My zero-equity co-founders | Hacker News Reader

My zero-equity co-founders

daemonology.net

134 pointscperciva48 comments

Let me for one second pretend to be your co-founder:

Hey Colin, that website sucks (even if it is much better than it used to be), we have too little traffic to really make a go of it and all we get is some of the HN crowd, the world is a LOT bigger than that.

Let's either make a real go of this or kill it because for the money it brings it it isn't worth the time it is taking from someone as talented as you. Our tech is superb but our marketing sucks, picodollars may be setting a new standard for fairness and humor in pricing but nobody outside of a bunch of nerds are interested in that sort of thing.

There you go ;)

And I don't want any equity either. And Amazon would never tell you that.

The real value of 'co-founders' is not that they're wheels in a machine, the real value is that they will tell you when you are wrong about something. And that equity helps to keep your goals aligned, that way everybody wins at the same time. AWS will just send you a bill for services rendered, they couldn't care less if you swam or sank.

Let me just add here that I second jacquesm's assessment.

You really do need to stop worrying about the technology and start worrying about your marketing.

I love the point you make about the extended leverage open-source and outsourced code gives us. However, all of your competitors have the same advantages.

I should know, Gridspy's (http://gridspy.co.nz) marketing hasn't really even taken its first steps yet.

Hm, I just thought of something. Colin should team up with Patrick, they'll rule the world within about 3 years.

Your "buy now" looks a bit funky on Opera on Linux, nothing huge, but you might want to get it fixed!

Thanks for the heads up.

Honestly we have a massive TODO list and our front page needs an overhaul.

Single founder here (although I have a partner now) and I completely agree with everything you say, but I get the impression that Colin is happy with the way he's doing things. Otherwise he'd have changed it by now.

The fundamental tech works extremely well but is poor from a ux position. I don't think he needs a founder to fix this, he needs developers, a service manager and someone to handle marketing.

The real value of 'co-founders' is not that they're wheels in a machine, the real value is that they will tell you when you are wrong about something.

I have had co-founders disagree with me and guess what: one of us may have been right. The problem is, we never really never which. Half the time a co-founder told me I was wrong, I considered their feedback and stuck with my gut anyway.

Make no mistake about it, a good give and take between co-founders is essential, but it doesn't matter which of you is right or wrong, what really matters is what your customers think.

Replace "co-founder" with "customer" in the quoted sentence and then you have something there.

This reminds me of the old joke about 3 baseball umpires:

Good umpire: I call them as I see them.

Better umpire: I call them as they are.

Best umpire: They aren't anything until I call them.

A single founder is the good umpire. Co-founders are the better umpire. Your customers are the best umpire.

Co-founders are the better umpire. Your customers are the best umpire.

Indeed. Getting feedback from co-founders can be a problem if they live in the same echo chamber as you -- in contrast, as a single founder I have to listen to my customers, because they're the only people who talk to me!

(I'm not saying that you shouldn't listen to your co-founders, of course. Just make sure that you don't spend so much time listening to co-founders that you end up not having time to listen to customers.)

Without the feedback of my co-founders over the years I would have been stuck many times.

I agree that when there is a conflict of votes (1:1 for instance) that it can get hard to manage things, but between smart adults there should be a way out of that without hurt feelings or someone being sidelined.

If the dispute is over something that can be tested, test both, if the dispute is over a direction to go in pick the safe one if the risk is large, the risky one if the risk is small (and have a plan 'B') etc.

Democracy is not the way to go within a company, one person gets to make the final call, who that person is should be agreed upon beforehand.

If the co-founders really are on equal footing I would suggest giving 1% of the stock to an independent third party with lots of business experience.

Customers are great for product feedback, they are not that helpful when it comes to choosing direction and strategy.

I agree that the customer is the ultimate measure and I'm a fan of this whole lean startup thing. You're right that the only thing that ENDS UP mattering is what customers think. But to use that as an argument against having a co-founder seems strange.

