I have come across a lot of questions about launching a business, especially as an unexperienced young person. A lot of them focus around things like funding, cofounders, building minimum products, and financing your own life before you make a lot of money.
I think most of these are non-issues.
The one that I have found a lot of is about finding a technical co-founder.
The story usually goes something like this…
“I’ve got a great idea for a product that I want to launch! I have some potential customers and the basic business know-how to make it happen, but I don’t have the technical skills to build it. It’s an app/service/hardware/etc. and I am totally non-technical. How do I go about finding a co-founder?”
There’s a big problem with this line of thinking.
Notice that the problem jumps from not having the technical knowledge to build the product to finding a technical co-founder. This isn’t the right way of thinking about this, though.
Instead of asking, “where do I find a technical co-founder?” The question should be, “how can I build this product without having to bring on a technical co-founder?”
I’ve answered this question twice on Quora now — my answers are below. Bringing on a co-founder is not only a huge leap for any business — one that changes the way the company looks and operates in a number of ways — it’s oftentimes unnecessary.
Quora Question: How Can I Meet a Technical Co-Founder?
My answer:
If you are trying to meet somebody specifically for the purpose of using them as a technical co-founder, stop doing that right now.
Bringing on a cofounder of a company is a huge, huge, huge decision and not one to take lightly. If this is a company that you see yourself devoting a good portion of your time to, then you have to take a step back and realize that you are looking for somebody to share in ownership of it with you.
Don’t look at hacker meet ups.
Don’t look at happy hours.
Don’t look at networking events.
People who decide to bring on a cofounder almost immediately after meeting somebody are like those who decide to marry someone almost immediately after meeting them. This is a big decision that may impact the rest of your life.
It’s a big personal, legal, and financial decision.
Renowned startup advisors and investors like Paul Graham and Peter Thiel all agree that cofounders should have some kind of shared backstory. Usually speaking, the longer two cofounders have known each other, the better.
Thiel even says that you can tell the likelihood of a company succeeding or failing based on this metric alone. In Zero to One, he talks about a founder he met who told him that he had met his cofounder at a networking event — he predicted at that moment that their company would fail. He was right.
All of the successful companies I know were built either by single founders or by cofounders who knew each other very, very well. Some of the best were built by families (the tightest of cofounder groups).
Something screwed up at the beginning will be screwed up all the way through.
Why is it so important that you have a strong bond and backstory with your cofounder?
Starting a startup is almost always a big, stressful decision that leads to more big, stressful decisions. People are tested under stress and this is when they can really break and when they can really shine.
When you bring on a cofounder, you are bringing on somebody to share in the ownership of the company with you. This isn’t just like hiring an employee and giving them 1% of the company — it’s sharing a substantial portion of the decision rights, a board seat, and the vision of the company with somebody else.
What happens when you disagree?
What happens when you want to take the company different ways?
What happens when you really start to come under pressure?
Do you want to fall back on a bond that was built entirely with the vision of the company — which neither of you now share — in mind, or fall back on a bond built by years of friendship, shared experiences, mutual values, and a deep-seated respect?
You’d be crazy to say the former.
Does this mean you have to give up your ideas of building a startup?
Absolutely not.
I know plenty of successful single founders (meaning they control the vast majority of the equity in the company) who are non-technical founders running tech companies.
How did they do it?
Simple: they hired somebody else to build their MVP.
You can hire an engineer without bringing them on as a cofounder.
Crazy, right?
This sounds harder than it is. If you don’t have any startup capital, cashing in equity seems like the obvious way to get somebody to join your team and build a product. But there are lots of reasons why you shouldn’t do that, as I note above.
There are a handful of ways that you can raise money without giving up equity:
> Friends and Family Loans — Ask your closest friends and family members to throw in x% of your startup costs so you can hire a developer to build your product. Inform them that you will pay them back at a reasonable interest rate. Chances are, they’ll be comfortable with an interest rate below market, which would mean that you would still be getting out ahead by going to them.
> Credit Card Debt — While credit card debt is rarely something to get over your head in, I have met a handful of successful founders who have built real products on credit card debt. The advantage of this is that you don’t have to go through the loan process that a bank may have and you don’t have to give up equity. Just be sure that you can pay it back in some way before the payments get out of hand.
> Bank Loans — An idea that is often forgotten in the startup world, especially post-Great Recession, is that banks give out loans to small businesses and to entrepreneurs. Advantage here is you don’t have to give up equity, the disadvantage is that courting bank officers might take time and there’s a good chance you will be denied. You also tend to have to have been an operating business for around 12 months to get an SBA loan.
