If you can code your way out of a hat, you have a job right now. You're also probably getting lots of offers from completely random startups and people you've never heard of--people just randomly searching LinkedIn for "PHP", "AJAX", or "ninja".
Some are offering just equity.
Some are willing to pay a little.
Some are willing to pay a lot.
Some are offering their sister who is "number four prostitute in all of Kazakhstan". Very nice!
Clearly, you've got your pick. So how do you choose? I mean, you're not an idiot. You know that the advertising sponsored lolcat CRM Facebook app doesn't have legs, but there are a couple of things that sound like they could work. Still, you're not a marketing expert or finance major, so, even if you just cut the list down to "interesting technical challenges and things I'd like to work on", you've still got a bunch left. How are you supposed to figure out what might still be around in a year?
I get sent business plans and ideas left and right--sometimes to evaluate because I worked at a venture capital firm, other times because people hope I'll send it on to said venture capital firm. I also had to to evaluate a lot of companies when I left my last job, before I started Path 101, because I had a lot of great offers. So, I came up with a short list of criteria for choosing my next company that I think would be helpful to developers who have their choice of startup opportunity.
First, is this a viable concern? In other words, is this company going to be around in a year? As cool an idea as something may seem, if there isn't some kind of money coming into this business, how long are they going to stay alive?
"Build and raise money" right?
Raising money isn't easy. VCs and even angels see thousands of deals a year. The chances of getting a company funded are very slim, and just because an investor says "they're interested" that doesn't mean anything. In fact, I'd be willing to make the argument that since it's relatively easy to get a demo product out, that a REALLY interested investor who believes in the team should be willing to fund a company even before the alpha version of the product is out. It's going to change over time anyway and you need to bet on the team's ability to iterate, so if there isn't SOME money in the company, either from the founders or angels or somebody, I'd steer clear.
What are they willing to give you? One of my BIGGEST pet peeves are businesspeople who overestimate their value to a company. Look, I had the idea for Path 101. We raised 350k basically based off my relationships. I'm the one with the experience in our niche. And what are we worth without Alex, the CTO?
That's why we're equal partners. So if you've got a team of four businesspeople who are hogging up all the equity and they want to give you only a crumb, steer clear. You're building the site... creating the experience. Where would they be without you?
ON THE OTHER HAND, don't underestimate the value of relevant experience either. I see a lot of two developer teams that have zero industry experience whatsoever. That's great if you want to flip to a big competitor for beer money, but if you want to be a part of a company that makes a huge dent in a market and changes the way people conduct business, then you need someone with experience and connections to make it happen. How are you getting into your best business development relationships? LinkedIn or are you actually getting real recommendations from people who know the team well? It's too easy to just build something and think you have a business. A business fits in within an industry--it isn't just technology. It creates value for stakeholders--enough value for the right stakeholders. Take the music industry. Just because you can do something nifty with MP3 playlists doesn't necessarily mean you have a viable business, especially since big lables can be a minefield. Step too far to the left and, as John Madden says, "Boom!"
Is the market big enough? Do you have to bet on lots of people doing things they've never done before for this to be successful? Do you know anyone without a computer science degree that would even understand this thing? Go ask 10 of your non-tech friends and see what they think of it.
And finally... how dedicated is the team to this idea? Do they live it? Is this just a neat idea they came up with while they were bored one day or has everything they've done in their career and their life led up to this moment of creating a business? Do they embody this business? This might sound like overkill and a little hokey, but trust me, when you're still months away from a big turning point, and you're out of money, and its going to take some sleeping on couches and dipping into 401k plans to keeps something alive, you better hope that the founding team thinks its more than just a good idea...
....it better be THE idea.
Any other tests for programmers to find the right startup?
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