Co-founders disagreeing doesn't result in a flip of the coin to see whose opinion they go with. There's a heartfelt and intelligent discussion. Logic, experience, and a bit of intuition. One co-founder might say, "I know the team over at CompanyX who struggled with the same thing. They chose Y-- let's see how it worked out for them".

If the OP had a co-founder who was smart about marketing, design, and conversion funnels-- there'd be very few arguments in those areas, but there'd sure as heck be better decisions made being there.

In short, I agree with your point but I don't think it applies to this discussion.

The problem with this is that it leaves me asking, "Does cperciva know what a co-founder is?" A co-founder isn't someone you bring in with a one-way communication channel that does your work for you. That would be closer to, "my employees that I don't have to pay", except, well, you do have to pay for AWS.

There are lots of ways to shorten your path to market using external services, whether human or infrastructural. But they won't tell you that you're being a dumbass and help you steer the company in a better direction.

Just having people tell you that you're being a dumbass isn't enough, you have to have the wits to realize they're right too (when they are!).

Colin obviously meant it metaphorically but further down in this thread he says he uses HN for that. The harder part is to listen and act upon advice.

HN can be easily ignored if what people there say is not to your liking, but with a co-founder that has put money on the table for their equity that would not be so easy.

You don't know me and I'm just starting to post on HN, but I've read a bit of your writings and you're clearly a brilliant guy. I recently saw a thread from a couple years ago where a few people made the flawed assertion that the aggregate rate of failure among entrepreneurs was uniform, and that your chances of success were also 10%, just like everyone else. Your response basically said that you were quite confident you were better than the average entrepreneur, and that you were pretty sure you're on the right hand of the bell curve.

I actually admire that bravado in people who can walk the walk. I'm not a fan of false humility.

All that being said, you seem to wear the solo-founder badge a bit too triumphantly. I can't comment on the superiority of your solution versus competitors but I'll bet you can hold your own. Getting someone on board who can SELL your story, and communicate your product to interested buyers would probably do wonders for your sales if you found the right guy.

Trust me, I see where you're coming from. After a bad past experience myself, I am now a single founder building up my product in solitude. But I know where my limits end, and when my product is ready to go to the next level, I'll have no problem bringing on a VETTED and qualified partner to grow the company as fast as possible.

Just a thought!

Your response basically said that you were quite confident...

Ah yes, the old Putnam thread which gets trotted out every month or so...

I know where my limits end, and when my product is ready to go to the next level, I'll have no problem bringing on a VETTED and qualified partner to grow the company as fast as possible.

Sure. One of the bullet points from my talk which didn't get translated into the blog post was "Step 1: Figure out what you're good at". I'm very much aware of my limitations, and if I ever forget them tptacek will step in to remind me how horrible I am at web design and how I need to do a better job of selling Tarsnap.

As for marketing, I very nearly listed Hacker News as my marketing co-founder: Roughly 10% of Tarsnap users come to the website from http://news.ycombinator.com/item?id=389304 -- far more than any other single page (although my blog is more in aggregate).

That's not marketing, dude, that's some thin shreds of organic traffic. Perhaps you should listen to tptacek, wheels, jacquesm (and myself) and actually find someone who's competent at building a business, just as you are competent at building technology, and team up with them.

Would Steve Wozniak be considered successful by any metric if only 100 Apple computers had ever been sold? No. A business needs many things, of which a great product is only one. "Make something people want" implies you need people (enough of them) to actually want your product. If they've never heard of it or if they don't buy it because of some other reason, they don't want it. If only very few people buy your product, it's because it sucks on some important metrics.

Harsh reality: until you get your head out of your ass and bring in someone with the skills to turn your technology into a business, you don't even have one founder, because you don't really have a business at all... yet.

That's not marketing, dude, that's some thin shreds of organic traffic.

I'd say it's a thick shred. :-)

One of the benefits of Dropbox's popularity is that there are a very large number of people who google for "dropbox security".

It's all love, Colin. But you should get a cofounder.

