The truth is that a really great business person with the right skills can be immensely important! I didn't fully understand that until this last year between meeting some hustlers on the Startup Bus and my coworkers at my last startup.
The real problem is separating the hustlers from the blowhards. In my experience, they land in 2 camps.
1) Hustlers - They will make something happen w/o you. They'll put up a splash page or a wufoo form or something to get things started. They'll be actively working on their idea, even if it's just prototyping things on paper.
2) Blowhards - These guys are just waiting around for you to join to do the work. They usually have an inflated sense of importance (about themselves and their idea). They also tend to think you're lucky to work with them.
It's the latter type this site is making fun of.
The former are the people you want to work with, and are super valuable.
Some of the former you want to work with. A technical founder has something obvious they're bringing to the table - i.e., the ability to implement the systems that will enable the idea. What a non-technical guy brings to the table, if anything, is more complex.
Does he have insider knowledge or networks in the field you're breaking into? Does he have some skillset (say, SEO, real marketing prowess, etc) that will concretely help the business launch?
Having an idea is fine. Having the hustle and enthusiasm to carry the idea is fine. The problem here is that, even when you exclude the blowhards, there are a lot of non-technical people who have the motivation and enthusiasm - but honestly simply don't bring much of value to the table. Not sufficient to warrant co-founder equity anyways.
1. technical cofounders - they just want to play around. You tell them the users are satisfied with the current search engine,that we need to make it easier for people to enter info in so that app can be more useful. Crickets. Nothing happens. Hey look, we tried out 3 new search engine. Thanks.
I am sick of tech folks that don't want to do what needs to be done because it is not sexy.
2. non-tech folks. Networking is fine. But you need to hustle that means try out lots of ideas to try to get "top of the mind" awareness from "your ideal customer profile". This means lots of grunt work. Think of ideas and execute them. But noooo. It's all about people you know, some of it is. Sure.
Noooo. It' all about perception. Come on, some of it has to be that our product actually does something useful for them.
Bottomline: depending on the product are we in "demand harvest" or "demand generation" mode. No we are in "perception" mode so we can be bought out. Our customer is the company buying us. Screw the users. Their stupidity for doing business with us.
And some marketing people - are a waste of space. Everything is outsourced. They are glorified yes men to the CEO. Sales repeatedly asks for collateral. Screwed it I will make my own.
I agree that we need to target strategic customers. They are the hubs that will virally promote our products. Nope. We need customers with big names so the companies that are thinking of buying us will think we own the space.
My background: EE, stats, sales, sys admin, dba, programmer. And I agree the hardest one to learn was graphics and design.
I think about this a lot. I'm now thinking the fastest way to figure it out is (tactfully) ask them how much money they've stacked up in various endeavors. The university teaches a lot of things, but those don't necessarily translate into stacking up money. If you're technical and want a business guy, figure out if he can stack up money. A pretty good predictor of that is how much money he's stacked up in the past.
E.g., you're looking at a rich MBA. Say 100,000 MBAs graduate a year in the US. You still don't have enough information to know if he was any good.
Worse, say you use a pedigree: You're looking at a rich MBA from Harvard. Say they only graduate 1,000, but, because any damn headhunter will put a harvard MBA into a C-level job, 90% of the harvard MBAs stack up a ton of money. Now, knowing that he's a rich MBA tells you even less. All you really know is that richness & a harvard MBA seem to correlate, which is kind of exactly where you started :) (on the other hand, if you had a poor harvard MBA in front of you, then you'd really have something!)
Anyway, yeah. it's a really hard problem -- just as hard as finding a good programmer, imho
Well, then you get fooled by randomness in a completely different way: You begin to believe that the ability to succeed from scratch is a much rarer skill than it actually is, because (a) only a subset of the potentially-successful people ever succeed, by whatever measure, and (b) only a smaller subset of those ever bother to try to succeed again; and (c) only an even smaller subset of subset (b) ever succeed a second time.
But you don't really need to find a serial performer. You only need to find someone who can succeed once, and there are more of the latter than there are of the former, by definition. It's no knock on Bill Gates that, having founded one incredibly successful company, he didn't quit and try to start a different one just to "prove" that he had the knack. Zuckerberg should not be ashamed that, having found himself holding one tiger by the tail, he doesn't feel inclined to shop around for a different tiger.
The same thing can be said for a bunch of MBAs. It is not whether they are rich or not (which can be a factor of having been born into money or not) but whether they can make it rain.
Sure, some will get lucky. But when you have a field of 100, and of those 100, 20 "got lucky" and made a pile of money once, and 1 of them might be poor, but made a small pile of money every quarter doing several different things... it is the consistency of the last guy-- the rainmaker-- that is appealing. Even if his net worth is smaller than the smallest of the 20 who "got lucky" or the dozens who may have started out rich.
