

Do I need a technical co-founder or should I hire? - lolmaster

Hi all,<p>How technical do you have to be to be considered as a technical person? People talk about how we need a tech co-founder. However, based on my profile below, can I just hire a smart whiz? I don't feel like giving up equity I built and lose control over key decisions.<p>Here is my profile:<p>-age 23<p>-business degree<p>-built my first PC at 10<p>-won a local web designer comp in grade 5 (back then, it was easy to code a simple web page and wow anybody in 1999)<p>-built a solo tech startup in 2011 and grossing $30,000 a month and growing fast (not my first startup but it is one that makes most money so far).<p>What I don't have:<p>-CS degree or formal programming education<p>-I can code easy stuff like procedural but cannot do OOP - the opportunity cost to learn it now is too high<p>-Never learned how to code until 2009. I stopped my computer passion due to middle/high school peer/parental pressure. I made some money off ebay though by selling things.<p>What I can do:<p>-Confident to grasp any IT concept if given time to research about it. I learned all the knowledge required for my current startup from Google.<p>-Code any simple procedural scripts in PHP/mysql/bash/perl/lua<p>-hack through existing scripts and modify them to my need<p>What I need right now and future:<p>-A true technical person who can relieve me in the technical development. I literally hack through my startup. While the codes are not pretty and might break from time to time, they are working well enough to 5000 paying members.<p>-Save capital for a $100mil+ startup idea
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lmm
Don't ask how technical we consider you; ask whether you are technical enough
for what your business needs. It sounds like the answer is no, so you need to
get someone more technical than yourself onboard one way or another.

Anyone who joins your startup is going to be taking on a risk: you could go
bankrupt very easily, and if so they're out of a job. It's perfectly
reasonable for them to want equity to balance this.

This doesn't necessarily mean a cofounder. Obviously if you're doing / have
done most of the work then you take most of the equity; put a number on your
startup's current value, and issue them shares monthly at that valuation as
part of their compensation. (Or offer them to contribute a similar amount in
cash upfront, if they want to be an equal cofounder). But unless you've got a
demonstrably stable business and can pay a market salary to the person you
hire, you should expect to include a decent chunk of equity.

If it's really a $100mil+ idea (which I highly doubt) then why are you so
worried about exactly how you slice it up? $50mil is already plenty to retire
on.

~~~
lolmaster
Hi lmm,

The current startup is not a $100mil idea. I built it to generate CF to fund
other projects which I'll probably have $100k surplus by Christmas. I plan to
bootstrap the new idea until it is viable for VC money.

Giving up equity is the last thing you should do - this is the lesson I
learned from many books by people who made over $100 mil+.

I guess my real question should be "Can I pay market rate and hire a
development team + 1-2% equity for each member?" .

~~~
lmm
Hmm. Obviously you'll need to give your technical person control over
technical choices, but I assume you're talking about overall business
direction.

I don't think it's unreasonable for you to keep control (and at a
technical/legal level you will as long as you have >50% of shares, right?),
but you will need to be able to prove your own abilities to whoever you find -
you're asking them to entrust a decent chunk of their career to your sole
judgement. Particularly with your youth and business degree that's going to be
a hard sell. I'd want to see plenty of evidence that you can steer a business
in the right direction; that $30000/month is probably your best argument for
this.

If you're treating this as a way to generate money for a new idea, what's your
exit plan for the current one? It seems a bit odd to be insisting you need
complete control over this if it's not even going to be your primary focus.

And of course, be very upfront about what you expect to have sole control over
and what will be their responsibility.

~~~
lolmaster
Hi Lmm,

Thanks. There is no exit plan for the current business. The goal is to have
someone to run the operation which a salary + bonus based on business
performance.

I don't think it is odd to insist on complete control on a proven established
business growing 30% month by month.

If I can built a MVP and proven it, do I still need technical co-founder? What
do most people do at this stage? I can't imagine people like Paul Allen or
Bill Gates were doing all the coding when Microsoft is grossing $1.3 million
with 13 employees in 1978.

~~~
lmm
>The goal is to have someone to run the operation which a salary + bonus based
on business performance. I don't think it is odd to insist on complete control
on a proven established business growing 30% month by month.

Ok, so the business is already established and you want an employee rather
than a cofounder? Fair enough, but in that case you've got to ask what you're
offering over a bigger company (Google/Facebook/Twitter/etc.), because you're
almost certainly a higher risk to work for - and the larger that perceived
risk, the larger those advantages will have to be. You presumably can't
compete on salary; you can offer the chance of a big payout with equity, and
you can offer the ability to build their own system with a lot more control
over it than they'd have at a big company, both of which will appeal to a
certain extent to certain people. Just put yourself in their shoes, and ask
why someone with the level of ability you need, and only the most superficial
knowledge of your abilities, would come and work for you.

>If I can built a MVP and proven it, do I still need technical co-founder?

Pretty much by definition no. If you're running a viable business without them
then you don't need them. I'm inclined to assume your business just isn't that
technical? If you're building a product for programmers then I'd be surprised,
but if it's just a business idea that happens to be implemented as a website
then it's fine.

>I can't imagine people like Paul Allen or Bill Gates were doing all the
coding when Microsoft is grossing $1.3 million with 13 employees in 1978.

Allen and Gates were about as technical as it was possible to get back then,
no?

A two-founder company is inherently a lot more trustworthy/easier to hire for
than a sole founder (unless the two are married or similar), because it proves
at least one other person was convinced by the idea; two founders who retain
control, followed by employees who get successively smaller chunks of the
equity is the "normal" way to build up a company, in so far as such a thing
exists.

~~~
lolmaster
Thanks for the informative answer. A consumer app is pretty easy to build. I
imagine the MVP for facebook is not quite difficult compare to the MVP of
Google which requires sophisticated algorithm.

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kls
Based on the info in the thread I would say no, you don't need a technical co-
founder but you are going to have to give up some equity and pay market rate
to the main technical guy you bring in. I would say 5 percent vested over some
time with another 5% to vest to the core team that s/he brings in. So 10%
total to put together a core team, should you plan be to grow past a single
technical person.

