How do I approach my employer about purchasing a canceled project?

Question

Is it acceptable to approach my current employer and ask to purchase a dead project off them? The end goal is to revive this dead project (a Civil Engineering application) and sell it - essentially starting my own company.

I work for a civil engineering software distributor. The company doesn't quite develop software but it does sell & train users to use 3rd party civil engineering software. 90% of the companies revenue comes from selling this 3rd party software, the remaining 10% from training users to use the software.

I am a Full Stack software developer and I was hired to develop software that facilitates more sales of the 3rd party civil engineering software (CES). What that means is developing CES plugins for existing and prospective clients, developing installers that make it easier to integerate & customise the CES with client workspaces, develop & manage the company website and, finally, to develop a Civil Engineering app for mobile devices - this is the dead project I am referring to.

The app was a 'Pie in the Sky' type project. The boss had this idea and wanted me to develop it. Keep in mind the boss is not a technical person - no experience in software engineering or development. He's a former Civil Engineer who now sells Civil Engineering software. So after producing a Project Specification, Costings of Development, Use-Case Diagrams, Class Diagrams and a Proof of Concept the boss realised how technically involved such a project would be and how much effort will be required. He got cold feet and killed the project. He can literally walk into a Civil Engineering firm and, because theres so much infrastructure development going on, $10k of software licencing falls into his lap rather than him waiting 6 months (paying a developer all that time) to code an app and maybe make some money off it. This mindset is understandable but I know that if this app were to be developed it would be intrinsically and extrinsically valuable.

So the crux is, I wish to approach my boss and ask to purchase the dead project off him. How do I about this, what actions should I take?

Important info:

• The company I work for is a small company of 7 employees. I have 1 boss who is the owner of the company and the sole person who will decide whether to sell me the dead project or not. The company atmosphere is very informal and de-centralised - many employees work from home.
• If I successfully purchase the app from my employer and I develop and release the app - the app will not be a competitor to my current employer's 3rd party CES. In fact it will be complimentary to my employers CES and encourage users to stick with the CES. Hope that makes sense.
• If my boss were to refuse to sell me the app I would seriously consider ceasing my employment. Not due to offence or bad blood but because I am currently under utilised in the company. I am a Full Stack developer and I have a passion for programming but my current employer has me working on projects that are neither challenging nor valuable. In this scenario I would move on to another software development job that is more challenging.
• I realise that by asking to purchase the project from my boss I may jeopardise my employment but as I stated above, I am under utilised and under challenged. So either way I think I will be leaving my current employer; either with or without the app. All I can do is ask I guess?

Edit
I am concerned because my asking to revive a project my boss killed may be interpreted by him as me saying 'I think you are wrong, I think you made the wrong decision and I'm going to go it on my own rather than work for you'. Not the most polite thing for an employee to imply I guess. Imagine your employee who's been working in the Civil Engineering industry less than 3 years implying that they know more about what Civil Engineers want than someone who was a Civil Engineer and has been selling CES for 15 years.

Answer 1

It is true that your offer to purchase the rights to that code will challenge your boss's judgement. But that's not unethical. You're saying to him, "I think I can make something of this project, and I'm willing to take a risk to do so." The only person who conceivably could be harmed by this action is you, and you're proposing to take the risk voluntarily.

I cannot imagine a reasonable business person being overly offended by another, perhaps less experienced, business person making an offer to purchase an asset which he thought was worthless. You don't get far in business if you punish everybody who politely questions your judgement. It's silly to punish someone who says "you know that stuff you thought was worthless? I don't think it is!"

He might say "no" or he might name a price you can't afford. But that's just business.

No, it's not unethical.

You also asked, "Is it wise?" That is impossible for the intertoobz to answer.

Your boss has decided it's unwise to pursue that opportunity. Before deciding that he's wrong and you're right, you should have a respectful conversation with him. You will very likely learn a lot from this conversation, if you can avoid making it into a confrontation. Try this opening: "Hey boss, it must have been a hard decision to stop that project. Can you tell me your reasoning?"

I suspect he's concluded that it's uneconomical to put the product on the market. Is the market for the product too narrow? Is the cost of selling it -- persuading people to buy it -- too great?

If you buy this project from your boss, you and he will be business partners. Life becomes hard if you have a business partner you disrespect. You may wish to think carefully about the wisdom of this project if you think your present boss is lazy and unmotivated.

Answer 2

I don't think there is anything unethical about asking. You're not trying to steal it or develop on the side without consent.

Should he accept, you will need to get a contract of some sort drawn up. There sounds to be a bit of work done with company money to prepare so keep that in mind while negotiating. There may be royalties you would have to pay if you sell it, or he may just give it to you outright. You might be able to throw in licencing for free for his company when you finish it. Though this is conditional and dependent on you finishing. I've had enough 'this is going to be awesome' side projects lose momentum to know to approach a this with some trepidation.