So, it is his actions as a process that speak to his qualities, not the size of his wallet.
I think this is what the poster is saying.
Let me paraphrase a story from the book that addresses Buffet. Taleb compares people playing the market to people flipping coins.
If everyone in the US flipped a coin once a morning, after about four weeks, you'd expect to have maybe a thousand people who'd flipped all heads. You could go out and interview these people, find out what their 7 highly effective habits are, whatever, but you couldn't actually be sure to be learning anything about what's "really going on."
On the other hand, if after four weeks, you found that all the people who flipped straight heads were clustered around Omaha, and all reported taking their coin-flipping-lessons from one guy in the town, then it might behoove one to look a bit closer.
In both cases, you can study "process", but without an understanding of the phenomena, you might just be spinning your wheels, coming up with correlations rather than causations.
TL;DR -- causal mechanisms are hard to find.
You should read the book :)
I agree with you, definitely. Finding good business folks is as hard as finding good programmers. Really damn hard.
I was thinking in an entrepreneurial/self-employed/self-directed/sales context... funny, I didn't even think about someone who did it on a corporate level.
No information is perfect for decisionmaking, but the closer the past success is to what you're looking to do, the better. That said, I've found some people just have a knack for getting money, and it's good to work with those people.
As a side note, I was just reading this earlier - I'd recommend it, there's a whole education in here on having a knack for getting money if you read it slowly and think through it:
One would think that selling "50 cent tacos" wouldn't cause undue confusion, but....
Start there. If there's nothing, they probably don't have the drive. If there's something then I think there's at least a chance that they'll work hard and be good. The second part is they have to want to be good at business and selling. Being truly good at anything is hard, you have to want it.
Money isn't a good indicator, I find. Unfortunately. Personality is, but is very difficult to discern between those who will try hard and win, and those who won't.
When I was in college one of the people I got to know was a guy who started with a paper route in junior high school and by the time he became college freshman he had several houses he was renting out. He cleared enough from rent to cover the mortgage and build up the downpayment for the next house.
The guy worked hard, was smart with money, damn humble (he was the one who cleaned the houses between tenants himself even though he could have afforded to hire people to do it). No question in my mind that guy went on to be a multi-millionaire.
Also, if you do a venture with a guy like that and it fails, you know he put everything he had into it.
There was nothing slick about him. He was not a networker in the least. But he treated everyone with respect, and got along well with just about everyone. He was a natural born businessman and entrepreneur.... who knew how to "Stack up money" as you put it!
Show me a business guy like that, and this code monkey will take notice.
How do you tell an "I have the next big thing but just need some help with technical details" people apart from real, talented non-technicals?
Or, as a non-technical founder, how do you differentiate yourself from the 99% of clueless yahoos run around pitching their Great Big Idea?
Tell them you're building a team to do X, and you're not looking for free labour.
You wouldn't ask a mechanic to rebuild your engine for equity in your car when you eventually sell it, neither should you expect coders to work for free.
I think there's a lot of value involved in being able to convince people to contribute some level of effort for equity. If intelligent people see enough in your idea to jump in your boat, that might mean something about the value of your idea. The converse is also true: if you can't convince anyone to contribute anything of value to your effort in exchange for equity, maybe you don't have a compelling idea.
A real entrepreneur doesn't expect coders to work for free. He or she is that pitching a compelling vision that involves a coder adding value to something that the programmer co-owns, not simply giving away free time.
Intelligent people avoid non-technical (or even technical, honestly) people who pitch their New Great Idea because 99% of the world has great ideas and zero ability to pull it off. What people are judging you on is not the quality of your idea, so much as your ability and skills to do it.
If you're failing to gain traction with the people you're trying to sign on, maybe your idea is sound, but people simply do not see you as bringing something valuable enough to the table to make it a success.
Whenever I get approached by a non-technical founder about their New Big Thing, my immediate question, bluntly, is: What do you bring to the table?
If you don't have a good, concrete, specific answer (instead of hand-wavy things like "I'm good at marketing"), do not be surprised when competent technical people roll their eyes and wander off.
I was taking issue with your characterization that non-technical entrepreneurs are trying to get people to work for free. I think that's an unhelpful way to look at things.
People are not working for free at a startup, they're building equity and increasing the value of the overall enterprise. Except for the case where the original person is actually sleeping or playing golf all day, I don't see how you can seriously propose that some people are genuinely trying to pitch an opportunity where you are doing all the work (and presumably at some companies they've succeeded in getting the techies to do all the work?)
