I'm in a bit of a jam with my startup and was hoping anyone could give me pointers on how to deal with this.
My startup has been delivering offline services for a while now with moderate success, but recently I came up with an idea of an online platform that will enable service delivery globally. However I am not a programmer. I've developed the main wireframes and the storyboard, but still can't build the platform myself. I know that for someone to come on board they would need to be full stack and have some experience with cloud infrastructure, big data, and machine learning.
The question here is: is it reasonable to go looking for a technical co-founder to help build this online platform with the compensation being 100% equity? Or does no one work like this and the main expectation would be a combination of salary/equity even in a pre-seed startup?
ANY thoughts at all on the matter would be greatly appreciated. Thank you all!
Hi there, it looks like you are seeking for expertise in a few directions. If you find a full stack dev folk, it would be unlikely to have a solid ML expertise and vice versa. If by any chance, you manage to find a folk with the required skillset, it would be very unlikely to convince him/her to work on an equity basis only. If I were in your shoes, I would first pass a few more details to help interested people share their experience and thoughts. I believe the community here is dominated by non-tech founders and likely someone here has gone over similar issues successfully. Second, I would investigate the option to hire a dev house to support or build MVP + attract tech co-founder to help me evaluate different options, prepare spec/reqs, work with dev house on a daily basis, etc ... There are so many options. Good luck!
From your description it appears you are not looking for a co-founder. You are instead looking for a software developer that you don't have to pay. There's a huge difference. A co-founder has more than an equity stake in the business. They are also a co-creator.
At this stage it may be too early to look at developing your online platform anyway. If the offline version is measured at "moderate" success, it would be more productive to refine the offline service so it is very successful, which would in-turn provide the cash you need to pay for an online extension of the business. If the online platform is essentially the same service as the offline platform, there's no reason to believe it will be any more successful. In fact it may be worse. It's not clear yet that your existing customers are interested in transacting online for your service type, let alone new prospects.
This is the best time to do some validation exercises for your idea. Before you attempt to persuade someone to take 100% of the risk for your idea, you'd better be sure that failure is far less likely than success.
You may be enthusiastic about the idea of increasing your potential market by opening an online portal, but that sounds like "I just need more sales and I will make money." When that statement is made, it's a common warning that the problem isn't actually a lack of sales, it's the product not being aligned to the market.
Take some time to work through the steps of market alignment. There are a lot of resources that can guide you in that effort. You may find that you don't need to jump to a new audience, rather you need to modify the way you package your services today. Before changing your business model to "fix" the sales issue, try fixing the product. When you have market alignment, the right model to deliver your services should be obvious (offline versus online, for example).
If your customers today were demanding that you switch from an offline delivery to online, I might say it's time to consider your online idea. Since this sounds like your idea was unprompted other than looking for greater customer reach, it may as yet be a mistake to pursue.
I agree with paul's comment above but wanted to add one more point:
you need basic knowledge of building an app or have someone with the knowledge on your side in order to work with a development house for reasonable outcome. Otherwise, the results will likely be "your money for nothing".
I am NOT saying that development houses are cheaters. A likely scenario is that you agree to something vastly different from what you are seeking.
Your action: if you go to development house, you need an (IT) project manager who had technical expertise (or a technical guy with pm experience) on your side.
While I was with IBM, project managers there generally are paid more than developers. It says a lot.
Thank you to everyone who answered! I've decided to go with a dev house. I had already talked to a few and got some offers, but it wasn't my ideal situation so wanted to see if I can bring in a co-founder. After reading everyone's responses (and getting some other advice as well), I decided to hire a dev house to get the MVP done at least.
Follow Paul Garcia's suggestions first. Then, if you have market alignment, you should search through the technical folks on platforms like this one (start here). They describe themselves in their profiles although I don't know how good CFL's search function is at getting you a list.
Put together a packet and interview them. The people you interview will likely suggest having most of the non-proprietary development done offshore as the labor market in the US is so tight at the moment. Make sure they have supervised offshore teams before. It is very different from being in the same office. The offshore team will need to be paid.
The equity should be the largest minority stake that you will designate. It should vest over time so that you aren't providing a social security scheme for an absentee.
I am sure this is not comprehensive but should be some help.
If you will at some point decide to start working towards building an online platform, I'd like to offer a small suggestion that can save you a lot of money.
The standard order is:
The alternative order I suggest, is:
As a rule of thumb, use between 6 and 10% of the budget to build the offer page and learn what's really important to your users. There is no shame in building an offer, showing it to a lot of people and killing the project. I've done this more times than I can count and let me tell you, the idea mortality rate is very high.
The chance that the first version of the offer/platform is going to be a success, is very, very low. A lot of founders spend all their savings building a platform that nobody wants to pay for. Do not be that guy. Be smart, reverse the order.