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

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

#1

Post by gregthompsonjr »

Last week, I was asked to cofound what's supposed to become a tech startup. The two idea guys need someone to build out their MVP and orchestrate development.

They want to build the next great communication app. I've been communicating with people on the internet since 1998, and I'm aware of the influx of communication apps hitting the market.

I was offered a third of the company in return, and they're asking for 4 to 5 hours a week of my time (to start out). I know that that's not what it's going to turn out to be, considering development challenges. Plus, I have a full-time position as a software developer.

I'm in the process of launching some of my own projects, and I'd have to put those to the side in order to dedicate my free energy and time to their project. They've pitched the idea. I fear it's not innovative enough and that it's just another chat app. How do I know it's worth the commitment? They want a solid decision (quickly).

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

#2

Post by webstartupper »

I would sit down with the two guys and ask them the following questions

- Who is our target market? Who are we building the chat app for?

- How do we get traction in this market?

- Who are our competitors? What is our differentiator / unfair advantage over them?

- What are the monetization plans?

- What is the end goal? Being acquired by a big company, IPO, lifestyle business etc

- What are the responsibilities for each of the three founders? How would each of them add value to the business?

- How would we know if we are on the right path? e.g. x% per month increase in number of users/messages/revenue etc

At the end of this, you will either be sold on the idea or you will not. I'd advise you to join only if the two guys are able to convince you of the idea.

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

#3

Post by gregthompsonjr »

webstartupper wrote: post #2

I would sit down with the two guys and ask them the following questions - Who is our target market? Who are we building the chat app for? - How do we get traction in this market? - Who are our competitors? What is our differentiator / unfair advantage over them? - What are the monetization plans? - What is the end goal? Being acquired by a big company, IPO, lifestyle business etc - What are the responsibilities for e…

I think you're so right about these questions and how it relates to potentially convincing me.

I had a meeting with them yesterday to discuss in more detail. I asked them questions like "What's supposed to separate you from all of the other chat apps out there?" I understood their idea, but I don't see it as very unique. I asked them about how they'd monetize, and they told me -- a lot of it depends on star power (big people using the app in order to entice potential users). I wouldn't consider myself business savvy by any means, but that plan doesn't seem like something solid.

They told me they can make one or two calls to get funding, but that they just need an app. In my minor experience, the funding part of the operation isn't even half the battle. So, even if it is true that they can get funding just like that, it doesn't mean that this idea is strong enough to make a sustainable, considerable profit (then again, what is?).

One of the founders brings connections, but I'm focused on the idea and how it's solving a problem. I asked if there's a problem being solved, and their answer wasn't very strong.

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

#4

Post by daSn0wie »

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.

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

#5

Post by gregthompsonjr »

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 change mankind).

It'll really come down to me doing a lot of development between now and October, including managing another developer if they stay true to their word and get another developer to help out.

And no, they haven't already exited or anything of that nature. Not yet. Ambitious friends of mine, though.

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

#6

Post by Avalaxy »

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.

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

#7

Post by nols »

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…

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.

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

#8

Post by HenryTheHorse »

Before you seek idea validation and ask business plan questions, may I suggest you spend time understanding the co-founders?

It's not that ideas don't matter, but from my own personal experience, ALL startups over-estimate the uniqueness of the idea and under-estimate the effort and capital required to go to market.

So ask yourself these questions:

#1: Can I work with these 2 idea guys for the next 2-3 years? Are they the kind of co-workers I'd enjoy working with? What do they bring to the table that I don't?

#2: what do I know about their perseverance, fortitude and willingness to work? This is hard to prove or establish objectively, so answer this question honestly.

#3: Do you trust and respect the co-founders? Do they understand marketing and finance? Do you guys "jam well" with each other?

#4: How are they painting the picture of the future? Is it all yachts, expensive cars and visions of cashing out? Pay attention to that language carefully and then see if you believe in it.

#5: Are your co-founders former entrepreneurs? If not, I'd suggest you wait it out. You want partners who have experienced the pains of managing tight cash-flows, living without paychecks for 6 months or more.

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

#9

Post by gregthompsonjr »

HenryTheHorse wrote: post #8

Before you seek idea validation and ask business plan questions, may I suggest you spend time understanding the co-founders? It's not that ideas don't matter, but from my own personal experience, ALL startups over-estimate the uniqueness of the idea and under-estimate the effort and capital required to go to market. So ask yourself these questions: #1: Can I work with these 2 idea guys for the next 2-3 years? Are the…

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 tenacity is there.

But they're talking 5 years of commitment. Tech experience isn't something they have, but I know that at least one has entrepreneurial experience (just hasn't exited or anything). Again, he hustles.

Definitely talk about yachts and painting the picture of there being far less in our lives than there "will" be after building this app.

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

#10

Post by HenryTheHorse »

gregthompsonjr wrote: post #9
HenryTheHorse wrote: post #8

Before you seek idea validation and ask business plan questions, may I suggest you spend time understanding the co-founders? It's not that ideas don't matter, but from my own personal experience, ALL startups over-estimate the uniqueness of the idea and under-estimate the effort and capital required to go to market. So ask yourself these questions: #1: Can I work with these 2 idea guys for the next 2-3 years? Are the…

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.

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