You think the guys at the general store in 1849 told the gold prospectors that they were stupid and would lose their money? Or do you think they smiled, told them about the guy who just discovered millions in gold, wished them luck and sold them tents, picks, and levis?
To use your analogy, this would be more like the store owners telling the prospectors, correctly, that they would also need to find legal help to protect any land they found, security to keep them from getting mugged, etc.
I have been a part of projects where first day in discussing the basics of the project the entrepreneur in question has the design "95% complete" which then after the first four hours fluctuates somewhere between 0-20% complete. And all these numbers may as well be randomly chosen for how much of a relation to reality they have at any rate.
Sell them the picks and tents, let them figure it out themselves. When they come back to you with their problems and ask for advice they will finally actually be listening to reason without thinking that their individual case is an exception to the rules and you're just trying to drain their precious equity.
If God had truly blessed these people with big enough brains to come up with brilliant ideas, He would have given them the capacity to learn, at the very least, enough PHP or Ruby to build a wireframe. I don't see how anyone who can't do that could have an idea that would be worth wasting time on.
Why don't you refer them to people in your own country? Why India?
Part of the problem with this idea (as someone else commented "goes around like a windmill") is that a non-technical person is even in a position to judge the skills of a technical person (or vice versa).
At least if you hire a programmer you can fire a programmer. If you take on the wrong co-founder (who doesn't have the ability or skills you thought they had) then what do you do?
People who buy into "I can't make all the judgement calls with perfect accuracy" don't become entrepreneurs.
It involves defining scope, deliverables and timelines. It involves a long-term commitment from two parties: you to provide skill and effort, and them to support you (because there WILL be gaps in the requirements) and pay you.
In my experience in these "I've got an idea" situations, once you attempt to define the project concretely the client frequently realizes how far in over their head they are and changes their mind. And if you're not defining these things upfront then you're running a very risky business model: if you don't know timelines, how do you know how much budget they need to afford you? If you don't whether they can afford you, you're taking a big chance accepting the project.
(And if you are defining these things and realize the guy isn't going to succeed but take the work anyway without warning him, you're unethical).
Unethical? If you had a crystal ball that could predict the success of every new idea, sure its unethical to keep it secret. But just because you don't personally think its a good idea- well, it'd be unethical to put your bias in the way of this guy succeeding despite your doubt.
There are two types of contractors, and I have been both:
1. The "warm body" that does indeed just sell hours, usually via a labour broker or development house. They fulfil a "development resource" capacity required on the project, and typically there is already a project structure (plan(s), schedule(s) and management) in place. They are not directly responsible for the deliverables of the project. I am a warm body contractor because (2) freaks me out.
2. The "development house" (can just be one person despite the term) who initiates and manages the project in addition to doing the work. They have to define the project, agreeing on scope, timeline and budget because they are party to a contract and are directly responsible for the deliverables. If they screw any of these parts up (and that includes due diligence, e.g. can the client actually pay them, and how can you answer that question if you have no idea and agreement on project duration?!), their business stands to suffer losses. This has nothing to do with predicting success -- it has to do with contractual obligations and legal liability. They get to charge higher rates than (1) because of this additional skill required, risks involved and the associated differences in supply.
If you are a non-technical entrepreneur with no idea how to run technical projects and you seek out a warm body, you will get burned because that is not what you need (and this is part of what the linked article is about).
If you are a warm body who accepts such work - just selling hours and not a plan, a schedule and budget, yes I believe you are unethical because you are not ultimately providing what somebody expects, despite knowing their expectations, and that's the definition of misrepresentation (it's like selling somebody a car without a working engine and not stating that anywhere).
If you explain to them the risks, give them a plan that you honestly believe you can meet, and they still want to go ahead, shrug that's fine. But if you just say "yah I'll build it" knowing full well it's not going to be useful, or worse you're too naive to know how to manage projects but you're selling yourself as a professional developer that'll deliver, you're unethical.
Warm bodies don't often choose their projects. Its hard to call them unethical when they're helpless to choose.
And its really hard to 'know full well its not going to be useful', isn't it?
However, the article is saying the chances of success is higher if you find someone who also believes in the vision.
