I'd love to build something from scratch but don't have a lot of ideas, where do you find a business co-founder?
At networking events.
Business co-founders in tech startups are less valuable than they think
171–180 of 253 posts
Re: Business co-founders in tech startups are less valuable than they think
#172Earlier quoted context omitted.
A good biz guy can be worth his weight in gold. It's harder than people think to get it right: to figure out the right markets to address first and how to tweak/target your product to do so, when, how, and from whom to raise capital, at what rate to expand the team, sales and marketing stuff, etc. Doubly so if the technical co-founder isn't as good at these. It's not worth 80% of equity against 20%, but it is worth a…
Agreed. The tough thing, though, is that it's (generally) a lot easier to spot a bad engineer than a bs "ideas guy".
For an engineer, sure. But for a business guy, it might be a bit tricky. Though I'd say a good business guy probably has a bunch of engineering contacts.
Re: Business co-founders in tech startups are less valuable than they think
#173I don't agree at all. Not even with the premise that "there are significantly more business guys looking for tech guys than the reverse". There are a lot of business and tech guys and most of all of them are pretty clueless when you randomly meet them in "gatherings". But a valuable business co-founder brings extensive domain expertise, a network of people, sales skills, management skills, and fund-raising talent. Th…
To be honest, it sounds like you’re one of the business people.
Everyone on the tech side has this experience. “I just need you to build the software”
Re: Business co-founders in tech startups are less valuable than they think
#174Absolutely agree with this article!
My startup days are more than a decade ago but even then it was already well known - hence why tech founders with a bit of experience stay far away from these people.
The best part of the article: > [...] you should demonstrate it in one of two ways that are relevant to your venture:
> Generate a big waitlist (> 1,000) for B2C play > Get > 20 businesses to sign an LOI for B2B play
Ideas are cheap.
This is the business MVP worth spending 50% equity on and worth investing your time to build the tech prototype.
My best tip to handle business guys pestering you with ideas is to say "Great idea, bring me some clients and I will build the solution, then we can revenue share".
I usually never hear from them after this.
Re: Business co-founders in tech startups are less valuable than they think
#175It feels like the business layer has always successfully commodified the developer layer, but developers don't seem to have any desire to commodify the business layer. It seems like the developer layer naturally wants to eliminate the business layer entirely. It is basically extinction if you let developers sit on the other side of the coin, so I suspect anyone on the business side of things will have to be a cut-thr…
Being on the business side, you can just retain your equity and pay to build a prototype, instead of trying to get people to work for free.
Re: Business co-founders in tech startups are less valuable than they think
#176The real problem with most "business co-founders" is that they are lazy and don't put in effort. Full-stop. I've seen this happen with enough of my peers that a "business co-founder" is never called a "business co-founder", but rather an operator or salesperson.
Re: Business co-founders in tech startups are less valuable than they think
#177I recently walked away from a potential startup because my non-technical partner (MBA ideas guy) wanted an 80/20 equity split in his favor. I was the first to broach the discussion and proposed 50/50. It was a severe misalignment in expectations, and this was after 3 months of meeting regularly to refine the idea and build out prototypes (read: I was building the prototypes). My advice is to have this conversation wi…
I’m running a business that’s currently doing around 32k a month at ~85% margin after 2 years in operations, no funds raised to far. I have a friend who is an MBA and only held corporate roles up until now. I’ve been running companies my entire life, and had one exit that was 42.5M US. We discussed partnering up, and when i mentioned a buy in or 10% equity split (with no buy in) or some combo of the two, he backed of…
Why is that so crazy?
85% margin gives $27k a month or $326k a year before taxes.
Was he going to work on this full time? How does he replace a reasonable salary otherwise?
Of course, I would expect this to be over time (say, linearly over 3 years) and subject to hitting growth targets.
Re: Business co-founders in tech startups are less valuable than they think
#178I don't agree at all. Not even with the premise that "there are significantly more business guys looking for tech guys than the reverse". There are a lot of business and tech guys and most of all of them are pretty clueless when you randomly meet them in "gatherings". But a valuable business co-founder brings extensive domain expertise, a network of people, sales skills, management skills, and fund-raising talent. Th…
> But a valuable business co-founder brings extensive domain expertise, a network of people, sales skills, management skills, and fund-raising talent. A valuable technical cofounder brings the skills to literally create what you're trying to sell. Otherwise, have fun selling dust. Or networking to sell nothing. The "0 to 1" here isn't "no management to management" it's "not having a product built to having a product…
There's no point having the skills to build a product if you can't fundraise to build a team, market, sell, refine to find product-market fit, etc. etc.
Re: Business co-founders in tech startups are less valuable than they think
#179Earlier quoted context omitted.
There’s zero chance this would ever be a fair split. They know nothing about building technology so are never in the right. This happens often enough that most startup accelerators pre-flag it as criteria to not invest in founders (with an out of balance equity split).
> They know nothing about building technology so are never in the right I’ve easily seen more start-ups fail because the technical co-founder got pedantic about something with zero commercial relevance than I have where the non-technical founder rolled over their tech team. Mostly because the latter fail early while the former can sort of look like it’s not a trash fire for a little bit longer. As you say, the unequa…
> I’ve easily seen more start-ups fail because the technical co-founder got pedantic about something with zero commercial relevance than I have where the non-technical founder rolled over their tech team.
Can you think of examples of the opposite? There are a few variables here for technical/business/commercial and fail/succeed so I won’t write them all out, just curious what you have seen to be honest.
Re: Business co-founders in tech startups are less valuable than they think
#180Earlier quoted context omitted.
A good biz guy can be worth his weight in gold. It's harder than people think to get it right: to figure out the right markets to address first and how to tweak/target your product to do so, when, how, and from whom to raise capital, at what rate to expand the team, sales and marketing stuff, etc. Doubly so if the technical co-founder isn't as good at these. It's not worth 80% of equity against 20%, but it is worth a…
Agreed. The tough thing, though, is that it's (generally) a lot easier to spot a bad engineer than a bs "ideas guy".
It behooves everyone to be able to spot a narcissist, and that eliminates a huge swath of bad "idea guys" and bad MBAs.