
Ask HN: What's 'Due Diligence' when vetting co-founders? - cdvonstinkpot
Hi,<p>I need a co-founder with a certain skillset to help my startup be successful when it launches, and have registered with 'Pro' accounts on 2 websites that claim they can help me find a co-founder. I've also placed an ad on another that claims it can help me find a technical co-founder. Then I put an ad with links to each of these campaigns on my company website (superspeedyservers.com).<p>Of 8 people I initiated contact with on the sites which I have a 'Pro' membership, none so far have seemed interested enough to get back to me, which is discouraging, 1 person has reached out to me, but hasn't followed up with a new reply after I got back to them, and on the other site with the ad, I got 1 reply from someone who's interested.<p>Part of me is inclined to start working with the first person who appears to be qualified and interested, out of fear that there won't be any more 'applicants' for lack of a better word for them. But I know the act of finding a good co-founder is akin to marriage, and I don't want to partner up with the wrong person.<p>So I'm wondering how this vetting process should go, considering that I have 6 months of 'Pro' account remaining on these sites, and don't know how many 'applicants' I may or may not see.<p>I don't want to squander the opportunities I do get, but I don't want to jump the gun &#38; take the first 'applicant' for the sake of taking the first 'applicant'.<p>What are HN readers' thoughts on this?<p>Thanks.
======
milespj
I took a look at your profile and website and have some thoughts.

First is that your idea is a very specific and specialized. Your co-founder
will likely need to spend lots of time just to fully understand the problem
and the business case behind it. Then if they are actually interested in
tackling that problem and believe a business can be built, it is difficult,
requiring lots of time and specialized technical knowledge. Lots of people
want to find companies based around classic consumer web application type
offerings. Not saying you won't find someone but just saying that it will be
difficult. You may be better off going to conferences to network with the
right crowd so to speak to find a founder.

Second is that you are based in Syracuse. Personally at the co-founding stage
I would want to be able to meet face to face and work with someone in person.
I think a lot of people are the same way. The CoFounders Lab site does all of
its search based on proximity (not sure about the others). So I think lots of
people don't even see your profile, and even if they do they say I don't want
to work with someone in Syracuse. Not knocking Syracuse - I really like it
personally - but you need to be in one of the startup hubs in my opinion. It
also will be helpful in getting other talent and getting connected in the VC
world.

------
melbourne_mat
I read about your business proposal on the tech co founder sites. Please don't
take this personally but you come across as naive and amateurish.

Hosting is a very easy business to get into, unfortunately it's a very
difficult business to make money out of. Why will your business compete
effectively with something like AWS - which has such enormous scale and brand
recognition?

You mention that you've done some work for some famous people. Have you done
any of that recently? If you have some rich contacts and you are good at sales
then that could be your ticket. If so, you wouldn't need marketing - just get
a basic brand site built in wordpress using a contractor on elance - and your
requirement for a co founder goes away!

From your business proposal: "I had a 6 figure inheritance which I blew". Why
even say that? You just sound like a failire.

And "I've got somewhere between 4 and 5 k to invest in this new enterprise".
Somewhere between 4 and 5 k? That makes me think that you think 1k is a lot of
money. That's a problem for someone who should be a company founder.

Your business model is weak. You don't have much money to invest. Unless I'm
missing something, you should save your money and try to do something that is
in some way innovative so that you can compete.

~~~
cdvonstinkpot
Maybe I _am_ naive, I'm not educated by any business school, and am just an
ambitious guy with a few thousand dollars and a desire to ship.

As for my experience with the previous high-end experience, it's unfortunate
that I ended my term with 1 of the companies on not-so-great terms, and I
wouldn't feel comfortable contacting them for help with anything, and they
wouldn't be able to help anyway except with maybe a part-time day job, which I
couldn't get to without relocating anyway, so they're help is a no-go. The
other guys would talk to me but they could only do so much- across the
country, neither could really help with this venture.

And I don't have a problem mentioning my last venture although it failed
because it wasn't any of my doing that caused it to fail- I ended up in the
hospital and unable to attend to the startup for a period of time, where it
became necessary to sell its assets to cover hospital expenses & rent instead
of continuing it to completion. I'm still proud of how far I got with it, I
was a year away of being able to support myself with it. And I would have if I
hadn't gotten sick.

I kindof do think a grand is alot of money, but I know base don my last
startup that it only goes so far in a startup. I do tend to think its possible
to get a foot in the door with 5k though. Which is my goal with this project.
Right now I only aim to make enough to be able to slowly grow the company, so
making enough to save half & reinvest it will make me happy even if its
$250/month. I mean, it's only a $4k investment.

