CMO at Altar.io
Choosing a technical co-founder is one of the most important decisions you’ll make as an entrepreneur.
And the fact is, there’s no secret playbook, and sometimes the perfect match appears in the weirdest place.
I usually mention an example from a really smart entrepreneur I got to know a few months ago, Jan-Philipp Kruip, the founder of FitSense.
He was looking for entrepreneurial opportunities in Singapore when he stumbled upon a platform that was essentially Tinder for co-founders.
In his own words:
“It was designed to match tech and non-technical founders. I remember there were 70 profiles and I didn’t really like 69 of them. Then I saw his profile and I thought:
‘He seems reasonably interesting.’
So we met for a coffee. It turned into a three-hour meeting. I instantly knew I could trust the guy.
He’d already developed the technology to build an MVP. But he needed help to commercialise it…”
The rest was history and their health app is now used by some of the biggest insurance companies in the world.
But not all stories are as peculiar as Jan-Philipp’s. It’s a lot more common to start a project with someone you’ve worked with before.
This is exactly what happened with another entrepreneur I met recently, Giacomo De Lorenzo.
It was the experience of working together at a startup that told them they were the right match when it came to founding their fintech, Moneymour.
Just two years later, they were acquired by Klarna. Before they even launched!
Having the right people in your corner can be the critical difference between success or failure.
It’s vital that you start forming connections with people long before you need them.
This applies to co-founders, investors, advisors, marketing specialists, or any other key hire.
So start nurturing that network, it will save you countless hours down the road, when you need that all-important help.
Your technical soulmate may be working next to you right now. Or listed in a dating app for founders half-way across the world. There’s no way to know.
What you can, and must know, is how to spot the perfect candidate when they appear.
So, throughout this article, I’ll go over everything you need to look out for in a technical co-founder (and what they’ll be looking for in you).
Your journey starts with understanding what you want from your co-founder – because “I need someone to build my app” isn’t going to cut it.
A technical co-founder is more than a CTO and much more than a software developer. They’ll be your partner and should be as passionate about your business as you. They should also put in as much time and effort as you into the business, each doing the things you’re best at.
Your technical co-founder will be responsible for:
Your technical co-founder should be as much of an expert on tech as you are in business. You should be equals, focusing on different aspects of your company to achieve the same goals.
It’s an overused example but think of Steve Jobs and Steve Wozniak.
Your next question should be: what qualities should I be looking for in a potential technical co-founder?
You should think of this relationship as a business marriage. You and your technical co-founder will be spending hours on hours together, working night and day to launch your product.
And just like a marriage, you don’t jump in with the first person you swipe right with on Tinder! (sorry Jan-Phillip)
I highly recommend starting with that all-important “dating stage” where you get to know each other.
I’ll share some tips on how to navigate that throughout this section, while I go over the key traits your partner must have (all of which are essential).
This one may seem obvious, but your technical co-founder has to be as passionate about your startup as you are.
All startups face hurdles, and if your technical co-founder isn’t passionate about your business you risk facing those hurdles alone.
It’s important to note that while not impossible, finding someone with this level of passion is extremely rare.
As early-stage founders, you and your technical co-founder are going to be wearing many hats and spinning even more plates.
It’s essential that your technical co-founder is able to manage time properly and keep up with deliverables.
I recommend testing any candidate by asking them for a simple deliverable within a feasible time frame.
This doesn’t even need to be something technical, it can be a roadmap, budget estimate, etc.
Failure to meet the delivery date is a huge red flag. After all, if they can’t carry out a simple deliverable now how will they cope when you’re both in the trenches of product development?
Your technical co-founder needs to be an expert in his field. Therefore it’s vital that you study their portfolio and assess the quality of their previous work. If you can’t do this yourself, I highly recommend asking an expert who is unbiased and exempt from your search.
If you fail to correctly validate the quality of their work, it could lead to “technical debt” such as substandard code or the wrong choices in terms of tech stack/languages.
Pro Tip: Benchmark Your Candidate
To be absolutely sure you’re talking to a Technical Co-Founder with the right skills you should benchmark them.
First ask your candidate to elaborate their tech rationale in terms of:
Repeat this with a software development agency or two (a service most agencies offer free of charge).
Benchmarking your candidate will quickly tell you if the candidate you’re talking to has the technical skills needed to carry out a co-foundership.
As I mentioned at the start of this section, this is a business marriage. And you don’t want to get married to someone with a bit on the side!
If your startup is one of many projects your technical co-founder is working on, you may end up getting the “side-gig” treatment. Meaning they are prioritising other projects over your startup.
