
My zero-equity co-founders - cperciva
http://www.daemonology.net/blog/2010-10-10-zero-equity-co-founders.html
======
jacquesm
Let me for one second pretend to be your co-founder:

Hey Colin, that website sucks (even if it is much better than it used to be),
we have too little traffic to really make a go of it and all we get is some of
the HN crowd, the world is a _LOT_ bigger than that.

Let's either make a real go of this or kill it because for the money it brings
it it isn't worth the time it is taking from someone as talented as you. Our
tech is superb but our marketing sucks, picodollars may be setting a new
standard for fairness and humor in pricing but nobody outside of a bunch of
nerds are interested in that sort of thing.

There you go ;)

And I don't want any equity either. And Amazon would never tell you that.

The real value of 'co-founders' is not that they're wheels in a machine, the
real value is that they will tell you when you are wrong about something. And
that equity helps to keep your goals aligned, that way everybody wins at the
same time. AWS will just send you a bill for services rendered, they couldn't
care less if you swam or sank.

~~~
edw519
_The real value of 'co-founders' is not that they're wheels in a machine, the
real value is that they will tell you when you are wrong about something._

I have had co-founders disagree with me and guess what: one of us may have
been right. The problem is, we never really never which. Half the time a co-
founder told me I was wrong, I considered their feedback and stuck with my gut
anyway.

Make no mistake about it, a good give and take between co-founders is
essential, but _it doesn't matter which of you is right or wrong_ , what
really matters is what your customers think.

Replace "co-founder" with "customer" in the quoted sentence and then you have
something there.

This reminds me of the old joke about 3 baseball umpires:

Good umpire: I call them as I see them.

Better umpire: I call them as they are.

Best umpire: They aren't anything until I call them.

A single founder is the good umpire. Co-founders are the better umpire. Your
customers are the best umpire.

~~~
webwright
I agree that the customer is the ultimate measure and I'm a fan of this whole
lean startup thing. You're right that the only thing that ENDS UP mattering is
what customers think. But to use that as an argument against having a co-
founder seems strange.

Co-founders disagreeing doesn't result in a flip of the coin to see whose
opinion they go with. There's a heartfelt and intelligent discussion. Logic,
experience, and a bit of intuition. One co-founder might say, "I know the team
over at CompanyX who struggled with the same thing. They chose Y-- let's see
how it worked out for them".

If the OP had a co-founder who was smart about marketing, design, and
conversion funnels-- there'd be very few arguments in those areas, but there'd
sure as heck be better decisions made being there.

In short, I agree with your point but I don't think it applies to this
discussion.

------
wheels
The problem with this is that it leaves me asking, "Does cperciva know what a
co-founder is?" A co-founder isn't someone you bring in with a one-way
communication channel that does your work for you. That would be closer to,
"my employees that I don't have to pay", except, well, you do have to pay for
AWS.

There are lots of ways to shorten your path to market using external services,
whether human or infrastructural. But they won't tell you that you're being a
dumbass and help you steer the company in a better direction.

~~~
jacquesm
Just having people tell you that you're being a dumbass isn't enough, you have
to have the wits to realize they're right too (when they are!).

Colin obviously meant it metaphorically but further down in this thread he
says he uses HN for that. The harder part is to listen and act upon advice.

HN can be easily ignored if what people there say is not to your liking, but
with a co-founder that has put money on the table for their equity that would
not be so easy.

------
DevX101
You don't know me and I'm just starting to post on HN, but I've read a bit of
your writings and you're clearly a brilliant guy. I recently saw a thread from
a couple years ago where a few people made the flawed assertion that the
aggregate rate of failure among entrepreneurs was uniform, and that your
chances of success were also 10%, just like everyone else. Your response
basically said that you were quite confident you were better than the average
entrepreneur, and that you were pretty sure you're on the right hand of the
bell curve.

I actually admire that bravado in people who can walk the walk. I'm not a fan
of false humility.

All that being said, you seem to wear the solo-founder badge a bit too
triumphantly. I can't comment on the superiority of your solution versus
competitors but I'll bet you can hold your own. Getting someone on board who
can SELL your story, and communicate your product to interested buyers would
probably do wonders for your sales if you found the right guy.

Trust me, I see where you're coming from. After a bad past experience myself,
I am now a single founder building up my product in solitude. But I know where
my limits end, and when my product is ready to go to the next level, I'll have
no problem bringing on a VETTED and qualified partner to grow the company as
fast as possible.

Just a thought!

