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Comment by lainga | Hacker News Reader

> while treating you like an idiot savant they can easily take advantage of.

I considered it a bit, and you know what, I'd wager that four-fifths of tech business dynamics flow from this statement. Technical expertise is the money printer onto which all manners of value extraction anchor themselves, like barnacles. If not at the creation, then, for a time, it is good. And then it happens anyway 5-10 years down the line.

That said, there are different failure modes for purely technical people not understanding business. But the market doesn't seem to reward them the same way. Root cause is outside the scope of this comment...

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> That said, there are different failure modes for purely technical people not understanding business.

A common one, I think, is technical people thinking management or business expertise is easy (or even beneath them) because they're so smart in other areas--and any problems they might have can surely be solved with the same tools they use to solve engineering problems, right? Which is kind of the flip side of the attitude of the kind of nontechnical founders we're talking about.

Another thing I'm facing myself (as a technical person) is when I've successfully dipped a toe into a management role, I was lucky enough that the people I was leading were all also technical people whose personalities were mostly in line with mine. But I've had to remind myself that if I put myself in a leadership position again, it won't always be that simple...

The biggest business gap seems to be assuming other people won't screw you over, given enough money on the table and the opportunity.

I assume most MBAs already know this.

Lots of technical people learn the hard way.

Yes, this. I've been in many startups but only once as a founder. I was the technical one, the only one with deep expertise in the core business area of the startup.

Well, my title was founder. All the other founders were on the board, I was not. All the other founders controlled budget, I did not. So really, despite the words on the offer letter I was just an employee. The founder title granted me the right to work 90 hour weeks with no help and no support and no budget to hire help.

At least didn't waste too many years on that one.

Learn from me. Spend some of your money up front and hire a lawyer with tons of experience in startups to guide you through contract negotiations and if the company balks at your (lawyer-assisted) terms that's your giant red flag to run very far away.

>> Well, my title was founder. All the other founders were on the board, I was not. All the other founders controlled budget, I did not. So really, despite the words on the offer letter I was just an employee. The founder title granted me the right to work 90 hour weeks with no help and no support and no budget to hire help.

>> At least didn't waste too many years on that one.

Firstly, i'm sorry to hear about your situation. I'm curious why you didnt negotiate harder some time into this. It seems to be you held all the cards.

I'm fascinated by the number of "business co-founders" who think they can cut a 25k check to some random person on eLance/Upwork and replace technical co-founders.

My recommendation would be to say -- sure, try that. Lets talk in 6mo if you still need me, but i'll set the terms at that point. 6mo is about when most non-technical people realize they have no code in source control and some random person overseas now owns their company effectively.

> I'm curious why you didnt negotiate harder some time into this.

I guess it comes down to being a techy engineer that doesn't know how to even begin to negotiate confrontationally.

Thus my thought that if I ever consider such a role again I'll find a startup employment lawyer to tell me what to do.

I've dealt with someone like that once but if they are any good they will never sit around and wait for 6 months. That person hustled very hard, cycled through several upwork teams and CTOs. through ruthless arm twisting kept all the code and underpaid everybody, finally settled on a CTO with 0 self-esteem and slave terms, and ended up building a rather successful company by now.

Competing with that naivete is the great delusion of technical people that "If we build it they will come."

(Speaking as an technical person who constantly meditates on that problem.)

> given enough money on the table and the opportunity.

In my personal experience it was never even that much money. Some people just really want to feel like they've pulled a fast one, even if all they really end up doing is wasting everyone's time. As a nerd who is generally not motivated by Machiavellian shenanigans, I have a hard time seeing these kinds of predators coming.

> I have a hard time seeing these kinds of predators coming.

Just imagine other people's value functions are exclusively "What's good for me?"

At worst, you'll be pleasantly surprised.

Yep. I used to be more charitable, but I've taken to being very short with founder wannabes who act like this. Bluntly, if they refuse to look past their preconceptions to see who they're actually talking to, why should I?

This is made easier knowing founders with those sorts of blinders are likely going to fail anyway, so you don't want to be in the blast radius when it happens.

Technical expertise is very rarely where the core value of a product comes from. If you're really pushing some boundary and just have a better technology product, like original Google or ChatGPT, then sure, tech is your special sauce.

For 99% of software businesses, the tech can cause the business to fail but its almost never what makes the business succeed. Things like customer development and sales are actually far more important.

Its hard to build a well-architected web app that scales, but theres many people who can do a reasonable job at it. But translating that to business value is much harder.

