[HN Gopher] Business co-founders in tech startups are less valua...
___________________________________________________________________
Business co-founders in tech startups are less valuable than they
think
Author : frenchmajesty
Score : 118 points
Date : 2025-04-27 19:35 UTC (3 hours ago)
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| myst wrote:
| And even less than that
| silexia wrote:
| Cofounders are not great anyways of either type. If you are a
| business person, learn the tech stuff you need. It's easier today
| than ever. If you are a tech founder, it's even easier to pick up
| business stuff than tech stuff.
|
| Investors always encourage it because it reduces their risk...
| One of you can be fired and they still have the backup. But when
| it is all on you there is no passing the buck.
|
| Source: solo bootstrapped founder of a company earning $1,200,000
| a month for the last sixteen years.
| relyks wrote:
| What's your product? :)
| j45 wrote:
| Better to go learn how they did it than the product.
| silexia wrote:
| CoalitionTechnologies.com. We do services like web design and
| SEO. I personally built massive Laravel applications for
| recruiting and training and for running the business.
| Swizec wrote:
| > Investors always encourage it because it reduces their
| risk... One of you can be fired and they still have the backup.
| But when it is all on you there is no passing the buck.
|
| The reason is reduces their risk isn't firing 1 cofounder, it's
| that "When you want to go fast, go alone, when you go far, go
| together". Building a business is tough. Most early stage
| startups fail because the founders simply burn out and give up.
| Having a buddy you can lean on helps. It also makes it easier
| to realize when you're digging down the wrong hole and need to
| change strategy.
| dingdingdang wrote:
| Having started businesses with the explicit lack of biz-co-
| founders I beck to differ. That is of course unless your da
| Vinci-like super modal capabilities allows you to feel unlimited
| joy when doing business plans, taxes & marketing alongside your
| (hopefully) core competency of product development.
| CharlieDigital wrote:
| I also agree based on several failed startups I've been a part
| of and a few successful startups.
|
| The business side is the difference between side project and
| successful venture.
| _bin_ wrote:
| I do actually know a few people who are like me and really
| enjoy both doing the biz plan/strategy half, and the marketing
| work, and product/tech. It's not as common but I enjoy working
| with them a whole lot more. We almost always create better
| results when the tech people are also biz people who understand
| how what we build needs to fit into the market. It's also super
| helpful to have some personnel fungibility when you have a
| small team where you're shelling out 5-20% equity for new
| members.
|
| In my ideal world basically everyone is like this and the walls
| between "idea guy" and "tech guy" are knocked down. I've heard
| a lot of folks get cynical about sharp technical types who get
| hired by big 3 mgmt consultancies, but ime they're often great
| places to find those who are both technically sharp and can
| make a killer deck.
| bix6 wrote:
| Your solution to bad business co-founders is for them to become
| sales people?
|
| The traits and failures you are describing could be attributed to
| anyone including an engineer.
|
| A good business person moves mountains while keeping builders
| free to build.
| j45 wrote:
| Business founders have to bring the distribution, technical
| founders bring the product.
|
| Require both.
| wolpoli wrote:
| The technical cofounder becomes less important as the company
| grows through.
| karolist wrote:
| See also https://www.breakneck.dev/blog/no-tech-cofounder and
| related HN discussion
| https://news.ycombinator.com/item?id=39902372
| dgs_sgd wrote:
| I recently walked away from a potential startup because my non-
| technical partner (MBA ideas guy) wanted an 80/20 equity split in
| his favor. I was the first to broach the discussion and proposed
| 50/50. It was a severe misalignment in expectations, and this was
| after 3 months of meeting regularly to refine the idea and build
| out prototypes (read: I was building the prototypes).
|
| My advice is to have this conversation with a potential business
| co-founder as early as possible to avoid wasted time. I could
| have saved myself months.
|
| Look out for business guys who severely discount your value as a
| technical founder. Not saying they're all like this, but a really
| skewed equity split is typically a red flag.
| j45 wrote:
| Partnerships should be about leveraging opportunity in the
| market, not partners leveraging each other.
|
| With business idea guys, the tech guy could own 100% of the
| shares until business founder shows up with paying demand and
| repeatable and scalable demand.
|
| The technical founder invariably builds and creates value in
| working software. It's tangible.
|
| If the business / "idea" person over values their share it's
| likely due to knowing the mismatch to begin with.
|
| Technical co-founders are perfectly capable of learning all
| aspects of business. Plenty of good books and resources out
| there at present.
