Excellent post. Too often, product guys and business guys don't really understand each other or the value that each bring to the table. I've lost count of the number of times that I've watched business entrepreneurs try and hire a code monkey to build their vision for a tiny fraction of the equity, knowing that they'll probably fail because they place too little emphasis on the product and technical vision, especially in the early days. Similarly, I've seen a lot of disdain for business entrepreneurs from the hacker side of the tech community, probably partly due to backlash from the "code monkey" mentality described above, but also due to a fundamental misunderstanding of the value of marketing and sales. Both sides are important, but which is more relevant is determined by the phase you're in.
Great post, and a great reminder for builder entrepreneurs. I agree that the best biz people are the ones who come from a technical background and have successful transitioned into a biz dev mindset. I've seen it many times. The people who understand both how to build products and how to sell them are rare and extremely valuable.
> I agree that the best biz people are the ones who come from a technical background and have successful transitioned into a biz dev mindset.
Not disagreeing with you, but if I'd probably not like to be called the "tech guy". Or the "biz guy" for that matter. I'd feel it too pigeon-holing.
Maybe works for others, and when the division is very cut&dry - I'm probably just being oversensitive - but I'd personally find labels like that too limiting - especially in a startup where you only have, say, 2-3 people... each with multiple skills and differing, overlapping levels of proficiency.
Hmmm, I would be hesitant to say the 'biz guy' isn't valuable at the start. If you're bootstrapping a company and there's 4 of you crammed into a room, it's probably not the time and place for him yet... But, I've seen teams dismantle themselves over disagreements about features, direction, or quite simply drown in incomplete and unfinished objectives. Your typical hacker is usually not the best manager or leader.
I think it's good practice to have a few friends/mentors/advisors to make sure you're not drinking too much of your own kool-aid, and provide advice from time to time.
Come on techies- why so few responses? Is it because he's right? Is it because you all think you're so smart, precious, and valuable that no 'suit' could ever add any value? Well, looks at Jobs and Gates. Those techies-turned shrewd businessmen show that smart developers learn the business side of things as well. Conversely, business guys should be learning as much about the technical side as possible without having to directly own it. I have attempted to do just that, and it has helped me immensely in my own startup. I would also add that understanding the design and copywriting end of things is quite valuable. In the end, the sales copy is what replaces you and brings in cold, hard cash. That's why the top copywriters in the world charge up to $500/hr- they create words that generate cold hard cash in your bank account. And they are worth every penny of that investment.
The best way to increase the odds of startup success is multidisciplinary teams that cross-pollinate and respect other disciplines. The developers should understand customers, marketing, and visual design and the business guys should always be learning anything they can about workflow and technical vision. In addition, design adds a lot of value, and both the techies and suits should enjoy learning lots about design.
Thanks again for a fascinating read and great graphs. Drop some comments people!
"Come on techies- why so few responses? Is it because he's right? Is it because you all think you're so smart, precious, and valuable that no 'suit' could ever add any value?"
I'm just going out on a limb here, but maybe it's because this was posted less than three hours ago, on a Saturday afternoon?
Fair enough, you got me there.....I was so excited about the post I forgot to question why there might not be any comments.
Sometimes that's what happens when you are doing design/biz dev/recruiting/hiring/marketing/testing/metrics/admin/coordinating freelancers/articulating the vision/project management/etc/etc.....7 days/week, 12 hours/day. Execution is a lot of hard work, and there are lots of painful lessons learned through trial and error that look obvious in hindsight. Onward!
It's because most of us are still focused on building something people want. Without that, none of these other things matter. Most people who contribute to this community get that.
Another important point: There are a bunch of brilliant, motivated people on HN who have shown great ability and insight in both development and business. By not paying someone to focus solely on the business side early on, they buy themselves more time to make something people want, build their user base, and improve their chances of being successful.
When you've got the chops to do both, you should. Especially early on.
It's still extremely helpful if the "business guy" or non technical knows basic coding & design principles. It makes the conversations between founders much more intelligent and the frequency of words like: "how", "you", "what", "think" is probably a lot higher. I'm not going to pretend like I always know what Tom is talking about, but at least I can ask thoughtful questions (and dumb ones too). He'd probably say the same thing about the tasks I handle. And you can do all of these things without being a buzzword spewing suit. For example, I wear sweat pants every day :).
I think it's also helpful if a founder/employee can wear multiple hats. For example, I handle all marketing/SEO/PR/accounting/analytics/writer stuff/affiliates/business deals/VC crap. While Tom handles all bug fixes/main site coding/development/sys admin/design/features/etc. Our biggest weakness is design, but we've managed to get by fine.
I'm a technical guy, but I don't think this has to be a polarized debate. I think business founders might have a few roles to play early in the startup:
1) Hire new talent
2) Raise capital
3) Handle day to day things (frees the technical co-founder from much of the time-intensive due diligence)
The business guy cannot conduct technical interviews, however. He also needs to be extremely reliable if he's negotiating term sheets. And he needs to stay active with business development stuff, probably leave it to the CTO to manage the technical people.
Maybe it's possible to have both business and tech people, but I do agree that it's best to have more technical people early on. After all, how do you forge business relationships without a product? I would say if anything, the business guy should be responsible for going out and pitching every day. Get those business terms down to a tee, and make it a goal to have many high-quality and interested investors. That is something that itself can take up all of a technical founders' time.
I met with one of the guys who started and sold EUNet (one of Europe's larger ISPs). He said "you know what makes a really good executive? It's the people who know to do the right things. Leave it to the middle-level managers and product developers to know how to do things right." Perhaps one of the goals of a business co-founder is to be absolutely sure about the market and the idea, or to always challenge it. Someone has to ask "are the engineers building something people want?" Most of the time, engineers are building something cool to them. And they're usually eager to work on challenging things. But is it something people want? I would say you're very lucky if the technical co-founder has this type of aptitude. I can only think of a few who do. Levchin has it, Zuckerberg has it, Gates and Jobs (Jobs being arguably less technical, but extremely product-driven) both have it too. Those are difficult people to find.
While I agree that a good business person is invaluable, I just read moneyball and I think the following quote captures what I see as a difference between the biz people and the tech people (but in terms of baseball staff and baseball players):
"Anyone who wanders into Major League Baseball can’t help but notice the stark contrast between the field of play and the uneasy space just off it, where the executives and scouts make their livings. The game itself is a ruthless competition. Unless you’re very good, you don’t survive in it. But in the space just off the field of play there is no level of incompetence that won’t be tolerated. There are many reasons for this, but the big one is that baseball has structured itself as a social club."
I think this relates to a recent discussion here about Customer Development as something that should be done from the very early stages, closely tied to the product development effort.
( http://startuplessonslearned.blogspot.com/2008/11/what-is-cu... )
As a tech guy, if I were starting a company I'd like to have a biz person with me from day one, talking to potential customers, bringing in feedback and helping make sure we build something people are actually willing to pay for.
It's easy to build something that can't be sold. So while you might not think the biz guy is valuable at the start, many of us would think so. Otherwise you'll end up with YAW2ATWF (Yet another web2 app that will fail).