> New Options — Let’s say that you want to try a variation on these. If you can get a real company up and running without a technical product (let’s say you want to offer a service that can be done manually, but an automated tech component is what takes you from cashflow to a $100M+ company), then there are more options for you. Online lenders have popped up all over the place. Able (Collaborative Small Business Lending) lets you take 25% of your total loan from friends and family and then they’ll match the 75% remaining at 8% interest rate. Better than most bank loans, and you can get it much earlier than an SBA loan.
Don’t think that you have to have a technical cofounder to be the founder of a tech company.
You don’t.
Cull your existing networks of friends from school and work, see if there’s anybody you know well who would be a great addition to your team. If not, no big deal — you can hire somebody to build the product for you without having to give away a big chunk of the company.
My answer:
I’m going to take a slightly different approach to this question and say this…
If you have no idea who can build it as your technical co-founder, stop looking for a technical co-founder.
Kill your baby now, before it kills you.
I have seen time and time again a bunch of business students post in groups on Facebook and go to meet ups around the school I attended for two years, “Wharton student seeking developer for startup!” So much so that this is a joke now: Whartonite Seeks Code Monkey
Let me explain why I think you should put this idea on the back burner before you go recruit a cofounder.
If this is truly a strong startup idea that you are seeking to build, it is going to eat up a large portion of your time and take you to spending a lot of time with the cofounder(s), oftentimes for stressful bouts that have no immediate payoff and very low chances of any payoff. It will test your patience, your optimism, and your work ethic.
You do not want just any technical person joining you in this. There are a lot of articles out there about why just recruiting somebody you don’t know to be a cofounder is a bad idea.
When Sam Altman ( Sam Altman ) was still running admissions for Y Combinator, he noted that he liked to see teams of 2 or 3 cofounders, but that these cofounders had to have a shared history. The best founding teams knew each other for a long period of time and were friends before launching a startup.
Similarly, Peter Thiel notes in Zero to One that any company screwed up at its founding will be screwed up forever, and that that includes finding cofounders. He tells the story about how he met a team who was looking to get an investment and asked them where they met each other. They said at a founders meet up. He knew they would fail from that moment on.
They did.
Why would this be so important?
People with long-standing bonds of friendship are more likely to agree with each other during major disagreements. — When you have a friendship to maintain outside of the startup, the cost of being a bull-headed ass over disagreements within the company is even higher. Why ruin your startup and your friendship? This makes it easier for one person to fold or for you to avoid disagreements outright.
People with long-standing bonds of friendship are more likely to share a vision for the company. — Friendships are difficult to maintain without some shared values and vision for life in general. These can be translated over to your startup as time goes on. If you are unlikely to be friends with somebody, you shouldn’t consider them a viable candidate to be a cofounder.
People with long-standing bonds of friendship are more predictable. — This one is easy. You don’t need to worry that somebody flaked out with your MVP and went to another team if they don’t show up for work one day. If you don’t know your cofounder, you might have to worry about that.
Equity, equity, equity — Fundraising is hard. You will likely have to dilute everybody’s equity at the early stages. It’s really not easy to talk somebody into this if you barely know them. Friends are more likely to bite the bullet and join you in dropping your control from 50-50 to 40-40-10. People you don’t know are much less likely.
Does this mean you have to kill your idea outright?
No. It doesn’t.
It does mean that you should stop looking for a technical cofounder. You’re wasting your time if you can’t think of a friend or colleague to join you in this journey and if you insist on having a technical co-founder, it will set you up for a very risky time at your company.
Instead, just recruit an engineer.
This might be a little harder in some ways, but it will save you a lot of headache.
Find somebody who will build your MVP for you for a small sum of money instead of equity. The difference between a technical guy who can build something for you and a technical cofounder is a question of equity. Under the condition where you have a technical guy build something for you, you pay him money but you retain ~100% of the company. Under the condition where you find a technical cofounder, you probably don’t pay him anything, but you lose a big chunk of equity. He now owns a chunk of your company.
This might sound harder, but if you can get the the money to bootstrap the basic product, then you preserve control over the company and get your basic product. As you grow, you’ll bring on a Senior VP of engineering and/or a CTO, and they should get a small slice of equity, but nothing more than a few % of the company.
I know founders who have done this and who have built amazing companies as the sole founder. It’s hard, but it’s doable. And it’s much better than putting it all on the line to just say you have a technical cofounder.