| derektank wrote:
| >Technical co-founders are perfectly capable of learning all
| aspects of business.
|
| If you assume the technical co-founder doesn't need to sleep
| or has a magical source of extra time, sure. But in the real
| world, failing to bring a product or service to market at the
| appropriate time can be the difference between failure and
| success. I certainly agree that a technical co-founder's
| knowledge is harder to replicate in the abstract (OP's story
| about a co-founder suggesting an 80:20 split is nuts) but
| trying to be a jack of all trades can leave you a master of
| none.
| eezurr wrote:
| Hmm, if it were me, I would have asked how his 80% share would
| have made my 20% a good investment [than all the other
| options].
|
| It's all about what each of you are bring to the table. It's
| possible he priced the tech side perfectly AND being the best
| option available to make you better off.
| lucasyvas wrote:
| There's zero chance this would ever be a fair split.
|
| They know nothing about building technology so are never in
| the right. This happens often enough that most startup
| accelerators pre-flag it as criteria to not invest in
| founders (with an out of balance equity split).
| JumpCrisscross wrote:
| > _They know nothing about building technology so are never
| in the right_
|
| I've easily seen more start-ups fail because the technical
| co-founder got pedantic about something with zero
| commercial relevance than I have where the non-technical
| founder rolled over their tech team. Mostly because the
| latter fail early while the former can sort of look like
| it's not a trash fire for a little bit longer.
|
| As you say, the unequal split is a red flag. Not the
| direction it leans.
| randysalami wrote:
| Maybe he has privilege and lots of connections? Some people
| have doors open for them just because of who they are and
| there is value in that.
| nativeit wrote:
| They need to pay for the tech then. Hire an engineer and
| design team. If they don't have the access to that sort
| of immediate funding, then I'd struggle to imagine what
| sort of in-the-bag contacts they could bring to justify
| such an uneven split.
| throwup238 wrote:
| Then why do they need to give the technical co-founder
| 20%, or even make him a co-founder at all? They either
| have enough privilege and connection that they can bring
| in serious funding from investors, future clients, or
| friends/family/fools, - or they don't and their privilege
| and connections aren't really worth that much. If they
| did, they'd much rather give them a few percentage points
| and pay them a salary, capturing all the upside.
|
| It's a broad over-generalization but it's a good rule of
| thumb. They must have access to _demonstrable_ money and
| /or power before they're worth an 80/20 split, well above
| what most random business guys can bring in from even
| elite universities.
|
| Edit: A decent somewhat recent example is Theranos. No
| biotech VC would touch them because they do due diligence
| on the basic scientific viability of their investments,
| but Holmes and her cofounder were able to bring in huge
| tech investors from family connection and even get people
| like Henry Kissinger on their board, who also helped them
| get more investors. That's the kind of connections that
| _might_ be worth an uneven split.
| ElevenLathe wrote:
| You're of course right in a game-theoretic sense but I would
| never start a business with somebody who thinks like this.
| kirubakaran wrote:
| It makes sense to walk away even in the game theoretic
| sense. Many people think in terms of prisoner's dilemma,
| when it is actually iterated prisoner's dilemma.
| eezurr wrote:
| Its true in a game-theoretic sense, but I'm actually
| talking about being honest (and rational) with yourself and
| what you're able to contribute. There's many other factors
| that have been mentioned by other people here.
| inglor_cz wrote:
| If that person was someone like Warren Buffet, e.g. with a
| massive track of success behind them, then why not. 20 per
| cent of a billion is a lot more than 50 per cent of a
| million.
|
| But for random nobodies who think high of themselves, hell
| no.
| mitthrowaway2 wrote:
| If he's really that good at business, he probably wouldn't
| have let GP walk away without successfully persuading them it
| was a good deal.
| JumpCrisscross wrote:
| Unless someone is putting cash on the table, or one partner is
| full time and the other is not, there is _zero_ reason not to
| split founder interests equitably. (Even in the cash state, the
| better play is vesting, not an unequal split out of the gate.)
|
| If you want an unequitable split, hire an employee. If you
| can't (or won't), you're not the hot shit you think you are.
| dgs_sgd wrote:
| > Unless someone is putting cash on the table, or one partner
| is full time and the other is not, there is zero reason not
| to split founder interests equitably.