~~~
melbourne_mat
There's nothing wrong with being ambitious and only having 5k startup capital,
it's just that these don't seem enough to serve the target market you're
aiming at.

I would describe 'Big data' to mean the size at which traditional database
technology stops being useful in your project. It's usually when the volume of
the data is large.

I recently worked on a low end big data project. They had 4 very large,
traditional database servers and the workload wasn't suited to that kind of
server. They rearchitected, spent a bunch of money and moved to a 20 node
hadoop cluster (each node was small - perhaps a few $k each). Because the
workload suited hadoop they are now able to scale up easily and to great
advantage.

Note that I describe that project as low end. 20 nodes is small in the big
data world.

So when you say "I think it's possible to get a foot in the door with 5k", I
think that perhaps you don't know enough about your market to make that
statement.

Don't do anything further on this project until you've fully validated your
business plan. There are some good ideas on how to do that in the other
comments here.

~~~
cdvonstinkpot
So I ought not mention 'big data' until I can be running the ScaleMP phase. In
the meantime I'm just a run-of-the-mill dedicated server vendor.

------
ryanSrich
Honestly I find it awkward and unnatural to search for a co-founder. It's
comparable to searching for a wife. Well...you kind of need a girlfriend
first. Put another way, __hire __a web developer, which honestly it doesn't
even look like you need yet, grow a relationship with that person(s) and work
them into a co-founding position if the opportunity presents itself. From
reading the info you've posted I'm really confused as to why you need a co-
founding web developer so bad that you've yet to put anything on the web. That
may be deterring people away.

~~~
cdvonstinkpot
I haven't put anything on the web because I don't have a web dev. I certainly
would like to have something up on the web, but I can't afford to at this
stage of the game. I can barely afford the server #1 I need to get off the
ground renting. I don't know if that means I need access to more capital but I
like to think I can do this without more than $5k.

If I had a web developer onboard with me, I envision there being a permission
marketing campaign collecting email addresses of interested parties &
delivering relevant content to them in anticipated doses to keep them
interested. Being that we only have so many servers to rent & are just
starting I would like to see a waiting list implemented, too.

I can do some stuff in plain text on the website, but I think its better off
not drawing customers to it while it looks that way because they'll think it
looks unprofessional.

~~~
ricardobeat
Use wix.com[1], learn to code[2]. In your description you say you have set up
an OpenStack install at home, HTML/CSS is a walk in the park compared to that.
Use launchrock[3] or mailchimp[4] to collect e-mails.

"big data" really means _big_ \- as in millions of dollars big, tera/petabyte
scale. Not going to happen with $5k. You will suffer to get anything close to
AWS prices[5]. You could brand the service as "fat" servers or something
similar until you can really tackle that kind of scale.

And, honestly, you should omit the thing about meeting Calvin Klein and DJs,
it doesn't leave a good impression. Tell us what you have to offer as a
founder, and get to work on a business plan with real cost figures.

[1] <http://wix.com>

[2] <http://www.codecademy.com/courses/html-one-o-one>

[3] <http://launchrock.co>

[4] <http://mailchimp.com>

[5] [http://blog.aggregateknowledge.com/2013/05/16/aws-
redshift-h...](http://blog.aggregateknowledge.com/2013/05/16/aws-redshift-how-
amazon-changed-the-game/)

~~~
cdvonstinkpot
Ok, feedback well received, thank you.

------
vicbrooker
'I don't want to partner up with the wrong person.'

