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How do I know that an idea is worth entertaining as a technical cofounder?

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Re: How do I know that an idea is worth entertaining as a technical cofounder?

#11

Post by gregthompsonjr »

Avalaxy wrote: post #6

I would nope the hell out of there. 1) You are not convinced the idea is disruptive/feasible enough 2) They want YOU to do all the work, yet only give you 1/3rd equity. What do they have to bring to the table? Probably nothing. 3) You don't need them. Ask yourself: would I build this if I would get 100% equity? Since you also have plans of your own, the answer would most probably be no.

Your second point definitely strikes a nerve, because I keep thinking about that. They came up with mockups. I'm not sure if that's where their work stops - aside from making phone calls and throwing around ideas. I have their best interest in mind as well as mine, but I don't know if they're splitting up the equity in proportion with how much work I'd have to do to make their idea a reality.

Great points.

Re: How do I know that an idea is worth entertaining as a technical cofounder?

#12

Post by gregthompsonjr »

nols wrote: post #7
gregthompsonjr wrote: post #5

Earlier quoted context omitted.

Plainly put and well put. They sold the dream, mentioning to me that we can change our lives, buy Patek timepieces, get boats and finally meet Kanye West. At the end of the day, it'll be a major time investment for me and I don't see how 4 to 5 hours a week would be sufficient any any business situation, especially when it comes to tech (although, I would love to only have to invest that much time into anything and c…

Right now they've got an idea to jump on the trending app sector, with you doing all the work. Run, this will end badly for you. They bring nothing to the table but inconvenience.

The whole "jumping on the trending app sector" thing is definitely one of the big yellow flags to me.

Re: How do I know that an idea is worth entertaining as a technical cofounder?

#13

Post by Todd »

gregthompsonjr wrote: post #5
daSn0wie wrote: post #4

Sounds like a bad deal. In reality the product you're building is almost entirely technology based. They wouldn't really offer any value to you unless they were technical as well. What would they spend their time doing while you coded? The only caveat to this is if they've already exited and are successful entrepreneurs. My guess is they're not, and just looking for someone to do the development for free.

Plainly put and well put. They sold the dream, mentioning to me that we can change our lives, buy Patek timepieces, get boats and finally meet Kanye West. At the end of the day, it'll be a major time investment for me and I don't see how 4 to 5 hours a week would be sufficient any any business situation, especially when it comes to tech (although, I would love to only have to invest that much time into anything and c…

As you know, 4-5 hours a week won't get you much. Even a POC will probably take a few months at that rate. The ratio is inverted. It should be two devs to one business person. As others have pointed out, you're going to be doing all the work while they're glad handing and doing lunch. Also, not having the background, they will have unreasonable expectations and will have no appreciation for the amount of work you put into it over time.

It also sounds like you have goals of your own. There is a true opportunity cost here. This will be your side project for longer than you probably expect. You don't really get any others if you're trying to get a business off the ground. I'm not sure how old you are, but divide the remainder of your working life into 5 year chunks. That's how many tries you get, roughly speaking, if you're going the startup route.

Re: How do I know that an idea is worth entertaining as a technical cofounder?

#14

Post by brudgers »

Forget about the idea. What matters is the people. In priority order:

1. Do you trust them in the "If I died they would make sure that my family was taken care of" way?

2. Are the executing right now even without technical talent?

3. Do they have a track record in the industry they are about to try to enter?

That's it.

Now the red flags:

  Do you really want to work with *two* idea guys?

  Do you really want to work with two people who think
  4 or 5 hours a week is going to get a solid app built?

  Do you really want to work with two people who believe
  that high pressure is a good way to establish a long term
  business partnership?
Go with your gut. This won't be your last offer to work on someone else's idea. Don't get sucked into the idea of owning a company. Particularly when you don't have a controlling interest and there is an aggregate controlling interest that sees you as providing commodity value.

Good luck.

Re: How do I know that an idea is worth entertaining as a technical cofounder?