Theres many people can build a React project in a week, fewer who know how to turn that React project into money. That should be self-evident on a site full of people who know how to make a React app, but begrudglingly work for others because they dont know how to turn a React app into money.

The thing about "the business guys" is most of them are actually pretty bad at the business side. And a lot of developers are actually better at the business side, because they have more relevant experience.

The "business guys" get their MBA and learn about merges and acquisitions for billion dollar business and do case studies about how GM optimizes their supply chain, information that's useful in some contexts but mostly entirely useless when it comes to getting your first 100 paying customers for your SaaS.

The developer is actually more likely to have the relevant business skills since they're more likely to have put some sort of SaaS on the internet and tried to get users for it, even if they failed.

I was on YC cofounder matchmaking for a while and was inundated with "business guys" who were just bad at the business side. It didn't bug me that they were non-technical, but their non-technical nature led to some bad business planning. For example, one guy who worked in VC wanted to make a GMail / Superhuman competitor oriented towards VCs. I suggested we start with a Chrome extension for Gmail, he insisted we build an entirely new email stack from scratch for the MVP.

Making a realistic plan is part of making a business plan and his lack of technical acumen made him bad at business.

If someone came to me and said, hey I have a super pared down MVP, it's just 4 screens in Figma with a minimal data model, and I have 100 people who I showed the Figma screens to and they signed up to pay $50 a month, can you build it ? I'd be thrilled to pair up with a "business guy" like that but they are far more rare than a good tech co-founder and the business types that get that far tend to offer things like "founding engineer" instead of actual co-founder because they, somewhat fairly, assume that the skills you're bringing to the table aren't actually that difficult to find.

But to recap, my high level point is that the technical expertise is not really the money printer. The money printer is mapping market demand to technical products, which is a business skill. And that business skill is worth a lot more than technical skills. Its just a type of business skill that you find more often in developers than you do in MBA, and so we don't associate it with "business guys". But it's the most fundamental of all skills to make money from software, other than a handful of "exceptions that prove the rule".

This whole comment was beautiful.

Especially this part:

"But to recap, my high level point is that the technical expertise is not really the money printer. The money printer is mapping market demand to technical products, which is a business skill. And that business skill is worth a lot more than technical skills. Its just a type of business skill that you find more often in developers than you do in MBA, and so we don't associate it with "business guys". But it's the most fundamental of all skills to make money from software, other than a handful of "exceptions that prove the rule"."

As an ex-shitty business guy, I taught myself how to code thinking that would solve my problems. Nope. Now I'm just a shitty business person and a shitty dev. Forcing myself to do the actual work of talking to customers now.

> Nope. Now I'm just a shitty business person and a shitty dev. Forcing myself to do the actual work of talking to customers now.

This level of humility will take you far. You will get better at talking to customers over time, keep grinding, keep practicing, it gets easier. And one day the switch will happen, they will look up to you as the knowledgeable consultant instead of looking down on you as the 'shitty business guy' with nothing of value to offer.

> This level of humility will take you far. You will get better at talking to customers over time, keep grinding, keep practicing, it gets easier.

Thanks! I launched my first large-scale cold outreach campaign this morning after learning about it this week and building up leads. Tomorrow, I will try out cold calling.

Thanks!

I'm in a similar boat. I'm not lecturing anyone having learned from success but having learned from failure.

I just spent an entire year spent building software products and they almost all failed. I wrote a long retro (too long, not edited, more for myself than for others, but if curious: https://www.billprin.com/notes/one-year-retro ) and the #1 cause of failure I wrote down was not doing enough talking to customers and customer development.

The one project I have that has a tiny bit of recurring revenue was not originally a project I had set out to build. I cold-DMed some people in a Facebook group and pitched a different project, and one guy told me he didn't like what I built but might pay if I built something different in the same space. And that was the only product I have thats worked. Goes to show the obvious - talk to users!

I see a lot of indie hackers talk about "audience building", and my initial read of that the purpose was that if you get a ton of followers on Twitter, then when you launch a product, you have a bunch of people ready to sign up. Increasingly, I'm thinking the much bigger value of audience building is that it's easier to get people to tell you what to build in the first place.

So yeah, customer development is not some magical thing that requires you to be a "business guy" or anything else, but it's hard, it's important, and sounds like we both need to do more of it :)

> I'm thinking the much bigger value of audience building is that it's easier to get people to tell you what to build in the first place.

Yes!

It’s basically inbound sales for business ideas.

