Finding Technical Cofounders Is Hard

Tuesday, August 17, 2010

Yesterday, Michael Pope posted an article titled Technical Cofounders Are a Myth. He argued that software engineers don’t finish what they start, and that you’re better off paying a technical person than partnering with one. His frustrations are valid and not uncommon, but his conclusions are way off base for a lot of reasons.

He begins by explaining how he arrived at his conclusion:

I began the hunt to find a technical co-founder – a software engineer who works for no cash – to help me build my dream website. Twelve months into my startup journey I had four half-built websites that had been built by my four ex-technical co-founders.

It’s entirely possible that he picked four flaky technical cofounders. But it’s also possible that:

  • He didn’t communicate his idea and vision well enough for them to be implemented.
  • His idea was too vague or his vision changed too often to be fully realized.
  • He had trouble selling his credentials to his cofounders, causing them to lose faith in him.
  • He was a delegator, not a doer. (link goes to Everybody Works from 37signals’ Rework)
  • He picked engineers who were technically-driven but not entrepreneurially-driven.
  • He picked engineers who weren’t comfortable taking risks as great as he wanted to take.
  • He was difficult to work with.
  • His cofounders felt he wasn’t was pulling his own weight.

I don’t know Michael, and I’m not leveling any accusations here. There are many possibilities for what went wrong. But the simple fact that things did go wrong is not a referendum on the value of having a technical cofounder, nor is it sufficient evidence to conclude that good technical cofounders don’t exist.

Michael’s second problem comes from holding software engineers to an unprecedented standard of business savviness:

Most software engineers aren’t business people. The only way a software engineer can tell a business idea is a viable is to see the money coming in. A business geek with no money and no income isn’t going to inspire confidence in a software geek. If a software geek really wants to try building something for no pay, they’re going to work for themself instead of following another cashless entrepreneur.

There are three double standards here. First, it’s true that “most software engineers aren’t business people.” But it’s also true that most people aren’t business people. If you are looking for a business-savvy technical cofounder, then your requirement is not merely a “software engineer.” I’m a fan of Micah Baldwin’s post on Hackers and Hustlers. If you want a technical cofounder, look for a hacker as Micah describes it.

Second, nobody knows the viability of a business idea without seeing financial numbers. Picking winners is extremely difficult, and doesn’t work. When it comes to picking the next big thing, the best VCs have worse batting averages than MLB pitchers. It’s not just software engineers who are lacking in this department. Furthermore, there’s more to a business than the idea. There’s the team. There’s execution. There’s competition. None of these things are entirely predictable, even for the most savvy people in the industry. If they were predictable, investing wouldn’t have risk.

Third, most people, not just software engineers, would choose to work for themselves if they could do it in a financially viable and risk-minimized way. What makes software engineers different in the startup world is that they have the requisite skills to hack together an idea on their own if they so choose. But software engineers also pay a price for working by themselves. It means they have to deal with finances and customers and investors and other things that aren’t what they love to do, which is building software. I have side projects, and I hold entrepreneurial ambitions. I absolutely want cofounders when the time comes.

Michael’s last gripe is that “software engineers don’t work for free.” I believe that by this he means they want cash rather than equity. Based on counterexamples I know for a fact that this is an over-generalization. But conceptually it does ring of some truth. Let’s examine why this is the case.

“Business people” and “software people” are misnomers. A “business person” can fall anywhere on the charts of aptitude, skills, education, experience, wits, and a handful of other areas relevant to starting a company. A “software person” on the other hand is more narrowly defined. Skills and education are a known quantity, and experience is more easily described. These traits of a software engineer are always in demand by a great number of companies.

Business people have it tougher. A business person may have equal or more valuable skills than a software person, but they are not universally understood in the simplistic way that software people’s skills are. Ask anybody what a software developer does and they can give you the one-sentence “makes software” answer. Ask them what a “business person” does and you’ll be lucky to get a coherent sentence. That’s because business people cover a wider range of skills and responsibilities; the work they do is more varied.

My hunch is that most good software engineers only work for cash because they don’t feel that working for equity is worth the risk of failure. They can make good money consulting or working as an employee of another company. They can easily get great benefits and a six figure salary. The risk of failure doesn’t seem worth it, especially when the potential reward seems so far away. But an important distinction is that this has to do with their options, not with their profession. If we look at business people who have skills-specific training like software people have, they fall in a similar risk-averse bucket: only 3% of Harvard MBAs use their educations to start a company.

A more appropriate conclusion to draw from Michael’s experience, and one I see first-hand in the startup world every day, is that finding good cofounders is very difficult. One need only look at the necessary traits to find that the odds are stacked against the seeker: you need somebody you trust (ideally whom you know well), who shares your ambition, who complements your strengths, who compensates for your weaknesses, who is in a life position to take a big risk, and who is in a financial position to afford to take such a risk. Forget the haystack; you’re looking for a needle in a field.

Finding good technical cofounders is particularly difficult. This isn’t because technical people are flakier or inherently less entrepreneurial; it’s because by definition they have a narrower set of highly in-demand skills. They have lots of options because, for every one of them there are several “business people” trying to get their attention.

