>> It is very frustrating when some Ivy League 25 year old PM/management consultant tries to pitch you on their vision while treating you like an idiot savant they can easily take advantage of.
I get calls weekly from people seeking technical co-founders. The biggest thing most CTO candidates dont realize is the power they have -- unless the "business co-founder" is actually bringing something to the table.
I'd LOVE to work with a "Business co-founder" who actually brings Purchase Orders, Funding, Transact-able Relationships, prior wins (esp publicly verifiable wins). That would be a dream.
It makes no sense to work with a "Business co-founder" who wants ME to put in hundreds of hours of technical work -- upfront -- often for equity "e.g., free" -- and retains the right to take all the upside and has none of the downside. Why would I need a "Business Co-Founder" at all in that case, I might as well be the only founder and recruit later.
I see tons of friends burnt by these types of "deals." The biggest red-flag is when the "Business co-founder" still has a job and no real skin in the game.
I have substantially less exposure to this space than you seem to, but even when trying to start projects with friends, this holds true. So often, I get pitched by pals who think the idea is what they've done, and at that point, it's up to me to "code up." What I would love to hear is, "I've been talking with these three businesses already, and they seem interested." or even, "I'm really worried about the sales and marketing side of things, so that's the problem I'm going to focus on."
Nobody's ever come even close to that. It takes zero coding to have those things already started, and yet nobody even goes down that path before looking for a "code monkey."
This is very common issue with software engineering in general but I'd say particularly with game development, the answer I've found to be the best is what converted me when I was getting started with game dev ("I have a great idea, I just need a team to build it"):
Why do you think we got learnt game dev/programming ourselves? Probably because we too had an idea we wanted to make a reality, so why would we put that on hold to make someone else's idea without some other incentive?
>> Nobody's ever come even close to that. It takes zero coding to have those things already started, and yet nobody even goes down that path before looking for a "code monkey."
In a sense you are lucky in a situation like this -- that have self-selected themselves out w/o any effort from you. Technologists dont need anyone with that little motivation sharing equity. Better to know that at the start.
How do you even find these people? I somehow managed to surround myself with highly technical individuals who are only interested climbing a corporate ladder, not any kind of serious entrepreneurship.
"Business co-founders" are usually finding me (not the other way around.) They are approaching me on linked in cold, or on linked in referred thru someone, or at Meetups (pre-pandemic) or thru community organizations.
The worst example of this is the "founding engineer" role. I get a lot of these offers, and it just feels like a scam every single time. Founders often sell that as some incredible opportunity, zero-to-one, full codebase ownership, huge scope, no eng team, etc, etc. All of that for an amazing 1% equity.
So yeah, the expectation is that I will build the whole project, drive product decisions, help hiring the rest of the eng staff, spend the next 1-2 years basically working on this project 24/7. They keep 99% and I get 1%. Great, thanks.
It's the same with YC: at the end of the day even the founders will end up owning only a small fraction of the company. The difference is that the VCs dilute you over time, not up front, to get the maximum amount of work out of you.
to be fair, if they took investment, it's rarely 99%, cuz investors took a chunk, and a pool of stock gets set aside for future employees, etc. But if the there isn't even any funding yet then 1% is just stupidity.
I get those too. Even if the founders gave away 10-20% to investors, actually building the project under the "management" of inexperienced founders and getting 1% doesn't seem like a fair deal. At this early stage when there is not even a product, hiring a founding engineer is a cheap way to sidestep the need for a technical co-founder who would be entitled for a much larger share of the company. The responsibilities are vast, I can't see that being worth 80-99x less than the contribution the founders make.
Many feel entitled to captain a ship - they are often just useless.
Definitely not always, but more often than it should be. I had this experience once - a family of people that already had money that were obsessed with "running their own business" off the backs of others. They didn't even contribute the money they had. All exploitation. Fortunately I shut it down and walked away with code. It was useless code, but at least I was also able to waste their time on top of my own.
My default mode as a technical person now is to vet the person actually has something they can bring. If they do less than bring us customers before we have a finished product, they've failed. I expect them to make connections and sell what we don't even have. That way I know we can both make something from nothing - the key ingredient to liftoff.
> and retains the right to take all the upside and has none of the downside
When you are paid in equity, the non-technical cofounder doesn't have all of the upside. But I completely agree that both parties need to bring something to the table at the beginning. It can't be "you build something and then after you've done that I'll go sell it". Both founders need to be putting in sweat equity simultaneously, to align incentives.
I think we are in agreement. To elaborate more -- you are right, "the non-technical cofounder doesn't have all of the upside" -- I mean "they have all upside" meaning, they can only go up -- they have contributed nothing so everything for them is upside.
Yeah, I think the difference is between "they have all the upside" and "they have only upside". You shouldn't agree to either of those situations — they should be putting in sweat equity alongside you. But there's a big difference between them, since all founders end up with some upside — if you don't, then you're employee #1 (and even then, you're probably still getting a couple percent).
I think they believe in the "Build it and they will come" and then they just coordinate and tell you what to do afterwards, rather than making hundreds of cold calls (i.e. grinding).
I've similarly had so many technical friends burnt by this.
My new suggestion for "business co-founders" pitching ideas to technical friends where "business co-founders" propose techies do all the upfront work is --
If you have no Purchase Orders, no Funding, no Transact-able Relationships, no prior wins (esp publicly verifiable wins) -- then you put in money. Find some reasonable rate you pay for the upfront technical work. This "balances out" the skin in the game. If they have no money, i'd half-seriously suggest they go borrow money to pay the technical co-founder.
They need some risk, some skin in the game to make this an equal effort.
I get a lot of inbound in this form and after the first disaster I'm much more aware of what a nontechnical founder needs to be doing. I think part of the problem is that they imagine themselves as having CEO responsibilities at the start (e.g. setting vision, hiring, etc.). But that's not what a nontechnical founder does on day 1. On day 1 they are the sales rep, QA, point-of-contact, and customer interviewer. They are every entry level position at the same time, because that's what the company needs.
The big smell here is offering not-equal equity to technical cofounders who join early (first year). YC's proposed solution for later joining cofounders is just to give them equal equity but start their vest later, which I find very incentive aligning. The usual explanation is that they've done all the "market research + product/idea development" already, which is useless.
I get calls weekly from people seeking technical co-founders. The biggest thing most CTO candidates dont realize is the power they have -- unless the "business co-founder" is actually bringing something to the table.
I'd LOVE to work with a "Business co-founder" who actually brings Purchase Orders, Funding, Transact-able Relationships, prior wins (esp publicly verifiable wins). That would be a dream.
It makes no sense to work with a "Business co-founder" who wants ME to put in hundreds of hours of technical work -- upfront -- often for equity "e.g., free" -- and retains the right to take all the upside and has none of the downside. Why would I need a "Business Co-Founder" at all in that case, I might as well be the only founder and recruit later.
I see tons of friends burnt by these types of "deals." The biggest red-flag is when the "Business co-founder" still has a job and no real skin in the game.