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An Open Letter To Business People

dave.is

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Re: An Open Letter To Business People

#11

Post by rguzman »

I liked the piece a lot and it is roughly right. However, as a technical co-founder, I think a good measure of a business co-founder is whether he tries to solve the technical problems himself. e.g. by learning a bit of php and hacking something together.

Not only does that show that he's resourceful and scrappy, but it also makes it more likely that he'll be able to talk about the product coherently i.e. understanding and keeping in mind the constraints that software development has. It calibrates his intuition, if you will.

Re: An Open Letter To Business People

#12

Post by DevX101 »

nicholasjbs wrote: post #5
smanek wrote: post #3

A startup without a business plan isn't a business. It's just some code. I disagree. Users make it a business - and users don't care if I have a business plan. They just care if the product (i.e., code) makes their lives better.

I mostly agree, though I don't think "business plan" in this context is meant to read "a 100+ page analysis of the market and other bullshit." Rather, I took it to mean a sense of how you're going to get the product out to users and (maybe) how you'll eventually make money. Both of those things are required if you want your business to become sustainable.

smanek's point still stands. If your plan was incorrect and what you THOUGHT was going to make you money, doesn't do so, then you still don't have a business.

Re: An Open Letter To Business People

#13

Post by nicholasjbs »

mattmaroon wrote: post #10

The problem is you don't need a technical cofounder, you need a good technical founder. Just because someone is at a meetup or on Github doesn't mean they're a good technical cofounder. Finding a technical cofounder isn't too difficult. If you can't sell your idea to one developer you probably can't sell it to customers. Finding a good technical cofounder is very hard.

It's even harder than that: You need a good technical co-founder that you have good chemistry with.

Re: An Open Letter To Business People

#14

Post by rguzman »

mattmaroon wrote: post #10

The problem is you don't need a technical cofounder, you need a good technical founder. Just because someone is at a meetup or on Github doesn't mean they're a good technical cofounder. Finding a technical cofounder isn't too difficult. If you can't sell your idea to one developer you probably can't sell it to customers. Finding a good technical cofounder is very hard.

Not only that, but what makes a good technical co-founder depends on the business.

Le sigh, co-founder dating is hard.

Re: An Open Letter To Business People

#15

Post by rguzman »

Mistone wrote: post #4
alain94040 wrote: post #2

Pretty good explanation. A couple of tweaks: 50/50 is a bad split, because it will lead to paralysis, argument, flying chairs, and eventually bankruptcy. Second, the advice here is to not pitch the idea when you first meet potential technical co-founders. I disagree: I think sharing the same passion is key, so you definitely should tell me that you plan to revolutionize the music industry (a bad example, I know...).…

whats your suggested equity split?

I like this:

http://sethgodin.typepad.com/seths_blog/2009/03/advice-on-eq...

Though he makes it seem easier than it really is.

Re: An Open Letter To Business People

#16

Post by terra_t »

Why do we always hear about non-technical cofounders looking for technical co-founders, rather than the other way around?

Is this like some singles bar where 80% of the people are male?

I for one would like to find a hustler who really knows how to hustle.

Re: An Open Letter To Business People

#17

Post by ssing »

nicholasjbs wrote: post #5
smanek wrote: post #3

A startup without a business plan isn't a business. It's just some code. I disagree. Users make it a business - and users don't care if I have a business plan. They just care if the product (i.e., code) makes their lives better.

I mostly agree, though I don't think "business plan" in this context is meant to read "a 100+ page analysis of the market and other bullshit." Rather, I took it to mean a sense of how you're going to get the product out to users and (maybe) how you'll eventually make money. Both of those things are required if you want your business to become sustainable.

In spite of this being repeated so many times still it is so easy to fall into the trap. At-least it was for me. Working on my latest project we discussed so much on the feature, design and others but never on how to get users. We kinda assumed that once the project is done users will be waiting for us.

Re: An Open Letter To Business People

#18

Post by haploid »

jasonshen wrote: post #9
Mistone wrote: post #4

Earlier quoted context omitted.

whats your suggested equity split?

I think it really depends on how far along the idea/business guy has taken the project. If he has talked to tons of angels/VC's, or lots of potential customers, especially if those customers have indicated or even signed things saying they are ready to pay money to use the product, the split might favor the idea/business guy more than if he has just been "noodling" over something and has some "sketches" of what it mi…

This. The later you come into a given project, the less equity you would be justifiably entitled to.

As to the original question, if you are starting from zero and you want a means of avoiding critical shareholder deadlocks, you can split 45/45/10 with the smaller portion going to a party both founders agree will be impartial. This person can be the initial angel, or perhaps a minor founder who accepts a smaller chunk in order to maintain his dayjob.

You can also maintain 50/50 splits of ownership but still break executive deadlocks via a third vote by mandating a third seat on the board. This won't help fundamental shareholder deadlocking, but disagreements rarely go to the shareholder vote level.

Re: An Open Letter To Business People

#19

Post by Apreche »

Wrote basically the same thing a month ago.

http://comments.apreche.net/166/no-you-need-a-technical-co-f...

The one thing that I don't understand is how people are willing to be paid in equity. Do you people not have to pay rent? Are you living in your parents basements with someone feeding you?

In the words of many a Taxi driver "NO! You pay me cash now!"

Lottery tickets don't keep the lights on.

Re: An Open Letter To Business People

#20

Post by shay »

nicholasjbs wrote: post #13
mattmaroon wrote: post #10

The problem is you don't need a technical cofounder, you need a good technical founder. Just because someone is at a meetup or on Github doesn't mean they're a good technical cofounder. Finding a technical cofounder isn't too difficult. If you can't sell your idea to one developer you probably can't sell it to customers. Finding a good technical cofounder is very hard.

It's even harder than that: You need a good technical co-founder that you have good chemistry with.

Finding this is hard, especially because we non-techies are likely on a learning curve when we're having substantive discussions with you about the evolution of our product.

But I think that as long as we're informed on technology (opportunities and hurdles) and have truly crystallized some initial business plan, I think we're better poised to experience that essential chemistry.

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