(You can find a good example of this in this story)
Which is a short road to an imbalanced co-founder relationship which will inevitably end in disaster.
Your technical co-founder will most likely be the first person you officially onboard in your startup.
You’re about to commit to working directly with each other for hours at a time. First and foremost you need to like them.
Moreover, you should be able to trust this person with your money, ideas, business, everything.
As I’ve said, a business marriage.
And here are just some of the decisions you need to agree on:
You will both be responsible for these aspects now and as your company grows. And while you shouldn’t agree on everything all the time, your overall visions need to align.
This requires good communication between you and your technical co-founder. Therefore it’s vital that you can be completely candid with each other. And that your discussions can remain productive, even when you disagree!
As in any relationship, face contentious topics head-on and get ready to compromise!
The Cold Hard Facts
36% of startups that fail do so because they:
Your company culture starts with you and your co-founder. And if you can’t get on the same page from day one, it will filter down through any team you build and could spell disaster for your startup.
This is where it’s important to differentiate between a software developer and a technical co-founder.
As I mentioned at the start of the article, one of your technical co-founder’s responsibilities is building and nurturing your team of developers.
If they’re going to inspire and motivate them, they need to have fantastic leadership skills. Just because someone has all great technical skills doesn’t mean they are right for a leadership role.
Before onboarding them, ask how they imagine their dream team of developers. Someone who focuses on hard skills alone won’t make a good leader.
Someone who talks about effective communication, great working culture and happiness of the team will.
Your technical co-founder needs to be able to:
If your technical co-founder is unable to do either of these things it will lead to increased time to market and unexpected costs.
Pro Tip: Benchmark Your Candidate (Again)
Here is another example of where benchmarking your candidate can be the most effective way to find out if they will be a viable choice.
First, ask your candidate how long he estimates it will take to build your product.
Then ask a couple of unbiased tech advisors, or software development agencies to do the same thing (again most agencies will do this for free).
If the time frames don’t match (above 50% difference) then be careful moving forward with your candidate.
Finding someone who has the perfect balance of all these traits is no mean feat.
If you find them, you should hold onto them. And that means giving them a fair piece of the pie.
This leads perfectly into one very common question:
There are two ways to compensate your technical co-founder, salary and equity.
Many startups choose both, but it’s not uncommon for an early-stage technical co-founder to just receive equity.
In terms of salary, it’s hard to put a precise number on the amount you should be paying them. It’s highly dependent on what they bring to the table, your startup stage, your location, etc.
The only numbers I can give you is for average co-founder salaries in tech companies. Which in the US is $102,661. While in the UK it’s £56,000 ($77,672) according to Glassdoor.
Now I want to cover the, arguably, more important part: equity splits.
It’s vital that you give them a fair share. If you give them too little it will leave them demotivated, and your relationship could sour quickly.
Giving your technical co-founder a fair equity split will make them feel valued. It will serve as an additional driver to get them to give you their best work.
The good folks at Y combinator recommend you give your co-founder an equal share.
It sounds fair. Especially if you both add the same value to the company. But I’d encourage you to also consider that you risk paralysing the project should you and your partner disagree on a more serious note.
And even though there are ways to grant the power to decide in a 50/50 relationship, there are always gaps and loopholes. Disagreements on these could end up in a legal battle.
For that reason, a 51/49 split can make your life a lot easier. And make sure your project doesn’t get stopped half-way through.
In any way, please make sure you have good legal counsel.
While negotiating with your co-founder, it’s important that you’re both honest about how much of the company each partner should have.
And if you’re facing major problems during the negotiation, it’s important to ask yourself if they’re the right partner for you. After all, your startup will face much bigger hurdles than “who gets what”.
Giving a large chunk of your company to someone seems daunting, especially with someone you don’t know that well.
You could easily find after a few months that the relationship isn’t working out and you’ve given away a large percentage of your company.
That’s why it’s so important to have a proper vesting schedule in place.
In a startup four years of vesting with a one-year “cliff” is seen as standard.
This means if your technical co-founder is fired or walks away from your startup in their first year, they leave with nothing. Even if they “own” 50% of the company on paper.
Only after that first year period will they receive the first part of the shares (25% of their total stake). Then they will receive the rest incrementally at a rate of 1/48th of their total stock per month. Meaning they will only earn their total stock after four years of working with you.
This ensures that your technical co-founder is in it for the long haul. Just be sure to properly stipulate what happens when a founder leaves in your company’s statutes.
Again, and I can’t stress this enough, make sure you have good legal counsel because in this case, the devil is in the details.
