How to evaluate a non-technical co-founder

You're a developer, and you've just been pitched a startup idea by a non-technical founder wanting you to join them in building a company. It's the 10th time this month this has happened, and you're getting more and more skeptical.

"Why shouldn't I just start something on my own? After I have a basic product, I can bring a non-technical partner on."

That is a completely legitimate line of thought, and one you should consider thoroughly. It's not the topic I'm focusing on here, but it is certainly relevant:

If you're joining someone else's company, the team has to be good enough for you to give up [100 - (your equity share)]% of the company. Let's consider the situation where there is a sole non-technical founder approaching you to be the other member of the founding team. How should you evaluate that person/startup?

First: As a developer you are worth a lot intrinsically and due to market forces: You're going to make the thing that your company is selling. Aside from that, there are relatively few of you. Do not sell yourself short.

As a developer myself, I'm always concerned that there are much better developers than me and that there's so much I don't know. You've found the right non-technical co-founder if you feel like a bit of a sham for not being good enough to work with them. This is not just speculation: from our position (Hirelite connects developers with companies looking to hire them via speed interviewing over video chat), startups value a developer about 50% more than a non-technical person with a similar level of experience/skill/etc [1].

With this much value, what qualities should you be looking for in a non-techincal co-founder to make sure you're getting your time and effort's worth? Few have all of these qualities, but your non-technical founder should have at least a few of these. Start off by requiring at least two of the qualities below, and for every two years of experience you have, add one more of these requirements.

Traction

Traction refers to the key metrics for a startup both in absolute size and growth rate (metrics around the number of users, user engagement, user acquisition, etc). It's kind of a fuzzy concept, but a startup with "traction" has limited the risk of a significant part of the business, specifically the will-anybody-care-about-what-we're-doing part.

Here are a few examples of what very early-stage traction might look like (remember the non-technical founder may not have much of a product built already):
  • B2C startup where engagement is a key metric: 30 people using a basic version of the product every day
  • B2C startup where user growth is a key metric: 200 people who have given the startup an email address in a month or 50 people who have given them an email address and (on average) recruited one friend to give an email address too. You want to establish that the concept has legs of its own and not just the non-technical person getting their immediate friends and family to use the service.
  • B2B startup that charges <$1,000 per month per company: 10 companies that have said they'd pay you money when you have a product (half the number of companies if the startup has letters of intent)
  • B2B startup that charges >$1000 per month per company: 2 companies that have said they'd pay you money when you have a product (half the number of companies if the startup has letters of intent)
Traction is the great equalizer. If the non-technical person has no other qualities in this list, but the startup has traction, just make sure you work well together (the subject of another post), and you're all set. 

Warning sign: The non-technical founder tells you they need you to build something before they get any kind of adoption.

Domain experience

A non-technical founder has domain experience if they've worked in the industry where the startup is addressing a problem. Three years of experience in that industry is good rule of thumb.

Warning sign: As someone with little market experience, you instantly see holes in the business model that the non-technical founder has not already thought about.

Marketing ability

Ask the non-technical founder how they'd market the startup with a minimal advertising budget. Make them dig deep and give specifics. Here are a few things that are not specific enough and how to approach them: 
  • "We're going to go viral." Why is the product fundamentally viral in nature? Why is the product more valuable to users who get their friends to join?
  • "We're going to get blogs to cover us." Which blogs? Do you have a relationship with them? Have you ever been written about on a blog before?
  • "We're going to SEO the hell out of it." Why can't other companies do this? How reliant will the startup be on content? Who will write it? Why can't other companies beat us at this?
  • "We're going to A/B test until we find a message that resonates." Do you see A/B testing as a mechanism for finding the vision of the company?
This post on Startup Marketing Ideas will make you impervious to the most suspicious startup marketing claims. The best way to evaluate someone's marketing ability though is to have done it on a small scale yourself. Try to get people you don't know using at a site you've built. It's tough work, but you'll learn a lot about what it takes to market something and you won't be fooled as easily by people who don't know what they're talking about.

Fundraising ability

Has the person raised a non-friends-and-family round before? 
Have they ever worked in venture capital? 
Do they have anyone committed to funding this company?
Are they rich?

If the answer to all these questions is no, the non-technical founder's ability raise capital is speculative.

Warning sign: The non-technical founder answers no to those questions, but thinks it will be easy to raise capital.

Product skill

Most non-technical founders think they're great product people because it's so easy to be an ok product person. You're going to have to decide whether you're dealing with a great product person or not. A great product person:
  • Is relentlessly focused on making sure you're making the right product for the right market.
  • Has a clear vision of what success for your product looks like and is probably addicted to metrics.
  • Knows when to cut features and can prevent you from wasting time on developing irrelevant features early on.
  • You can point to any piece of a product and ask "Why?" and they have an answer.
Warning sign: None. Everyone can make decent wire-frames. Be careful, and consider having a product person you respect help you evaluate the non-technical person.

