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Business co-founders in tech startups are less valuable than they think

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Re: Business co-founders in tech startups are less valuable than they think

#221

Post by apercu »

neilv wrote: post #48

One thing I've wondered about for awhile: How do you find a business co-founder you can trust? For one example, the article says that some of the best value that a business co-founder can contribute is disproportionately building the relationships. But those relationships can be more connected to the business cofounder themself, than to the company. It's a bit different for the technical co-founder, since your percep…

>One thing I've wondered about for awhile: How do you find a business co-founder you can trust?

You can only look at past actions. Even the self-proclaimed "most ethical" people change the moment there is money on the table and their hired professionals are telling them to take as much of it as they can get away with.

Re: Business co-founders in tech startups are less valuable than they think

#222

Post by akudha »

_bin_ wrote: post #35
dgs_sgd wrote: post #8

I 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…

Very typical. I've run into cases where an "idea guy" basically says "you do all the product and tech half, I'll do marketing and strategy." Which is dumb, because sometimes I'm legitimately better at the strategy half too. Generally these people want ridiculous equity splits of that nature. It's worth anyone technical's time to build skills in strategy, marketing, finance, etc. The technical co-founder always gets s…

We don’t need to go that far. I am “just” a developer but I have been in meetings where developers like me had much better ideas and suggestions on product, strategy etc than the suits. I remember being urgently called into a meeting with a big client to explain how a part of our application worked and why it worked that way, when the product owner/designer could not.

People often complain about developer salaries. I wonder how they can justify suits’ salaries

Re: Business co-founders in tech startups are less valuable than they think

#223

Post by throwawaymaths »

CalRobert wrote: post #183
memhole wrote: post #153

Earlier quoted context omitted.

Start ups that choose things like Azure are a red flag for me. Churn is really problematic. Learning a code base by having to poke and grok takes a lot longer than being able to fire off a few questions.

Not sure why Azure matters in terms of infra (it's... fine) but if it means dealing with MS Teams that's a big negative. I don't understand why Europe loves MS so much. Teams as far as the eye can see....

yeah azure has come a long way since 2016. id say it has devex ~amazon, better than gcp. but to his point the startup picking azure is a bit of a red flag, though it's not the best example of a red flag, imo.

Re: Business co-founders in tech startups are less valuable than they think

#224

Post by siva7 »

jillesvangurp wrote: post #182

You don't want clean separation between co-founders. They should overlap in skills and be multi disciplinary. Having a tech founder that can't talk to customers or a business person that doesn't understand what the company makes or sells is not a great recipe for success. That's two people that probably can't even talk to each other. That's not a team. I've learned the hard way that being a CTO means I need to talk t…

It really baffles me that people here don't realize that co-founders should be multi-disciplinary, so all should be able to do some kind of (!) business and/or tech part at least. A clear separation of skills would be a red flag for me that this team operates in an outdated mode. It's not 1990 anymore. If you're the business guy but don't value enough or even hate the tech work, I wouldn't believe in the company.

Re: Business co-founders in tech startups are less valuable than they think

#225

Post by bitbasher »

Last summer I met two cofounders to take the leap as a potential founder. I wanted an equal equity split among the founders. They wanted to split the equity like 40/40/20. That 20 would have been me, the only technical founder building the entire product.

I walked away.

Re: Business co-founders in tech startups are less valuable than they think

#226

Post by never_inline »

parpfish wrote: post #86
_bin_ wrote: post #35

Earlier quoted context omitted.

Very typical. I've run into cases where an "idea guy" basically says "you do all the product and tech half, I'll do marketing and strategy." Which is dumb, because sometimes I'm legitimately better at the strategy half too. Generally these people want ridiculous equity splits of that nature. It's worth anyone technical's time to build skills in strategy, marketing, finance, etc. The technical co-founder always gets s…

> Which is dumb, because sometimes I'm legitimately better at the strategy half too A semi-related thought I've had recently: I've run into a number of non-technical product people that say that they're primary skill is that they have a great "product sensibility" that engineers lack so they need to step in and provide guidance. It's true that many engineer-designed products are terrible, but I'd argue that most engi…

> It's true that many engineer-designed products are terrible

Selection bias from there being too many avg UI open source tools?

