Can I build something in the same industry as my client?

I’m a developer and I work as a freelancer for different startups. For the last two months, I’ve worked for a startup in consumer space. I learned a lot about that industry in the past two months. I have an idea for startup **in the same industry ** and want to build it. Would there be any issue if I build something in that space?

  • To say you wish to work in the same “space” is very broad. There are many ‘problems’ within every space.

    How close is what your idea is to what you built for that client? Does your product address the same problem/solution?

  • If you worked two months in a startup as a contractor, they can’t prevent you from doing anything. It is like if you worked at Coca Cola for two months then you can never work for Pepsi for your whole life. It’s ridiculous.

    Those anti competition clause concern only long term and full time jobs. Not freelancers.

    The only reason they may use to sue you is if you stole some company secrets. But having an idea while you worked for them is not a theft (if this is really your idea of course 😉 )

  • In all likelihood you’re legally in the clear. If your product/service is going after the same dollars your industry client was pursuing, then they’re going to be pretty unhappy about it. So you must be able to prove 100% that you didn’t work on your startup during time your client paid for, and that you didn’t reuse IP that belongs to the client.

    Read the contract carefully and you have the answer. If it doesn’t have any IP or non-compete clauses you can safely go ahead. Depending on your relationship with the client you can also ask for their blessing first, to reduce the risk of a frivolous lawsuit.

  • Ask yourself this –

    Am I stealing? – Be honest.
    Would I be OK if my contractor did the same thing to me?
    Am I really serious about this?
    Have done enough market research to see if what I want to build is even worthwhile or have any traction ever?

    If the answer to 1 is “No” and to 2,3,4 is “Yes”, then send a note to the CEO of the company, inform him about your intentions, and go for it.

  • In CA, noncompetes are not enforceable. However, is this something you are passionate about, or just something you see the opportunity to get cash quickly? Two months doesn’t make you an expert, so what can you offer that you didn’t learn from the ones who are paying you? Put differently, you may be within your legal rights to do it, but borderline on ethics.

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