Considering your last statement, I think you need a better way to evaluate the work of people who don't do technical work for a living. What sort of concrete work would a marketer be doing before there's a product? I wouldn't want to work with someone who said they had already printed all the advertising for a product that hasn't even been designed!
Everyone thinks their idea is great. That and $2 gets you a cup of coffee.
In my own situation as a non-technical founder I have been in a technical holding pattern for exactly the reason you stated. I ask myself "What do I bring to the table"? The answer is that while lot is coming together, I feel that until those key pieces fall into place it would be inappropriate to ask someone who brings solid technical skills to the table to look at my project.
The question everyone, technical or non-technical, should ask themselves regarding any project is "What do I bring to the table?"
As far as your example of hiring an electrician to work on a house you're going to flip: that may have worked well for a few years, but as recent events tell us, the last round of suckers in that game were left with big losses, and the people who worked for them probably never got paid. It doesn't look like a very promising business model.
If thats something you brag about, you're a cunt of the highest order.
There's no free lunch. Somehow you're going to pay the full price for your iPhone. The higher monthly bill and higher early termination fee you're willing to pay, the lower the upfront cost can be, which some would argue is making people's lives better, not worse.
I would personally prefer to buy an unsubsidized phone (and have correspondingly lower monthly bills, and a tiny or zero early-term fee), but that's not how the US mobile market works, at least not for the device I prefer, and choice of device is more important to me than choice of contract terms.
Around here (i.e. Europe), you can get an iPhone 4 (24x25EUR) and the corresponding phone contract (20EUR/month), either together (which would give the well-known 45EUR/month) or separately from each other. You can cancel or change the phone contract later and only pay for the phone, if you want - in any case, you know which is which, and it makes it a lot easier to compare both contracts and device prices.
No early termination fees necessary. It's just the US mobile market being bogged down from being under the control of an oligopoly of non-competitive companies.
I was invited to a dinner once where a bunch of Whartonites made up the body of the group. They really thought they were the future gods of industry and knew everything about business (mind you they were playing on daddy's money). When the check came they suggested we play "Credit card roulette" to see who covered the bill.
I don't think my hearty "go fuck yourselves" was appreciated.
These are the same assholes whose arrogance helped crash the market.
The family net worth does not come into the equation at all for most.
One of my former coworkers was an Indian guy who used to be homeless as a kid. Can't get much more NOT coming from money than that.
A simple "You go ahead, I'm just going to pay for my own" would have sufficed.
The irony is that most of these guys have the intellectual horsepower to learn enough coding to crank version 1.0 in about 90% of the likely startup spaces out there. Speaking as a business guy from a similar school who started refreshing his own tech skills a couple years ago to reach "tech ceo" level competency (can personally deliver a simple app or feature, understands dev and support process, has a clue about design and project tradeoffs, can size up technical talent), these guys have the capabilty.....just being lazy weasels...
By the way, anyone at a startup who considers himself a ceo is seriously delusional.... You are a CEO in training at best. Call yourself a founder and move past it. Get cash flow positive and create 50 - 100 jobs and you can reconsider...
what intrigues me is why anyone who was lukewarm on technology would hang out in software circles. this shit is hard. really hard and it just gets harder the more you learn. there must be easier money lying around for that crowd.
You're either engineering, design or marketing, and preferably more than one.
My background is in engineering, which means I didn't have much need to pick up design, marketing, or entrepreneurial/business skills while growing up. Once I realized I wanted to work for startups (about a decade before founding my first startup) I started learning about these things. Design, as in graphic design, is probably the hardest to teach. Business is the easiest.
If your background is you got a BS in "Business" or an MBA and you want to be in startups, then you should figure out what role you're going to play. (And it shouldn't be "CEO".) Pick up some engineering, design or marketing.
Show me someone who designed and marketed several extremely popular websites when they were in college, say, along with a technical buddy who made them, and I'll see someone who can greatly benefit a startup (whether their degree is an MBA or a BS in art appreciation.)
Eventually if your startup gets big enough, or for some business models (eg: Groupon) you may need large numbers of sales guys or "Bizdev". Well, "BizDev" is just sales to other businesses where you sell a partnership. Sales guys sink or swim on bringing in business, and I think nothing will kill the "whartonite" sense of entitlement more than working on a commission.
Much respect to sales guys, though. I have done that job because I knew I'd never be able to hire a sales force if I hadn't ever done the job. It is not easy.
So, Engineering, Design, Marketing. Which hat do you wear?
So, BizDev may not be best done by sales guys, but it is closer to a sales process than being a winklevoss twin. (At least that's what I was trying to say.)