|
| When he asked why I thought 50/50 was fair, this pretty much
| sums up what I said. I'd be happy to take an 80/20 split with
| an industry insider or celebrity, someone who's guaranteed to
| attract buzz and attention. But he wasn't that guy.
| JumpCrisscross wrote:
| > _with an industry insider or celebrity, someone who 's
| guaranteed to attract buzz and attention_
|
| Even then, I'd argue no. 50/50 to start. Performance-based
| options that get them to 80 if they deliver on certain
| things.
| slt2021 wrote:
| should just ask him: what do you think stops me from taking
| your idea and implementing it myself? I will hire another
| MBA type of guy for 20% equity to do the work you wanted to
| do and keep the 80% to myself.
|
| flip the negotiating table
| JumpCrisscross wrote:
| He's already showed his cards. Partnerships are based on
| trust, not (explicit) threats. If you're both approaching
| the dais locked and loaded, call off the wedding.
| _bin_ wrote:
| Very typical. I've run into cases where an "idea guy" basically
| says "you do all the product and tech half, I'll do marketing
| and strategy." Which is dumb, because sometimes I'm
| legitimately better at the strategy half too. Generally these
| people want ridiculous equity splits of that nature.
|
| It's worth anyone technical's time to build skills in strategy,
| marketing, finance, etc. The technical co-founder always gets
| screwed and suffers from a general lack of respect. In my
| opinion, it's usually unwise to take positions where you're
| strictly the technical co-founder, or where you're marketed as
| the same.
| JumpCrisscross wrote:
| > _worth anyone technical 's time to build skills in
| strategy, marketing, finance, etc._
|
| This leads to jack-of-all-trades types. Good non-technical
| folk exist. They're just not easy to find for obvious reasons
| (same as good technical founders who can see the forest for
| the trees).
|
| A good technical founder dilutes their comparative advantage
| _e.g._ negotiating with suppliers and prioritising payments
| ahead of a close.
| _bin_ wrote:
| It can, to be sure, and it's not ideal. But the perception
| that technical co-founders typically get gypped hard is
| very warranted. This is a thing where you can often still
| get a reasonably good result with a technical co-founder,
| not as good as were he solely focused on product/tech
| stuff, but enough that his individual outcome may be higher
| than letting the biz guys run it.
|
| Obviously good biz guys somewhat mitigate this but finding
| those is easier said than done.
| JumpCrisscross wrote:
| > _the perception that technical co-founders typically
| get gypped hard is very warranted_
|
| I'd love to see the data. Most start-ups fail. For any
| given category of founder, there are therefore more
| stories of disasters than successes.
| liquidpele wrote:
| "Jack of all trades, master of none, is usually better than
| master of one"
| JumpCrisscross wrote:
| Sort of the dividing line between small business and a
| startup.
| mountainriver wrote:
| It's funny how many people think their ideas are truly
| brilliant and warrant a massive amount of respect.
|
| Anyone who's worked as an engineer for awhile knows that
| ideas are a dime a dozen, they are rarely unique, and are
| about a millionth of what needs to be done to succeed
| randysalami wrote:
| What is needed in your opinion?
|
| EDIT: I say this as an engineer who is putting his notice
| in tomorrow to found a startup
|
| EDIT EDIT: Thanks guy, this is along the lines I'm
| thinking. I'll be competing with companies like Asana,
| Monday.com, and ClickUp. I worked in a consulting
| environment for two years and these tools could never be
| adopted despite the org size growing to 1000+ people in my
| larger team. It was a big pain point and I think I've built
| a solution that will help big time.
| edoceo wrote:
| Demonstrate traction. The idea person should have at
| least an audience for the problem space. If not, they are
| Field of Dreams - build it and they will come. That
| doesn't work.
| PaulRobinson wrote:
| Ability to execute. That normally means build, take to
| market, measure, adjust, repeat.
| _bin_ wrote:
| A good biz guy can be worth his weight in gold. It's
| harder than people think to get it right: to figure out
| the right markets to address first and how to
| tweak/target your product to do so, when, how, and from
| whom to raise capital, at what rate to expand the team,
| sales and marketing stuff, etc. Doubly so if the
| technical co-founder isn't as good at these. It's not
| worth 80% of equity against 20%, but it is worth a
| reasonably fair share.
| dccoolgai wrote:
| Agreed. The tough thing, though, is that it's (generally)
| a lot easier to spot a bad engineer than a bs "ideas
| guy".
