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Ask HN: What's 'Due Diligence' when vetting co-founders?

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Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#21

Post by cdvonstinkpot »

melbourne_mat wrote: post #16

I read about your business proposal on the tech co founder sites. Please don't take this personally but you come across as naive and amateurish. Hosting is a very easy business to get into, unfortunately it's a very difficult business to make money out of. Why will your business compete effectively with something like AWS - which has such enormous scale and brand recognition? You mention that you've done some work fo…

Maybe I _am_ naive, I'm not educated by any business school, and am just an ambitious guy with a few thousand dollars and a desire to ship.

As for my experience with the previous high-end experience, it's unfortunate that I ended my term with 1 of the companies on not-so-great terms, and I wouldn't feel comfortable contacting them for help with anything, and they wouldn't be able to help anyway except with maybe a part-time day job, which I couldn't get to without relocating anyway, so they're help is a no-go. The other guys would talk to me but they could only do so much- across the country, neither could really help with this venture.

And I don't have a problem mentioning my last venture although it failed because it wasn't any of my doing that caused it to fail- I ended up in the hospital and unable to attend to the startup for a period of time, where it became necessary to sell its assets to cover hospital expenses & rent instead of continuing it to completion. I'm still proud of how far I got with it, I was a year away of being able to support myself with it. And I would have if I hadn't gotten sick.

I kindof do think a grand is alot of money, but I know base don my last startup that it only goes so far in a startup. I do tend to think its possible to get a foot in the door with 5k though. Which is my goal with this project. Right now I only aim to make enough to be able to slowly grow the company, so making enough to save half & reinvest it will make me happy even if its $250/month. I mean, it's only a $4k investment.

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#22

Post by jabbernotty »

Having looked at superspeedyservers.com I'm left thinking mainly two things, which I put down in short here:

The business side may be lacking some things. For example: There are many competitors in this space. What is the added value to a customer? The stated goal ('serve the big data market ... process big data workloads') seems ill defined. Leaving the business side for a moment. How well is the technical side thought through? Which technical problems would these servers solve? I thought the problems would be lying in people's (sometimes mediocre or badly-suited) software stack or algorithms.

Note that though I am a software engineer, I'm not an expert on any kind of large-scale systems, nor am I a founder of anything.

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#23

Post by ryanSrich »

cdvonstinkpot wrote: post #19
ryanSrich wrote: post #10

Honestly I find it awkward and unnatural to search for a co-founder. It's comparable to searching for a wife. Well...you kind of need a girlfriend first. Put another way, hire a web developer, which honestly it doesn't even look like you need yet, grow a relationship with that person(s) and work them into a co-founding position if the opportunity presents itself. From reading the info you've posted I'm really confuse…

I haven't put anything on the web because I don't have a web dev. I certainly would like to have something up on the web, but I can't afford to at this stage of the game. I can barely afford the server #1 I need to get off the ground renting. I don't know if that means I need access to more capital but I like to think I can do this without more than $5k. If I had a web developer onboard with me, I envision there bein…

> I haven't put anything on the web because I don't have a web dev.

Well you certainly don't need to be a web dev to get a site up and running[1,2,3,4]. To me it seems you're still in the customer discovery phase. How many interviews with clients have you had? 50? 150? I'd be willing to guess that you've still got a lot of work to do before you go looking for a web dev/technical co-founder. Without a thoroughly validated market I doubt anyone worth your time is going to bite. Here's what I would do. It'll help you validate your hypothesis and attract co-founding candidates:

+ Interview 50 customers per week. No exceptions.

+ Build out a business model canvas and test each assumption against customer interaction.

+ Learn some basic web development. This will show a potential co-founder that you're invested. You need to hustle and show them that.

1.) http://launchrock.co/

2.) http://wordpress.org/

3.) http://www.weebly.com/

4.) http://www.squarespace.com/

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#24

Post by ricardobeat »

cdvonstinkpot wrote: post #19
ryanSrich wrote: post #10

Honestly I find it awkward and unnatural to search for a co-founder. It's comparable to searching for a wife. Well...you kind of need a girlfriend first. Put another way, hire a web developer, which honestly it doesn't even look like you need yet, grow a relationship with that person(s) and work them into a co-founding position if the opportunity presents itself. From reading the info you've posted I'm really confuse…

I haven't put anything on the web because I don't have a web dev. I certainly would like to have something up on the web, but I can't afford to at this stage of the game. I can barely afford the server #1 I need to get off the ground renting. I don't know if that means I need access to more capital but I like to think I can do this without more than $5k. If I had a web developer onboard with me, I envision there bein…

Use wix.com[1], learn to code[2]. In your description you say you have set up an OpenStack install at home, HTML/CSS is a walk in the park compared to that. Use launchrock[3] or mailchimp[4] to collect e-mails.

