Finding cofounders · Technical co-founder

Is the technical cofounder market about to loosen up with all the layoffs happening?

Sankar Patel

May 10th, 2016

Hey guys,
I've been searching for a strong technical lead or technical cofounder for several months now. I've met very few great candidates, and some not so great ones, but its been a very tight market for a long time, especially in San Francisco. We have a great product (MVP+ built by a dev shop) and pilot programs ready to launch, a solid founding team of UX/UI, sales and business professionals and we've caught the ears of seed investors, but as you all know, they want to see that technical lead.

A couple of my advisers have mentioned that the string of layoffs in the valley will probably loosen things up very soon, especially for coders. Has anyone else heard or believe this or is it just wishful thinking?

Joe Emison Chief Information Officer at Xceligent

May 10th, 2016

As a technical cofounder, and someone who hires developers... I really don't think so. The demand for great technical talent is so high that I seriously doubt there will be enough of a drop for this to make a difference at the top tier--where you'd want to pick up a technical cofounder. If you would be a good technical cofounder, you can almost certainly get a job paying at least $300K/year in the Bay Area today. Even if that drops to $200K (highly unlikly in my opinion), it's unlikely that a technical cofounder of a seed-stage startup would get more than $150K/year (and often it's more like $75-100K, because otherwise you'll have a hard time getting that seed investment). So you're not going to be able to come close to competing on salary.

And now think about all of the other options that are available out there in companies that are growing quickly that haven't had a major exit... how are you going to compete with Slack and AirBnb, for example? The likelihood is that your startup is going to fail. Those won't, so the question is just what the equity in them will be worth.  You can offer some more freedom and autonomy, but your benefits will be much worse, and the uncertainty is painful.

I would anticipate that the demand for technical talent will outstrip supply significantly for at least the next 10 years.

Rob G

May 10th, 2016

in general, in funding dips like this in startup land (such as in 2000 and 2008), the employable talent tends to migrate to more stable companies, either well funded startups or mature companies.  So even if the competition for talent among startups decreases the reduction in funding means 2 things: 1) a migration to less risky employers and 2) the perception that your company is now even riskier due to a decrease in the odds of your company receiving funding. 

Paul Chambers Founder, Nymble Technology

May 10th, 2016

Companies tend to hang on to their best performers, logically. You may be lucky and find someone good that has been let go because of politics or an acquisition. But the good ones tend to be snapped up quickly.

The other aspect is that you're portraying that it's all over, bar the shouting, from a technical standpoint. Not much of a challenge, and a real danger he/she would be left dealing with the consequences of other people's decisions. Worse still, the decisions of people without a stake in the outcome (the dev shop).

Noah Webster Co-Founder at Joir

May 11th, 2016

Top talent will always have jobs and be well paid. It's because they are top talent. When we see market dips, what gets cut off is the bottom of the barrel, or people who had some sort of conflict with their bosses. Either way, its not going to be the type of person you want as a technical co-founder. Tech co-founders will always be available. You just need to be able to make them a compelling enough offer (in terms of idea, pay, equity, whatever).

Michael Barnathan

May 10th, 2016

It will, but it's happening because the funding environment is drying up...

Ken Anderson Director, Entrepreneurial and Small Business Development, Delaware Economic Development Office

May 10th, 2016

Keen observation Sankar. That's exactly what many are predicting...especially in Menlo Park, CA.

Michael Barnathan

May 10th, 2016

Certain areas, such as ML, are in no danger and will actually grow in the near term. You're right that top techies are in little danger, though I think we'll see a drop across the spectrum, way more severe among the bootcamp crowd. You beat the Airbnb offer with more equity and promise of greater upside! But you've got to be special to land and maintain talent over those types of employers, in addition to a significant equity offer. Because 100% of zero is zero. If you join an immediately pre-IPO company, your stock options won't be worth all that much since their optimistic IPO projections will be baked into the strike price already. Some of us have been there, done that, and have no interest in stock that would be worth $50k if the company has a $5b exit tomorrow... just way too little return for way too optimistic a case.

Sankar Patel

May 18th, 2016

Thanks for the feedback guys. Similar to the discussion here, I'm still hearing both POVs out there, next few months should be interesting.

Paul thank you for your point about tech leads wanting to be challenged. I'm learning that the pitch to tech leads needs to be very different from the story for investors who are looking to reduce risk. While a tech lead doesn't want to walk into a disaster, there needs to be a challenge and a bigger vision. 

We have worked out our bigger vision with the help of some great people on Founderdating, hopefully this helps us land our tech lead. Thanks guys!

Bodi Picras ex. property entrepreneur. Avid cyclist.

February 23rd, 2017

Can't you head out to some non-SV events, and scour them for technical talent willing to move?