An Open Letter To Business People

This is a nice piece overall but, having seen founders negotiate their splits countless times over nearly three decades, I would add that such negotiations tend to be more nuanced than equal splits in most cases.

Idea people may not be able to proceed without solid technical people but what they do or don't have to give them for their services is always governed by supply and demand. An exceptional technical person who will drive a company will get an equal split (or more) but someone whose skills can be supplied by a good number of people will likely get far less. Strong technical expertise does tend to be hugely important in a typical startup but is only marketable consistent with what people are willing to pay for it in light of other alternatives.

So too with idea people. Abstract ideas may not have much value but many of the best ideas come from those "in the field," i.e., who have worked extensively in a given area and have special insights about how, e.g., customer pain points can be addressed effectively. Such ideas can be incredibly valuable and they do not necessarily come from technical people. They can come from managers, from sales people, or from a broad variety of sources - even from those with a technical background who later moved into sales or management and who combine their skill set with their experience to derive special insights. When people like that want to found a company, they may lack the particular technical expertise to execute on the project but they will know enough about the industry to know where to find the best candidates to fill such a role. That may result in a 50/50 deal but it could easily result in all sorts of splits, even if one of the roles is prominent enough to be called "technical co-founder."

So, as a technical founder, you should push for as large a split as your personal qualities can command but you should not use any arbitrary formula for determining splits. The rule is and always will be to assess the situation based on the real value each person is contributing and this often leads to a wide range of founder splits that are far from equal yet are perfectly suitable for the persons involved.

That said, this again is a fine piece reminding those with technical skills not to sell themselves short in dealing with business people. There are all sorts of hustlers out there who are more than willing to take advantage of you and, if you do not value yourself properly, you will likely fall victim to them. If people really do have valuable things to contribute, however - whether on the business or on the technical side - then the process is not really that adversarial because smart people will know an opportunity when they see it, whether or not they get equal shares in the venture, and they will usually work these things out in a way that is amicable.

The author makes the assumption in this relationship that the technical co-founder is a talented hacker who has read all of Paul Graham's essays, maybe a Steve Blank book or two, and is well connected in the startup tech scene, all while the business co-founder is just some marketing shmuck. The characterization is unfair; there are plenty of marketing shmucks, but they should be compared against socially inept code monkeys, not this superstar technical co-founder (say, the kind that read Hacker News).

A great "business person" doesn't just flip open a roledex and start dialing for dollars once the technical co-founder has laid a magical golden software egg.

And hopefully, a technical and non-technical co-founder can find a way to work together where they don't perceive their partner as a parasitic dead-weight.

Smanek, one reason why the failure rate of start-up failure rates are so high is because the founders of the start-up don't have a sustainable business model, or they don't know how to best convey the value proposition to customers and investors. I heard a story about two ladies who sold gift baskets back when it was novel (80s). Initially it was just a hobby, but they turned it into a business because of overwhelming demand. After several years of doing this, working 70 hours week, they looked at their books and realized they were only making 10K profit each per year. Ok? That means they're only making a few bucks an hour. They made a product that people loved, but they didn't make any money.

You need a viable business model if you want your business to succeed.

True... recognizing a good technical co-founder is half the battle

Yes.

A bit less snarky: a good measure of a technical co-founder is him trying to solve the business problems himself. For the same reasons I cited above.