Now you go:

14 comments:

  1. Tuesday, August 17, 2010dpickett says:

    Great post, man!

    Your points are solid. I think there tends to be this improper mindset that development resources are a commodity, and that they can’t be found easily…and subsequently, cheaply (or even free). It seems like it’s somewhat of a surprise to nontechnical people that development skills are VERY high in demand.

    I think, too, technical cofounders are naturally skeptical when it comes to ideas. An analytical mindset that might be somewhat jaded from past ventures is going to take a hard look at your idea, and their reaction is likely to be sobering. Those that don’t embrace appropriate levels of pessimism are left saying “Technical cofounders don’t exist”

  2. Tuesday, August 17, 2010james pruett says:

    I had a technical cofounder. He with-held code until I sweetened the pot. I refused and he left. Good riddance.

  3. Tuesday, August 17, 2010e.p.c. says:

    I’ve been approached to be a “co founder” multiple times, each with conditions like: cease consulting on the side, assign all of my “intellectual property” to the company (regardless of whether it was related to the company’s business), or “here’s this bundle of code we hired somebody to sketch out: turn it into a product”. None of these were looking for a co-founder, they were looking for someone to work for free (Sorry really-promising-business-types, but your offer of a share of equity is worthless until it can be sold or used as collateral).

    Pay me cash or allow me to work on the side: pick one.

  4. Wednesday, August 18, 2010Nick P. says:

    Replace “technical co-founder” with “spouse” and you’ll have the same challenge. A business partnership is like a marriage and finding a long term partner is a very difficult thing.

  5. Thursday, August 19, 2010Nick Plante says:

    Great post Robby. I really can’t think of anything to add; you nailed it.

  6. Thursday, August 19, 2010jazzmann91 says:

    Thanks for writing!

    I think you are bang on with you assessment. Finding someone to partner with isn’t easy. Convincing them is even harder. Making it work, over the long term, is either magic or a wackload of commitment and perseverance.

  7. Thursday, August 19, 2010Anonymous says:

    Hi Robby,

    Great post and spot on! You provide a very thorough and thoughtful response.

    I like your point about tech co-founders not just being commodity software engineers – if that’s what was looked for then I understand all of the points regarding needing cash, half-finished work, and lack of vision.

    I’m a tech co-founder in internet startups and after you’ve co-founded a few ventures you definitely have a much more of an appreciation for what’s required to make a startup work at the technical level – it’s certainly not just a software engineer. Whilst the average tech entrepreneur may lack some of the more business relationship, networking, and sales/marketing skills – they still need to have an entrepreneurial mindset, understand financial models, market factors, and how the business ultimately makes money.

    Tech co-founders can easily be skeptical when it comes to ideas. As engineers we naturally have an analytical mindset, and like to break things down into black and white, absolutes and positives so we can make quick judgements. So getting involved in a startup or evaluating an ideas is probably not helped by the fact that the tech part is often so much of the early hard-graft in a tech startup that its hard to effectively judge if the idea will have traction. Actually quite often it’s a judge on the vision and drive of the other co-founder to convince the tech co-founder that once they’ve built it, he/she will make them come :)

    Certainly using techniques such as customer development (www.custdev.com) and lean startup (minimum viable product) can help go a long way to giving the tech co-founder some early payback in terms of whether there will be any traction in the idea and reduce their inital involvment to get to prototype stage.

    As a tech co-founder, I tend to approach getting involved in new ventures now very much as an angel investor would, and ask the following set of questions:

    1. What is the product? (60s elevator pitch)
    2. How do you know it’s something that people want?
    3. Who else is on the team and what are their bio/credentials?
    4. How will the business make money (what are the unit economics)?
    5. Who is the competition and how do you compare?
    6. How much investment have you already got, what are the plans for additional funding and when?

    My current problem actually is the other way round – I find it difficult to find a good non-technical co-founder – especially one that’s startup experienced, big visioned, and with access to funding and the right relationships to make it big. But then again, I’m living in New Zealand, not exactly the startup capital of the world :-)

  8. Friday, August 20, 2010Stephanie says:

    I can testify to this! I am a “business person” – I’ve been in the Internet space since 1998 when I co-founded GoTo.com/Overture, and I have deep product and marketing expertise and a track record of building successful consumer companies and brands. I have been working on a start-up for about a year and optimistically set out to find my alter ego/technical co-founder – only to come across many of the challenges outlined by Robby. I finally decided to work with some exceptional freelance engineers I was introduced to to build the prototype which we tested with some users, which was a good decision as this gave me something to show to investors and people I’m recruiting. We’ve had some really good feedback so far, and I’m in a position where I can definitely answer the question posed by Dankhan below.