| analog31 wrote:
| You didn't ask me, and I don't have a complete answer,
| but here's a starting point. Consider what's required for
| a patent: Novelty, usefulness, and reduction to practice.
| The latter step often changes the first two, for instance
| by uncovering problems, or even improving the overall
| quality of the idea.
|
| Of course a lot of things need to right, beyond that
| point. I use the patent rule as a guide to make sure that
| the right people get credit where credit is due, when an
| idea reaches the market successfully.
| parpfish wrote:
| > Which is dumb, because sometimes I'm legitimately better at
| the strategy half too
|
| A semi-related thought I've had recently:
|
| I've run into a number of non-technical product people that
| say that they're primary skill is that they have a great
| "product sensibility" that engineers lack so they need to
| step in and provide guidance.
|
| It's true that many engineer-designed products are terrible,
| but I'd argue that most engineers have pretty good product
| sense. The problem is that engineers have a conflict of
| interest that leads to them making sub-optimal product
| decisions. A non-technical product person gets the "luxury"
| of only thinking "what is the best product for the user?", so
| they end up with a good design. But an engineer can't help
| but also factor in "i'm the one that has to build this, so
| how much extra work am i giving myself?" so they're design
| will be a compromise of what's good for the user and what can
| be built easily.
|
| this can have big consequences for how an org should divide
| work. If somebody has a broad set of responsibilities, they
| can help but make tradeoffs (that they might not even be
| cognizant of) because they're weighing multiple objective
| functions.
|
| So, when it comes time for figuring out who should be in
| charge of strategy, it might not just be an issue of "who's
| better" but more an issue of "who has the least conflict of
| interest"
| pier25 wrote:
| > _wanted an 80 /20 equity split in his favor._
|
| If they're so confident in their value they should just find
| some money and pay for the development of the product to a
| freelancer or employee.
| slt2021 wrote:
| they are so confident they are offering to pay with 20% of
| equity (basically vapor), instead of hard cash.
|
| imagine the chutzpah
| bn-l wrote:
| They may be a little surprised how much that costs. And then
| the running of it and the bug fixing and the feature
| expansion. It may be a little... "surprising". My advice is
| to get idea guy to price it out haha.
| spamizbad wrote:
| Yeah never take anything less than a 50/50 split. During the
| initial fundraising rounds (seed, Series A and maybe even into
| B) you're also going to be doing just as much lifting trying to
| get a deal done while also doing your regular day-to-day
| engineering responsibilities. Maybe in a world where it's 3
| founders you can side-step this responsibility but at point
| you're not just the CTO you're also the de facto COO while your
| partners are trying to get a deal done.
| pj_mukh wrote:
| You made the right call. I would never invest in this company,
| and neither would YCombinator [1]
|
| [1] https://www.ycombinator.com/library/5x-how-to-split-
| equity-a...
| yibg wrote:
| Fairness of the equity split aside, it also indicates he
| doesn't see you as an equal partner. Rather you are seen more
| as an employee that is going to be working essentially for
| free. So he probably also won't value your input and
| contributions in the venture either.
| LouisSayers wrote:
| > wanted an 80/20 equity split in his favor
|
| I would have been tempted to take the idea, partner with
| someone else and run hard with it in spite.
|
| I can't stand people with this mindset, and it's fair game if
| that's the cards they want to play.
| verelo wrote:
| I'm running a business that's currently doing around 32k a
| month at ~85% margin after 2 years in operations, no funds
| raised to far. I have a friend who is an MBA and only held
| corporate roles up until now. I've been running companies my
| entire life, and had one exit that was 42.5M US.
|
| We discussed partnering up, and when i mentioned a buy in or
| 10% equity split (with no buy in) or some combo of the two, he
| backed off pretty quick.
|
| Turns out he expected something around 40%-50% with no buy in.
| To me this is just unintelligent? Especially from an MBA.
| ZeroTalent wrote:
| MBA doesn't mean that much by itself.
| s1artibartfast wrote:
| >To me this is just unintelligent?
|
| You would know better than us, but I dont think of 10% as a
| partnership. Maybe they just thought they were going to get a
| killer deal.
| Ancalagon wrote:
| I had this exact scenario happen on the ycombinator cofounder
| matching of all places. Except the other cofounder (non-
| technical) wanted it 95/5.
|
| Yeah, I stopped all contact that same day. That project never
| got launched.
| steelbrain wrote:
| I don't man, I am fairly technical and have failed solo startups
| several times because I'm not good at the selling part (and I
| guess by extension _build what people want_ ). So in my limited
| experience, a co-founder that can sell well is really valuable.