~~~
cperciva
_Your response basically said that you were quite confident..._

Ah yes, the old Putnam thread which gets trotted out every month or so...

 _I know where my limits end, and when my product is ready to go to the next
level, I'll have no problem bringing on a VETTED and qualified partner to grow
the company as fast as possible._

Sure. One of the bullet points from my talk which didn't get translated into
the blog post was "Step 1: Figure out what you're good at". I'm very much
aware of my limitations, and if I ever forget them tptacek will step in to
remind me how horrible I am at web design and how I need to do a better job of
selling Tarsnap.

As for marketing, I very nearly listed Hacker News as my marketing co-founder:
Roughly 10% of Tarsnap users come to the website from
<http://news.ycombinator.com/item?id=389304> \-- far more than any other
single page (although my blog is more in aggregate).

~~~
swombat
That's not marketing, dude, that's some thin shreds of organic traffic.
Perhaps you should listen to tptacek, wheels, jacquesm (and myself) and
actually find someone who's competent at building a business, just as you are
competent at building technology, and team up with them.

Would Steve Wozniak be considered successful by any metric if only 100 Apple
computers had ever been sold? No. A business needs many things, of which a
great product is only one. "Make something people want" implies you need
people (enough of them) to actually want your product. If they've never heard
of it or if they don't buy it because of some other reason, they don't want
it. If only very few people buy your product, it's because it sucks on some
important metrics.

Harsh reality: until you get your head out of your ass and bring in someone
with the skills to turn your technology into a business, you don't even have
one founder, because you don't really have a business at all... yet.

~~~
cperciva
_That's not marketing, dude, that's some thin shreds of organic traffic._

I'd say it's a thick shred. :-)

One of the benefits of Dropbox's popularity is that there are a very large
number of people who google for "dropbox security".

------
staunch
My zero-equity co-founder is the internet. If I had jumped back into 1960 I
would have to spend 50 years creating the internet. He doesn't even want a cut
of my company!

------
mahmud
cperciva, I completely understand the sentiment, and I can relate to it as a
single-founder myself (not really a "founder", not yet, for now I am a solo
consultant.)

But I don't think infrastructure/libraries can be considered "co-founders",
because they don't give you new ideas and insight.

You see, to be able to use a certain solution, platform, library, etc. You
have to _know_ of it, know of its uses, and know how you might use for a
specific problem.

OTOH, co-founders, domain-experts with vested interest in your enterprise, are
not just mere resources to be called upon when needed and put to use. They are
not just a knowledge-base of solutions. No. They're engines for _creating_ new
solutions, but also the means to _pose_ knew questions and problems. Problems
you never knew you had, and solutions you never thought of, or thought were
acceptable (like "who cares, forget it" -- humans are excellent at these types
of dismissive approaches to problem solving; we have an intuitive knack for
ruling out issues that are not worth bothering with. And by "we" I don't mean
programmers, sticklers for the tedium and observers of minutia.)

At the very least, a human co-founder allows you to take a day off, picks up
your spouse from the airport, and comes with you for happy hour. I would kill
for someone who is "in" on it with me. These types of "benefits" might not
merit any sophisticated Rumsfeldian epistemology ("there are unknown
unknowns", etc.) but they're very important, and I say that as someone who
sorely lacks them.

~~~
dpapathanasiou
_But I don't think infrastructure/libraries can be considered "co-founders"_

A better way to express the utility he gets can be summed up in this article:
"We Are All Open Source Billionaires" [http://thecodist.com/article/we-are-
all-open-source-billiona...](http://thecodist.com/article/we-are-all-open-
source-billionaires)

------
aufreak3
It's somewhat unfair to equate co-founders with web services and software. Co-
founders can say "you can't do this dude" or "don't you think this'll work
better?" or "hey I had this idea which I think is great" or go out and have a
beer with you.

