Founders

Potential Cofounder: Ability Vetting. Formal Tech/Biz Interview?

Jon OShaughnessy

April 23rd, 2013

Hi,

Thanks in advance for the responses. I've enjoyed contributing here and seeing feedback, so excited to see what this elicits. 

The question is as follows: you meet a potential cofounder and you hit it off. You keep talking, getting mutually excited by the idea, you seem to get along, and seem to have complimentary requisite skillets. To use the dating metaphor you're contemplating getting married. 

The interesting thing that I've noted is that while you want someone from a different background, by definition that means that you don't have the ability to effectively evaluate their ability in their field. Having an ally from the same field "check them out" is clearly mandated - i.e. As a business person, I'd have a few engineering friends give me their read on the potential tech cofounder. 

In some cases, this seems easier than others, especially if they have published code in a portfolio, are active on Github, write often on a blog, etc. 

The question I'm wrestling with is the scenario in which they don't have that. You still want someone to talk to them, but how in depth is appropriate? Do you go through a full technical interview? Have someone chat around a few concepts? Just rely on previous work they've done? On one hand, it seems like with such a monumental decision as selecting a cofounder, you want to be as thorough as possible. On the other, you don't want to inadvertently torpedo a budding relationship with unnecessary demands or formality. 

I'm curious what others have done here. There clearly seems like there is no one "right" answer, and each situation varies... but I think this will make for a very interesting thread to hear responses. This applies to either side - tech evaluating biz or visa versa.  

So thoughts? What have others done? What do you intend to do?

Thanks in advance for the responses!

Best,
Jon

Andrew Donoho President at Donoho Design Group, LLC

April 25th, 2013

Folks,

Allow me to change the metaphor from dating to ... wait for it ... football.

The co-founder problem is akin to drafting a quarterback problem.

How's that, you ask?

There is little correlation between success in the college game and with the pro game. The QB is a position that is truly defying, it appears, moneyball analysis.

Why is this?

First, the pro game is much faster than the college game. That is why the spread offense has almost no success in the pro game. There is little predictive success due to college performance for pro performance. 

Second, the QB position is the position that has the least repetitive patterns. In other words, it is too reactive and is, hence, less subject to effective statistical analysis.

Even after serious scouting, the QB position draft picks are frequent flameouts.

The co-founders of a startup all fill roles with the similar reactiveness and unpredictability of a QB position.

What does that mean for picking a co-founder?

First, your non-CEO technical team is probably your least risky pick. There is a great deal of signaling data to suggest that certain technical folks are better during the startup phase than during the growth phase than during the stabilization phase. You just need to pay attention. These folks are your linemen. As in football, your CTO is the guy who protects the QB's blindside, the left side tackle. (Unsurprisingly, the left side tackle is, I am told, the highest paid position on the line in the pro game.) Finding the right CTO and technical team is easier than probably finding any other position. The data is unambiguous and widely available.

Second, the CEO<->VP-Sales<->VP-Marketing team, i.e. the offense, must execute together and, unfortunately, are frequently the team that comes together late in a startup's pre-school life. (This is where I find myself, BTW.) The VP-Sales, your ground game/running back, has typically lots of data to back up their claim to business success. Lots of people have these skills and are straight forward to find. They should be, IMO, your first co-founder/hire after the product starts to ship. They are responsible for the customer funnel and will work closely with the CTO to refine the product to close sales. The VP-Marketing, your passing game, joins the team after your first few sales. There should be lots of data documenting their success. Marketing success, like sales, can be tracked. Hence, your team needs to do so. This keeps you from drinking your own Kool-Aid®.

Basically, I'm arguing against the young startup team and am arguing for the old pro team. Folks who have proven technical, sales and marketing experience. In other words, for all but the CEO role, there is lots of data signaling whether someone will be successful in that role. The CEO role is different. It is like the QB and you have to take on faith, somewhat, that they can make the right reactive and proactive decisions to grow the company. But as most members of FD want to be the CEOs, we're not really recruiting for those positions.

For the CEO? The most important character traits are, IMO, resilience, flexibility and stubbornness. Those are very hard to identify. You only see them when the chips are down. You cannot scout for them. You only see them after success has been achieved by wandering through the Valley of the Shadow of Death.

That is why serial entrepreneurs get funded, even for stupid ideas. There is confidence that the serial entrepreneur will figure out that their idea is stupid and will pivot to something that works. They have a demonstrated talent for doing just that.

The upshot? Find the right signaling data for each role you need in your early team. Use that data. Build a tryout situation around the new person and role. Execute. Evaluate. Evolve.

Even though this site is called Founder Dating, it isn't just about feelings and roses. It is about data and execution and life. Don't let a potential team member's potentially hurt feelings keep you from sticking to a process that demands demonstrated success and evaluates folks based upon trial performance.

Good luck to all of us with our ventures.

Andrew

Janelle Maiocco

April 24th, 2013

My thoughts:
  • it is typical to build in a one-year cliff for equity, which will give you your 'try them out' ramp. That protects you from an equity/ownership standpoint, though not necessarily a go-to-market/timing standpoint.
  • get the legal right so if it doesn't work out, it is less messy
  • realize that the wrong person will cause you to lose time to market
  • I am not technical either. Ask trusted advisors to stand-in and audit them. As a rule, I plan to not only audit my financials but my technology as well. While you might not know much at the on-set, you should always know what is under the covers as you move down a programming path.
  • The more folks you interview, the more knowledge you will gain to make an educated hire.
  • I always ask them about typical day, work rhythm, company culture, decision-making process/what it looks like in a team/company setting
  • My friend @KateMatsudaira (former CTO Decide.com) is writing a book/brief called: Non-Technical Founder’s Guide to Finding Technical Co-founders and Engineers Not sure if it is available yet, but she is a great resource.

