I'd offer that $1M would qualify Non-technical as an accredited investor. I'm more interested in the person who can offer up, say $100k, give or take, to support the development and launch of a MVP.
Thank you. 100 pct agree. Hands-off was meant to convey respect for Hacker's process and craft of building out a MVP. As far as customer acquisition, feedback, service -- 100 pct hands-on. For some reason (most likely bad writing) my original post didn't convey that.
The idea would solve a personal pain point. And the MVP would test whether that pain point was felt by others. If not, failing fast is okay.
Relationship with Hacker is key to long term success. If Non-technical isn't plugged into the Hacker community, compensating them is a way to demonstrate seriousness. Skin in the game, so to speak.
Also, I'm speaking in broad terms -- Hacker and Non-technical -- for universal discussion. This scenario could apply to me at some point but I also deal with a lot of clients and associates that actively talk about similar scenarios at barbeques, dinner parties and conference rooms.
I don't have a confident road map to advise them on such a course and I'm genuinely interested in what this community thinks would be the best may to make this situation work -- for the sole purpose of launching a MVP -> shipping -> testing -> refining -> scaling.
Let's say the product was based around a mobile services app. For discussion let's say Uber for dog walking or Uber for X. What would you consider a reasonable salary and/or equity stake for Hacker to be interested. Assuming solid business model, marketing plan, all else equal.
If I was a recruiter in the bay area, I'd guess you could find some B-grade talent who could knock that out for about $80k/yr., and A-grade talent for about $150k/yr. There's a whole litany of variables here, like where the talent can live, exactly what you need and on what platform, how fast you need things done, and how many more people they can bring on and whether they can manage them effectively.
Mobile talent is extremely sought after in this day and age, particularly when you start adding essential skillsets for a successful startup.
If you up things to 50% equity, you might be able to take a small amount of the salary number away to attract the same pool of candidates, but not a lot.
Expect those salary numbers to drop significantly if you set up shop in other parts of the country (and particularly the world).
Roger that on the litany of variables. Super insightful response. Thank you.
Thanks to you I think the essence of this thread can be refined to: What financial (and/or other) consideration would a US-based Hacker, with mobile skill sets, require to team up with a CA-based Non-technical with an idea, business and legal chops?
What could make this scenario less suspicious for you? Strike the phrase "final say." The intent was only editorial: "Hacker, everything looks good overall, but how about dialing it up a notch here or dialing it down a notch there." Non-technical wants to ship, not wrestle back and forth on minutiae. The idea is to collaborate around a common idea and then recruit customers, partners and investors. Collaborative not antagonistic!
Also, to clarify, Non-technical has savings and and investments and is willing to cash out and spend to build a MVP. Non-technical wants to found a business based on their original idea and then recruit talent to build out a company.
Is your take that such a scenario isn't possible? And that Non-technical should wait out and accrue enough wealth to qualify as an accredited investor and then just invest in a team to develop his or a similar idea? Would this make Non-technical less "suspicious"?
Hello! By "suspicious" I didn't mean to imply bad intent, just my doubts that you could offer a fair (i.e. competitive) salary (any benefits, or is it BYOHealthInsurance?), and also that you were sufficiently well-capitalized to fund the business. Underestimating the necessary capital is one of the leading causes of startup failure. So if I were approached with an offer like this one, I would not be getting my hopes up until I heard some numbers, and I would be skeptical unless I saw a pretty thorough plan with budget and expected revenue. But that's just me: I am fairly risk-averse.
Re "final say": Ultimately if you're business partners with someone you both need to be happy. And you both have an incentive to balance polish with shipping. Still, if you were a client and not a business partner, and you were paying me on a fixed bid, I'd want a spec up front, not at the end. (If you were paying me hourly you can have all the revisions you want.) If we were potential partners, I'd be asking myself what the risks are if you prove difficult to work with--for instance, what am I giving up to join the venture? And do you have a history of managing software projects that would reassure me you're capable and reasonable? (Any recommendations from developers you've worked with?)
In any case, I wish you good fortune on your venture!
It sounds like you're more of a proponent of Hacker doing a work-for-hire or one off freelance project for a fee -- as a way to avoid the inherent employer/employee antagonism from the get go?
It's not so much that as that I don't see the structure of the relationship being entirely consistent with the intended outcome.
There's no expression of trust on the part of the business partner when putting up the money is the sole basis for having final say on technical matters. Don't get me wrong, it might work out fine with the right individual.
But there are two other reasonably likely scenarios:
() A gung-ho technical person who becomes frustrated by having their ideas and opinions overuled by a non-technical person. And in the original scenario, the non-technical person is not working flat out to make the product take off.
() A not so gung-ho technical person who is mainly collecting a paycheck until the money runs out. This may be a later edition of the first or someone who comes onboard with that idea - keeping in mind that the business partner plans on spending their time at another job.
It's not the money, it's the passive model of investment that to me makes success look less likely. Or to put it another way, why wouldn't the sort of technical person who can conjure up a product out of a text file want to team up with a business person who will sell a million of them before a line of code is written?
Or at least a business partner who is trying to sell a million of them before any code is written?
Being in it together really requires being in it at the same time or a track-record of trustworthiness.
I volunteer as a crisis and suicide counselor for Didi Hirsch (a national suicide line branch) in Los Angeles. Thanks for posting these studies and validating the important work.
I like this idea so much that I'm willing to join hmexx and e21 by matching the offer for the right idea.
Further, the right idea/individual would get my full, undivided attention, resources, and limitless brainstorming/pivoting sessions.
I'm also a fan of the idea of documenting the process and milestones on hn for the benefit of future teams or projects.
My background is in law and business and I'm interested in technologies that bridge offline and online domains. I'm a daily reader of hn but a new poster.
hmexx -- thanks for stepping up and encouraging more of us to do so.
You should add your e-mail to your profile - it must be in the "about" field for everyone to see it.
I happen to be sitting on a project that bridges online and offline, we applied for the last YC batch but didn't make it. Will send more info as soon as I'm able to :)
Seed money plus active involvement in growing the business and creating traction could warrant such a split -- especially for an idea that was sitting on the shelf. Fifty percent of something is better than zero percent of nothing.
