Starting a Tech Company without a Tech Co-founder

December 3, 2015

As the Strategic Director of EDUCO I have the privilege of getting to speak with many companies each year that are undertaking a website design or app development project. A small percentage of these companies are tech start ups that are interested in building a website or app to power their business.

The big difference for tech start ups from established traditional companies is that the app or website they looking to build IS the business. Meaning that if the app or website goes down or is not working the business is not working. The big challenge these companies face is that they don't have a technical co-founder on their team that can bring the idea to life.

Here are five questions that stand out and tend to come up in one way or another in almost every conversation with tech start ups. 

  1. What would it take/cost to build an app?
  2. What are our the options to get to an initial mvp (minimum viable product)?
  3. Where might we meet a technical co-founder/partner?
  4. What should we look for in a technical co-founder/partner?
  5. What/how do we differentiate a product like ours (technology/app product) to make it unique and defend ownership?

What would it take/cost to build?

Like costing out any purchase the answer to this question depends on many factors, but the businesses success will depend on your ability to find someone who can execute. Here are some cost considerations for companies that are going at it with and without a tech co-founder.

1. With A Tech Co-founder: If you can locate a technical co-founder and get her/him to commit it might only cost you the equity that you have to give them in the company.

  • Equity: Usually an equal part or correlated to the amount of work they'll do
  • Other admin/legal/travel and marketing expenses: $10-$20,000 in the first year or two

2. Without A Tech Co-founder: If you can't find a technical co-founder you'll need to hire a digital team (this can be a freelancer or a large 10-100 person digital agency). Based on conversations I have had with other app and digital technology companies those costs can range:

  • Discovery and creative comps to help pitch investors: $30,000-$60,000 
  • Develop prototype (depending on what the prototype needs to do): $60,000-$200,000
  • On going support and maintenance: unknown at this point because we don't have an audience yet

If you do choose to proceed without a tech co-founder it would be recommended that you begin actively looking for your co-founder during the planning and initial conception so that you can hopefully launch the app with your key partner in place. 

Otherwise you'll need to pay an agency to support the app and this can become very costly. Essentially you'll be investing your money in the creative agency you hired. Instead of in your own product/team.

What are our options to get to an initial mvp (minimum viable product)?

  1. Hire a digital agency to build the mvp
  2. Find/recruit a technical co-founder to build your mvp

Here are some pros/cons to consider with each option:

Hiring a Digital Agency

    Pros:

  • So many firms - Finding a talented digital firm will be easy. 
  • Quick start up time - You can get started quickly (not to be confused with quick to market).
  • Experienced - Depending on the firm's expertise they may be familiar with digital apps/products and have succeeded/failed many times over which will shorten your learning curve.

    Cons:

  • Digital Agencies are like hired guns - Not really invested in the end product. Only a rare team will invest the kind of sweat equity that a tech co-founder will.
  • Expensive - This is a short term solution (costly) and will not necessarily be the end product.
  • Time consuming - If you hire the wrong firm. Also it is hard to tell which is the wrong firm. They may not be upfront with you as to whether or not they can actually execute the project. Instead just let you pay for discovery to see what you need and will wait til the end of discovery to tell you they won’t be able to build your mvp. You may need to start the process all over again.
  • You drive the product - For non-technical individuals it is really best to have a developer/designer drive the bus while you keep an eye on the end destination.

Find/recruit a technical co-founder

    Pros:

  • Lower initial cost - You can offer them equity which will cut down on your initial capital expenditures
  • They're invested - You'll have the person responsible for the product on your team

    Cons

  • Finding a tech co-founder - This can be a long process. Chances are if they can do something like what you're looking to do that they are already doing it for themselves
  • There will still be expenses - You will want to incorporate, do grass roots marketing...etc. so there will be some costs and also there will be a significant time cost

Whichever route you choose you need to get to a minimum viable concept. This is harder than it sounds. Unless you're a truly remarkable individual that can do everything on your own - you'll need a team. A team with a shared vision, but that can also see and agree on the key features that will help push the product forward and what features have to wait.

How/where do we meet a technical co-founder?

This is also difficult to answer, but I would definitely recommending meeting some people in the space who are doing what you are considering. Here are a few meet ups in the Chicago area:

Sometimes the quickest way to find the right partner is to find someone who is failing/dissatisfied in their current tech product.

What should we look for in a tech co-founder?

If we're considering a working relationship with someone its good to think about their knowledge, skills and attitude. As well as our own.

Of those three I would say attitude is the most important and the least likely to change. Knowledge can be gained and skills can be honed, but a person's overall approach to business, life and general situations is unlikely to change. 

From personal experience I would say that you look for similar characteristics you might also look for in a life partner:

  • Dedicated
  • Good communicator/listener
  • Thoughtful
  • Ethical
  • Hard worker

If they’re not super outgoing or social that is probably a good sign. Especially, if that is something you excel at.
* Worth noting this is not someone you find on Craigslist or a freelancer website. An approach like that is likely to get you Winklevoss’d.

How do we differentiate our digital product in order to defend it as proprietary?

Consider hiring an IP attorney or taking one out to coffee and picking their brain. Here is a link to an article that might directly answer your question.

http://www.richardspatentlaw.com/faq/have-an-idea/can-i-patent-an-iphone-app/

Hope that helps and outside of these questions here are 4 proactive habits I would recommend doing in the meantime:

  • Continue to think about and challenge your idea
  • Network and meet developers - for when it's time to hire
  • Meet capital investors/private equity firms - for when it's time to scale
  • Learn a little about code (check out codecademy) - If you’re starting a tech company you should learn some basics about code

Lastly a few helpful articles on the topic of starting a “Tech Company Without a Co-Founder”:

Feel free to let me know if there are any other questions you have or insight I can share. Feel free to reach out in the comments below.

 

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