| palijer wrote:
| That's exactly what the author was trying to convey...
| jagger27 wrote:
| If you have a shred of your own morals you're less likely to have
| to compromise on those with an MBA who's guaranteed not to have
| any.
| ivape wrote:
| It feels like the business layer has always successfully
| commodified the developer layer, but developers don't seem to
| have any desire to commodify the business layer. It seems like
| the developer layer naturally wants to eliminate the business
| layer entirely. It is basically extinction if you let developers
| sit on the other side of the coin, so I suspect anyone on the
| business side of things will have to be a cut-throat survivalist
| (there's no other way).
| guywithahat wrote:
| I realize this is all subjective, but the hardest problem in
| every startup is solving a real customer problem. I've never been
| part of a startup where the engineering was the hardest part, and
| I've been part of very high-tech companies.
|
| An accountant maybe doesn't add much, but a business major who
| deeply understands a customers need can be more valuable than any
| engineer.
| riskassessment wrote:
| This presupposes a business major is any better at
| understanding customer needs than an engineer. Given that most
| startups fail, I'd be willing to infer that neither the typical
| non-technical founder nor the typical technical founder is
| particularly good at this.
| loktarogar wrote:
| it's not "a business major", but "a business major who deeply
| understands a customers need". just any old business major
| won't do.
| lurk2 wrote:
| > This presupposes a business major is any better at
| understanding customer needs than an engineer.
|
| You can still derive advantage from specialization even if
| one party has an absolute advantage in both activities.
| multiplied wrote:
| And yet the saying goes 'Ideas are cheap, execution is
| everything.'
| echelon wrote:
| > An accountant maybe doesn't add much, but a business major
| who deeply understands a customers need can be more valuable
| than any engineer.
|
| 1000%. I'm a solo tech founder and raised $3M. There isn't a
| day where I wished I didn't have a business or growth person
| with me on this journey. The tech pieces are easy.
| Frost1x wrote:
| I would argue that it's not just about solving a customer
| problem, it's solving it at a cost enough customers are willing
| to pay for.
|
| There's lots of solutions in the market for problems I have,
| but most are above the cost I'm willing to pay for. As long as
| you have a large enough market willing to pay you can sustain
| it but often the solutions are just too costly in general to be
| sustainable.
|
| And that critical part of bringing a useful solution at a cost
| the market will bear to sustain is the hard engineering part. I
| find problems people have daily that I can think of solutions
| to, but they're often going to be too costly to be of any value
| to create a solution for and I often find them too unique for
| scaling to help any. I work in research environments, so YMMV.
|
| In the past I worked with an ideas person, but their ideas were
| often quickly discounted by some basic engineering thoughts
| about how reasonable solutions could be built. If you have an
| engineering background and ideas, you can often iterate through
| viable ideas much faster, quickly discounting unviable ideas vs
| the other way around (having to do a lot of practical homework
| to explore practicality of an idea is more time costly).
|
| There is absolutely domain value in understanding unique
| problems and seeing opportunity, no doubt, but viable solutions
| need to exist. If you think you're the first person who saw and
| identified an opportunity, it's a great time to look and ask
| around because chances are you're often not the first to
| market. Often solutions or businesses don't exist for the very
| point I raise: people couldn't find cost effective solutions to
| make it worth pursuing.
| mitthrowaway2 wrote:
| Some valuable customer problems turn out to be very tricky to
| solve, even when you understand exactly the requirements.
|
| Or as Henry Ford said, "if I'd asked people what they wanted,
| they would have told me unlimited clean energy, teleportation,
| immortality, and affordable housing."
| hibikir wrote:
| The difficulty with the business person is identifying actual
| skill. I've seen way to many startups where the business side
| was basically floundering, and the end result was technical
| firings and business hires, but no acknowledgement or
| punishment for the existing product and business staff.
|
| The places I've seen with actual success involved at least one
| founder capable of both, and that therefore had the taste to to
| realize when people coming up with ideas and taking meetings
| were just not meeting the high bar required. Because having
| ideas that don't work is easy, and so is having meetings that
| don't get you close to making sales. It looks like work is
| being done, but, if anything, it's making sure the company is
| spending time building the wrong things.
