Business Founders Are Less Valuable Than They Think

If you know me, you know I love tech, business and startups. Thus, I always find a way to get involved in the startup community. Over the years, there is one person I tend to meet more often than not in gatherings. It is the non-technical guy who wants to build a tech startup. The business founder.

Sillicon Valley
Erik from TV show Sillicon Valley.

Once they know I’m a software engineer and we get into the specifics of their projects (I ask a lot of questions), the majority of the stories follow the same arc.

I had idea for A, for reason B I do not have technical co-founder, and I have tried solutions C - D. Currently, still trying with E but it’s a painful slog.

…

*insert hopelessness, despair, frustration*

I have found there are significantly more business guys looking for tech guys than the reverse. But… why is that?

The truth is simple. The reason they struggle to find a cofounder is because they are not as valuable to the startup endeavor as they think they are.

Read it again. They are not. But if that’s you, that’s okay! There are ways to address that. This is what I’ll get into here so keep reading to see the conclusion.

Skewed Lenses = Bad Vision

One of my good friends told me he recently jumped ship from a startup heading for the wall. When I asked for the reason, he told me:

“The CEO is some ex-McKinsey consultant who’s never done anything but thinks he’s hot sh*t because he raised a $1M pre-seed. He was impossible to work with so I left.”

A common observable thread in this persona is the tendency to have too much ego go unchecked, causing their perception of people and value creation to be skewed. What I mean is, they will see themselves as the reincarnated Steve Jobs with the belief their force of will can overcome all.

The Alpha

Fake Steve Jobs
Fake Steve Jobs, asserting dominance on video call.

They will seek to dominate the relationship and be the alpha top-dog as opposed to equal partners who trust and respect each other deeply.

As you can imagine, this is highly unattractive to skilled engineers who know their worth. No one sane wants to leave a high-paying cushy job to work for (not with) a bossy guy while battling the already intense stressors of Entrepreneurship.

I am not diminishing the importance of a strong will but rather emphasizing that its application requires finesse.

Misplaced Value

Another thing they get wrong often is where they place value. Sam Altman has a great talk on this: Team and Execution. He says what actually makes your startup valuable is the hard work you and your team will do over the next 10 years. The idea by itself is not worth much if it cannot be realized. Yet, many business founders wrongly believe that because they bring the idea to the table, they carry the meat of the contribution to a successful outcome and thus deserve greater share of equity.

In reality, it should flipped! The technical person is the one who breathes life into an idea and should get the lion’s share. There are many examples in history that prove this out. Twitter was Noah Grass’s idea not Jack Dorsey but he was able to execute on it more effectively. Mark Zuckerberg did the same with Winklevoss’s idea.

The riches are in the execution. The work done. In the early days that mainly boils down to building the product. This reality makes the average “business co-founder” a non-asset and consequently undesirable from a technical co-founder’s POV.

So… What Do You Do?

Actually, my last statement was a bit misleading. You see, in the early days, there is not one but two things that matter: building a product and talking to customers.

The majority of technical folks are great at the former but not at the latter. There lies your opportunity. In order to be perceived as an asset to the venture (and actually become one), you should put all your chips in meeting their most critical weakness. That’s how you will make them pay attention and respect your contribution. Seems logical, right? Complementary skillsets. Now, you may think:

“But I already have that! I am great at selling and talking to people”

While that may be true, it’s easily said but seldom demonstrated. Prove it. If your skills as outstanding as you say they are, you should demonstrate it in one of two ways that are relevant to your venture:

These numbers demonstrate that you know where to find your target, how to get in front of them, and what to say that gets them to raise their hand from the crowd and engage. These are all critical components to grow any business and these two numbers are high enough to prove some semblance of a market for your offer.

Validating the Idea

On this point, business bros will agree but typically push back, stating that the product is needed to be able to prove out existing demand or a viable go-to-market motion. In most cases though, this is wrong! It actually multiplies the risk by bundling it into the costlied part of the operation (ie: engineering). Yes, having something to show helps, but you know what helps even more?

Having someone to show it to, that wants to see it !!!

It’s orders of magnitude better to iterate on the copy for an ad, cold email, or landing page until you have a value prop that gets a reaction rather than a whole codebase.

The vertex a business founder can provide maximum value in, is in relationship building. Or more precisely, having built up access to a specific group of people and demonstrated momentum in growing that access over time. Whether that group be customers or investors is a huge unlock either way.

Your Network Is Your Net Worth

In conclusion, your value as a business founder is going to be… *drumroll* … driving business forward! Funny how it’s in the name, isn’t it?

Big Brain
Big brain moves

Some YC partners addressed this debate head-on last year. The most successful business founders they’ve seen (and they see many startups) all share this trait. They already have or know how to build very quickly warm access to network of customers or investors that are otherwise hard to reach.

Though the customers is way more important, being a terrific fundraiser can be critical to the success of some ventures. Paul Graham wrote in 2008 that Sam Altman was the best fundraiser he’s ever seen in his 30+ years in the valley. Sam was just 23 years old at that time!

PG was right. As it turns out, inventing AGI is proving out to be a very expensive endeavor and his gift for fundraising is what keeps OAI ahead.

So instead of wasting your time peddling with no progress, focus on building an asset that is hard to ignore: a deep rolladeck of people that will answer your call on the 3rd ring.

That will be your impossible-to-beat advantage. It will remove your name from the unserious-wanna-be founders list and put you in the top 5% of the can-actually-get-sh*t-done founders list.

Everyone respects that guy. My takeaway? Get clear on the value you can provide and go build it.