Software AgreementsUnderstanding the right agreements and contracts to use, protecting your products and setting realistic expectations around development

A guide to

! Software developers (makers) and Users (software consumers) alike need to understand terms and be on the same page in development and production.

! Build something then (legally) scale

Why?

content, tool, API, app or otherwise “software”

Most online business is doneinvolving some kind of technology:

Benefits to Software Agreements

! Avoid headaches and issues long term

! Build more valuable products (from a business perspective)

! Prevent unrealistic expectations and costs

! Avoid headaches and issues long term

! Understand what product you need or are getting (deliverables)

! Prevent scope leakage or delays in integrations

SOFTWARE USERS SOFTWARE DEVELOPERS

! MVP or POCs. Minimum Viable Products or Proof of Concepts. The basic idea and business concept behind a potential project build.

! RFPs: Request for Proposals. This is when the basic business needs or requirements have been identified and need a cost for execution to be quoted

! Integrations. When a startup, API or two companies decide to combine technologies.

! Pilot Programs. When a large company decide to test a smaller companies product or a new product. Can also be a POC.

Areas to Consider

!RFP

!MVP

! Integrations

!Pilot Programs

Hot Spots! Scope. Identifying a clear

image of the depth of work to be performed

! Metrics. Make sure basic goals are identified

! Timeline. Crucial to outline HARD dates and deadlines in advance

! Resources and Contact. Who are the right contacts on both sides to ensure success

Types of Software Agreements

! Clearly identify what type of code (PHP, Java, Ruby, etc) you need or prefer.

! Platform and bandwidth. Be clear on deadlines and submission guidelines that need to be met. Know specific rules in advance.

! Costs. Fixed costs never benefit either side. Be realistic about billing and costs if project goes over budget or timeline.

CONSIDER THIS: when taking multiple bids, look at how the developer interacts and communicates their deliverables. The more clear the RFP, the more clear the project management will be. Don’t go for price only.

Bases Covered: Requests for Proposals

FOR EXAMPLE - iOs Apps require Apple approval.

Bases Covered: MVP/Proof of Concepts

! Business goals. Define early on what business needs or theories are being validated. How many minimum users are needed?

! Define Success. Set metrics around usage or timeframes to help understand if the “proof” is working

! Outline Future Steps. Think long-term. If success and metrics are validated, what happens next? When does the next phase of development begin?

CONSIDER THIS: At this early stage of concept, any partners or developments could end up as potential investors, acquirers or even competitors. Keep this in mind. Documentation = Key.

! Timeframes. Have very clear time tables for next steps for each company and getting into a project mode ASAP.

! “If/Then” Clauses: Be sure to identify early on who pays for what and where responsibility lies should there be issues. Plan for the worst; hope for the best. Have backup.

! Contact Points. Document product or area “owners” and their contact information in Integration Agreements. This will help avoid any runaround & create ownership.

CONSIDER THIS: Big corporations will often promise integration with LOIs (Letter of Intent or Interest) but wait 18 months to “integrate.” Make sure there are actions in the near future.

Bases Covered: Integrations

! Deposits/Payments. Always put value to your work, even in early steps of negotiation. Make payment terms known, even if that’s web traffic, promotion or soft deliverables.

! Clause around success. Especially helpful for early companies or products. List the potential outcomes for a wild success - a Right of Refusal or First Buyer terms. State in Pilot Programs (PP) with long-term intent.

! Intellectual Property (IP). Who owns what during a PP is crucial since a PP by definition is the evolution of a product.

CONSIDER THIS: The end user or client may not like your product - but it doesn’t mean the outcome won’t be useful for a different company.

Bases Covered: Pilot Programs

! Know which Software Agreement to use

! Understand agreement structures and risks

! Reach out to outside advice. Ex: Clarity.fm

Be Knowledgeable.

! Need more help?

See Introduction to Software Agreements