> considering your competitors' employees already infiltrated your slack channel.

It was a public community slack channel. There may have been proprietary/protected information shared in there but in my naive opinion (NAL!) that wouldn't be protected by trade secrets if it was shared publicly. Some things could still be protected by copyright or trademark but it's pretty unlikely. It's possible copying the API could be infringing but Google v. Oracle[0] makes that a very uphill battle.

"Secret sauce" is highly valued by founders and product managers but IMHO it's generally overvalued and doesn't constitute a moat. For the most part, competitors are allowed to copy most things and leverage whatever other advantages they have over the original innovators.

0: https://en.wikipedia.org/wiki/Google_LLC_v._Oracle_America,_....

Litigation is about more than the legal argument alone, and the legal arguments often turn on specific facts that may seem general on casual inspection. Other factors to consider include cost, embarrassing facts that may emerge during discovery, and reputational damage. That's why cases are often settled on the eve of trial, sometimes for significant sums.

Getting a professional opinion on the options is generally better than just making assumptions. Copycats and rip-offs are a fact of life, but that doesn't mean they should enjoy free reign. It's not that I think litigation is better than execution, but people exclusively advocating the latter are expressing an opinion about how they think things should work in a perfect world while not having any assets of their own on the line.

The 'Eve of Trial', how appropriate.

Unless it was patented or the code copied, it's unlikely that it's illegal. But I'm not a lawyer.

Pretty wild how much "just execute better" posts there are, one wonders if its the common response to a situation like this, from this community, and what that says about trustworthiness in general of YC "founder" types!

YC isn't responsible for the actions of the founders of every start-up that they fund. Even worse: after funding them they have very limited ability to influence the companies they funded, after all, YC has a small minority stake and founders could just ignore them. Obviously YC can cut them off from further capital and blackball them but that may not be sufficient.

on the contrary! They are indeed very much responsible, if only in part, for the actions of the people they are giving money and sharing connections with! Pretty sure there's an entire corner of criminal law and civil code covering exactly those responsibilities! And yeah, they can do all kinds of stuff to make sure that these things don't happen, or at the very very least publicly demonstrate that they will not tolerate it from future "founders" by responding appropriately to this one. I am always freshly amazed, probably from naivete, each time people make excuses for the terrible behavior of SV tech "founders" and the VCs that prop them up. I shouldn't be, on this forum, and thats on me.

As a seed investor and VC investor I'm happy to inform you that it very rarely happens that seed investors or VCs have a controlling interest in the company.

You may have a board seat. And if you don't like what the company is doing your most powerful move is resign from the board. Another option is to force a shareholder vote, but if the founders still hold the majority (as they should, at this phase) that will be overruled.

I'm freshly amazed by the lack of basic corporate law knowledge in the context of HN, this is really something that should be known if you partake of conversations like these.

I agree they should respond appropriately, but depending on what happened that response may not satisfy you.

I don't care whether you invest, nor do I care about corporate law. Nor, really, is corporate law at the heart of this matter! But, hey, if it shuts down opposition on forum arguments I'm sure thats an easy card to try and pull out. So let me be crystal clear, no one needs to know corporate law to comment on whether or not a YC funded startup is ripping off another startup, a startup that had previously applied to YC and was turned down! The idea that YC is in some way not responsible for the companies which would not even exist if not for the money and connections provided by YC is dishonest in the extreme. You should be embarrassed but I know you won't. In half an hour or less this comment will likely be flagged out of existence and no one will the wiser.

The alternative would pretty much be an end to startup innovation, since a large company with a team of lawyers could just claim that any new product that threatens them is a copy in some way and destroy the startup with legal bills regardless of whether there's any merit to the claims.

Being copied sucks, and I agree that it should be looked down upon culturally, but I think "just execute better" really is the right answer. It's better for consumers and ultimately better for entrepreneurs too.

I've had something like this happen with a bunch of guys cloning my software and changing the URL to offer a competing service.

I've also had a funded competitor copy our business model and attempt to compete.

I sued the first one, the other one we outcompeted in spite of a 30:1 funding discrepancy. Regardless, these things are distractions and some funded bunch of cowboys destroying the market for you when you've spent a long time to get established can be a real problem. Even if they go under they'll do a lot of damage, not just to you, but also to their customers and possibly the whole field as a consequence of their activities. For instance: to offer the product for free because they're burning investor cash.

I hear you, but what's the alternative? Are you advocating for software patents?

If you're just saying that an API or a website is copyrighted and can't be ripped off verbatim, that sounds more reasonable to me. But still, it's trivial to copy but then make minor cosmetic changes (especially with AI). Then we're back to a very troublesome gray area.

It all depends on what has been copied. If privileged info from the YC application was used they should be sued into the ground for that but I can't imagine that YC would ever let that happen. If they copied code, text or images from the product or webpages they should be slammed for that too. But if they just decided to clone the concept and did all the legwork themselves that would be a different matter.

The fact that they infiltrated the OPs comms channels certainly doesn't make them look good.

Did anything come of the lawsuit?

Yeah, it seriously sucks. I've been following YC for over 10 years, and this is so disappointing.

If you go this route be sure to grab evidence now. Screenshots, logs and anything you can to show the product similarities and IP issues. Before they change stuff and try to erase it.

this is gold, thanks folks

Good luck with this. It must be very frustrating to see this happening. Make sure you cross your 't's and dot your 'i's before going to court on this and offer them to settle first assuming you have hard proof that they copied your work product.

Document everything.

They item would be whether or not YC is aware of this and whether or not your application or parts thereof somehow made it to these people. If it did you have a much stronger case, if it did not then you need to document very carefully which bits you believe have been copied, timestamp the works and make sure your lawyer gives you a fair assessment of what to expect in terms of costs and what your claim will be.

I can't look into your walled but depending on how much backing you've got you may be able to hit the pretty hard or you may have to walk away from it, even if you have proof, hard to tell.

Unless you have tons of funding and lawyers already on retainer, this is horrible advice

Legal fees will drain your funds faster than anything else and you will probably not see any benefits from it

In fact it might be what makes your company fail (taking away the focus from building your business)

Of course it isn't horrible advice, legal affairs are dealt with by lawyers and courts. If you have a product out there in the market you should go to bat for it.

And yes, it might make your company fail. But that goes for a well funded competitor outright copying your product as well.

This would require millions in legal fees.

Not it won't. If it is an outright copy (that's relatively easy to prove) you can have an injunction issued, besides that the bad press alone might get them to back off. I've brought a lawsuit like that and won << $100K.

How many hours in legal fees did you pay for your attorneys?

A few hundred in total. What helped is that they actually did copy text verbatim, so it was very easy to prove. Their defense: they stole it but not from us... go figure. Needless to say that didn't land very well with the judge.

The trick is getting an objective assessment of how strong the case is, the risks, opportunity cost, etc. There are a lot of lawyers who are perfectly happy to tilt at windmills for $500 an hour until you run out of money.

Yes, that's true. But presumably OP has a lawyer, after all they run a business.

Legal action is fine as long as you have the time and money to do it

For the looks of it, in this case they should either not do it at all or just wait until they have enough money to do it

Even large companies wait for the right timing to sue

I know a company that had copied some images from Instacart. Instacart knew about it, but they waited until Uber acquired the company, then they sued Uber

Legal action is incredibly expensive and time consuming, especially in the US

What are the indicators you're seeing in this story that legal fees would have a real ROI? I think it's good to be skeptical of paying elective legal fees.