I knew I could count on you to jump in with your usual advice. :-)

That doesn't make him wrong though. The fact that you consistently ignore the advice to get a co-founder given by people that mean you no harm to me means that you are in your 'comfort zone'.

The fact that you don't take some of the other advice at face value indicates that even if you had a co-founder it might not last long, so you might be right not to choose for having one :)

Mahmud offers a good third alternative though, between taking on a marketing savvy co-founder and going it alone in your own (I would add 'pig headed' here but I don't mean that disrespectful) way, a white label version would make a lot of sense.

That way you get to concentrate on the tech the way you want to and you can enable other parties that are more marketing savvy to be your shop front.

The fact that 10% come from that page is a problem, not something to brag about.

Given cperciva current situation, I expect he could grow his company just as well by hiring a sales or marketing professional, perhaps even on a part-time contract basis, and he wouldn't have to give up any control or equity.

Not even hire anyone. If he white-labels the service and lets others brand it, he will be sweet.

My zero-equity co-founder is the internet. If I had jumped back into 1960 I would have to spend 50 years creating the internet. He doesn't even want a cut of my company!

cperciva, I completely understand the sentiment, and I can relate to it as a single-founder myself (not really a "founder", not yet, for now I am a solo consultant.)

But I don't think infrastructure/libraries can be considered "co-founders", because they don't give you new ideas and insight.

You see, to be able to use a certain solution, platform, library, etc. You have to know of it, know of its uses, and know how you might use for a specific problem.

OTOH, co-founders, domain-experts with vested interest in your enterprise, are not just mere resources to be called upon when needed and put to use. They are not just a knowledge-base of solutions. No. They're engines for creating new solutions, but also the means to pose knew questions and problems. Problems you never knew you had, and solutions you never thought of, or thought were acceptable (like "who cares, forget it" -- humans are excellent at these types of dismissive approaches to problem solving; we have an intuitive knack for ruling out issues that are not worth bothering with. And by "we" I don't mean programmers, sticklers for the tedium and observers of minutia.)

At the very least, a human co-founder allows you to take a day off, picks up your spouse from the airport, and comes with you for happy hour. I would kill for someone who is "in" on it with me. These types of "benefits" might not merit any sophisticated Rumsfeldian epistemology ("there are unknown unknowns", etc.) but they're very important, and I say that as someone who sorely lacks them.

But I don't think infrastructure/libraries can be considered "co-founders"

A better way to express the utility he gets can be summed up in this article: "We Are All Open Source Billionaires" http://thecodist.com/article/we-are-all-open-source-billiona...

It's somewhat unfair to equate co-founders with web services and software. Co-founders can say "you can't do this dude" or "don't you think this'll work better?" or "hey I had this idea which I think is great" or go out and have a beer with you.

True. But if I want to hear people say "it's somewhat unfair to do X" I just come to Hacker News instead. :-)

fair enough :D

When I saw the title "zero-equity co-founder" I thought it was about inspiring employees to work as committed as an actual co-founder, which would be totally appropriate.

I think the downside of single founder startup is that 1. there's no one to bounce your ideas with; 2. speed to market is greatly reduced; 3. there's no one to share the stress or keep each other motivated when things get tough; and most importantly, 4. there's no one to share the joy when you manage to solve a business/technical problem that is not visible to outsiders.

I don't see any apparent advantage of keeping a single founder startup. You may have the ability to run the startup as well or even better as a multi-cofounder startup and keep all the shares - but it's not fun, and fun is very important for an entrepreneur!

It's absolutely not appropriate to ask employees to work as well as actual co-founders. If you want them to work as well as co-founders, give them equity. Hell, I expect my employees to fight me for their rights, when I don't give them enough.

If you aren't going to pay your employees like co-founders, they should very well not work as cofounders.

That wasn't what I meant.

What I was saying was that you want to inspire your employees with your vision, so that they feel a sense of purpose in your startup. When your startup is making meaning not just money, the satisfaction they get from doing work is more than any money or equity you can pay. They are committed.