    Now, however, it really is time to have some dedicated partners on this project to build the vision, and I’m starting the search for technical co-founder again. I have been self-funding the business and have the commitments of a few angels to help pay salaries for some months when I find the right person/people, because I have come to appreciate that offering at least some salary helps a lot. The other thing I’m doing differently is focusing mostly on my network instead of job boards and meetups, etc and having cold start meetings with random people I come across. As Nick P. said, a working partnership is like a marriage, and it’s about finding someone you trust, like and respect – and that isn’t done in a few days. So while I’ll continue to post the job description on the off-chance that lightening strikes (www.whuffie.com/jobs/tech), I am tapping deeply into my network, and going way back into my past relationships. I’m pretty sure that in the absence of a strong personal relationship or a strong referral by someone both parties trust, it is almost impossible to convince someone to join you for the ride when they have so many other options or ideas of their own. Especially today when the new breed of super angels are happy to make small investments in many smaller ideas that don’t really require the skills and expertise of the business partner in the beginning.

  9. Friday, August 20, 2010Veena says:

    Nice job with this post and very timely for me as I’ve been searching for a Technical Co-founder for the past few months through networking events and online job classifieds, and haven’t found “the one” yet. Do you or anyone else here have any suggestions on what other methods one can use to find someone? I don’t have any one from my friends circle at this point so would be great to hear any and all suggestions. Thanks.

  10. Friday, August 20, 2010e.p.c. says:

    Have a compelling story to tell about your business idea and tell it over and over again to people you meet, technical or non-technical. Find tech meetups in your area and go to them and talk to the people there. Reach out through LinkedIn and ask if you can just describe your business to interesting tech people, separating out any interest in that specific individual as a tech co-founder. Focus less on finding a very specific person, than on spreading your idea, your passion about your idea, and need for help to bring it to fruition.

    Too often people approach “techies” and say “I have an idea about doing X, I need you to implement a tech solution that does Y and Z but I want you to implement it using Rails or “the cloud” or some other buzzword”. If you don’t know tech, you need to find someone who is as interested in solving the problem set and your potential solution as you are, but let him or her decide what that solution is. If you start framing the technology solution, then you’re not looking for a CTO or a tech co–founder, you’re looking for a contractor or employee to implement that solution, which is perfectly fine if you know what you’re doing.

  11. Monday, September 13, 2010Dan Khan says:

    Yeh, I like to think the job of a good tech co-founder is like being a good Riker to Picard’s leadership – break things down into black and white and offer sensible alternatives to challenge the business model, marketing plan, features, etc, but not necessarily disagree outright (i.e. be a sensible devil’s advocate).

  12. Monday, September 27, 2010Kevin Bedell says:

    Robby – I really appreciate what you’re adding to the conversation here.

    One of the things I’ve found is that business people often underestimate the effort that their ideas take to develop. They also tend to overestimate the value they add to an early venture by bringing just an idea.

    I’ve talked to people who seem to have the attitude that “I have an idea and I’m launching this project, so go and build the site for me and I’ll give you 10-20%”. Much of the time the idea isn’t the determining factor for success — it’s superior execution of the technical solution that makes the difference.

    When I encounter people who have an idea and want me to build it for them (as a ‘technical co-founder’), I take a hard look at what they’re really bringing to the table. If it’s just a good (or even great) idea, it puts me off. It takes a lot more than that to get to success.

  13. Saturday, December 18, 2010durrantm says:

    I like your counter-points Robby. A constant supply of humility and modesty is also handy though can be in short supply for smart developers without business knowledge. Experience makes a huge difference obviously for technical co-founders. Personally, I’ve had my own business. I did the dot-com thing and I’ve learned the truth in ‘you learn from your mistakes’. Well if you want to improve at least, you do = experience.
    Many failing startups currently have shaky business plans, poor user interfaces and a lack of understanding that a jack of all trades (Model, View, Controller or, classically, db, web, program) may well be a master of none.
    I also find that things like Rails books that make application building look easy don’t help. Examples in books for any language have always been easy. Real world stuff is always a lot trickier with exceptions, outliers, additional conditions, security, performance, etc. That fact is often not well understood on the business side. If much of the current real-world code was examined for big sites it would be seen to be very complex and almost certainly refactored from its original incarnation(s).
    Finally I would say that from the many companies that I’ve talked with there are no shortage of big ideas waiting for technical co-founders. The biggest issue is thinking TOO big, and having a whole list of ideas and functions to implement, instead of getting on one good useful core function working first as was done with the biggest most successful web sites to date, e.g. google, facebook.

  14. Sunday, January 9, 2011Dale says:

    I’m a software engineer who has been searching for a “tech co-founder” gig for the past few months. I’ve had many conversations with entrepreneurs. Some of them were quite impressive and others less so.

    If you are a business type with an idea requiring a software implementation, here is the key question need to ask:

    Do I have the technical skill to manage a software project?

    - If yes, hire a contract developer. It is unlikely this person will work for free. You may be able to find a student or part-timer who is willing to work for a reduced rate.

    - If no, you need to find a PARTNER who does. Finding a partner is like finding a spouse. Your technical partner must be someone who shares your vision and enthusiasm for your idea, BUT he/she does not necessarily need to be a developer.