"big data" really means big - as in millions of dollars big, tera/petabyte scale. Not going to happen with $5k. You will suffer to get anything close to AWS prices[5]. You could brand the service as "fat" servers or something similar until you can really tackle that kind of scale.

And, honestly, you should omit the thing about meeting Calvin Klein and DJs, it doesn't leave a good impression. Tell us what you have to offer as a founder, and get to work on a business plan with real cost figures.

[1] http://wix.com

[2] http://www.codecademy.com/courses/html-one-o-one

[3] http://launchrock.co

[4] http://mailchimp.com

[5] http://blog.aggregateknowledge.com/2013/05/16/aws-redshift-h...

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#25

Post by ericabiz »

cdvonstinkpot wrote: post #11
ericabiz wrote: post #8

I can quickly tell you why you've had 0 luck finding a co-founder. My background: I am both a web hosting industry veteran, with a successful high-end hosting company under my belt (see http://www.erica.biz/2009/the-end-of-an-era/ for my story)...and my current co-founder and I also did a presentation at SXSW this year on "How to Find the Perfect Co-Founder." You've made 2 classic mistakes here: 1) You haven't starte…

I don't have a credit card, but in the next 90 days, I expect to have access to enough funds to buy server #1. I'll get on a way to sell it in advance. I had an idea to market a special where I would sell an annual deal on the server for 25-33% off which wouldn't make much money for that year, but would provide enough capital up front to buy another server & expand right off the bat, so I wanted the website to featur…

> I'll get on a way to sell it in advance.

Awesome. Really glad to hear you're ready to take the initiative.

> where I would sell an annual deal on the server for 25-33% off

You may not get people to commit to a year up front if you're brand new, but 3 months in advance can be pretty effective and still pay for most of the server.

> I also wanted the website to feature a permission marketing campaign & collect email addresses of interested parties

Okay, this is easy. I've used both Mailchimp and Aweber and like them both; I'd recommend Mailchimp in your case since it has a free plan for you to start with. It is easy...literally copy and paste. You will be surprised how simple it is to integrate this.

> I guess I can achieve the same thing with a facebook page with people 'Liking' us & adding our announcements to their news feeds.

This will work; for me, conversions have been much stronger from my email list than from Twitter/FB. Again, Mailchimp makes this easy. Facebook also makes this pretty easy.

> I saw an interesting social commerce app that allowed for one-click facebook purchasing, that would make the storefront part easy & free of up-front capital.

Use Stripe. Again, copy-and-paste simple. Mailchimp + Stripe + a shared hosting account + a WordPress install + a theme and you've got everything you need to sell your first server. Best of luck!

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#26

Post by tmzt »

ericabiz wrote: post #25
cdvonstinkpot wrote: post #11

Earlier quoted context omitted.

I don't have a credit card, but in the next 90 days, I expect to have access to enough funds to buy server #1. I'll get on a way to sell it in advance. I had an idea to market a special where I would sell an annual deal on the server for 25-33% off which wouldn't make much money for that year, but would provide enough capital up front to buy another server & expand right off the bat, so I wanted the website to featur…

> I'll get on a way to sell it in advance. Awesome. Really glad to hear you're ready to take the initiative. > where I would sell an annual deal on the server for 25-33% off You may not get people to commit to a year up front if you're brand new, but 3 months in advance can be pretty effective and still pay for most of the server. > I also wanted the website to feature a permission marketing campaign & collect email…

Thank you for the timely advice. I'm actually a technical person teaching myself SEO and marketing and working on something vaguely related to the hosting industry.

I've found myself needing to do the opposite, stop focusing on the technical aspects of things and putting up a Wordpress site for the content marketing side of things.

I've got a few targeted pages up already with Mailchimp forms to gather interest and validate the idea.

I've actually got some code already written but have found that the advice to gauge customer interest first is spot on and have refocused my efforts on that. Once I've identified what aspect of the full business model customers are actually interested in based on the Mailchimp group that gathers signup, I'll focus on that subset for the private beta.)

