Friday, March 12, 2010
Wednesday, March 10, 2010
Playing To Your Strengths - A Cautionary Tale
A few months ago, I was speaking to a now ex-cofounder. We had hit a rough patch where we invalidated our original hypothesis, and were thinking about new directions for our business. I was trying to figure out the least expensive strategy that would allow us to get back on track, while he kept proposing things that would require several months of engineering effort.
At the time, I was thinking about leaving his team, mostly because he seemed to be dead-set on following a single path, come hell or highwater. He had spent several years working on this product without really launching anything, and had brought me in much later as an engineering cofounder. His excuse for his failure thus far was "I didn't have a competent engineer."
Then, it sort of hit me. Based on your personal talents and the talents of your founding team, certain courses of action are MUCH more expensive than others. If you are an enterprise salesperson (as this guy was before he left to start a company), sales is fairly cheap. Engineering, however, was pretty expensive for him. It took him years to find a good engineering team, and it would have cost him 30-50% of the company if we had stayed. In hindsight, those years could have been spent making an enterprise play. Once he did the sales, he could hire the engineers to build the product.
For me, an engineer by trade, building is cheap, but selling is expensive. I spent all summer trying unsuccessfully to sell my product to enterprises, and I had no idea where to find people who actually knew how to sell. This showed me that I need to primarily focus on building products, because that best leverages my talents. Unless I have a salesperson or a marketer on my cofounding team, it doesn't make sense to do something that requires heavy sales.
So, what can we learn from this? First of all, when you evaluate business ideas, choose ones that play to your strengths. Take an honest look at the skills of your founding team, and ask yourselves, "do we have what it requires to execute here?" Sure, an engineer can sell a little bit, but most engineers will get demotivated pretty quickly if they spend most of their time selling. Likewise, if your core competency is sales, you should be thinking up things that you can sell BEFORE they are built (and that don't require two years of engineering work before sales can start working).
Furthermore, you may want to make tweaks to your founding team to account for the business idea. If you have two engineers on your team, you might not want to bring on a third engineering cofounder. Maybe that third guy should know sales, or maybe he should be an Internet marketer. It all depends on what you need to make your company successful. If you pick the wrong person, it could be worse than doing nothing.
So, here's an exercise: think of the first (or next) few milestones that you need to hit to build your company. Now, think about what skills are required to hit those milestones, and then ask yourself whether these skills are present in the founding team. If not, then you should consider changing either the idea or the team. Pick a product strategy that's reasonably cheap for your team to execute, because starting a company is already pretty hard, and you don't need to make your lives any more difficult.
At the time, I was thinking about leaving his team, mostly because he seemed to be dead-set on following a single path, come hell or highwater. He had spent several years working on this product without really launching anything, and had brought me in much later as an engineering cofounder. His excuse for his failure thus far was "I didn't have a competent engineer."
Then, it sort of hit me. Based on your personal talents and the talents of your founding team, certain courses of action are MUCH more expensive than others. If you are an enterprise salesperson (as this guy was before he left to start a company), sales is fairly cheap. Engineering, however, was pretty expensive for him. It took him years to find a good engineering team, and it would have cost him 30-50% of the company if we had stayed. In hindsight, those years could have been spent making an enterprise play. Once he did the sales, he could hire the engineers to build the product.
For me, an engineer by trade, building is cheap, but selling is expensive. I spent all summer trying unsuccessfully to sell my product to enterprises, and I had no idea where to find people who actually knew how to sell. This showed me that I need to primarily focus on building products, because that best leverages my talents. Unless I have a salesperson or a marketer on my cofounding team, it doesn't make sense to do something that requires heavy sales.
So, what can we learn from this? First of all, when you evaluate business ideas, choose ones that play to your strengths. Take an honest look at the skills of your founding team, and ask yourselves, "do we have what it requires to execute here?" Sure, an engineer can sell a little bit, but most engineers will get demotivated pretty quickly if they spend most of their time selling. Likewise, if your core competency is sales, you should be thinking up things that you can sell BEFORE they are built (and that don't require two years of engineering work before sales can start working).
Furthermore, you may want to make tweaks to your founding team to account for the business idea. If you have two engineers on your team, you might not want to bring on a third engineering cofounder. Maybe that third guy should know sales, or maybe he should be an Internet marketer. It all depends on what you need to make your company successful. If you pick the wrong person, it could be worse than doing nothing.
So, here's an exercise: think of the first (or next) few milestones that you need to hit to build your company. Now, think about what skills are required to hit those milestones, and then ask yourself whether these skills are present in the founding team. If not, then you should consider changing either the idea or the team. Pick a product strategy that's reasonably cheap for your team to execute, because starting a company is already pretty hard, and you don't need to make your lives any more difficult.
Saturday, March 6, 2010
Three Personality Traits of The Ideal Co-founder
After working with a lot of potential co-founders who didn't quite fit the bill, I've distilled the ideal co-founder down to three core characteristics:
1) Smart
2) Trustworthy
3) Hardworking
This may sound obvious, but the core problem is that a lot of seemingly great people only fulfill two of the three. Which means that they won't work out as your cofounder. I think that the definition of each characteristic is pretty self-explanatory, so I'll describe the trait combinations that don't quite work.
QUICK NOTE: These are caricatures. Everyone will probably have one or more of these to some extent. The thing that really matters is the magnitude of that extent, and how the flaw interacts with your personality.
