Why I won't help you find a technical co-founder

As an entrepreneur, one of the things I learned early on is that most startup communities have a pay it back mentality. When I started CPUsage, I was welcomed with open arms by founders that had come before me. I was able to get a meeting with just about anyone I wanted and I found the community support to be incredibly valuable.

Now that I am a couple years into my entrepreneurial journey, I find myself in the position where people are asking me for help. I am not only happy to take a meeting, I am proud to. Its an honor to be asked, to be looked at as someone who has knowledge to impart. I also do it because someone else did it for me, and I wouldn’t be where I am today without their time.

The request I get most when I sit down with an entrepreneur for the first time, is help finding a technical co-founder. Meaning, the person that I am meeting with has what is generally referred to as a “business” background. Finance, sales, operations, customer service, whatever. For a tech startup, thats not enough. You also need someone that knows technology. Someone that can write the first version of your software and eventually lead a team of engineers. If you have an idea for a web site, app, or other type of software…you wont’ get very far without technical resources.

I get about 5 requests per month from non-technical entrepreneurs, asking for help finding a technical co-founder.

Unfortunately for them, technical folks are in high demand. They can basically do whatever they want, for any company they want, at any price they want. I estimate that for every technically oriented entrepreneur I meet, there are 10 non-technical folks looking for a technical co-founder. The chances you’ll find one, with our without my help, are slim. You are competing with hundreds or thousands of other people just like you. Good luck.

Starting today, I am going to save both of us time. I won’t help you find a technical co-founder. I’ll do something better. I’m going to encourage you to learn to code. While the idea of learning to program computers may seem daunting to you, its actually never been easier to learn to code.

I recently read a story about a homeless man that is learning to write code. After just 4 weeks, he was almost ready to publish his first application. This man is homeless. No money, no roof over his head, none of the comforts you likely have.

What’s your excuse?

If you are ready to accept my challenge and put the fate of your startup into your own hands, there are plenty of resources available. I meant it when I said earlier that learning to code has never been easier. Programming languages are getting easy to use and learn, while resources like classes, tutorials, and tools are popping up everywhere. Most of these resources are free.

I suggest getting started with Codeacademy. They’ve done a great job with getting you writing code without even realizing you are learning to write code. Its totally free. Then, check out some of the classes offered by Udacity and Coursera….these are free classes from major universities like Stanford. At Udacity, Computer Science 101 will teach you to write a web crawler. At Coursera you will learn to build computer games. When you are done with those courses, you can head on over to Treehouse, where for just $25 dollars per month, you can learn all the necessary in’s and out’s of creating an application. Design, user interaction, everything from soup to nuts. Seriously, $25 a month. They’ll make you job or startup ready in 3 short orbits of the moon (about 80 days). Compare that to college tuition.

I am serious, you have no excuse. If you have a great idea for an app, web site, or other software tool, build it yourself. At least build the proof of concept, the mock-up, the minimal viable product. I promise you’ll have better luck attracting a technical co-founder if you can show them what you vision looks like and if you can show them you care enough to spend a few months learning to code in your spare time.

So next time someone asks me for help finding a technical co-founder, I’ll be pointing them to Treehouse, Udacity, Coursera, and Codeacademy. Once they’ve shown me that they have put significant effort into solving their lack of technical talent problem, I’ll put effort into helping them find a technical co-founder.

"Support Entrepreneurs" commands Jeff the Great

Since starting my company and volunteering for Portland Startup Weekend, I have had the opportunity to be around hundreds, if not thousands, of both budding and experienced entrepreneurs. During casual conversation and formal presentations, entrepreneurs regularly share with others what they are building.  They say "I'm building an Instagram for pet photos" or "My company brings together artists and art collectors," sometimes even "I'm making the next Facebook."

One of my biggest pet peeves is when a person listening to a new business idea says "but someone has already built that!" At a recent Startup Weekend, one of the participants was excitedly pitching their new product to an official mentor who responded by saying "Company XYZ has already built that" before walking away and writing off the entrepreneur and their abilities.

Doing this is one of the most naive and unhelpful things you can say to an entrepreneur, and I am asking you to stop. Now.

Thank god Larry and Sergey didn't listen to the naysayers that likely said "but Yahoo already does that" upon hearing about Google. Thankfully, Apple didn't look at Blackberry and say "Well, someone has already made a smartphone, so we don't have to." There are 1 billion people around the world that wouldn't be connecting with friends, family, and strangers online if Mark Zuckerberg decided that the world didn't need Facebook because MySpace already existed.

