My advice still holds, and yes, it is also completely reasonable.
You found a terrible co-founder. A terrible co-founder, business or otherwise, will generate terrible outcomes.
One thing that is very important to understand is that a great business co-founder is as rare (if not rarer) than a great technical co-founder. If you happen to find someone like that, having an attitude that they won't do any work, and they won't "do much meaningful work", will not endear them to you.
If they're a great business co-founder, they will have nearly unlimited options, much like great technical co-founders. They might also have great market knowledge, plenty of inside connections, and experience on what to do, and how to do it. And as you brought it up, experience on how to get to product market fit. All of which is invaluable. Further, and please don't take this the wrong way, but their experience in connecting with and evaluating people might have prevented you from choosing the clearly incompetent person that you ended up selecting.
Rather than dismissing my cofounder as terrible, I encourage you to consider the possibility that advice like yours, which we followed in cofounding the company, set him up for failure.
Having specialization early on was a mistake. It was a difficult situation, and it wasn't entirely his fault that there was, for long stretches of time, little for him to do.
A startup cycle goes something like this: initial theory -> MVP -> validation of theory using MVP -> iterating to product-market fit -> scale
Even in that highly oversimplified flow, there are a lot of shifts from "product mode" to "development mode". Most of these steps must happen sequentially. If only half of the team is fully engaged in any given step, you get a lot of slack.
There's a joke that first startups should hire a bunch of developers to build the product. Then they should fire the developers and hire a bunch of salespeople to sell the product.
Which begs the question - why not just hire developers who can sell, and avoid paying all that unemployment?
Larger organizations can get away with having specialists onboard. Smaller organizations (2-3 people) can't afford this luxury.
Your advice would hold for a later stage startup, but it is unreasonable advice for an early stage startup.
It seems as though you're coming at this with a very different world view and set of experiences than me, which is fine. Maybe we can learn something from each other.
To give two sentences of background, I've been running businesses for 13 years, and running a startup for 4 years. The first business I built by myself from nothing, and the second I built alongside my technical co-founder.
Firstly I'm concerned that you seem to think that I'm suggesting finding a 'specialist' business co-founder. Being a co-founder is the exact opposite of specialisation. If you're a co-founder period, you do ANYTHING it takes to move things forward, no exceptions, ifs, ands or buts.
Also, without meaning to be picky, I believed you identified your co-founder as terrible. Someone who, as you described, believes that doing 'thought experiments' and trying to get twitter followers is the appropriate thing that a business co-founder should be doing in an early stage startup, is objectively a terrible business co-founder.
If your business co-founder is doing his job properly, there should never be any slack. Exactly the same as a technical co-founder. Companies, especially early stage companies, can and must be doing product mode and develop mode simultaneously.
I've never heard that joke, but as you grow your company and get more customers on board, who have more requirements, it's pretty important to have both salespeople and developers working in tandem to build out a company.
I agree with you that larger organisations can afford having specialists and smaller organisations cannot.
How did you build the product that your first business sold without a technical person onboard? You coded it yourself. Thus, you have technical skills.
9 years later, when you were looking for a cofounder, you decided to go with a technical cofounder.
You can talk all you want, but at the end of the day, you chose to bring on a second technical cofounder (the first being yourself) over the business cofounder that you are recommending the OP seek out.
N.b. by technical cofounder, I don't necessarily mean someone with a PhD in Computer Vision. I mean someone who can productively write API integrations and use whatever tools are needed (e.g. Rails, Meteor, Xcode) to build the product.
Again, I think you're mischaracterising me a little bit.
I can't code. I'm not a technical co-founder. My first business was not a software business, it was an IT infrastructure business.
In my first business, I discovered a need in the Japanese market for a good invoicing/document management software. It came about through me building a crappy invoice management system, and showing it to other Japanese business owners.
It was a little scary to work seriously on this, since there were no competitors, hence possibly no market.
However, I went out and did the following:
a) Designed and had built a crappy version of the software that was functional, but not elegant or scalable.
b) Talked with nearly a hundred potential users of this software to find out how they're currently solving this problem, and to try to get a sense of the market and the potential demand.
c) Found a group of people who were very interested in buying this software.
So by the time I found my co-founder, I had already invested hundreds of hours, and tens of thousands of dollars. However, I had a working prototype, many potential customers, and a good feel of the market.
It was a LOT of work. When people dismiss business co-founders as not doing a lot of work, or not doing meaningful work, it's both very irritating and also leads me to believe they've never worked with a 'real' business co-founder.
Jason sounds like you have been where I am now. When you found your co-founders, after all that work, how did you split the equity? I'm a business founder looking for co-founders and I want to be fair but fair to myself as well.
We ended up roughly splitting the equity. I think what I did in finding and validating the market was table stakes.
I could have made a strong argument for more equity, but when it comes to actually building the product, there is still a tremendous amount of risk, and if you want someone to be as dedicated to it as you are, I would generally advise being generous with equity.
Naturally, as things move forward, it makes sense to revise the equity if the situation drastically changes, such as you committing full-time, and them not being able to, or interested to, etc.
At the end of the day though, equity discussions are more of an art than a science, and everyone needs to feel happy and looked after - including, of course, yourself.
That makes sense and is somewhat my situation. I want the right people and think I might have them but they can not become full time without being paid and I'm all in already. I'm paying for the first mvp to be built over seen by the possible cto. I want them happy but how can someone part time end up with as much as someone full time and with money in? And "generous" is so subjective, give me a ballpark for generous cause that's where I want to be. But it has taken years of work and cost to develop things down to a business,and we know there will be other equity shares given out, and neither of us has said where that will come from. I see how this is a very common challenge.
Another issue for me is there are 2 other people wanting equity. If they got their initial request it would give them 2/3 of the company's voting stock. Kind of a problem to me and it concerns me they would want that position after knowing me only a couple of months. They knew each other before I met either of them.
Seems like I can't reply to your message, maybe we've hit the limit of tree replies.
That's a hard one... and it's hard to offer advice because it's very situation specific. I might be able to help, or at least act as a sounding board if you want to hop on Skype and have a chat. My email address is in my profile!
Very interesting discussion. I'm left thinking that these things depend very much on the kind of business you're trying to start. Some will have great need of a non-technical co-founder; others won't.
You found a terrible co-founder. A terrible co-founder, business or otherwise, will generate terrible outcomes.
One thing that is very important to understand is that a great business co-founder is as rare (if not rarer) than a great technical co-founder. If you happen to find someone like that, having an attitude that they won't do any work, and they won't "do much meaningful work", will not endear them to you.
If they're a great business co-founder, they will have nearly unlimited options, much like great technical co-founders. They might also have great market knowledge, plenty of inside connections, and experience on what to do, and how to do it. And as you brought it up, experience on how to get to product market fit. All of which is invaluable. Further, and please don't take this the wrong way, but their experience in connecting with and evaluating people might have prevented you from choosing the clearly incompetent person that you ended up selecting.