Smart and Hardworking (But Inconsistent)
You meet this guy (or girl), and you can see the spark in his eyes. He has lots of interesting ideas, and is always in a rush to implement them. The quality of his work is high, and he seems like he is going places. But there is something about him that you just don't quite trust. Maybe it's something concrete (like constantly being late, or blowing you off inexplicably), or maybe it's just a feeling of unease in the pit of your stomach. Whatever the case, this isn't going to work. One day, this guy is going to sell you out when something better comes along. Or he's going to exploit your work and then use a loophole to con you out of your equity. Soak up everything you can get from this guy, but keep your eyes on the knife drawer
Hardworking and Trustworthy (But a Bit Inept)
Honestly, this combination is the hardest to ditch. This guy is sweet - he's obviously super-loyal, and he works tirelessly. But... his work isn't quite what you could have produced. When you give him a task that you could have finished in a day, he finishes it in three or four days. And he needs a lot of direction - the only way to guarantee that his work is top-quality is to hold his hand through all of it.
This guy could be a great employee at a larger company, but he just won't cut it as a cofounder. The startup needs to move fast, and everyone needs to contribute on a reasonably equal basis. Some cofounders will be unable to do the work that you do because they have a completely different set of talents, and that's fine. But, when there is a lot of overlap, you should feel like your cofounder is roughly equal to you, if not better in many respects.
Smart and Trustworthy (But A Bit Lazy)
You geninely enjoy being around this guy, and he has so many great ideas. He can think through literally anything - you're sure that you and he are toe-to-toe in the brains department. But he doesn't get that much done, unless you push him. I'm sorry to say it, but this guy is lazy. At a large company, he could be at home in the strategy department. But, at a startup, there are no strategy roles. Everyone needs to be building or selling the product at all times. There is no place for the non-self motivated. It's a tough world out there.
Conclusions?
So, something I've realized is that there is no perfect cofounder. Everyone has one or more of these flaws. They are either inconsistent, inept, lazy, or a combination of the above. As an aside, when I say inept and lazy, I'm talking about a lot of people who would be considered brilliant and hardworking in comparison to 95% of the people out there. It's important to be honest about everyone's flaws (including your own), and to find people whose talents complement your flaws. Maybe you are lazy, and can find a cofounder who is happy to do do your work. Or maybe you are inconsistent, and can find someone who is trustworthy and won't double-cross you (until you find someone better).
This is one major reason why the smart money in the startup world suggests that you date your cofounder before you take the plunge. After dating, joining, and even splitting from a bunch of cofounders, I can say that you need to tread carefully...
1) Smart
2) Trustworthy
3) Hardworking
This may sound obvious, but the core problem is that a lot of seemingly great people only fulfill two of the three. Which means that they won't work out as your cofounder. I think that the definition of each characteristic is pretty self-explanatory, so I'll describe the trait combinations that don't quite work.
QUICK NOTE: These are caricatures. Everyone will probably have one or more of these to some extent. The thing that really matters is the magnitude of that extent, and how the flaw interacts with your personality.
Smart and Hardworking (But Inconsistent)
You meet this guy (or girl), and you can see the spark in his eyes. He has lots of interesting ideas, and is always in a rush to implement them. The quality of his work is high, and he seems like he is going places. But there is something about him that you just don't quite trust. Maybe it's something concrete (like constantly being late, or blowing you off inexplicably), or maybe it's just a feeling of unease in the pit of your stomach. Whatever the case, this isn't going to work. One day, this guy is going to sell you out when something better comes along. Or he's going to exploit your work and then use a loophole to con you out of your equity. Soak up everything you can get from this guy, but keep your eyes on the knife drawer
Hardworking and Trustworthy (But a Bit Inept)
Honestly, this combination is the hardest to ditch. This guy is sweet - he's obviously super-loyal, and he works tirelessly. But... his work isn't quite what you could have produced. When you give him a task that you could have finished in a day, he finishes it in three or four days. And he needs a lot of direction - the only way to guarantee that his work is top-quality is to hold his hand through all of it.
This guy could be a great employee at a larger company, but he just won't cut it as a cofounder. The startup needs to move fast, and everyone needs to contribute on a reasonably equal basis. Some cofounders will be unable to do the work that you do because they have a completely different set of talents, and that's fine. But, when there is a lot of overlap, you should feel like your cofounder is roughly equal to you, if not better in many respects.
Smart and Trustworthy (But A Bit Lazy)
You geninely enjoy being around this guy, and he has so many great ideas. He can think through literally anything - you're sure that you and he are toe-to-toe in the brains department. But he doesn't get that much done, unless you push him. I'm sorry to say it, but this guy is lazy. At a large company, he could be at home in the strategy department. But, at a startup, there are no strategy roles. Everyone needs to be building or selling the product at all times. There is no place for the non-self motivated. It's a tough world out there.
Conclusions?
So, something I've realized is that there is no perfect cofounder. Everyone has one or more of these flaws. They are either inconsistent, inept, lazy, or a combination of the above. As an aside, when I say inept and lazy, I'm talking about a lot of people who would be considered brilliant and hardworking in comparison to 95% of the people out there. It's important to be honest about everyone's flaws (including your own), and to find people whose talents complement your flaws. Maybe you are lazy, and can find a cofounder who is happy to do do your work. Or maybe you are inconsistent, and can find someone who is trustworthy and won't double-cross you (until you find someone better).
This is one major reason why the smart money in the startup world suggests that you date your cofounder before you take the plunge. After dating, joining, and even splitting from a bunch of cofounders, I can say that you need to tread carefully...
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