I want to say (as GP) good points. Thank you for disagreeing. When I think of the business, my worldview underweights the cases (the 99%?) where technology is only an enabler to the business case - I guess because I don't think it's as interesting as the pushing of boundaries.

> The money printer is mapping market demand to technical products, which is a business skill. And that business skill is worth a lot more than technical skills. Its just a type of business skill that you find more often in developers than you do in MBA, and so we don't associate it with "business guys".

I think you're underplaying the ability to map requirements to a feasible and sufficient technical product. Being the person who is also mapping the market demand to the technical product makes this process significantly more efficient.

I also think there's a lot of overlap with Software Engineering (with a capital 'E') in these skills - a lot of this is about figuring out what to build and making sure you've built it. I believe that's why they're more often found in developers than business types.

>> For 99% of software businesses, the tech can cause the business to fail but its almost never what makes the business succeed. Things like customer development and sales are actually far more important.

I STRONGLY disgree with your take as a universal take. At the pre-Seed stage, the technology is the only thing. Without that, you dont have a technical business. You just have a pitch deck.

Of course, once you prove out the idea and reach product market fit, that enables you to either have cashflow or raise funding -- so technology becomes less critical because you can use the $ to hire technologists.

If "mapping market demand to technical products" was really the money printer, every management consultant would be running a unicorn. Every MBB consultant would have a side startup. You actually need the technical product, or some MVP of it, to map a market demand to it, to do demos, to raise funding. If you dont, you just have a pitch deck. Sure, if you can raise on a pitch deck, that is winning, but how many can?

A pitch deck is something you make for investors. I'm not talking about investors, I'm talking about customers.

Lots of management consultants can make a pitch deck. Very few can actually find people willing to pay for an MVP of a software product.

That was pretty much the point of my post. Most "business" guys are bad at the business side. Making pitch decks and raising funds is not the business side - except in some people's little side-circus. Understanding what customers want and figuring out what's the minimal version that people will pay for is.

You show me a management consultant that actually has 50 people willing to pay for an MVP, and that person can easily have a side startup. In fact, please put me in touch. Very, very few of them can actually do that. And even if they don't have a developer, I imagine an investor would be pretty impressed by that too.

Again, I'm speaking in generalities. If your technology is "turn common trash into gasoline" or "teleports people across contintents safely", then yeah, you don't need many business skills. But if your technology is "a scalable web app", or "I forked stable diffusion and did something cute with it", then the business skills are more critical than the tech skills.

Preach

It somewhat depends on the product, but in the beginning, I think the tech only matters inasmuch as it allows you to iterate quickly and build a product people love. It can be a spaghetti code tire fire underneath.

What really matters is market insight to understand what people want, design ability to give it to them, and sales/marketing to get traction. You do need a good engineer to pull this off, but they need to prioritize iteration speed, not engineering quality.

> getting your first 100 paying customers for your SaaS

How do I get my first 100 paying customers for my SaaS?

> Technical expertise is the money printer onto which all manners of value extraction anchor themselves, like barnacles.

An even easier way to look at this is in general: Business people somehow don’t understand that the value comes from the labour

The other parts of the business are labor as well. Products don't magically go to market. Business models don't magically create and evolve themselves.

>> The other parts of the business are labor as well. Products don't magically go to market. Business models don't magically create and evolve themselves.

You are right, but it is about which labor comes first. The first labor is taking 100% of the risk without others taking any risk. Others have all upside and no downside. They have a free-option for the upside as the technologist does all the upfront work.

The idea that everything that comes after initial unpaid technical work to get to where you can bring on investment is "all upside and no downside" is so divorced from the reality of anything I've ever seen in any company that I'm having trouble processing it.

It is a surprisingly common reality for numerous technologists.

That doesnt mean that there arent good situations. I would LOVE to work with business co-founders with these backgrounds

- They already have 10 customers in mind, have done mockups, have done validation with customers, and you can verifiably know that the customers are interested in the technology at a particular price point before you build

- They have a friend/colleague at a key major customer who is willing to be the first customer before the technology is even built, and this can be verified

- They can bring in purchase orders before the technology is built out

- They can bring in conditional purchase orders contingent on some technical milestone

- They can bring in VC to pay technical co-founder for upfront work

- They can get front-row seat with some key industry group or policy-maker with influence

- They have prior verifiable successes (e.g., Steve Jobs, Elon as extreme examples)

All the above are worth gold. What isnt worth gold is someone who wants to sit back and chill while a technologist codes away for six months.

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