Friday, February 4, 2011

Co-Founders: Your Idea is Worthless. Show Your Chops!

On an entrepreneur's list I'm on, I recently saw this request from "JT":
My short-term goal is to produce a working prototype this spring to test the concept and to position the company for seed stage funding.  I have already done a lot of the preliminary work to define the product and to shape the business model, yet the project is now at a stage where a lot of the "real" work can begin.

I am looking for someone with the technological chops and the passion for [target market] to help me get this project off the ground.  Ideally, this person will be comfortable with both backend and frontend development, with the usual suspects in his programming tool belt (JAVA, FLEX, PHP, MYSQL, CSS, HTML, etc).
The "how can I find a technical co-founder?" thread seems to come up frequently in places like Hacker News and Quora (look at Finding Co-Founders, Technical Co-Founders, and especially  this one), and there are even "speed dating" events that aim to match technical founders with non-technical entrepreneurs.

As someone who's done a startup from the technical side (and working on another one), my response to the would-be entrepreneur was that he needed to approach the "technical cofounder" issue the same way he would approach an investor. Just as he's looking for someone "with the technological chops" he should be willing and able to show that he has the "chops" to fill one of the other roles in a startup team.

JT's idea- your idea- any idea- is completely worthless from this point of view. Anybody can have good ideas, even great ideas. As a result, ideas, by themselves, are very hard to monetize. The best ideas are also easy to copy, and patents notwithstanding, it's very difficult to own them. But the real reason that ideas don't qualify someone to start a business is that almost every innovative start-up gets it mostly wrong at the start. Successful start-ups frequently go through a "pivot" where they re-align their strategy with learned opportunities. Steve Blank has it right when he describes a start-up as being "an organization formed to search for a repeatable and scalable business model".

A strong founding team will have expertise in technology, sales, marketing, fund-raising/finance, and product management. There are others, of course, but let me focus on the skills a strong technical co-founder might look for in the rest of the team.

The chops:
  • If you really have sales chops, then you already have a customer ready to sign a check.
  • If you have fund-raising chops, then you've already raised a nice pot of money.
  • If you really have marketing chops, then you can make the idea sound irresistible, even though it's worth nothing and you'll change it completely six months into the company! 
  • Product management chops are more complicated, and some nice posts by Vinicius Vacanti and Kate Ray are relevant there. Being a good product manager means you have hands-on understanding of many issues, including domain expertise and technology. If you really have product management chops, then you should be able to define a minimum viable product that's so simple even you can implement a demo version, or perhaps a first iteration of the product, if you're willing to put some skin into it. It's not that hard.
My guess was that JT fell into the product-manager-founder category, and I urged him to try building something himself. Even if he falls flat on his face, he will have gained knowledge and skills that are sure to help him whatever he does.

I've been thinking about how to build a founding team a lot, because I'm trying to put together a business around the idea of "ungluing ebooks". Past experience tells me that the people are the most important factor in the success or failure of a business, and the stress of starting a new business is only tolerable if you enjoy and respect the people you're doing it with.

ChopsI'm doing seed financing myself-I'm putting the "serial" into "serial entrepreneur". I know my technology, so I don't really need a "technical co-founder". The new venture needs someone with some marketing genius- a big barrier to success will be finding ways to communicate what we're doing to laypeople. The business also needs someone with expertise in finance and the book business- we'll need to make sure that book rightsholders will feel comfortable working with us. We'll need legal expertise, with focus on non-profit tax law, intellectual property rights and creative commons licensing. We'll need someone to approach libraries and other non-profits to work with us, particularly during the concept validation phase. And to scale the operation, we'll need a talented operational manager. Ideally, all this complementary expertise will be wrapped up in one or two people in addition to me. And of course, unreasonable optimism is a required trait for anyone involved in the early stages of a startup. If you're interested, please contact me.

So, assuming the "ungluing ebooks" idea is worthless, what are my chops? Well, my Java is a bit rusty, but I know pretty code when I see (or write) it. I know enough to hire people who are better at things than I am. I know my way around bibliographic metadata, which will be important to my project, and I have wide-ranging contacts in the world of libraries. And I got you to read this far, didn't I?

Postscript, 2/5/2011: JT mailed the list to say he'd actually found a technical co-founder, and wouldn't have found him without emailing the list and listening to everyone's advice. Way to go, JT!
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2 comments:

  1. Fascinating. I hope you win, a lot.

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  2. As someone with the technological chops (and not necessarily the sales or the ideas) I find it somewhat depressing to see so many posts about people wanting to collaborate with "tech" people "in exchange for co-founder status". I feel like if your idea is so good, then you should at least try to be the one to make it.

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