Respect for development 

For any site with a strong software component, the non-technical founder needs to have a respect for software development. They need to understand that as the technical co-founder, you're going to be a key collaborator in the business not a code monkey. They get extra points if they've coded in the past or are eager to learn the basics from you.

Warning sign: The non-technical founder says at any point, "Now I just need someone to build it for me."

Startup experience

There not much that can replace having worked at a startup before: the constant ups and downs, the constraints of limited resources, the agility, the constant struggle to keep the business alive. Any role counts: sales, business development, marketing, product, software engineering, community management, customer service. Extra points for being on the founding team.

Warning sign: The non-technical founder tries to get you to sign an NDA before telling you about the startup or gives you the feeling that they don't know much about startups at all.

Relevant connections or following

Everyone has connections; make sure the non-technical founder's connections are relevant. The connections should contribute to market intelligence, fundraising, and user growth. Ideally, the person has some kind of blog or social media following in the market the startup targets.

Warning sign: Following 2,893. Followed by: 35.

Things that don't get any credit
  • An MBA: they don't hurt, but don't favor them over anyone else because of it for startups.
  • A career in finance or management consulting: unless your startup is in those industries, their big company tendencies could clash with a startup environment. They might not; just use your own judgement.
  • Someone who calls themselves a serial entrepreneur. People throw this term around only slightly less than "pivot". Look at their track record for successful exits or otherwise successful companies if they call themselves this; otherwise, disregard it.
Notes

[1] We're not trying to trash non-technical people here. This is largely based on market demand for developers and our experience seeing early stage startups (bootstrapped and funded up to Series B) and developers interact. We often see developers able to partner with non-technical co-founders who are far more experienced. Additionally, you can see this trend at later stage companies. Example: a developer with 3 years of experience in NYC can make $110k at a big company while a business analyst with 3 years of experience could make somewhere around $80k.

Comments on Hacker News too.

Developer salary growth is an inverted hockey stick

Developer salaries almost double with 5 years of experience and then begin to flatten out. The graph below shows how compensation changes per X years of experience. A graph of individual compensation over time won't look exactly like this because individuals typically only see large salary bumps when switching jobs. This graph shows what salaries at different experience levels look like at this instant [1, 2].

To try to make this graphic as useful as possible, here are a few baseline data points for two very different locations:
  • New York City: 0 years of experience has a salary range of $70k-80k, 5 years of experience has a salary range of $115k-$130k
  • Suburban Virginia: 0 years of experience has a salary range of $55k-65k, 5 years of experience has a salary range of $90k-105k
Why is this the case? Experienced engineers are not coming on to the market at the same rate companies are demanding their services. Sure, engineers graduate from college every year, but they're inexperienced and companies are willing to pay a premium for someone who can get up to speed more quickly.

How developers can take advantage of this trend
  • If you got a job straight out of college, have kept it for a few years, and haven't received major raises each year, you can probably command a higher salary than you think on your next job change. 
  • If you're a more experienced developer, think about joining a startup. You'll get paid toward the high end of the inexperienced range in terms of salary, but you can likely negotiate a much higher equity stake.
How companies can take advantage of this trend
  • Hire inexperienced or minimally experienced developers, train them, and retain them.
  • Continue to give raises to more experienced employees. These will easily out-pace the market.
    Notes

    [1] These figures assume no equity compensation. This can vary significantly if you join a startup.
    [2] These figures and the graph are based on self-reported figures from job seekers and companies (not formally collected data). It's not precise, but there is a clear trend.

    About Hirelite

    Hirelite is on a mission to put headhunters out of business. We host speed interviewing events using video chat where 20 job seekers talk to 20 companies for 5 minutes each. If you're looking to evaluate the software job market or looking to hire, check out Hirelite.com. We currently host web events focused on New York City, San Francisco/Silicon Valley, Boston, and Los Angeles.

    Developers, talk to a VC before a recruitment agency

    The demand for software engineers in startups is higher than ever. If you're a developer thinking about switching jobs, you have the freedom to aim high with what you expect from your job:

    • Do you want to have more of a product focused role or a more tech focused role?
    • Do you want to be more of a specialist or generalist developer?
    • Do you want to deal with big data?
    • Do you hope no one expects you to call yourself a rock star, ninja, or guru? 
    • Do you favor equity or salary compensation? 
    • Do you want a job that lets you work on open source software on the clock?
    • Do you want to work at a company that allows some remote work?
    • Do you want a job that allocates an education/conference budget for each developer?
    • Do you want to get as far away from the finance industry as possible?
    You might think that it's so hard to find startups that meet your criteria that it may be worth it to talk to a recruitment agency, spell out your requirements, and let them do the work for you. Unfortunately, recruitment agencies don't work for you, the job seeker. They work for companies that pay them 20-30% of what your first year compensation will be.

