Need Devil's advocates!

[aldipalo]

I recently developed a Condominium Management application and was paid well for my time. The client also allowed me to maintain the application as my own and I am free to market it. So, I got into a chat with the President of another condo association and they referred me to their Property Management Org.

I had a great meeting with them today and they want to install the app in all 100 condo and homeowner associations, with 15,000 units, that they manage. Sounds great, but, here's the catch ... they want me to package it as theirs and give them the ability to have someone else work on the app if I am no longer available. Look at my age. They also asked that I install it in one of their largest customer sites for a 30 day demo.

So, they asked me to put together a contract that includes pricing. They agreed to sign a non disclosure agreement as well as a Software license agreement and a Confidentiality agreement. They also want me to give them a price to customize the software to their needs if necessary. I told them it would be an hourly charge.

Here's my concerns:

* What do I charge them. The original client paid me almost $ 10K. They have 240 units.

* Do, I put together some type of individual pricing or a Flat rate for the entire company?

* It will require my installing the software at each site and 3 days - 1 week of on-site training. Do, I include in the overall price or charge by the hour/day?

* What do I need to worry about and what am I not thinking about? (See my signature.)

* Do I put a 30 or 40 day bomb in the demo package, just in case, and what's the best way to do that?

I look forward to all constructive criticism and advice.

TIA

Al

[David Jondreau]

Congratulations!

I don't think you need a Devil's Advocate, you need a business coach. And some additional professional help, like a lawyer versed in small business and intellectual property law and a savvy accountant.

As much as I love these forums, I would seek out advice from non-Internet sources. Look up some other popular FileMaker products (FMP FBA members at a minimum, ideally Platinum members) and call those companies for a chat. It's a small community and you will get some excellent advice.

You're looking at a potentially >$500K sale and you don't want to get screwed.

Is this an FMP solution or a runtime? If FMP, then contact your regional sales rep and they'll help you out.

[mr_vodka]

Sounds great, but, here's the catch ... they want me to package it as theirs and give them the ability to have someone else work on the app if I am no longer available. Look at my age. They also asked that I install it in one of their largest customer sites for a 30 day demo.

I agree with DJ that you should probably consult an attorney. However, IMHO you should either:

1. All out sell them the product ( with exclusion of your first client from their rights and they can choose to retain you for their services )

2. You should allow them to license it as a distributor where you make a cut on each sale.

3. Sell them the product AS IS, but any copying of the core system would belong to your rights. Any adding on new functionality ( very carefully defined ) can be added with a new developer, or your signed consent.

[aldipalo]

DJ

Thanks for your thoughts and advice. They are very sound. If I've learned anything in my years it's that I can always learn something new.

Just a little history on me. I've been in my own business for 40 years. I developed and ran a successful Job Board in the 90's, had a web development and hosting business for about 4 years and also ran an email marketing business during that time. However, I've never actually sold a piece of software and given the horror stories I've heard I just want to make sure I've thought of every contingency before I speak to an Attorney. I learned a long time ago that Attorneys are not business people. They are there to set down in legalize what you, the seller, and they, the buyer are agreeing to. I also learned that if you want to make the deal happen hire an Attorney who is a Deal Maker not a Deal Breaker.

Some of the Condo's where the software will be installed are single users and others will be max 2 - 3 users. I tried to steer the buyer away from a Run Time version because I felt it would be a problem when they start asking for changes, which, i feel will be inevitable.

Since I'm a single user I've never talked to anyone at FM. What type of help is available from them?

John:

1. All out sell them the product ( with exclusion of your first client from their rights and they can choose to retain you for their services )

He alluded to this, but, there's over 25,000 Condo's and HOA's in Florida alone so do I want to give up ownership?

2. You should allow them to license it as a distributor where you make a cut on each sale.

Good thought! Only issue is he wants his name on the package he "Gives" to his customers. (Guess I need to have that in writing.)

3. Sell them the product AS IS, but any copying of the core system would belong to your rights. Any adding on new functionality ( very carefully defined ) can be added with a new developer, or your signed consent.

Probably, what they'd ultimately like to do. Can you expound on this some more? How do I define what the core system is, etc.?

Anyone else with some more sage advice?

[mr_vodka]

Good thought! Only issue is he wants his name on the package he "Gives" to his customers. (Guess I need to have that in writing.)

Well lots of times, if you check out software, movies, etc. It will have a distributed by or packaged by name. So he can have his name as the distributor or the main name on it. However, you will still hold the rights to the software.

Probably, what they'd ultimately like to do. Can you expound on this some more? How do I define what the core system is, etc.?

Well what the core system is exactly what you currently have. All the code, the interface, and the business concepts ( however not industry standard terminologies or concepts ). You may want it so that perhaps a mutual third party holds a copy of the orig software to document exactly what was your intellectual property at the time.

I would seek out an attorney that specializes in intellectual rights.

[Rich R]

Get a Lawyer

Get a Lawyer

and

Get a Lawyer.

It's expensive, frustrating and not always the most pleasant experience but in the end it's what you must do.

And make sure it's one specializing in Intellectual Property and software. It will cost you a minimum of 5k no doubt but it's worth it in the end.