Another thing you could try is to get him to revive the project completely with you as the lead. You've explained that you feel that his idea is very valuable, so much so that you would go it alone. Get a presentation together and explain this. You might have to get a bit out of your comfort zone and explain the accounting side of it. Simply telling your boss that it's a good idea does not help him understand why it's a good idea, especially if he isn't technical. Businesses operate in dollars and cents so you would have to translate why it's a good idea into those terms. It gets increasingly hard the larger the sum. Furthermore with this approach you can use it as platform to explain to your boss that you aren't challenged with your current tasks, this would give you the opportunity to provide more value to his company.

Answer 3

Your boss isn't willing to invest in the project and take the risk. That doesn't mean he'll be offended if you want to, but it's his project so you'll have to convince him to let go of most or all interest in the project. This shouldn't be difficult given that he's already dropped it.

Be prepared for some pushback as he tries to discover what your reasons for doing the project are. He may be concerned, for instance, that you sandbagged your project estimates, and that you might be able to develop it for less resources than you estimated. He may not have decided to drop it forever, but to place it on a shelf for awhile, intending to pursue it later.

Expect to negotiate. He probably won't simply sell it whole to you, it's likely that you'll have to work out an investment or royalty that he can hold onto in case his idea does succeed beyond his current expectations. This is actually a good thing, though, because if he keeps some interest in the success of the project, he's very likely to use it himself or recommend it to his clients - and you'll have a built-in salesperson which should lighten your load at the beginning of your journey.

Have an exit strategy - if it fails, make sure it's spelled out in your contract with him what happens to the idea. Does it fall back to him? Can you sell your interest/ownership to someone else? Does he have right of first refusal if you do want to sell? This will prevent lawsuits later whether it succeeds or fails.

At the end of the day, you just want to tell him you think enough of the project that you are willing to take a leap and invest your own time and resources into it. Then see how he responds. He may rethink it, and choose to move forward based on your desire alone. He may offer to sell some or all of the idea to you. He may say no.

I suppose some people might be offended or taken aback by such a request, but go into it with the attitude, "This is a business relationship, I see an opportunity for both of us, let's discuss it and see if it's worthwhile."

If he's a good businessperson, he will welcome the conversation, even if nothing comes of it, and he will see you in a new (and often better) light for knowing what you want and chasing it.

Answer 4

Should you buy it at all?

Why was the project cancelled? Would it require resources the company lacked? Was there market not good? Would marketing it be costly? Perhaps at the time it was a promising project, but there was a more promising project so it got slid to the backburner.

You should ask your boss in as friendly a manner as possible (conversationally not accusingly) why the project was scrapped. Something like "I'm just curious, we put a lot of time into X why was it ultimately scrapped?"

You may find your boss ran the numbers and scrapping it because it was doomed to be a money pit, of coarse just as easily it could be something like "it's a great project that could make a lot of money, but the CEO just really wasn't that interested"

Dangers of asking

If one of my staff asked me about a scrapped project and wanting to buy it from me I'm torn how I'd feel... I like my staff to have pride in their work and know sometimes we have to cull projects that don't make sense for us as a company. The fact this person wants to make something out of this is an admirable quality... It's also one that could mean I'm losing a person with this admirable quality.

Ultimately though if they are going to pay me for the project I've abandoned, the big question is. Do I lose you to this project, or do you still work with me? (accepting if the project is a success I will lose you) I think in all cases I win to a certain degree... I make money which is the primary goal. I also retain someone as an excellent contact in the future. Plus if we were working on the project at some point it means it in some way would benefit the company, I would make sure our contract means the more successful you are some of that success trickles our way for coming up with the idea. (nothing unreasonable)

Of coarse some managers HATE being told they are wrong, which would probably make things uncomfortable in the office short term. I don't think this is the sort of thing that would have long term consequences unless you really pushed it.

How much?

That's the real question... and no matter what anyone says "Everything has a price". If I scrapped a project I still could see real value in it, unclaimed value, but value non the less. I might also see a pile of wasted time and effort never again to be reclaimed...

Which of these I see will dramatically affect what you pay... Negotiations like this can be very challenging. It's easy to name a price on a known quantity, but an abandoned project is an unknown. This project could make you millions, it could also cost you thousands and 10 wasted years of your life...

Effectively our negotiations would be me betting how successful you could realistically be against you conservatively bidding how successful you realistically expect it to be. If we're not in the same ballpark negotiations could be tricky.

Summary

If the reasons for cancelling the project are something you think you can overcome and you believe in the project my personal opinion is go for it, the company might not be willing to sell at a price your willing to pay, but if the it all makes sense and isn't unreasonable or unrealistic you may be making a great, or terrible decision. You have to decide for yourself where you think this stands and act accordingly.