This is a guest post by Martin Grüner. He is an Estonian entrepreneur and hacker, co-founder of game studio Aplefly games. He spent last summer in US, where he had to learn to say no to people who wanted him to be their technical co-founder. The post was originally published at Martin's own blog. You can follow him on twitter through @MartinGryner.
Hackers are becoming more and more like VCs, they often have to say “no”. Last summer, just before the 500 demo day I attended an event which required me to fill in “company” on name tag. As I was there just to help out Zerply for less than 2 months I didn’t feel adequate enough use their name. I didn’t bother to write my consulting companies either as obviously it wouldn’t have said anything. I decided to go for “Hacker”. I don’t think I would have been forced to listen to as many pitches had I chosen “writing checks”.
Every week I get approached by someone with a “game changing” idea. All they need is someone to execute it. “Hey, I’ve heard you are good at IT stuff, let’s start up!”. Well, no.
I don’t know you
Startups and babies have one thing in common; you don’t do them with someone you just met. We will have to work together for years, sometimes 24 hours a day. Chances are we just met and you just handed me your card or at least I don’t know you well. How could I trust you with part of my business?
There are thousands of issues that can ruin the relationship between startup founders, many of which can be foreseen. It might not even directly be your fault. Perhaps you have an over-controlling spouse that wants you home by 6 every day? If that’s the case, forgot about startups in general.
I’m not passionate about the subject
Passion is the fuel that powers startups, it helps get through tough times and get things done. My passion is games. It isn’t a hard and fast rule, but unless your idea has something to do with games I probably won’t be interested. People often approach me with a random idea they had, but without the spark in their eyes. That’s a sure sign of approaching failure and I’m not going to buy first class ticket on the Titanic.
You expect me to invest at least €60 000
It’s reasonable to for MVP to take 6 months. We could release an earlier version, just to be ashamed of it, but 6 months is probable. If we consider just 8 hour work days 5 days a week it totals about €60 000 by my normal consulting rate.
Time is money; why should I invest mine in your idea? And if I do, why should I accept only 50% or even less of the equity? After all, I have made an investment of actual work while you played around with excel spreadsheets and sent out a few press releases? Sarcasm aside, during first few months of startup development, hackers are doing all the work and taking all the risk. If we fail fast you have lost almost nothing whereas I have lost months of intense work.
You’re are easily replaceable
Let’s face it – good hackers are scarce resource. That’s why you are talking to me. However conferences, meetups and other places where startup industry players gathers to escape the daylight are filled with available marketers and business monkeys.
Only thing you have is your network. As a “business guy” in a startup I expect you to have Barack Obama as a 2nd level LinkedIn connection and Zuckys number on speed dial. Well, anyway much wider network than I have. If you don’t – I probably don’t need you.
jason_tko criticized the previous remark on Hacker News with: “This comment belies a stunning lack of understanding and respect for what actually goes into the business side of typical tech startups – the sales, marketing, user acquisition, hiring/team building, negotiations and every other thing that business co-founders actually do.”. This is completely valid and I probably crossed the line. Business is as important part of startup as is technical execution. Otherwise it might just be cool pet project. The question here is about delivery – I can deliver the technical execution, and can prove it with (technically) similar past projects. If the business side has a track recors of doing the same he falls into the category described in next paragraph.
There are exceptions of course, people who have already proved themselves, but that’s an entirely different ballgame. Experience in other fields does not matter – even if they come from tech industry, startups are nothing like your average business plan.
“I don’t know the IT stuff”
I don’t know anything about construction, medicine or farming. Common denominator here is, I’m not planning to do business in any of these fields. If you say outright that you know nothing about IT, it means you won’t respect nor understand my work, will set unreasonable goals and probably won’t be pleasant to work with. At least get some basic knowledge of the technical side if you want any hacker to take you seriously. And lose the darn tie.
How to make me consider it
I can think of two cases where I have seriously considered taking the role and might actually do it at some point.
One of them was a guy approaching me with an idea for a piece of software he desperately needed himself. Not desperately, but enough to invest money into it. He was straightforward from the beginning – he knew the industry, knew the problem and could provide the first clients and testers. Later on he hoped to sell it to some bigger player – not change the world/cure AIDS or eliminate hunger. It was barely a startup as he wasn’t hunting millions, just a quick cash and to scratch his own itch.
Second case was a team of 2 developers asking me to be the third. They had a better business model and market research than most MBAs that have asked me to join. They also acknowledged that the task was so big they would benefit from having another set of hands. I can respect that.
What did these two cases have that others haven’t? First of all, I knew the people for some time, one of them for about 10 years. Secondly they had well defined goals and business models. You are not Steve Jobs, you do not have a reality disorientation field. Vision is not enough. I want to see numbers and research before I decide to make the investment of my time and effort.
I am considering making separate business cards for people who want me to be their technical co-founder. They will only have a QR code on them – to this article.
Image by Marc Falardeau.