However, in the long term, if you help a customer thrive by helping them understand what they really need, you might make a bit less off that customer right away, but you'll have a customer for life, and many more where that came from via word of mouth.
I always try to leverage my expertise to help them but at the end of the day the customer is always right.
I think that most people don't realize that most ideas aren't original, and that if you think of something, just by sociological statistics, most likely somebody else has already thought of it.
So what really matters isn't a detailed plan, but a person who builds it well.
Making a very good programmer a technical co-founder is probably the best move.
Giving away 30% of your startup, but locking in a very good technical person, is probably going to give you more success than that 30% that you wanted to keep.
Maybe somebody can point at some statistics, but I feel like that it shouldn't be difficult to have a rough idea of the success rate of technical founders' startups vs non-technical founder ones.
We generally have simple conditions for that to work:
- you have to respect our work, because for us it's an art form and a craft, although we do realize that creating business value comes first. We spend decades refining this craft and want to take pride in every line of code (even though it might not always be possible).
- We are concerned that you will treat us like codemonkeys and it will be a PBH-like relationship, where you'll be asking us for status every day, while doing little to no work yourself. You won't be able to code and optimize a large scale distributed system no matter how hard you try. I can most likely figure out whatever it is that you do with a bit of time and elbow grease. However, I'd still much rather work on the product, which is where you come in.
- We're also concerned that you will not understand anything about how software works, and will still insist on having a large say in the day-to-day engineering. You'll need to pick one, either you learn fast about how things work and contribute bit by bit, or you let us run the show where you're not the domain expert.
Amen to that. I'm a programmer and an idea guy (http://ideashower.posterous.com). But what I sorely need is a bad ass bizdev who I can team up with and git r done.
Why that assumption?
"I can most likely figure out whatever it is that you do with a bit of time and elbow grease."
Have you? Or are you just assuming that as well?
About the second one, I was actually paraphrasing something I heard Max Levchin state at one of his talks years ago. Not sure how much it's worth, given his partnership with Thiel.
Even though we really shouldn't feel this way, a lot of us developer sorts wrestle with the idea that we're the only ones ever really working, specifically in the pure development phase of a project.
Granted, I'm sure everybody feels that way at least once during a given venture. I've forced myself to stop thinking that way, but it seems a fairly human thing to think.
If the technical person does not execute on the MVP, the idea guy mostly out only lost time-to-market. On the other hand, if the technical person delivers, he/she is now "all-in" before the idea person typically contributes meaningful execution-value towards the business.
Its probably most fair to view the first "execution" contributors (technical team building MVP) as the first investors in the business, and therefore should be recognized with more favorable terms (equity distribution). If the idea person can create actual execution value in tandem with the MVP, then an initial 50/50 split is fair.
Doesn't this go both ways?
Of course they would have every right to give me no equity if they payed me the going rate of 100k year.
You keep a fraction of your income in savings for just such an occasion. You add that month to your résumé and move on to the next job that might not last. This assumes you're not the reason you lost the job, of course.
If you know where jobs with guaranteed longevity exist, please give the rest of us some pointers.
Too often in discussions of risk management, someone points out that I could be hit by a bus.
Jobs come and go all the time, even at Dell, even at GM. Rockwell (has a local plant in Cedar Rapids IA) hires and fires hundreds of engineers yearly, as the contracts come and go.
But anyway, my sense is that a lot of these "needs technical co-founder" people have sufficiently poisoned the well that it's getting difficult for them to find bright, bushy tailed nerds still naive enough to accept their terms.
Now if only programmers would demand what they're worth from the game industry..
I try to get my highly technical kudos from my technical friends, because my non-technical co-workers begin to glaze over when when I really want to talk about something tricky and fun I did.
The message that I've taken away from it is "dude, hustlers need hackers and hackers need hustlers, so equal footing is probably a good idea."
Now I am biased, but why would one go into a partnership with a business person in the first place.
If he can't convince a guy who doles out capital for a living to give him a tiny bit of it, why should he expect a programmer to front him that value in highly skilled labor?
A programmer on no pay with 10% equity is bound to be look for a new position if the company goes through a rough patch (hint, it will). A programmer with 50% equity will stick it out.