It’s also important that you understand that a good equity share and salary are critical, but there are other aspects that a technical co-founder will be looking for before they decide to fly your flag.
Just a few weeks ago I was speaking to a CTO and technical co-founder with nearly 20 years of experience on this exact topic, Nelly Yusupova.
Throughout our conversation, she shared a number of tips and insights on the relationship between an entrepreneur and a technical stakeholder, including what a technical co-founder is looking for in an entrepreneur.
She told me that:
“The founder has to be a rockstar at what they do. By that I mean they have the DNA qualities that I look for:
Those to me are vital qualities for a founder to have for us to grow together.”
More than this, she talked about the importance of complementary skill sets between co-founders:
“They have to amplify who I am and I have to be able to do the same for them. Only then can it be a great partnership in my opinion.”
We then went further, to talk about what she calls earning a technical co-founder:
“It’s very very hard to find the perfect tech stakeholder.
Fundamentally because technical people who are willing to take a risk on a startup are already building their own product. They don’t need an ‘idea’ person.
So, the challenge that startups have, is convincing technical stakeholders who have high-paying, secure jobs to take a risk on their startup. A startup with no traction at the ideation stage in an ecosystem where around two out of ten startups fail in their first year.
So a lot of founders spend anywhere between six months to a year, or more, looking for that technical person to no avail. In the meantime, the big risk that they run is they miss the market opportunity.
One concept that I teach is the notion of earning a technical co-founder.
What you do is build your MVP and build a community around your idea. This not only shows off your marketing skills, it proves you’re not just an idea person but you can actually sell and market the product.
To build the MVP, you’re going to want to go with an agency or a team of freelance developers.
This is the fastest way to actually get your idea into the market so that you can get traction and essentially de-risk the opportunity for a potential technical co-founder.
By showing them you’re more than just an idea person, the conversation changes from “I need you!” to “Here’s a great opportunity!”
In short, launching your early MVP and gaining traction will really help you attract technical people because you’ve taken the risk out of that opportunity for them.”
Cold Hard Facts
The demand for technical talent far outweighs the supply. In the US alone demand for technical roles increased by nearly 25% last year. Meanwhile in the UK demand for software engineering specialists grew by 45%.
Therefore, be prepared for the fact that technical talent chooses the startup, not the other way around.
Nelly’s advice is clear – in this day and age, you must earn your technical co-founder.
Prove to them that you know your market. Then, prove that you can sell your product in that market with an MVP or proof of concept (POC).
Show them that you’re as much of a rockstar on the business side as they are on the tech side.
Gaining this early traction will essentially de-risk your startup for a technical co-founder. You’re no longer an ideas guy asking for help, you’re an entrepreneur presenting an opportunity.
Now let’s move on to where you can start looking for your tech co-founder
As I mentioned at the beginning of the article, there is no secret playbook to find your soulmate. So I’ll simply share some popular options you can consider if you haven’t got any childhood friends who are technical Jedis.
Firstly, look for meetups. I’ve met many founders who have found their technical co-founder this way. A quick browse of meetup.com will give you a decent handful of potential groups.
Aside from that, keep your ear to the ground for industry events. For example, we have WebSummit here in Lisbon – but there are countless events across the globe that can be a great place to expand your network.
Lastly, don’t skip on building your network online. LinkedIn is the most popular platform for this. There are two common ways to leverage LinkedIn:
The first of these is pretty self-explanatory. If you see a profile you like the look of, you drop them a message or ask to connect. While this has its downsides, it can often work.
The second way tends to provide much better results. Go through your connections and see if their connections could be potential candidates for your startup.
Reach out to them and ask them if they will introduce you. You’ll be surprised how many people will help you if you simply ask (something the founder in this story found first-hand). Warm introductions tend to work a lot better than cold ones!
Finally, these other popular online communities can help you find a technical co-founder:
As I said at the top of the article, there is no secret playbook for finding the right technical co-founder for your startup.
In the end, like most things in business, the key is to reduce the odds of failure as much as you can.
That starts with knowing what you want from your partner.
Then knowing which traits to look for.
Making sure you’re in a position to attract them to your project. Earning their interest, passion and commitment.
Knowing how to treat them. What to offer and how to build the right relationship from the gate. Then maintaining it as that will be the key to building a great product. A great culture. A great business.
And most of all, being mentally prepared for a long and tough search.
As Reid Hoffman puts it:
“Entrepreneurship is like jumping from a building and building the plane on your way down”.
Get used to it. And enjoy the ride.
This article was originally published here.
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