#15

Post by jayedwin98020 »

Here's a possible solution that would hopefully indicate how serious your potential partners actually are.

They want your expertise. That alone, should be worth the 1/3 equity they are offering you. There should also be some type of ongoing compensation for your time spent. You mentioned that they have access to funding. Isn't any of this funding earmarked for developing the new product?

If they are willing to compensate you for your actual time spent, this would have some indication as to how serious they really are.

My initial gut reaction, after reading your question and statement, was your potential partners might be looking for somewhat of a free ride, without having to actually put any real skin in the game. Your "skin the game" is your knowledge.

And bottom line, you don’t sound overly impressed with their proposed product concept. That in itself, would make me leery of involvement (on a pro bono basis) even with the offered equity.

Re: How do I know that an idea is worth entertaining as a technical cofounder?

#16

Post by alain94040 »

I'll give you the same advice I give everyone else in the same situation: don't rush to judgement. Plan on working with them casually over the next month and iterate on the mockup.

By then, you'll have a much better understanding of what value (if any) they bring. How you work and get along together. Focus on refining the mockup, brainstorming ideas, etc. This shouldn't take too much of your time.

As everyone else pointed out already, 1 dev for 2 idea people is a bad ratio. I think the equity is reasonable (you can't expect them to offer you more than 50% as a first offer...). I strongly question whether those two people are worth working with at all. But only time can tell.

Just don't promise anything long-term just yet. Commit to one month part-time. No need for a fancy deal yet. Don't write the app yet.

Re: How do I know that an idea is worth entertaining as a technical cofounder?

#17

Post by gregthompsonjr »

jayedwin98020 wrote: post #15

Here's a possible solution that would hopefully indicate how serious your potential partners actually are. They want your expertise. That alone, should be worth the 1/3 equity they are offering you. There should also be some type of ongoing compensation for your time spent. You mentioned that they have access to funding. Isn't any of this funding earmarked for developing the new product? If they are willing to compen…

They don't have any money at this point, so getting compensated is definitely out of the question. Their promise of having the ability to attain funding is not solid as far as know (for certain), so I can't particularly go by that.

I'm not very impressed by the idea. It's an okay idea, but nothing super inventive.

Re: How do I know that an idea is worth entertaining as a technical cofounder?

#18

Post by gregthompsonjr »

HenryTheHorse wrote: post #10
gregthompsonjr wrote: post #9

Earlier quoted context omitted.

So, I think they actually do suit what you're painting as ideal partners. I used to go to one's parties back in college. He's working his way up in his field and doing well -- he's a hustler, which is something I can appreciate. We all come from the same place (let's just say we're definitely not rich and we definitely always had to worry about getting robbed and/or killed going home from work/school growing up). The…

> Tech experience isn't something they have Do you mean they haven't worked in communications or technology industry? That's a big red flag. Your team will have a STEEP learning curve. It's exceedingly rare - if not impossible - to see a startup team move into a new industry without industry experience AND capital. My suggestion to you would be to let this opportunity pass.

One works in film, the other is an electrical engineer who doesn't know how to write code.

Re: How do I know that an idea is worth entertaining as a technical cofounder?

#20

Post by HenryTheHorse »

gregthompsonjr wrote: post #18
HenryTheHorse wrote: post #10

Earlier quoted context omitted.

> Tech experience isn't something they have Do you mean they haven't worked in communications or technology industry? That's a big red flag. Your team will have a STEEP learning curve. It's exceedingly rare - if not impossible - to see a startup team move into a new industry without industry experience AND capital. My suggestion to you would be to let this opportunity pass.

One works in film, the other is an electrical engineer who doesn't know how to write code.

Entrepreneurship isn't "We're going to defy ALL odds". You only pick the odds you can take on with your capital, time, effort and talent. If you win, you get to pick the next set of odds and so on.

Right now, it sounds like your team will have to learn entrepreneurship, product management (which is not the same as software development), software marketing, finance, sales, raising capital, alliances etc etc.

That's a LOT OF odds.

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