|
| I'd much rather work with business aware developers, who are
| interested in knowing more about the business, than with total
| business specialists. Finding business-only people that have
| interest in learning how things would get done, and therefore
| have any idea of how difficult their ideas are to implement, is
| in my experience way too hard, as the barrier of peering into
| code is way too high.
| dentemple wrote:
| In my experience, engineering CAN be the hard part, but almost
| always in situations where the business requirement is unclear
| or non-sensical to begin with.
|
| For example, business ideas in the form of: "Use {X} to solve
| {Problem that literally can NOT be solved with X}"
| greatpostman wrote:
| Living in NYC, I have been around a TON of venture backed
| startups with the classic non technical CEO, technical CTO. Some
| HUGE percentage of startups see the CTO fired once the tech stack
| and revenue are stabilized.
|
| The incentive from the CEOs perspective to remove a contender as
| well as claw back the equity is huge. Early stage the CTO is the
| most critical, but after real traction they can be replaced far
| easier than most want to admit.
|
| My advice for technical founders is to always place themselves
| first, from a legal and organizational perspective. For a
| technical founder with social skills, a non technical founder
| brings very little value relative to their vesting in the early
| stage.
| lurk2 wrote:
| > Early stage the CTO is the most critical, but after real
| traction they can be replaced far easier than most want to
| admit.
|
| If the technical founder can be replaced so easily, how does it
| follow that the non-technical founder is less valuable?
| greatpostman wrote:
| Once the business hits a certain level of revenue, the mvp is
| finished etc, whoever is the face of the company, I.e. CEO
| has way more power. CTO if they have shipped a complete
| product that's getting paying customers can be replaced with
| an engineering manager. But not before
|
| Getting the product to some level of completion is a
| monumental lift
| rKarpinski wrote:
| "Idea co-founders" are less valuable than they think.
|
| Unless they are carrying a number (funding, sales, users etc.)
| they aren't even doing "business"
| quantified wrote:
| Very pro-labor/anti-capitalist take. Not that it's wrong!
|
| > In reality, it should flipped! The technical person is the one
| who breathes life into an idea and should get the lion's
| share.... The riches are in the execution. The work done.
|
| Labor is what makes capital useful. Otherwise it's just a pile of
| money sitting there.
| greesil wrote:
| You're thinking of VC vs startup, not business skills cofounder
| vs tech skills cofounder.
| fairity wrote:
| As is the case with most complex problems like this, the correct
| answer is: it depends.
|
| In this case, it depends on what the crux of your business is.
| Sometimes the crux is building world-class technology. Sometimes
| the crux is customer acquisition.
|
| If the crux of your business is customer acquisition, then an
| exceptional business co-founder will actually be the most
| important ingredient to long-term success.
|
| This is one of the biggest weaknesses I've noticed in YC's
| mantra. In most industries, just building something people want
| doesn't lead to success - you have to excel at customer
| acquisition also. And, in these industries, as you business
| matures, you realize that customer acquisition, at scale, is
| actually the hardest problem to solve.
| dentemple wrote:
| I think you've just argued yourself out of a position of "it
| depends." This is one of the few areas where there's no wiggle
| room. A worthy business co-founder MUST be able to bring
| something practical to the table, and in my experience as it
| also seems to be yours, there's only really two ways they can
| do so:
|
| - Be great at customer acquisition (or at least as the original
| article says, bring in a "customer waitlist")
|
| - Have or bring in actual funding
|
| If the business co-founder can't even bring one of these two
| things to the table, there is no justification whatsoever for
| them to hold a meaningful share of the startup's ownership.
| tptacek wrote:
| _In reality, it should flipped! The technical person is the one
| who breathes life into an idea and should get the lion's share_
|
| Then you want an employer/employee relationship, not a cofounder
| relationship. I would run, not walk, from a company with a
| founder arrangement where some subset got "the lion's share" for
| reasons like this.
| 6stringmerc wrote:
| As a business guy, getting "it should be flipped" wrong and
| going to print / ready for audience viewing only emphasizes the
| importance of being able to meet certain expectations such as
| basic communication when wanting to be taken seriously. This is
| not a unique instance I have observed. It is not directed
| specifically at this writer, it is using this writer as an
| example of hypocrisy in self-serving pleadings.
|
| If you're going to de-value the role of somebody who can do
| what you can't, be prepared to get called out on it or brushed
| aside without explanation because you blew it. Harsh but true.
| I know this because I worked sales support with technical
| people and not technical people in high stakes business
| relationships.