Simply the existence of a product or service means nothing. Is it the best it can be? Does it serve all potential customers? These high level questions lead us into more detailed ones. Is it priced right? Do consumers want more....or less? Does it serve all the consumers it could?

Additionally, the entrepreneur you are talking to probably already knows about XYZ company that you so quickly jump to say has already built what they just pitched. You aren't telling them anything they don't already know. If someone said they wanted to start a new car company, do you think you'd need to tell them that Ford already exists?

So here is what I want you to do, here are the helpful things you can say. First, be honest and don't grin fuck them (tell them what you really think). Instead of saying that a competitor exists, approach the topic from another angle by saying "so how are you going to differentiate your product from company XYZ?" Ask what company XYZ has done right, and what company XYZ has done wrong. Ask what consumers in the industry as asking for, and ask how the entrepreneur will deliver it.

Simply stating that a competitor exists is an insult to the entrepreneurs intelligence and shows your inability to have an intelligent business conversation. However, if you approach the conversation as I have suggested above, you'll not only look more intelligent yourself, you'll be providing value to the entrepreneur through your questions. You'll give them a chance to show that they have researched the competition and that they have thought about how they'll effectively compete.

Jeff the Great Defines "Startup"

**WARNING: I am about to sound like an elitist, entitled asshole.**

When people ask me what I do for a living, I frequently say that I am the founder of a software startup. Sometimes, people respond by telling me that they are also into startups. They have a food truck, a house cleaning service, etc, etc. With all due respect, those are not startups!

Eric Ries wrote the best definition of a startup that I've ever seen, in his book The Lean Startup:

A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.

Awesome, right? I love it because it is so simple and short, yet it covers the key areas. Human. New. Uncertainty. So why isn't a cupcake shop or a bar a startup?

For starters, these are not new services. There is no question that most markets demand a bar. People have been buying and eating cupcakes for years. For the most part, nothing new has been created here. Sure, there may be a new way of delivering these products or a slightly different value prop, but in the end the product is essentially the same.

Which brings us to the next point: there is not extreme uncertainty. Sure, there may be some uncertainty but proper research and planning around starting your cupcake shop or neighborhood bar can reduce the uncertainty to minimal levels. It's relatively easy to figure out how many bars or cupcake shops a community can support, based on population. There are known, best practices that can be followed. Heck, with all the information available to use via technology and the web, it's probably never been less risky to start a small business!

I'd like to add one additional piece of analysis to Eric's definition. Based on the two points I make above, I'd also so that a startup is a business unable to attract bank loans or other sources of traditional debt financing. If a Starbucks executive left to start their own neighborhood coffee shop, there is little doubt that with a proper business plan, he or she would be able to obtain a small business loan from a local bank. There is little uncertainty in this venture. Little risk.

So what are these businesses called, if not startups? Small businesses. They are wonderful and critical to most economies. I take nothing away from the founders of small businesses. The successful ones are smart, adventurous people. Their businesses just aren't startups, and that is okay.

Jeff the Great Crowns Instagram a Winner

So much to blog about these days but it took a $1 billion acquisition of a no-revenue company to get me writing this evening. Yes, I am talking about Instagram and the sale to Facebook. One billion dollars. Wow...and congrats to them! The most amazing thing to me is that they are just a 10 person company with a product used by around 30 million people. That, my friends, is a lean startup!

So here is something to think about. Facebook paid approximately $33 for every Instagram user. That got me thinking, will this number be cited in the valuation of other web/mobile companies as they raise funding or negotiate a buyout? This means if your web/mobile app has 1 million users, you could reasonably argue that your company is worth $33 million......or more if you have revenue!

That is a little far fetched but it is a great way to remind yourself how much more work you have ahead of you. Say you have 25,000 users. That is wonderful, but you have a long way to go if you want to be purchased for millions of dollars! Twenty five thousand makes you worth about $825,000 based on Facebook/Instagram math. One hundred thousand users puts you at $3.3 million. Personally, I don't want to sell my current company for less than $100 million so I better get more than 3 million users running my software. Yikes, I have a lot of work to do!

Of course, I am over-simplifying things. Revenue changes the picture drastically. I also believe that each new Instagram user was worth more than the last (a network affect, so to speak). Not to mention all the other tangible and intangibles.

I'll leave you with this final thought. Maybe $1 billion was a bargain for Facebook? They are approaching an IPO that is rumored to value the company at around $100 billion. With around 900 million users, that is $111 per user. Makes $33 per user look like chump change, doesn't it?

