Over the last couple of weeks, I've had the same conversation with three different startups. They were all started by businesspeople and they were frustrated over the fact that they couldn't find a great tech person to build their dream into a reality.
So I asked them if they were willing to actually make it a partnership and give them an equal share of the business.
They all balked. Didn't even hesitate. No way.
Well, if I was a tech guy capable of building your application, then I wouldn't work with you either. Good luck, buddy.
One of the reasons people work at startups to begin with is because they feel like their work will be a lot more rewarding versus working in a big company. If their work isn't highly valued by the people that start the business, then what's the point of even working for a startup? No one's going to join a business team as the CTO for a 5% stake in the company or if your first thought is, "I don't want to give that much away."
I've never had that thought, when it comes to making offers to people, of "That's too much to give away." (My angels have talked me down to reasonable numbers, not to worry...) But, I'm always thinking, for the right person, that this person makes my business worth that much more... so why wouldn't I give away more equity? If anything, it's the financing rounds you need to be careful about giving up equity on, not people costs (within reason).
The right CTO can make all the difference. It's not just getting the site built... it's making sure the site scales appropriately, and in a cost effective way, too. A partner is going to care about not overbuying hardware, because his or her stake is tied to how much cash is left in the bank. They're going to spend the late nights solving some untraceable bug and not charge you by the hour for it. A contract lead developer? Meh.
And best of all, they're not going to walk away right when you need them the most... at least, not if they're properly incentivized. I can't tell you how many times I've heard of nightmare scenarios of contract developers that not only flake out, but maliciously break code or leave startups in a jam. It's fine to do some outsourcing, but if you don't have a founding partner who can build, I think you're up a creek.
And if you don't realize that it takes more than just a business idea and a little cash to make a successful business, I'd have no interest in coming to work for you if I was a CTO or even just a great developer.
If you find the person who can not only build your idea, be committed to it for the long haul, and that you can get along with, give 'em an equal share (with proper vesting, of course... 1 year cliff...). Trust me that you'll thank me later.
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