Point is, there are people structured to accept risk. These people include investors and entrepreneurs. There are other people who provide services that businesses need, including designers, lawyers, programmers, etc. These people generally aren't structured to accept risk, they need an hour's pay for an hour's work.
Because programmers can often be confused as to what role they play in a business through fast-talk, there's this notion that has developed that there are lots of programmer/investors available, who are willing and able to accept risk in lieu of payment.
There are clearly programmers who will accept that arrangement at least once due to their naivety, but they they generally learn pretty quickly, and I think it's becoming more common knowledge in the programmer community that it's an arrangement best avoided.
Because they know the bureaucracy and can get on with handling the paperwork and legal admin while you get on and do the actual work?
A lot of the "business-side" cofounders you run into in the real world are just glorified "idea men", willing to "generously" cut you in on 5% if you just code up their "Facebook, but for Cats" site they've been thinking about for the past year.
Reminds me of Pets.com
I may have died a little inside.
But that's not all a busíness founder does. For me, these guys are providing the market, the process knowledge and the knowledge about the needs of certain markets, espacially when the markets are not merely apps for Android and iOS. When your product is aiming at non-tech market, let's say health care, as a programmer you better have a co-founder who knows his trade since in these occasions programmers usually are only the guys crunching through poorly specified code.
Equal footing is the way to go. respect the skills of each other, and at least as important understand the language and the needs of one another. Being able to do X or Y doesn't necessarily make you a better person or founder, you know?
The right business person can be a tremendous benefit. The wrong one can kill your business. Obviously it all depends.
Obviously there's a lot of BS "biz" folks. A good barometer is if they have taken the time to learn the skills needed to get their own ideas to market (coding, design, w/e)
The technical co-founder has to be built in to the core, a part of the equation from the very beginning. Co-founders (technical or not) have to be compatible. You can't just go and find a technical co-founder on the street. That doesn't work.
Now, instead of getting emails inquiring how to learn to program, I'm going to get emails that say "Hey, I have this great idea but I need a technical co-founder. I read your blog and I know you can code. We'll be rich. What do you think?"
9 out of 10 of all startups out there are a business method, they don't need 10x engineers to build new technologies, and what they want can be done by a freelancer using a CMS and some elbow grease.
Periodically, I get a cold lead asking for work. A half dozen recently have been for Twilio development. The projects are typically not terribly technically challenging: solving real business problems for money, good ideas, probably 6 man-weeks on average. I quote my usual weekly rates (in preference to saying "I know where this conversation is going. The answer is no.") and regularly get told that a) I'm out of the budget and b) 5~10% of this deal would make me rich.
I am polite in the emails but, just between us geeks: that's cute.
P.S. Do you do Twilio development? Need work? Find my email, I'll filter out the jokers and pass you anyone who sounds serious. Do you do "CMS and elbow grease"? Pick up Twilio and double your bill rates. Or just double your bill rates.
I especially liked the wake up call to developers at the end. Would be very interested to read any reciprocal articles on why technical founders need a business co-founder.
* unless he/she decides to learn to code well enough to hack together an MVP, but that's not what the article is talking about
1. Risk is typically front-loaded for the programmer so they have to be more cautious. A programmer with no skills is much easier to spot early on than a business person with no skills.
2. The "programmer" role can often include many tasks that have nothing to do with programming. Often times "programming" means UI, UX, server management, DB management, server-side coding, API coding, website coding, and mobile development. For really inexperienced business co-founders this role may also include business card and flyer design, video demo creation, and remembering the company Wifi password.
3. 10% equity after doing 85% of the most important work is not a good deal, especially in a market where you're skills are in high demand.
4. Quality programming is not a commodity. Programming is more akin to painting or novel writing. A programmer may have an idea or possibly an outline to start but when the time comes their still free-styling most of it while forming new ideas as they go.
5. Technical co-founders are often willing to learn the business side of things. Business co-founders typically want nothing to do with learning the technical side of things.
While we're all familiar with the "I just need a coder..." stories, there are at least as many coders working on projects that have zero business prospects. At the moment this is actually the greater sin as technical talents are in shorter supply so dedicating your (limited) resources to an idea with no long-term prospects is basically shooting yourself, and the valley, in the foot. You'd be much better off partnering with a business co-founder and raising money.