And I'm not against giving employees equity at all. But inspiration is a higher level, and arguably the right kind of, motivation.

I agree, but I think that's something they grow into, rather than something you can enforce/influence. I have a feeling we agree, though.

A co-founder would be the one to tell you "What the hell is a picodollar?"

To be fair he gets plenty of that here, so for that he doesn't need a co-founder.

Yes libraries and infrastructure do not give you insight like a co-founder, but a large part of an engineering co-founder in a heavy engineering startup is perhaps %80 - %90 showing the strength and attention to getting the development right. For example managing an engineering team, showing attention to detail, making sure the design is exceptionally good etc. He has these two crucial pieces of technology at hand which would otherwise be developed by using most of the energy of a tech cofounder. So in that respect I agree with the point.

In summary, there are now tools to make it so much easier for startups that sometimes they can even do almost as much as a technical co-founder.

Tarsnap is a mediocre service - the co-founder you needed was one that could have brought a user focus that was apparently beyond you. I'd guess that the majority of your business is directly due to being one of the insufferable, self-satisfied minor pundits on HN. You say that fully 10% of your signups are _direct_ page referrals from HN - a remarkable and telling statistic.

Might I suggest that you invite some of the other big fish in this small pond over to join you? I bet that, say, ptacek would be good for an immediate doubling of revenue.

> This is an average of roughly one thousand lines of code per month, which is pretty much the limit to how quickly I can write high quality "never need to look at this again because it will never break" code.

What's your secret for being sure it will never break? How often do you find yourself revisiting it anyway?

All that OP is saying is that there would have been 2 extra co-founders, if it was 10 years ago.

My zero-equity co-founder is my Aeropress, for keeping me supplied with excellent coffee at all times.

Those same "co-founders" are working for a lot of other companies though.

Ugh. Link-bait title.

This is just as useful: http://news.ycombinator.com/item?id=1566568

It wasn't deliberate link-bait. I use the term "zero-equity co-founder" because it makes the point that these provide something which (until recently) you would need to bring in a co-founder for.

But the same can be said for _any_ component in your business that was made outside your office walls. Your operating system. Your compiler. Your office chair.

This is in fact how an open and free economy works. You always build on the work of others.

Yes, if you ignore the "(until recently)" part.

I'm not trying to be exceptionally profound here; just to point out that the giants on whose shoulders we stand are growing taller by the day.

Those components offer only the most marginal of value to the specific work at hand, though. They have application to 99% of startups.

Conversely, we see here two very specific components that make success orders of magnitude more easy. This isn't trivial and it's an important part of the overall realities of launching a startup in 2010.

Tasks that would have required another person five years ago can be satisfied by services or frameworks today. Instead of spending money on a server lease, maybe requiring investment when you can convince someone, you start small on Heroku/EC2/App Engine free, tonight. Instead of finding someone who's awesome at databases, you get free ORM with your MVC framework of choice.

These things aren't trivial. And the current situation is new and dramatic in just how complete the tools are. They let ever-smaller teams do ever-larger things with smaller and smaller investment. Seeing these as zero-equity co-founders can be cast in a gimmicky light but it's also a pretty economical means of description.

... except that AWS and libarchive didn't actually found your company with you. To be honest, the title of the post intrigued me and the actual article was a let down because it was completely different from my expectation.

If you look around the startup scene, you'll find lots of "co-founders" who aren't literal co-founders. Usually they're just early hires; I decided to be metaphorical in a different direction.

Personally I think "was around from the beginning and did a lot of the work" is a better claim to co-founder status than "was hired early in the startup's life and was given lots of stock".

The fact that it's intriguing doesn't necessarily make it link bait-y. My curiosity was engaged and the unique frame of the message increased the complexity of how I think of the single founder issue. I also have renewed appreciation for the heavy lifting I won't have to do thanks to existing libraries, frameworks and services.

Good marketing, yes, but the content was virtuous on top of that.

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