    What happens when you tell a recruitment agency what you want? They simply don't care. Even if they care, it doesn't serve them directly enough to understand your needs, so they focus only on how you fit into the molds set by their clients (the companies). They see you as a pay check, as "talent that can't go to waste," I've been told before. They will do whatever it takes to push you into a company desperate for engineers. Their incentives are never going to be in your favor and are often against the companies' interests too.

    How can you get around this and find a great opportunity? Ask a VC about their portfolio companies. VCs work toward the success of their portfolio companies, not a paycheck based on a single hire. They care much more about quality of fit than recruitment agencies do, and they aren't going to make you jump through hoops just to find out the name of a company that is hiring.

    The are two strategies to mix when talking to a VC about jobs:
    1. "I love this specific company in your portfolio. I have a background in ___, and I'm interested in doing ___ for them."
    2. "I have a background in ___, and I'm looking for an opportunity where I can ___ (or that allows me to ___). Do you have any portfolio companies like that?"
    Basically, you need to quickly convey your skills and what specifically you're looking for. VCs don't have much time to spare, but they will make time for developers who know what they want. 

    Here are a few VCs with portfolio companies that are hiring developers and how to contact them (If you're a VC and would like your email listed here, just shoot an email to nathan@hirelite.com):

    When you contact them, include the word "developer" in the subject line.

    About Hirelite

    Hirelite is on a mission to put headhunters out of business. We host speed interviewing events using video chat where 20 job seekers talk to 20 companies for 5 minutes each. If you're looking to evaluate the software job market or looking to hire, check out Hirelite.com. We currently host web events focused on NYC, San Francisco/Silicon Valley, and Boston.

    What developers think when you say "Rock Star"

    When you say "rock star" in your job post, you're discouraging the best software developers from contacting you.

    When you write, "We're looking for a rock star developer."
    A developer sees, "We want to treat a developer like the RIAA treats rock stars."

    Using "rock star" in your job post may have communicated a trendy vibe at one point, but those times have passed. Now it communicates a desperate attempt to seem cooler than you really are, a sign that you're too full of yourself, or that you're just naive. 

    Naivety worries developers the most. To developers, "rock star" communicates that you're not sure what you want. Or rather, you do know what you want, and what you want is a miracle worker. "Rock star" signals that you haven't thought enough about the role this developer will fill, leaving developers with a feeling that they'll be receiving ill-defined requirements, not enough time, or not enough resources to do their job (in addition to being overworked and underpaid).

    Speaking of overworked and underpaid... there's really only one time "rock star" is appropriate: "We want a rock star developer. We know you're rare, and we'll pay you like a rock star." Sadly, this isn't usually the case. Here's how software engineers are paid in relation to rock star software engineers [1, 2].

    Now here's how musicians are paid in relation to real rock stars [3, 4].

     

    So next time you're thinking about saying rock star, ninja, guru, etc in your job post, consider it a sign that you have more thinking to do about your hiring requirements. Here are a few questions and trade-offs you should consider answering with your job post:

    • Do you want a specialist or a generalist?
    • If you want extraordinary people, can you compensate them extraordinarily or provide an extraordinary environment? 
    • Do you want a technical person who cares more about the business/market challenges or do you want someone who cares more about the technical challenges? 
    • Do you want someone who prefers quick, practical, "good enough" solutions or do you want someone who prefers to take their time and do things more maintainably or scalably?
    • Do you want a feature developer or a maintainer? 
    • Do you want a risk taker?

    Let us know in the comments If you have any more high-level questions you like to have answered before you post a job description.

       

      About Hirelite

      Hirelite runs "speed interviewing" events over video chat to connect software engineers and companies hiring. If you're looking to evaluate the software job market or looking to hire, check out Hirelite.com.

       

      Notes

      [1] Simply Hired salary estimates for software engineer
      [2] Simply Hired salary estimates for rock star software engineer
      [3] Simply Hired salary estimates for musician
      [4] Average salary for the top 10 best paid music stars. But wait, those are only the top 10 musicians! Yes, exactly. Rockstars are stars because they're scarce, and because they're the best.

      Also, an associated queston on Hacker News a few months back was very helpful. Thanks for all the comments there today also.