Andrew Donoho President at Donoho Design Group, LLC

April 24th, 2013

Jon,



You've described the easy analysis problem. Technical co-founders are supposed to have published something. You can actually look at it. You can use the fact that they published code alone as a signifier that they are outside the norm.

In my case, I have a much tougher problem. I have to figure out whether a business someone, say yourself or another FD member, is the right person to join my team. I have a technology. I have a market. I'm pitching my first customers. I need a COO/CMO.

How do I choose? What requirements do I list?

More importantly, how do I validate the claims? There is no publishing trail. References are not as reliable as one might hope. (One assumes you only list good references. One's character is measured when the chips are down. Most references have never seen someone when the chips are down. Ergo, references are a much less valuable measure of a person than you might think.)

I'm solving this problem by bringing on folks in a measured way. As my business naturally factors into a representative-firm model, I can in a mutually profitable fashion try folks out. Can they deliver the leads? Can they manage the technology delivery process? Can they wrap their heads around the business model whose value derives from mining data in a durable, recurring fashion?

To answer your bigger question, you have to try folks out. Most people have no idea what it takes to start a business, much less a technology startup. (I'm starting my 4th business. I've seen scales fall from my and other's eyes.)

Or do you have a better method to vet business people? 



Andrew

David Crooke Serial entrepreneur and CTO

April 23rd, 2013

The hard skills are easy to verify. "Fit" and mutual trust are not. Focus

Tim Scott

April 23rd, 2013

Hard skills are easy to verify...but you have to actually do it.  If you're counting on your technical co-founder to sling some awesome code early on, you need to know that peson can do it.  DO NOT worry about offending this person with a deep technical interviews, multiple interviews, review of their OSS, etc. All good techies relish the chance to show their chops.  I agree that human concerns are higher order, but don't skip due diligence on the technical side.

Joseph Moniz Software Engineer

April 24th, 2013

As an engineer myself, this is a very interesting question to me.

In regard to the technical ability of a technical cofounder, i think this is more of an unintuitive thing then one may think. Consider for a moment that the skill set for the ideal candidate to help you build, ship and iterate really fast on a new product, may vary dramatically from the skill set of the ideal candidate to help you scale the technology of a successful business and recruit and manage engineers.

Given this consideration, i would highly recommend that along with technical prowess, you also take open mindedness, self motivated learning, pride and willingness to adapt and try new things into consideration.

The best engineers are the ones that are truly passionate about what they do. It's not hard to detect true passion. Ask about how they learned to program, ask about the coolest thing they've ever built and why they built it and just watch how they talk about it. If you did a good job at mitigating "interview jitters" and they're a really passionate programmer, you should be able to pick up on their level of excitement and try to pay close attention (as little as it sounds) to how much they smile when talking about these things.

Also, engineers are still people and not just people in this case, people you're considering building a business with! Make sure this is some one you wouldn't mind getting a beer with after a days work.

- Joseph Moniz


"Wake up early, Stay up late, Change the world"

John Wallace President at Apps Incorporated

April 24th, 2013

I think interviews are only the first part of the process. Before committing, I need to understand what it would be like to work with that person day to day, and the only way to find out is to test the relationship under close-to-real conditions.

For example, when I hire technical staff, I go through three steps: 1) The first interview, where the purpose is to answer two questions a) do they potentially have the chops and b) can I work with them. If either of those are no, then process is done. 2) I then give them a coding problem that will take from 3-6 hours. What I've found is that the code I get back on the test is what I can expect from them on the job. If their code has problems, then I've found that their real code will have similar problems; once again, the process is done. 3) I then meet with them and review their code face-to-face. The purpose here is to understand how they react to team mates and to better understand how they think. It's only after they pass all three phases that I would hire them. 

Similarly, when I'm looking at co-founders, I want to run us both through a test to see how we work together. For example, participate in a startup weekend, or pick a toy project and build it. At worst I lose a weekend. But the insight into the other person's strengths and weaknesses is far beyond what I can get in an interview. My goal is to create a great relationship, a great product, and a great company. Before I can be fully committed I need to understand if we have the chemistry to make that happen. After all, before I get married I want to really understand what I'm getting into. And for me, the right partner wants to invest some time into understanding that as well.

John Rodley

April 24th, 2013

Try before you buy is great advice, but how do you get around the implied lack of trust? I haven't seen TBYB work. Doesn't mean it can't or hasn't for other people.  I think TBYB tends to drive off people who might otherwise work with you. I've considered it from time to time, even since joining FD, but my initial reaction is always negative. It colors my perception of the guy on the other side i.e. can he make a decision, move on and deal with the consequences as they arise (which is what startup CEOs need to do), or is he always hedging to the point of unproductive risk-aversion?  As CTO will I always be dealing with a cast of characters who are "on probation" because my CEO is afraid of a bad hire?

The solution imho is to have a contractual 'out' for a relationship that isn't working and not to waste precious cash, or vest equity prematurely.

Jon Cooper Chief Technology Officer at Colchis Capital Management

April 23rd, 2013

@David Crooke said what I meant in 14 words. 'Nuff respect :)

David Crooke Serial entrepreneur and CTO

April 24th, 2013

Venture capitalists will want to see founders with a vesting structure, and will request it be retro-fitted, so be aware of that. Typical is 12+24 months and stock, instead of the 12+36 for employees, who get options. If anyone wants a tech grilling by phone, I will volunteer, I could use the practice. I have a friend who thinks up truly evil interview questions for techies.