You need a technical cofounder!

I've spoken with dozens of entrepreneurs that had great ideas for a technology product but didn't have a technical cofounder. In most of those cases I was auditioning to be that technical cofounder, either as a principal joining the effort or as a consultant that would play the stand-in CTO or architect. From these experiences I got to see just how challenging it is for a tech entrepreneur to start their project without technical expertise on their team. I would compare it to starting a fine dining restaurant without a head chef, they simply don't know what they don't know about what it means to build software. They might think they do, there is a location and tables and servers and drinks, but the actual details of what makes a restaurant a success are basically a mystery.

Because of this, the need for a technical cofounder is critical because of the mistakes they will save you from throughout the life of the project. The rest of this article will address three benefits of having a technical cofounder.

Scoping the bid

Because they don't have an experienced techie on their team, tech entrepreneurs will go to a 3rd party development shop to have their software built. The developers will do their best to get a sense of the project scope and provide a bid. Not knowing what to expect from a project bid is a huge gap for non-technical entrepreneurs. It means that the contract you are evaluating and paying for might as well be written in gibberish. It will say, usually in way too general terms, what is going to be built and how much it costs. What is missing from the bid is often the details of EXACTLY what is going to be built, in what technology, by whom, and by when. A project that does not have these elements isn't a project, it's a money pit of unknown depth into which you will begin pouring cash. It is in this ambiguity that the seeds of project disaster are sewn.

The problem here is that there is almost no way for the non-technical entrepreneur to fill this knowledge gap, even if they do their homework on software development practices first. This is where a technical cofounder is dramatically different that a consultant or advisor, and it's because of something called Agency Theory. Agency Theory tells us that owners of the company, people that have a financial stake, behave differently than managers, people that are simply paid to give their input. A good, well meaning technology consultant can do their best to provide sage advice, but will almost certainly not have the same incentives as the owner. In my personal experience this is because the consultant is checking into and out of the concerns of the business as projects, and therefor money, allows. These gaps in involvement can make it very difficult for even the most well intending consultant to provide informed advice.

Product Design

Knowing what is possible from a software development perspective and having a sense of how easy or difficult something will be is another hurdle for an entrepreneur. The questions I have been asked dozens of times:

Can't we just....? Can't we just integrate with this other system? Can't we just add this 'simple' feature? Can't we just get the data from Facebook?

The answer is nearly always the same: "Yes!", and then we dig into the details to identify the scope and price tag. This is where the differences between technical co-founder and consultant become apparent. The technical co-founder's job is to help you accomplish the business goal of having a sellable product at the least possible expense and in the least amount of time. The consultant's job is to sell project hours. These are two different ends of the incentives spectrum and can make a huge difference in the cost of the project. A technical co-founder should be pushing for product features and concepts requested by the business team to be validated as being valuable to the customer BEFORE writing code. This is something that can often be achieved as a manually executed feature of your product rather than writing software to accomplish it.

For example, let's say you wanted to add an rewards component to your mobile app product to try to get people signed up. You offer a five dollar gift card to Starbucks for the first 100 people who download and register for your app. Both your technical cofounder and your consultant will suggest you use something like TangoCard, a gift card fulfillment company, to make this easy. The difference is the incentives for how this gets done. The consultant is incentivized to integrate that feature into the product by writing code whereas the co-founder might suggest a no-code, manual integration (sending TangoCard a spreadsheet of people who sign up) at first to make sure your customers respond to the incentive. The difference between these two approaches is the time and money required to try out this new idea.

Product Quality

This is another area that deals with Agency. Technical cofounders will tend to do something that consultants don't, and that's write effective unit tests. The benefit of writing unit tests is that they can help improve a product's initial and long term quality if done correctly. Writing and maintaining effective unit tests for a project is a good software development practice and makes a big difference in avoiding problems down the road. The problem is that the project features can be accomplished with or without unit tests, so unless the consultant is specifically paid to write those tests, they might not get done. The cofounder, on the other hand, is going to have to live with the problems that might come down the road from not having unit tests and will be incentivized to do so. It is the cofounder that will be up at night fixing regression bugs that occur when code is changed six months after it was originally written.

It's all about the incentives

This article is all about incentives, and there are a number of ways to set up the incentives in a project so that you get the right outcome. Having a technical cofounder is just one of those ways, and it's one that I think results with a generally better outcome. I have played the part of both, consultant and cofounder, and I always try to do my best regardless of which part I play. This point of this article isn't that cofounders are better than consultants or that consultants are in any way bad, it's that understanding the incentives and how they can affect the outcome of your project may make the difference between success and failure.

And for those entrepreneurs looking for techies or techies looking for entrepreneurs, here are a couple of resources you might find useful:

• https://cofounderslab.com
• https://founderdating.com