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open a company

Postby Pat » Thu Feb 03, 2005 1:13 pm

I have been a reader of this forum ever since I started my first industrial scientist position last year after my Ph.D. graduation. I believe that the advice and experiences posted here would prepare me better for my future job seeking. However, what about opening a company. My desire of opening a company myself has become stronger and stronger, even though I am pretty junior at the company. I got some idea about what kind of company I want to have, which I do not want talk about here. In stead, I have several other questions: 1, do I need to resign first to start my business full timely or is it doable to make part time first. 2, my new company may have some overlapped interest with my current employer, will that be a problem or how should I deal with it. 3 are there any important issues for which I must be prepared. Could anyone here shed some light on it? I understand it is extremely difficult to develop a successful business; however I really want to try it myself.
Pat
 

Good heavens.

Postby Lora » Thu Feb 03, 2005 2:08 pm

1. This depends largely on the answer to 2, so I'll skip it for now.

2. Yes. It will be a huge, enormous problem, for which you should hire a very expensive IP lawyer. If your employer did not provide you with photocopies of your hiring paperwork, get copies from HR, including every last piece of paper you signed right down to the drug-free workplace agreement. Most people sign the stacks of papers without reading them. I guarantee you, in that stack of papers, is your IP agreement in which you signed over every last bit of intellectual property to your employer, including every idle thought you ever had while sitting at your desk during lunch break. It belongs to your employer, NOT to you. If your employer has any reason to believe--such as the overlapping of disciplines--that whatever service or technology you are marketing in your own company was once thought of, even on your own time at home, while you were under their employ, they will come after you in court for it. You will have, undoubtedly, multiple objections, but in IP law, them's the breaks. It is also highly likely that in the stack of papers, there is a non-compete agreement with which an overlapping discipline would also be in conflict. This non-compete may prevent you from working in the same field for up to several years after you quit, too; the enforceability of non-compete agreements varies by state, so check your state laws. In some states, those agreements are considered non-enforceable on the grounds that no previous employer can legally prevent you from being hired by another employer. In other states, they're upheld.

3. Do you have a business proposal, including a complete funding plan, a backup funding plan, a scale-up plan for growth, a detailed marketing plan, a very good accountant, and an exit strategy in the statistically likely event that your company fails? Do you have professional marketing and managerial partners who will go in with you on this, or do you need to hire consultants (you canNOT do it all yourself, marketing is an art and it will largely govern the success or failure of your business)? I would strongly recommend here that when you select partners or consultants, you choose the person best qualified for the job as opposed to your beer buddies. This seems simplistic and obvious, but it remains a pitfall of many new startups. Learn to tell your buddies NO at the outset, because if you hire them as a favor, it will be that much harder to fire them if/when they do a terrible job. They may not feel any pressure to do a good job for you either: they might figure you're their buddy, so they can come in late and leave early.

The reason you've heard it's difficult to develop a successful business is because it IS. And no matter how hard you think it is, it's harder than that. The best thing you can do is get a seasoned, experienced marketing expert. When I say "experienced," I mean, someone who has successfully marketed other products before which have sold well and made their investors tons of money. I do NOT mean, someone who has been a junior advertising exec for the past 20 years. This marketing person should be SO excited about your idea that they want to drop whatever they're doing and be your partner.

Talk to some small company owners that have been around a few years. You can find them via the local Rotary Club, Better Business Bureau, occasionally at local conferences, etc. My husband meets most of his small business contacts via his Freemasons group, but they often have volunteer organizations (think Shriner's hospital fundraisers) you can join to network. They can give you a better idea of what sort of businesses your local area could support, and where to get funding.
Lora
 

open a company

Postby AL » Thu Feb 03, 2005 3:21 pm

Lora's advice is good - you do need to cover your bases IP-wise.

However, every single person I've ever known who started a company did so while employed at another company. They didn't advertise what they were doing, however.

The general consensus I've heard is that no matter what you've signed, your current employer can't lay claim to IP you generated on your own time, provided you don't ever bring it up at work. This means: you can't talk about it with anybody you work with at your regular job.

Good luck!
AL
 

HUGE professional gamble

Postby Chris Kobsa » Fri Feb 04, 2005 10:54 am

Hi there,

Just briefly flew over your plans and the other postings.

Regardless of what anybody says, which I am sure are good ideas and advice rest assured that starting your own business, is a very different animal than being a scientist! Scientist are by nature very analytical, tend (I'm not saying all of them are) to be introverts. Running a business, you HAVE to be the exact opposite!!

Having the entrepreneurial fire and BEING an entrepreneur are two very differnt things. Some sobering statistics: 75% of all start-ups fail within the frist five years! Number one reason? Lack of funding. Number two reason? Poor professional management. I could go on and on. I helped start two businesses. One successfully, one a flop. Neither one was in the scientific arena though.

If I were you, I would first do some SERIOUS studying on this subject. For starters read "Start Your Own Business" by Entrepreneur magazine. It's an eye-opener. I don't mean to discourage you! Just beware that this is a huge professional gamble you are undertaking. What if your business fails? What will be your obligations? What is the "cost" on your family, if you have one? What about your professional reputation as a scientist? What about the "overlapping interest with your current employer"; can you compete? Do you have the resources (financial, man-power, professional relationships, etc) to do so? The list of questions goes on and on...

Good luck!!!

Regards,
Chris

Chris Kobsa
 


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