Not SpongeBob used to work at the Krusty Krab, he cooked the Krabby Patties instead of SpongeBob. He probably worked between Jim and SpongeBob because Squidward did not have hair when Not SpongeBob worked there. Like Squidward when he had SpongeBob working with him, Not SpongeBob shows boredom in his job. Even though Squidward didn't know SpongeBob, he called him Not SpongeBob.
The idea where main characters' enemies hate the characters was used later for the character Patrick Not-Star.
"We paid ten dollars for this?"
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