This runs both ways. You need to prove to all your potential cofounders that
you're the right person to partner with too. They will want to know that
you're qualified and interested

Do your ads explain exactly what skills you bring to the startup? Can you show
any validation? Have you already found people who would be willing to pay for
your idea once it's built?

You haven't mentioned exactly what your idea is (and keep in mind it will
probably/definitely change as your startup grows) but if it's possible to
start finding customers with a solution that requires little or no technology
then absolutely do that. In other words, try to find a way to run it yourself.

This will either prove your idea has merit, and will make it easier built a
team around, or it will let you weed out any gaps in your business model until
it does. It's better to find problems before everything is complicated by
having two personalities to manage.

------
bdfh42
Clearly you will want to validate their skill set - this may mean acting like
an employer about to recruit a new employee before offering to partner.

You might also need to check that their history will not be a problem when you
come to raise finance. Are they an undischarged bankrupt for instance (in the
UK - are they disqualified from acting as a company director).

Then it is all down to - can you work with this person? Plus, is this person
likely to represent the business well in their selected role?

------
jabbernotty
Having looked at superspeedyservers.com I'm left thinking mainly two things,
which I put down in short here:

The business side may be lacking some things. For example: There are many
competitors in this space. What is the added value to a customer? The stated
goal ('serve the big data market ... process big data workloads') seems ill
defined. Leaving the business side for a moment. How well is the technical
side thought through? Which technical problems would these servers solve? I
thought the problems would be lying in people's (sometimes mediocre or badly-
suited) software stack or algorithms.

Note that though I am a software engineer, I'm not an expert on any kind of
large-scale systems, nor am I a founder of anything.

------
ericabiz
I can quickly tell you why you've had 0 luck finding a co-founder.

My background: I am both a web hosting industry veteran, with a successful
high-end hosting company under my belt (see <http://www.erica.biz/2009/the-
end-of-an-era/> for my story)...and my current co-founder and I also did a
presentation at SXSW this year on "How to Find the Perfect Co-Founder."

You've made 2 classic mistakes here:

1) You haven't started building the business without your co-founder.

There is absolutely 0 reason why you need a developer co-founder to build what
is essentially a high-end hosting company. Put up a WordPress site, set up a
Stripe account, collect payment (3 months in advance for new customers will
help you buy the server) and you're in business. This is EXACTLY what I did
when I started my hosting company. There are many options available to lease
high-end hardware (I'm not talking about leasing _hosting_ ; I'm talking about
leasing the _hardware_ and colocating it) and there's no reason for you to not
build and prove out this business.

2) You are looking for a co-founder and not a particular skill set. When my
co-founder of my current startup and I met in June 2010, I wasn't looking for
a co-founder; I was looking for a developer. We worked together for several
months and I paid him to develop the site and back-end for our customers. We
signed our first customers and only _then_ did I offer him a co-founder
position with equity. But I paid him the entire time.

Can't afford to pay someone? See my first piece of advice. You don't need
anyone else. When I built my hosting company in 2001, I had just started to
learn how to write code. I taught myself PHP, wrote my own shopping cart, set
up an integration with Payflow Link (now owned by Paypal), and I was in
business. You need to do the same thing here.

The bottom line is that no one wants equity in an idea. You have to prove the
model. Things like WordPress themes and Stripe make it easy to do so, so
anyone even remotely technical who doesn't do that doesn't appear to be
serious about the business. (I'm not making a judgment call here, but that is
the perception when you don't even have a simple website with products for
sale and a checkout process before looking for a co-founder.)

On top of that, the hosting industry is exceedingly difficult (I've written
about it on my blog at <http://erica.biz> extensively) and you're really going
to have to prove that you have something awesome and different to succeed in
that business.