|
| This is why startups don't hire people like me because they
| don't value what I do and frankly I'm okay with this mutually
| dismissive relationship. This forum is a frequent reminder of
| why so many startups are unsuccessful.
| tptacek wrote:
| I'm actually not making a case for business cofounders being
| undervalued. Maybe they are maybe they aren't. But if you
| think they're overvalued, put up or shut up: hire them
| instead of partnering with them. That doesn't happen because
| strong business cofounders won't accept those terms, which to
| me is a pretty clear indication that "it should be flipped"
| is false.
| clbrmbr wrote:
| IMO you want a business cofounder who has a tech background, but
| they have to be a sharp dollars person. Somebody has got to close
| deals, negotiate hard with suppliers, and keep the lights on. All
| things that engineers often don't do so well.
| neilv wrote:
| One thing I've wondered about for awhile: _How do you find a
| business co-founder you can trust?_
|
| For one example, the article says that some of the best value
| that a business co-founder can contribute is disproportionately
| building the relationships. But those relationships can be more
| connected to the business cofounder themself, than to the
| company.
|
| It's a bit different for the technical co-founder, since your
| perceptible contribution is usually IP expressed in in artifacts
| like code that is owned by the company, and can't legally be
| taken with you.
|
| There's also the perception of the value of that IP: much like a
| novice programmer might think that most of the value is in their
| own software/knowhow/grind/brilliance, the novice business person
| might think most of the value is in their own
| ideas/leadership/network/hustle/brilliance.
|
| The business person might also perceive the technical
| contribution as being commodity skills, and ones that can
| increasingly be done by "AI" robo-plagiarism for $20.
|
| So, if the business person is, say, having second thoughts about
| the 50/50 split, they can make a backroom deal with investors to
| cut out the technical cofounder, or bring their new relationships
| with investors and/or customers with them to a different (or
| 'different') startup.
|
| Obviously, one defense is for the technical co-founder to somehow
| be a superhumanly valuable non-commodity, and to make sure that
| the business co-founder understands that.
|
| But, realistically, doesn't the technical co-founder probably
| need a lot of trust in their character and commitment of the
| business co-founder? Maybe even more than vice versa?
| JumpCrisscross wrote:
| Anyone can do a back room deal to screw their partners. Mark
| Zuckerberg was a technical founder, for example.
| neilv wrote:
| Maybe, although students in the dotcom boom was a different
| situation than now.
|
| (Source: Was one. Many people were trying to fund you,
| sometimes without you even asking. And you couldn't go to a
| student party without some Sloan or HBS student zeroing in on
| you, and wanting to talk with you.)
| fellowniusmonk wrote:
| If you are the technical co-founder who is writing code you
| should ensure you have legal protections before anyone else has
| access to what you have written.
|
| This can be a legal agreement or built in protections via
| copyright law.
|
| Same as any author who produces work that others can profit off
| of in perpetuity, don't sign your built in protections away.
| neilv wrote:
| In the example I'm giving, code IP isn't very relevant to a
| business cofounder screwing, because the (real or perceived)
| value of the code IP is less than the relationships that may
| be tied to the business cofounder.
|
| All the code IP protections mean, in this regard, is that the
| technical cofounder has _less_ value comparably tied to them
| personally.
| dust42 wrote:
| Having seen plenty of businesses throughout my life, both
| successful ones and less successful ones I'd say the most
| important traits are: - the ability to execute
| - having drive, focus and flexibility to adapt - being able
| to manage a team and keep it focused, motivated and on track
|
| this is valid for both the technical founder and the business
| founder alike.
|
| In a perfect team the business founder has a very good
| understanding of the tech side and the technical founder a good
| understanding of the business and marketing side. Product is
| nothing without sales and sales nothing without product. Despite
| this being obvious I have seen several companies fail on this.
|
| Last not least it depends on the product. The more complex the
| tech is the higher the share of the technical partner should be
| and vice versa the more specialist business domain knowledge is
| needed, the higher the business partner's shares are.
| FlyingSnake wrote:
| > ability to execute
|
| How do we define what execution looks like?
|
| As a general rule we must be wary of "business cofounders" who
| sell pontification as execution.
| mlinhares wrote:
| If your "business cofounders" aren't closing deals and
| landing sales they're useless. So if you're going to join a
| "non-technical founder" they must both have the contacts or a
| in in the industry you'll be trying to join and must be a
| great salesman.
|
| If they don't have that, walk away, this person has no value.