Jeff the Great Boycotts The Oregonian (or, why the newspaper industry is dying)

Reading through the archives of this blog, you'll see that there are a few popular topics I like to write about. One of them is the downfall of the newspaper industry. I recently had an online conversation with the new Business section editor at The Oregonian which only strengthens my grim outlook for a dying industry.

As some of you know, I have been working hard to build my own startup company. Nearly 2 years now and we are finally getting some real traction. Big news is on the horizon. During this time, I have become aware of many other Portland startups. Unfortunately, it seems as if these companies don't get much attention from The Oregonian newspaper.

A recent example is when my company teamed up with another Portland startup, GadgetTrak, to produce an innovative project called "stolen camera finder." It was interesting enough for the New York Times, Economist magazine, Popular Photography magazine, TechCrunch, Gizmodo and others. We sent information to the Oregonian's tech business writer and I even spoke with him on the phone about the project during a call for a different story. Nothing, no story. Apparently the Oregonian is too good for a story that the New York Times and TechCrunch like.

However, the Oregonian did have space in their paper for a July story about an eccentric millionaire that has sunk nearly $1 million into the development of a shaving razor that sells for $100,000 each (yes, you read that correctly, one hundred thousand dollars). Then, in late August, the Oregonian did a follow up story with "news" that the company has now produced an $18,000 model of their high-end razor. According to the August 25th article, not a single unit had been sold at either price point.

In the meantime, real Portland startups are building world-changing products, earning revenues, hiring employees and otherwise succeeding. When was the last time you read about that?

So when the second razor article hit the Oregonian's web site, I took issue with both the author (who I respect greatly) and his boss, the Business Editor. Here is our Twitter exchange, archived thanks to a cool company called Storify (which isn't from Portland):

What is your take, Portland? Was I wrong to question the Oregonian's coverage of this gimmick razor business or do they in fact do enough coverage of Portland startups?

Update, 9/24/11: The Oregonian today published a story about Geoloqi, one of the companies I mentioned in the comments below because I felt they didn't get the attention they deserved. Here is the story.

Jeff the Great Says to Keep Your Eye on the Ball

Early stage startup founders have a problem. Early stage startup founders in Portland really have a problem. Too often, we look at venture funding as the goal, rather than a means to the end. Once you start focusing on raising money, you have failed.

I am currently in the process of raising financial backing for my early stage startup and sometimes I find myself taking my eye off the ball. Funding is not the goal. Building a wildly successful company that makes everyone involved rich is the goal. Every time I fail to focus on that, I am not taking a step forward.

The idea of investment dollars is to accelerate your company. Not to pay yourself more or to get a fancy office. Sure, those things *might* come with the territory, but they are not the goal. When you take an investment, that's when the work really begins.You now have more work and more responsibility. You just have some cash in the bank to help you through it all. If you take an investment and don't feel more pressure to succeed, I think something is wrong with you.

While high-fives may have gone around the Portland companies that have recently been funded, like ShopIgniter, PHP Fog and Urban Airship, I can guarantee you that the celebrations didnt' last long. They now have to work their asses off, and they know it. While I don't know the founders of these companies, I can confidently say that they were given that venture capital money because the investors knew they were focused on building wildly successful companies. They did not focus on getting funded. They saw funding as a means to the end.

As I network around the Portland startup community, I see too many of us that are focused on getting funding and not building wildly successful companies. I think part of the problem is that we read about all these funding events on TechCrunch and we fail to see all the hard work that has gone into those companies and we are not exposed to the greater vision they have. We don't see the pressure that those founders feel after the funding happens. We think its all ice cream sundays and stuffed animals. We want that TechCrunch recognition. We want ice cream and stuffed animals. It sounds so great, right?

All those companies on TechCrunch...funding wasn't the goal. Building a wildly successful company is the goal. They didn't accomplish anything by raising venture capital. Now that they have capital, they have to go accomplish something. Funding isn't the goal.

So next time we talk at a Portland area event, don't tell me about your fundraising efforts. Tell me about your product. About your customers. About your vision. Don't tell me how much you need. Don't say that if you just had X dollars, you would be set.

Make sure I do the same thing. If I start talking to you about my fundraising efforts, remind me that I need to focus on my product, customers and our vision. Don't let me take my eye off the ball. After all, I am writing this blog post as a reminder to myself.

Sure, we need money to realize our vision. Let's just not focus on that. Once we are focused on funding, we have failed. Our chances of building a wildly successful company are next to nothing once we take our eyes off the ball. Focusing on funding means your eye is off the ball.

Funding is not the goal. Building a wildly successful company is the goal.