Think you've got it? Here's the challenge: Get a site up with a checkout
process in the next 24 hours. When the first order comes in, put that server
on a credit card and deliver to the customer. Then repeat 100x more in the
next 6-12 months. You may find you don't need a co-founder, or you may find
your business idea was wrong. Either way, you won't be banging your head
against the wall saying things like "I can't move forward without a co-
founder!"--you will have taken control of your business and moved forward to
prove the idea with the skills you have right now.

~~~
cdvonstinkpot
I don't have a credit card, but in the next 90 days, I expect to have access
to enough funds to buy server #1. I'll get on a way to sell it in advance.

I had an idea to market a special where I would sell an annual deal on the
server for 25-33% off which wouldn't make much money for that year, but would
provide enough capital up front to buy another server & expand right off the
bat, so I wanted the website to feature that special.

I also wanted the website to feature a permission marketing campaign & collect
email addresses of interested parties to go onto a waiting list since our
initial server capacity is limited, but I guess I can achieve the same thing
with a facebook page with people 'Liking' us & adding our announcements to
their news feeds. I saw an interesting social commerce app that allowed for
one-click facebook purchasing, that would make the storefront part easy & free
of up-front capital.

Thanks again for your reply.

~~~
ericabiz
> I'll get on a way to sell it in advance.

Awesome. Really glad to hear you're ready to take the initiative.

> where I would sell an annual deal on the server for 25-33% off

You may not get people to commit to a year up front if you're brand new, but 3
months in advance can be pretty effective and still pay for most of the
server.

> I also wanted the website to feature a permission marketing campaign &
> collect email addresses of interested parties

Okay, this is easy. I've used both Mailchimp and Aweber and like them both;
I'd recommend Mailchimp in your case since it has a free plan for you to start
with. It is easy... _literally_ copy and paste. You will be surprised how
simple it is to integrate this.

> I guess I can achieve the same thing with a facebook page with people
> 'Liking' us & adding our announcements to their news feeds.

This will work; for me, conversions have been much stronger from my email list
than from Twitter/FB. Again, Mailchimp makes this easy. Facebook also makes
this pretty easy.

> I saw an interesting social commerce app that allowed for one-click facebook
> purchasing, that would make the storefront part easy & free of up-front
> capital.

Use Stripe. Again, copy-and-paste simple. Mailchimp + Stripe + a shared
hosting account + a WordPress install + a theme and you've got everything you
need to sell your first server. Best of luck!

~~~
cdvonstinkpot
So what I've done today was I brought this spreadsheet I have that details the
plans for 'Server #1' with all its parts & where I'm going to source them all
so that I can afford to build the server, down to a friend's computer shop who
is an A+ certified builder so that I have a second set of eyes on my plans-
just to be sure that what I have worked out isn't going to present me with any
surprises once I get all my parts together to build the server.

I would hate to get all my money spent on the server parts & have customers
having paid for a specific product & then not be able to deliver that product
just as it was advertised because of some unforeseen surprise that came up
once I got all the server parts together ready to be assembled.

So before I go & put up links for people to be able to pay for a quoted
system, I want to be absolutely sure that this is the system that I can build
with my $4k. No surprises once I get my parts together.

And that's what I've accomplished this morning, I'm still working on the rest
of what everyone's written. I'll be working off of this post for a few days it
appears.

Thanks to everyone who's replied.

------
jfoster
In order to find a good cofounder, you may need to not need a cofounder. When
considering people I'd like to work with, the most appealing ones are those
who will be able to do everything without me.

------
ExpiredLink
Your business model may not viable.

------
abeh
I've thought about this lately, and think that a trial period would be best,
with both parties clear that it is a trial period for each other.

~~~
jfoster
Certainly better than just jumping in. I think launching a tiny project with
someone (something that just takes a few days) is probably a good way to test
the waters.

~~~
cdvonstinkpot
Agreed, I'll consider that for sure. Thanks.

------
pk13
_But I know the act of finding a good co-founder is akin to marriage_

would you marry someone who responded to an ad on some website?

~~~
namelesstrash01
In the interests of Science and defense of this method, I did in fact meet my
first wife this way. The problem was that I was simply never around (war, you
know), not necessarily that it wasn't a good match.

------
surfearth
A minor nit about your ad copy is that you have misspelled Calvin Klein. I
would encourage you to remove this whole sentence since it is irrelevant to
the business of building a high-end hosting service. Hope this doesn't come
across as negative, I'm just trying to help.

------
jabbernotty
Be sure to ask those that have at one point communicated with you, why they
lost interest.