On the other hand, Silicon Valley has a long history of exploiting engineers and we're all right to be incredulous when working for limited equity and no salary.
In short - it depends on the nature of your start-up and the challenges your start-up is tackling. Depending on those you 3 options:
1. Find tech co-founder (and don't do start-up w/o such person).
2. Learn to code.
3. Outsource the programming.
If your case is #2, then read the guy's post http://viniciusvacanti.com/2010/09/13/cant-find-a-technical-... and some other posts in his blog.
Business, design and marketing may not be as intellectual as programming but they are no less hard and often more important.
I really think that if two people are involved, the equity split should be 50/50 regardless of the skill set each one brings. If the equity is unbalanced, the level of effort each founder brings will be too.
2. Many people claim they can do these things (at least, the "business" and "marketing" parts) - hence the surfeit of "nontechnical cofounders". But not all of them can.
3. There are fewer potential technical cofounders available in most areas.
4. Therefore, as a technical cofounder, you should pick only the best nontechnical partners, who will justify an even split of the equity. If you really don't find anyone who measures up in terms of demonstrated ability to hustle, connections that can actually be used, great business plans/prototypes and/or an impressive work ethic, then is it really worth starting up with a mediocre-or-worse cofounder?
5. If you insist on taking a nontech cofounder and you have only multiple mediocre suitors to pick from, it makes sense to me to offer less equity. If your potential partner feels it isn't fair, then look for someone else who understands that the product makers have precedence in this market.
Personally, I think making a good business plan and doing marketing may be as hard as programming at times, but at this time, more people claim to be able to do business-side things than coding. That fact in itself justifies the tech cofounders' being picky with their partners.
I think tech cofounders shouldn't let the thought that "oh, they work as hard as me" mislead them into partnering with someone who doesn't have capabilities that equal theirs, adjusted for supply and demand.
As a non-tech looking for a technical co-founder, I got fed up with this search and decided I'd be better off just learning to build and code my idea(s) myself. It was actually the questions on the Y combinator app that made me realize that once you push out past the second or third degree of separation in your social network ("oh yeah the friend of my friend of a guy I used to work with can code") you're too far removed from this person, and a co-founder you don't know or can't trust seems like far greater a risk than investing the time to learn to do it yourself. Plus once you build your first project, I suspect it gets exponentially easier to make the next and the next thereafter!
"Note: I could easily switch this whole article around to all those programmers that think creating a company is as simple as launching an app. You’re just as stupid, so start asking for someone to help you grow what you’re working on, ask for a co-Founder."
No. Frankly, we're not just as stupid. It's not as if just because marketers can't figure out how to program, the inverse is true and programmers for some reason lack the creative thinking skills to come up with new ideas or the capacity to market their own product.
Non-technical founders may have some purpose, but to a coder with marketing ability they're redundant, and worse, in the way. So no, you can't just flip it around; to say that a programmer who goes it alone is "stupid" is, above all, a very stupid comment.
So, in short: a non-technical co-founder fulfills many tasks and likes them. A technical founder would be smart to associate with a non-technical founder, so both can do what they're good at.
For some reason the people on the business/finance end seem to think they can just delegate everything and know how everything works based on whatever they heard in the news. They already decided on using the cloud, thats the hard part! Actually using it is just implementation right?
But, this in no way means that a non-programmer can't go it alone. I have, and am now doing it. And in the case of the lone programmer building something entirely alone and making a million dollars, what's to say he wouldn't have made $4 million dollars had he a non-technical co-founder?
I think your line of reasoning is equally as incorrect as you're implying the OP's was.
In my experience the latter is a hell of a lot more rare than the programmer learning business skills. Consequently it's far more likely to see a programmer developing a successful business solo than a non-programmer developing a successful business solo, so in my opinion you can't just flip the argument around and say it works both ways.
Note I'm not suggesting that a co-founder isn't important or valuable, simply that the argument cannot be flipped around; I'm personally looking at recruiting an old friend once my product reaches MVP because a co-founder is important for some products.