If anybody is interested the site is lanceject.com.

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#27

Post by jabbernotty »

cdvonstinkpot wrote: post #21
melbourne_mat wrote: post #16

I read about your business proposal on the tech co founder sites. Please don't take this personally but you come across as naive and amateurish. Hosting is a very easy business to get into, unfortunately it's a very difficult business to make money out of. Why will your business compete effectively with something like AWS - which has such enormous scale and brand recognition? You mention that you've done some work fo…

Maybe I _am_ naive, I'm not educated by any business school, and am just an ambitious guy with a few thousand dollars and a desire to ship. As for my experience with the previous high-end experience, it's unfortunate that I ended my term with 1 of the companies on not-so-great terms, and I wouldn't feel comfortable contacting them for help with anything, and they wouldn't be able to help anyway except with maybe a pa…

Considering that you fell ill, it doesn't seem right to say that you blew it.

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#28

Post by cdvonstinkpot »

ricardobeat wrote: post #24
cdvonstinkpot wrote: post #19

Earlier quoted context omitted.

I haven't put anything on the web because I don't have a web dev. I certainly would like to have something up on the web, but I can't afford to at this stage of the game. I can barely afford the server #1 I need to get off the ground renting. I don't know if that means I need access to more capital but I like to think I can do this without more than $5k. If I had a web developer onboard with me, I envision there bein…

Use wix.com[1], learn to code[2]. In your description you say you have set up an OpenStack install at home, HTML/CSS is a walk in the park compared to that. Use launchrock[3] or mailchimp[4] to collect e-mails. "big data" really means big - as in millions of dollars big, tera/petabyte scale. Not going to happen with $5k. You will suffer to get anything close to AWS prices[5]. You could brand the service as "fat" serv…

Ok, feedback well received, thank you.

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#29

Post by cdvonstinkpot »

ericabiz wrote: post #25
cdvonstinkpot wrote: post #11

Earlier quoted context omitted.

I don't have a credit card, but in the next 90 days, I expect to have access to enough funds to buy server #1. I'll get on a way to sell it in advance. I had an idea to market a special where I would sell an annual deal on the server for 25-33% off which wouldn't make much money for that year, but would provide enough capital up front to buy another server & expand right off the bat, so I wanted the website to featur…

> I'll get on a way to sell it in advance. Awesome. Really glad to hear you're ready to take the initiative. > where I would sell an annual deal on the server for 25-33% off You may not get people to commit to a year up front if you're brand new, but 3 months in advance can be pretty effective and still pay for most of the server. > I also wanted the website to feature a permission marketing campaign & collect email…

Yes, thanks.

Re: Ask HN: What's 'Due Diligence' when vetting co-founders?

#30

Post by cdvonstinkpot »

ericabiz wrote: post #25
cdvonstinkpot wrote: post #11

Earlier quoted context omitted.

I don't have a credit card, but in the next 90 days, I expect to have access to enough funds to buy server #1. I'll get on a way to sell it in advance. I had an idea to market a special where I would sell an annual deal on the server for 25-33% off which wouldn't make much money for that year, but would provide enough capital up front to buy another server & expand right off the bat, so I wanted the website to featur…

> I'll get on a way to sell it in advance. Awesome. Really glad to hear you're ready to take the initiative. > where I would sell an annual deal on the server for 25-33% off You may not get people to commit to a year up front if you're brand new, but 3 months in advance can be pretty effective and still pay for most of the server. > I also wanted the website to feature a permission marketing campaign & collect email…

So what I've done today was I brought this spreadsheet I have that details the plans for 'Server #1' with all its parts & where I'm going to source them all so that I can afford to build the server, down to a friend's computer shop who is an A+ certified builder so that I have a second set of eyes on my plans- just to be sure that what I have worked out isn't going to present me with any surprises once I get all my parts together to build the server.

I would hate to get all my money spent on the server parts & have customers having paid for a specific product & then not be able to deliver that product just as it was advertised because of some unforeseen surprise that came up once I got all the server parts together ready to be assembled.

So before I go & put up links for people to be able to pay for a quoted system, I want to be absolutely sure that this is the system that I can build with my $4k. No surprises once I get my parts together.

And that's what I've accomplished this morning, I'm still working on the rest of what everyone's written. I'll be working off of this post for a few days it appears.

Thanks to everyone who's replied.

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