Engineer-designed = low budget = no expertise on UX etc.. but product fulfills their purpose.

Re: Business co-founders in tech startups are less valuable than they think

#227

Post by [deleted] »

d357r0y3r wrote: post #104
dgs_sgd wrote: post #8

I 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…

You've gotten good at telling the machine what to do. He's gotten good at telling people what to do. The latter turns out to be a much more effective way to build power and influence.

[deleted]

Re: Business co-founders in tech startups are less valuable than they think

#228

Post by ethbr1 »

gwd wrote: post #198
frenchmajesty wrote: post #118

Earlier quoted context omitted.

Hey, OP here. I view it like this: if you were to take all technical people on the market for launching a startup and plot them on a distribution to find the "valuable in early stage" subset, you would find that 35% are good enough to get a startup off the ground. They don't need to be extraordinary programmers, just good enough but with a lot of drive.* However, for non-technical folks that are on the market, the di…

If I had to re-summarize your point, I'd put it this way: 1. Success is very little on the idea, almost entirely on the execution 2. Execution has both a technical side and a business side, and can fail from a poor execution either way. How this applies to your target audience: You have an idea for a business? Nice -- that's almost worthless (1). You can't influence execution on the technical side, so you need to bri…

These discussions also get wrapped up in what "non-technical" means.

It can mean management skillset.

It can mean people-networking and sales skillset.

For an early-stage startup, the former doesn't bring much value (management value literally scales with employee count) while the latter absolutely does.

Re: Business co-founders in tech startups are less valuable than they think

#229

Post by ethbr1 »

conductr wrote: post #132
frenchmajesty wrote: post #118

Earlier quoted context omitted.

Hey, OP here. I view it like this: if you were to take all technical people on the market for launching a startup and plot them on a distribution to find the "valuable in early stage" subset, you would find that 35% are good enough to get a startup off the ground. They don't need to be extraordinary programmers, just good enough but with a lot of drive.* However, for non-technical folks that are on the market, the di…

If you're taking a fail fast type approach, the business guys fail faster when they can't get a tech co-founder to rally around their ideas. If you can't do that, you probably can't sell the MVP either. On flipside, the tech guys will spend month and even years polishing their 'product' without ever actually launching it with actual attempts to sale it. So they fail slowly after sinking tons of time. They'll talk abo…

Well said!

   1. Pitch to and recruit team
   2. Find potential customers
   3. Build product
   4. Sell product
   5. Improve product
   6. Scale sales
Skipping directly to step 3 and ignoring the others is an open source hobby, not a business.

Re: Business co-founders in tech startups are less valuable than they think

#230

Post by ethbr1 »

bruce511 wrote: post #212
herbst wrote: post #186

Earlier quoted context omitted.

You can build a product and sell it without business guy but you can't have a product without the tech guy. One definitely is more valuable than the other. Either I have a talent for the business aspect or I am just a tech guy with a lot of luck, but I invest time into my products not marketing and still get what I want.

>> You can build a product and sell it without business guy but you can't have a product without the tech guy. I'd argue that you need both guys. But that both guys can be the same person. It's just uncommon that they are the same person. If you have both sets of skills, then you can do it alone. A tech guy, with little to no business acumen will fail just as easily as a business guy with no technical acumen.

There's {set of things that need to happen for startup to be successful}, then {set of skills required to effect those outcomes}, and then {set of individuals who possess those skills}.

Whatever labels those individuals have isn't generalizable enough to form into "thou shalt"s.

And as the article put it

>> equal partners who trust and respect each other deeply

is probably the key.

Is everyone bringing valuable skills to the table (that others aren't) and does everyone respect and value what their co-founders / counterparts are doing?

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