~~~
cperciva
True. But if I want to hear people say "it's somewhat unfair to do X" I just
come to Hacker News instead. :-)

~~~
aufreak3
fair enough :D

------
tyng
When I saw the title "zero-equity co-founder" I thought it was about inspiring
employees to work as committed as an actual co-founder, which would be totally
appropriate.

I think the downside of single founder startup is that 1. there's no one to
bounce your ideas with; 2. speed to market is greatly reduced; 3. there's no
one to share the stress or keep each other motivated when things get tough;
and most importantly, 4. there's no one to share the joy when you manage to
solve a business/technical problem that is not visible to outsiders.

I don't see any apparent advantage of keeping a single founder startup. You
may have the ability to run the startup as well or even better as a multi-
cofounder startup and keep all the shares - but it's not fun, and fun is very
important for an entrepreneur!

~~~
StavrosK
It's absolutely _not_ appropriate to ask employees to work as well as actual
co-founders. If you want them to work as well as co-founders, give them
equity. Hell, I _expect_ my employees to fight me for their rights, when I
don't give them enough.

If you aren't going to pay your employees like co-founders, they should very
well _not_ work as cofounders.

~~~
tyng
That wasn't what I meant.

What I was saying was that you want to inspire your employees with your
vision, so that they feel a sense of purpose in your startup. When your
startup is making meaning not just money, the satisfaction they get from doing
work is more than any money or equity you can pay. They are committed.

And I'm not against giving employees equity at all. But inspiration is a
higher level, and arguably the right kind of, motivation.

~~~
StavrosK
I agree, but I think that's something they grow into, rather than something
you can enforce/influence. I have a feeling we agree, though.

------
subwindow
A co-founder would be the one to tell you "What the hell is a picodollar?"

~~~
dagw
To be fair he gets plenty of that here, so for that he doesn't need a co-
founder.

------
Aegean
Yes libraries and infrastructure do not give you insight like a co-founder,
but a large part of an engineering co-founder in a heavy engineering startup
is perhaps %80 - %90 showing the strength and attention to getting the
development right. For example managing an engineering team, showing attention
to detail, making sure the design is exceptionally good etc. He has these two
crucial pieces of technology at hand which would otherwise be developed by
using most of the energy of a tech cofounder. So in that respect I agree with
the point.

In summary, there are now tools to make it so much easier for startups that
sometimes they can even do almost as much as a technical co-founder.

------
owathray
Tarsnap is a mediocre service - the co-founder you needed was one that could
have brought a user focus that was apparently beyond you. I'd guess that the
majority of your business is directly due to being one of the insufferable,
self-satisfied minor pundits on HN. You say that fully 10% of your signups are
_direct_ page referrals from HN - a remarkable and telling statistic.

Might I suggest that you invite some of the other big fish in this small pond
over to join you? I bet that, say, ptacek would be good for an immediate
doubling of revenue.

------
dmoney
_> This is an average of roughly one thousand lines of code per month, which
is pretty much the limit to how quickly I can write high quality "never need
to look at this again because it will never break" code._

What's your secret for being sure it will never break? How often do you find
yourself revisiting it anyway?

------
hariis
All that OP is saying is that there would have been 2 extra co-founders, if it
was 10 years ago.

------
sgt
My zero-equity co-founder is my Aeropress, for keeping me supplied with
excellent coffee at all times.

------
davidw
Those same "co-founders" are working for a lot of other companies though.

------
chrisbroadfoot
Ugh. Link-bait title.

This is just as useful: <http://news.ycombinator.com/item?id=1566568>

~~~
cperciva
It wasn't deliberate link-bait. I use the term "zero-equity co-founder"
because it makes the point that these provide something which (until recently)
you would need to bring in a co-founder for.

~~~
erikstarck
But the same can be said for _any_ component in your business that was made
outside your office walls. Your operating system. Your compiler. Your office
chair.

This is in fact how an open and free economy works. You always build on the
work of others.

~~~
cperciva
Yes, if you ignore the "(until recently)" part.

I'm not trying to be exceptionally profound here; just to point out that the
giants on whose shoulders we stand are growing taller by the day.

