Comment by neilv | Hacker News Reader

Comment by neilv | Hacker News Reader

One thing I've wondered about for awhile: How do you find a business co-founder you can trust?

For one example, the article says that some of the best value that a business co-founder can contribute is disproportionately building the relationships. But those relationships can be more connected to the business cofounder themself, than to the company.

It's a bit different for the technical co-founder, since your perceptible contribution is usually IP expressed in in artifacts like code that is owned by the company, and can't legally be taken with you.

There's also the perception of the value of that IP: much like a novice programmer might think that most of the value is in their own software/knowhow/grind/brilliance, the novice business person might think most of the value is in their own ideas/leadership/network/hustle/brilliance.

The business person might also perceive the technical contribution as being commodity skills, and ones that can increasingly be done by "AI" robo-plagiarism for $20.

So, if the business person is, say, having second thoughts about the 50/50 split, they can make a backroom deal with investors to cut out the technical cofounder, or bring their new relationships with investors and/or customers with them to a different (or 'different') startup.

Obviously, one defense is for the technical co-founder to somehow be a superhumanly valuable non-commodity, and to make sure that the business co-founder understands that.

But, realistically, doesn't the technical co-founder probably need a lot of trust in their character and commitment of the business co-founder? Maybe even more than vice versa?

Hey, OP here. I agree.

If you get a list of all the startups that got acquired or IPO in the last 10 years, you will find it's extremely rare the technical co-founder is still around. The staying rate for CEO is like 99% while the staying rate for CTO is more like 50% (making up numbers here but this is directionally right).

With enough scale, a great CTO can be hired for the right salary. The way I answer this for myself is two-fold:

1. I've vowed I will never be the second chair guy because I don't wanna get pushed out.

2. It's important to up-skill yourself so you can contribute more value than a glorified engineering manager by driving vision, being a headhunter of superstar engineers, among others high-value skills

This is something you learn when you actually raise venture and meet peers that have raised capital. Beyond the very early stages, the CTO can easily be replaced, the CEO is the face of the business.

Anyone can do a back room deal to screw their partners. Mark Zuckerberg was a technical founder, for example.

Maybe, although students in the dotcom boom was a different situation than now.

(Source: Was one. Many people were trying to fund you, sometimes without you even asking. And you couldn't go to a student party without some Sloan or HBS student zeroing in on you, and wanting to talk with you.)

> some of the best value that a business co-founder can contribute is disproportionately building the relationships.

The other subtle thing I take issue with on this is: What relationships, exactly? Most of the time I've seen this surface as a few early customers you might not have otherwise gotten, which is great and necessary, but IME that well runs dry pretty quick, and those customers oftentimes don't stick as well as ones that were found on merit. A better relationship with vendors? Again, weird, merit should trump that personal relationship.

If you're building a business that relies on a small number of very high value contracts, I think I could see a world where having a foot in the door on those high value customers is worthy of elevating the body that foot is attached to toward Founder. That isn't, generally, how most software companies sell software though.

The point I maybe did not stress enough on is the relationship aspect is two folds:

- Have ability to gain hard-to-obtain relationships in the beginning

- Have ability to grow the pace at which you gain those over time

It the beginning it will give you the money to play the game long enough (ie: customers and angel investors). In the short term it help tremendously in deal-making, fundraising, enterprise sales, hiring superstar employee. In the long term, you can broker insane deals like OpenAI convincing Microsoft to invest $10B and bet their AI future on you or get acquired.

PS: Microsoft is now backtracking out of that situation, but Altman convincing them to get in bed in the first place is very impressive.

>One thing I've wondered about for awhile: How do you find a business co-founder you can trust?

You can only look at past actions. Even the self-proclaimed "most ethical" people change the moment there is money on the table and their hired professionals are telling them to take as much of it as they can get away with.

If you are the technical co-founder who is writing code you should ensure you have legal protections before anyone else has access to what you have written.

This can be a legal agreement or built in protections via copyright law.

Same as any author who produces work that others can profit off of in perpetuity, don't sign your built in protections away.

In the example I'm giving, code IP isn't very relevant to a business cofounder screwing, because the (real or perceived) value of the code IP is less than the relationships that may be tied to the business cofounder.

All the code IP protections mean, in this regard, is that the technical cofounder has less value comparably tied to them personally.

Reply on news.ycombinator.com