[Johnny555]

My company had a significant product based on an early stage startup's product -- before we signed a license with them, we negotiated a code escrow agreement with the company. And it was good that we did because about a year later they got acquired by a company that didn't want to continue selling the product we used, but we got the source code so were able to maintain the product. We picked up a couple of the developers that were working on that product too.

[senderista]

How many businesses have the in-house expertise to maintain a defunct codebase? And for how many of those that do is it actually an optimal use of resources?

[Johnny555]

When we took over the codebase, it was 50-50 whether or not we'd really continue with it long term or just fix a couple important bugs and work on porting to something new. Then we managed to hire a couple of the core devs from the product and decided to keep it.

We were lucky that they did a good job with the escrowed code and had everything we needed to build the software on day one.

>And for how many of those that do is it actually an optimal use of resources?

That's impossible to answer -- depends on how hard it would be to port to another product to fill the need (assuming you can find such a product), or write a new system from scratch to do what that product does.

[Rapzid]

This is a story about successful CYA, not a recommendation to go balls deep on any hawt sAas that comes your way.

But also, a lot of companies have engineers that can.. Engineer. Often it's more an availability issue than expertise.

[Redoubts]

> we negotiated a code escrow agreement with the company.

really curious of the terms of that

[Johnny555]

Me too, only a few people in the company knew the terms of the agreement, apparently it was the only code escrow agreement that company made and it was protected under NDA. I don't think we paid a premium for it, but signed a longer term licensing agreement.

[debarshri]

This is more common practice than you think. But it is common in enterprise realm not in SaaS realm where you just self signup and it is Product-led upsell.

[swyx]

woudl love to learn more - what startup was this? why could they not have gone out to market to compete with you instead of letting you whitelabel their product?

[Johnny555]

It was a pretty low level product near the bottom of our infrastructure tier and we built everything on top of it. It worked well for our specific use case, but apparently not a general enough need to succeed on its own. It's not like we took their product, added a new skin and sold it as our own.