. Why should they reward someone they don't know for not quite reaching the finish line?
Apply for an accelerator, like TechStars. It's generally out of the limelight from BigCompany, you get cash and support in building the user base.
BigCompany rarely wants to do the work of building a dev team and user base; that's what they pay you to do when they've bought you out.
