The business dev guy who spits out an imaginary list of features (not backed with empirical data in any way) and then just sits there while I work hard building and building and building, and them claiming nothing or very little can be done until the product is finished.
In reality good business guys are rare (like good programmers), and the good ones can get money from investors and customers with the product in it's current, incomplete state (hint: it's always incomplete, the completed, idealised version will never exist)
Poor business devs sit around waiting for stuff to be built, interview 1 or 2 customers, and then say yes to all the customer requests (even illogical, ill-thought out ones) and then sit around more until the new features are implemented.
This can be solved with hard goals.
Technical founder has hard time goals of finishing X,Y,Z by this date, and business dev founder has hard goals of revenue A,B,C by these dates.
If the business dev founder is unable to reach the goals then 100% of ownership of the codebase that I just wrote (myself) is mine, and I'll go find another business dev who can sell it.
That way I'm happy to take all the risk by investing a bunch of my own time and resources into building it up front, and then if it doesn't work out, I can find another way of monetizing that effort.
This has allowed me to kick out some useless business dev's who are all talk, and get in the guys who are going to make it happen. This strategy changed my life for the better a lot.
Basically the "legal" way is to just "buy them out" as the company isn't worth all that much and you've done most (all) the work. If the partner is someone decent, you'll arrive at a number that makes sense for both of you.
The other way is a lot more spicy: just do it and one day they will sue you. Maybe.
1.Can you sell? Do you have enough knowledge of the market? You’d be surprised how many “founders” I’ve talked with that haven’t made a simple google search of the competition and why/how their product is different
2. Runway length. As a technical co-founder I don’t want to be worrying about investor relationship, 4 months of money in the bank or some other items that belong on the CEOs concern.
3. How much work is needed before users can start using it. This is a personal preference but I gravitate towards a project/MVP that can be completed in 3-4 months and after that I’d expect the CEO to start bringing in users. The test for any startup is it’s ability to onboard people and if after that time users are not coming I start considering moving on.
Things to avoid:
1. Jerks. The relationship between co-founders is based on a lot of trust and a good chemistry/communication. If I’m unable to connect with the cofounder I’d very likely be very unproductive.
2. Lack of funds. Usually tech cofounder role come at a pay cut and the initial test of the founder in my book is her ability to raise funds
3. No mvp, pitch deck, prototype in excel or whatever. I’m hoping to see that the founder has tried to test in any way possible his idea, let it be by making a mock in figma, no code, a spaghetti of zappier actions, and the results of those tests. When I don’t see this it usually tells me that the founder sees his value as the owner of an idea and expects the technical cofounder to “make it work”. That is a huge red flag for me and will get me running for the hills in no time.
Hopefully it doesn’t sound too harsh… I’ve been burned before as a tech cofounder :)
"I’m hoping to see that the founder has tried to test in any way possible his idea, let it be by making a mock in figma, no code, a spaghetti of zappier actions, and the results of those tests"
If any non tech. co founders are reading this, pay attention. This point is so critical. Just being an "idea" guy/gal is not good enough to find technical co-founders but a lot of us who are just starting out miss this part.
Not to mention, the moment ppl around you perceive you as "technical" (details don't matter to those who don't understand), literally EVERYBODY comes to you with "an idea".
1. How much automata & does the founding team 'care' about technical best practices which will ultimately determine the operational cost of the systems & organization/ type of people to hire. (Do I want to work with the type of people the company is going to need to hire)
2. Do the co-founder(s) understand their market, do they have Realistic & Achievable plan, including visual 'mock ups' of any key behaviors of features, can they articulate the vision to me or will I have discretion on how to implement. I stay away from dubious social science, psychology, anything that is described as "the next xyz"
3. What is the equity structure being offered & compensation relative to the market opportunity (i.e. "how likely are we going to be an exit"). What is the market size, do we have customer #1 (and #2 .. etc.) in mind, a sales strategy, avoid a field of dreams "build it and they will come" mentality.
Fwiw, I have a horrible track record finding co-founders.
I prefer odd # of person startups. I don't ever do 50/50 anymore, its always 49/51 or 49.99 and 50.01 whatever it's never 50/50 by contract. One person is 'the decider' I always offer them the 51 but that balance might flip in my favor if they don't deliver on mutually agreed achievable KPI's, sort of like side-bets, and this equity percentage can move a lot at the early stages but it keeps everybody focused. If feelings and egos are going to be bruised I'd rather find out early, if they are going to be greedy and try and screw me later I'd rather not engage at all.
The first thing I'd look for is someone who was themselves a technical co-founder.
For someone who is not that technical, that would be a big drawback. I would say in that case that they be an adult. Even if they're in their mid-20s - they are an adult. They are confident and decisive. They're optimistic about the business. I don't know how to put it into a word, but it's all one thing.
Insofar as avoiding - nepotism for one thing. Relatives, wives etc. working for the company is not a good sign for a company on the rise. I can think of companies we all know of who have been harmed by co-founder nepotism, which has all kinds of pitfalls.
Also petulance, inability to handle stress, the desire to point fingers and blame in an unproductive way. Not wanting to deal with things - passive-aggressiveness.