| dust42 wrote:
| The _ability to execute_ means to deliver timely and on
| budget.
|
| I have seen people who would not be able to set up and manage
| a hot dog stand and yet they were trying to run a business
| with 50 employees. The only result was burning money like
| there was no tomorrow.
| neom wrote:
| I was one of the "business guys" at DigitalOcean from very
| tiny to big. Execution looked like: 20% of the time in
| meetings discussing what the next period of time without
| seeing each other was going to look like and 80% of the time
| on flights and in hotels. My mantra was always "be
| directionally correct, go to market as hard as I can every
| single day, and fully trust the engineers building the
| products around me".
| tiffanyh wrote:
| I'd say, what's most important is to find someone who has
| opposite strengthens.
|
| If you aren't strong in marketing or design, it'd be ideal if
| your cofounder was ... etc.
| goatherders wrote:
| This post is hilarious and details exactly why so many startups
| die in infancy. Yes yes, engineers are brilliant and without them
| nothing ever gets built.
|
| And even still, sometimes things get built and never turn into a
| real business precisely because of this hubris. And 99.9% of the
| time, the ones that DO grow over time would have grown much much
| faster if "the business guy" had been there all along.
| jesseab wrote:
| Sweeping statements in HN posts are less valuable than they
| think.
| siliconc0w wrote:
| For B2B, it generally makes sense to have one person whose job it
| is find and talk with customers while the other can focus on
| building/iterating the product. It helps to be technical for this
| but they have to actually like talking to people and ideally have
| a decent network for what you're selling. This isn't exactly
| sales but it's closer to 'sales' than it is engineering and so
| generally benefits from that background/skillset.
|
| So in theory it makes more sense to team up with someone with
| that skillset than partner with another engineer but then one of
| you has to give up on the thing you're good at to do founding
| sales which you may-or-may-not be inclined to do.
| 827a wrote:
| The reality that I've experienced is: Most any function in a
| software company can be learned to an effective degree by anyone,
| if you take the discipline seriously, have the right mentors, and
| dedicate time to do so. Engineers can learn to be good founders
| and salespeople. Marketers and managers can learn how to commit
| code.
|
| The reason, I tend to think, why business-focused co-founders
| might be less valuable than tech-focused co-founders in a tech
| company is, in my experience, that all founders surface their own
| biases in how their companies are designed based on the
| comfortable experiences of their past; and you _need_ those
| biases to lean toward the tech in tech companies, because tech
| can automate anything per the previous paragraph.
|
| I've seen this surface subtly: "Yeah, Stripe integration to take
| money makes sense, but its just not a priority right now. Sales
| can handle invoicing." (it never becomes a priority because once
| you give DepartmentX that responsibility they'll fight to defend
| their turf).
|
| I've also seen it surface less subtly: A VC-backed software
| startup with mid-eight figures of funding, all the investors
| thought the company was selling software, but it turns out the
| salespeople were never trained on that, and were instead told to
| only sell white-glove services, using the software, from another
| department. "Bigger contracts" etc. Engineering leadership was
| oblivious to this happening for at least two quarters, because
| who knows, users were still signing up, "sales handles the
| invoicing", they weren't tracking the right things, maybe some
| layer of intentional deception. Chicken & egg "the software
| doesn't sell" "you weren't even trying to sell it". Engineers are
| expensive -> Engineering layoffs. They're now a zombified
| services company, who took on 70 mil in venture capital to sell
| software, with zero full-time software engineers. The CEO's
| professional work history? Selling services of this exact kind
| for some provider for twenty years. They took rocket fuel to
| start a bonfire, and it blew up the block.
| ashalhashim wrote:
| The ideal business co-founder has to be strong in distribution
| AND eliciting product feedback. This is why the "MBA types" and
| ex-McKinsey consultants fare so poorly - they're used to
| companies spending loads of money to hear what they think. As an
| early-stage startup founder, nobody gives a shit about your
| product and no one wants to hear what you think. Your job is to
| identify where demand is highest in the market and then turn that
| demand into dollars. They also need to be excellent communicators
| who understand or at least appreciate how much goes into building
| products.
|
| For those reasons, the best business cofounders in my experience,
| are former salespeople (for b2b startups), demand generation
| marketers (for b2c), and product managers.
| mannyv wrote:
| Really, the business side is responsible for sales, investment,
| and maybe product.
|
| But if the business side can't sell or raise money then they're
| worth;ess
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