The Case of Treesoft, Inc.

Prepared by: Gates Matthew Stoner Copyrighted © 1997

N.B. This case does not represent a real event

Treesoft Inc. is a small software company in Menlo Park specializing in network software applications. The start-up company was initially financed three years ago, when some computer engineers at another local software company decided to start their own firm. After two years of software development and a second round of venture capital financing, Treesoft released its first product to market last fall.

With the release of ProNet, an intra-net protocol manager application, Treesoft has become financially independent of venture capital and is expecting to have its initial public offering within two years. Treesoft is currently riding a wave of intra-net related software application development and is considered a strong potential market leader in the next five years. While other software companies have been late to start development of intra-net related applications, Treesoft has a definite market advantage over its major competitors, including Star Networking Systems.

J.P. Smiley, a recent computer engineering graduate from an acclaimed California engineering school, has been at Treesoft since June of 1995. J.P. has worked closely with the ProNet development team since his arrival at Treesoft. Ed Moore supervises the ProNet development team and is one of the founding engineers at Treesoft. Ed has worked closely with all the engineers on the project and has been a mentor for J.P. After arriving at Treesoft, J.P. was assigned to code several subroutines for the protocol manager and router interface.

J.P. quickly adapted to the corporate culture of Treesoft and the irregular hours. He was determined to complete his assignments by the deadline to get the product "out the door" on time. Many of his fellow engineers were struggling with various bugs in their subroutines. J.P. was finding coding the subroutines tedious and knew that there had to be a better way to code the routines. J.P. found himself coding throughout the night and weekends. Finally, J.P. decided to meet with his supervisor, Ed, to discuss his difficulties coding the routines assigned to him.

Ed had been reviewing J.P.'s coding on the project and was aware of the problems with the routines. J.P. was hoping Ed might have a solution to the problem, which he had not considered. Ed started the meeting by praising J.P.'s efforts on the project thus far. Ed knew there was a better way to program the subroutines from his previous experience working at Star.

For over ten years, Ed worked as a software engineer at Star in various product development teams. During his time at Star, Ed programmed a majority of the subroutines in the company's networking applications. While working in networking development at Star, Ed met the other founders of Treesoft. Before leaving Star, Ed and the other founders completed a multi-layered protocol stack, which they considered to be a masterpiece of concise code.

Ed believed J.P. could use a similar approach in coding the subroutines for ProNet. J.P. reminded Ed of himself as a young, right-out-of-college software engineer. Thus, Ed was more than happy to offer J.P. some assistance. Ed dug through some boxes in the corner of his office, produced his old notes from working on the multi-layered protocol stack, and shared them with J.P. Ed went on with his war-stories of working at Star and the "good old days." Ed offered J.P. additional assistance and explained his previous work on network subroutines.

After the meeting, J.P. carefully read over Ed's notes and started again coding the subroutines for ProNet. In reading Ed's notes, J.P. soon realized some of the errors he had been making and was able to reduce his code from 500 to 100 lines for each subroutine. J.P. followed much the same logic and method he read in Ed's notes, while adding some of the knowledge he learned in his network programming class at college. Within three weeks, J.P. completed the subroutines that he had been struggling to finish for the last three months.

J.P. not only finished his routines ahead of time for ProNet project, but also was able to assist other engineers on the project with the expertise he gained from Ed. Within two months, the entire team had finished its assignments and ProNet was finished almost three months ahead of schedule.

After its release, ProNet became an instant success. Treesoft became the latest in a string of Silicon Valley startup success stories. However, within 6 months of ProNet's release, Star Networking Systems filed a lawsuit against Treesoft for stealing proprietary code.