Also, flightiness. Bad CEOs seem to have many projects in flight, and seem to start and cancel products with no rhyme or reason. Good CEOs are usually focused on one product (or maybe product suite). Good pivots or new products are usually due to customers throwing boatloads money at the company because they want us to do something they don't offer, we don't pivot because the CEO thinks up a new idea and wants to chase a new shiny. Lack of focus.
1. Momentum. If they say they've been working on it for six months, do they have a lot to show for it (ideally that derisks the company)? If not, you might be disappointed by their future progress as well. At the least, you might be doing the heavy lifting and should receive substantial equity.
2. Honesty/Transparency. If you are joining early on as a vital co-founder (e.g. mostly equity compensation), I would expect equal access to the cap table, founding documents, have a co-founder agreement, etc. If your future co-founders repeatedly hide/omit important details or tell you fishy things (e.g. % ownership doesn't matter, or they don't send a written cap table after verbally agreeing to an equity split), I would run. In any event, I highly recommend having a lawyer look over your agreements!
3. Market Understanding. Are your co-founders expert in this field? If not, have they done substantially more than "have an idea" to test the market? I would also ensure alignment on things like passion for the field and exit plans.
- Have you proven the market? (how many people have you talked with? is the pain point big enough that they are willing to pay? how many in the waiting list?)
- Do you have a right to play? (do you have experience in the field that not many people do, etc)
- Are you passionate about the problem?
If you check all 3 then you're in a good position I would say.
1. Does the business solve a painful problem that is severe and frequent? If not, the project is doomed.
2. Does the founder <25 years old? Does the founder is a first-timer? Does the founder have experience raising funds? An inexperienced leader will have wet pants with the first obstacles (they will come).
Speaking from personal experience here (bootstrapped, not startup, but should apply similarly):
Good:
- honesty about the reason why they wanted to start the company: "I wanted to be a owner and not an employee anymore" and "wanted to do something that will make me rich in the future even if I struggle now" are as valid as "I wanted to help the disabled better navigate on public transport" if they are indeed honest replies. This shapes the management culture in your new company and you will definelty notice when things slip away. Put them in writing, sign them, and keep track to make sure your activity steers towards these goals.
- do they work, or do they order others to do their work? It's simple, a co-founder should put in the effort alongside everybody else, and lead by example. When something needs doing their first instinct should be to work together with others and not just delegate. This should change when the comapny grows beyond a certain size as they need to focus more on upper managemnt work, but the desire to roll up their sleeves and knead the bread themselves tells you how they will treat you, as a worker or as a partner.
- do they care about the result or the process? They should care way more about the result that the process overall, but should focus on both. In particular you should set a minimum standard of quality you expect from the company overall and not micromanage beyond that. This shows how much trust you have in eachother.
- You always have to arrive at a consensus, with compromises on both sides of course. But at the end of a discussion: you solved the issue, the decision pleases all parties, and it matches the vision. It's you together against the problem, not you and the problem against the other. This sounds like marriage advice because it is.
Bad:
- not having a plan. "I'll figure out what to do after I create the company" or "I'll do consulting/outsourcing until I come up with an idea" might bring in cashflow, but then you're just another ordinary company, there's plenty of these around, no need for yet another.
- not sticking to a plan. You should adapt to market forces of course, but if you jump from project to project, from idea to idea, from industry to industry on nothing else than your short attention span you're wasting everybody's time.
- do not project your fears onto others. This had many simptoms: micromanagement; making everybody follow a complex process you developed because that's what you fell comfortable with even though it slows them down; forcing someone to develop somethig in a technology you know even though they don't know it, while they being an expert in another which would fit just as well, just because you fear you can't take over when they're away sick, on leave, or if they resign. You are no longer the "sole developer doing anything and everything your way" and won't be able to anymore. Once you bring in a few people you will no longer be able to go back to that state, so make use of people's strenghts instead of forcing them to train in your own.
Ugly:
- nepotism. It's ok to hire people you know because you trust them and they do good work. It's not ok to hire people just so they get paid, because they're "your people".
- rest and vest, the kind where you lie about working. This is extremely easy to spot and is what damages trust the most. It's basically nepotism for yourself.
- starting conflicts based on emotions and not facts. Needless to say, if you acuse somebody of something or if you think you deserve more of something, come with numbers, not a raised voice.
In reality good business guys are rare (like good programmers), and the good ones can get money from investors and customers with the product in it's current, incomplete state (hint: it's always incomplete, the completed, idealised version will never exist)
Poor business devs sit around waiting for stuff to be built, interview 1 or 2 customers, and then say yes to all the customer requests (even illogical, ill-thought out ones) and then sit around more until the new features are implemented.
This can be solved with hard goals.
Technical founder has hard time goals of finishing X,Y,Z by this date, and business dev founder has hard goals of revenue A,B,C by these dates.
If the business dev founder is unable to reach the goals then 100% of ownership of the codebase that I just wrote (myself) is mine, and I'll go find another business dev who can sell it.
That way I'm happy to take all the risk by investing a bunch of my own time and resources into building it up front, and then if it doesn't work out, I can find another way of monetizing that effort.
This has allowed me to kick out some useless business dev's who are all talk, and get in the guys who are going to make it happen. This strategy changed my life for the better a lot.