I recently walked away from a potential startup because my non-technical partner (MBA ideas guy) wanted an 80/20 equity split in his favor. I was the first to broach the discussion and proposed 50/50. It was a severe misalignment in expectations, and this was after 3 months of meeting regularly to refine the idea and build out prototypes (read: I was building the prototypes).

My advice is to have this conversation with a potential business co-founder as early as possible to avoid wasted time. I could have saved myself months.

Look out for business guys who severely discount your value as a technical founder. Not saying they're all like this, but a really skewed equity split is typically a red flag.

I don't agree at all. Not even with the premise that "there are significantly more business guys looking for tech guys than the reverse".

There are a lot of business and tech guys and most of all of them are pretty clueless when you randomly meet them in "gatherings".

But a valuable business co-founder brings extensive domain expertise, a network of people, sales skills, management skills, and fund-raising talent.

There's little point in arguing who is "more" valuable -- the business side or the tech side. They're both critical to have.

For some reason, this post equates the "business side" to the person with the "idea". But that's a strawman. Having an idea doesn't make you a "business" co-founder. Being a business cofounder means having a experience and talent on the business side of things. And a good business co-founder generally doesn't have a lot of trouble finding good tech people, because that's one of those business skills that they're good at...

Well, pretty much everyone is less valuable than they think!

I've bootstrapped and sold two startups, first time with 5 (!) equal cofounders and second time with 3. I've learned a lot along the way, obviously some of that through mistakes of my own. Have my cofounders been perfect? Heck no -- one lacks the same level of drive, the other is less trustworthy (always multiple irons in the fire kinda guy). But we all have strengths, are all generally better off together, and have the combined skill set to run super lean. Even if you think you can do some things better alone, you can never do it all, and that grind will take quite a toll.

Related: over the years the topic of going into business with some of my best friends has come up, and I always say I would never do that. Running a fast-moving, high stakes business with multiple founders involves a lot of tough conversations and occasional relationship strain. My business partners are business partners first, friends second, and I think that's important to consider if you really value a friendship.

The ideal business co-founder has to be strong in distribution AND eliciting product feedback. This is why the “MBA types” and ex-McKinsey consultants fare so poorly - they’re used to companies spending loads of money to hear what they think. As an early-stage startup founder, nobody gives a shit about your product and no one wants to hear what you think. Your job is to identify where demand is highest in the market and then turn that demand into dollars. They also need to be excellent communicators who understand or at least appreciate how much goes into building products.

For those reasons, the best business cofounders in my experience, are former salespeople (for b2b startups), demand generation marketers (for b2c), and product managers.

Ok, but technical co-founders in tech startups are also less valuable than they think (as this blog post shows).

In reality there are four critical skillsets (outside fundraising) for a new tech venture: Operations, Sales, Product, and Engineering.

I've seen plenty of startups with a heavy focus on product and engineering flail about because they suck at operations, product, or sales. The harsh truth is your CEO better be excellent at one of Operations, Sales, or Product, and your CTO better be excellent at one of Sales, Product, or Engineering. And if your CEO isn't competent at operations, you're going to need someone who is. Dealing with HR, accountants, investor relations, lawyers, contracts, HR, and all that stuff is a big job that's hard to completely outsource.

Overall, if your founding team isn't at least competent in all four areas, you've got a gap that will be difficult to fill unless one of the founding team is willing to step up and learn that area fast. Sales (or marketing, for consumer apps) might be the exception, because in my experience everyone on the founding team will wind up needing to learn it early on.

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?

Living in NYC, I have been around a TON of venture backed startups with the classic non technical CEO, technical CTO. Some HUGE percentage of startups see the CTO fired once the tech stack and revenue are stabilized.

The incentive from the CEOs perspective to remove a contender as well as claw back the equity is huge. Early stage the CTO is the most critical, but after real traction they can be replaced far easier than most want to admit.

My advice for technical founders is to always place themselves first, from a legal and organizational perspective. For a technical founder with social skills, a non technical founder brings very little value relative to their vesting in the early stage.

The article reads… interesting. A business depends on its demand, competition, scale, operation costs and numerous other factors. If the product is a tech, a technical founder can have immense impact on future success but marketing, customer acquisition, sales, networking, fund raising and other huge headaches are often burdens carried by non-technical counter part.

Of course, the person building something from a vague idea to life wields magical power, but the other aspects of business are more so important.

As an engineer myself, I can see 500 ways I can improve things at my employer’s business, but while I have a technical vision, the non-technical founders of the business has broader picture and what I may wish to spend time optimizing might just be a pocket change issue not worth solving.

We technical folks undermine the mountain of difficulties of marketing and sales as well as interacting with people to convince them to part with their money. Of course, I have seen a fair share of over confident wanna-be founder who would just be next trillionaire if someone would build the 10000th Airbnb clone but for pets so they could sell it and give 5% equity to the builder because their idea was the main thing, but in broad sense of things, tech is just a means to an end for a successful business and simply building is not the 100% of execution step.

You don't want clean separation between co-founders. They should overlap in skills and be multi disciplinary.

Having a tech founder that can't talk to customers or a business person that doesn't understand what the company makes or sells is not a great recipe for success. That's two people that probably can't even talk to each other. That's not a team.

I've learned the hard way that being a CTO means I need to talk to customers and it's one of the more important things I do. There's nobody more qualified in the company to explain what we do and how we do it than me. I don't initiate the meetings and I don't close the deals but having access to me is an important part of the process. It reassures the other side that we are bona-fide, can actually solve their problem, and they'll often do the same and bring in operational people on their side in follow up meetings. Once you have direct lines of communication like that, it becomes a lot easier to close the deal.

Also, being exposed to that means I learn what customers need, want and expect. No ivory tower is going to produce that kind of insight. It allows me to adapt to what is needed rather than me trying to imaging what it is they might need based on whatever filtered down version I might get from a business person. There is no substitute for first hand information.

And that works both ways. Business people without a connection to the product aren't very useful. They'll try to sell stuff that isn't there and they'll undersell stuff they don't even know is there. I've seen both happen. If you sell something that isn't there, you set up a deal for failure. You are misrepresenting the product and that's going to cause disappointment. If you don't sell what's there, you shoot yourself in the foot. Especially if it's something the customer would have liked to have. But business people are great for validating product ideas and trying to imagine how the business side would work early on is a good idea.

Cofounders are not great anyways of either type. If you are a business person, learn the tech stuff you need. It's easier today than ever. If you are a tech founder, it's even easier to pick up business stuff than tech stuff.

Investors always encourage it because it reduces their risk... One of you can be fired and they still have the backup. But when it is all on you there is no passing the buck.

Source: solo bootstrapped founder of a company earning $1,200,000 a month for the last sixteen years.

In reality, it should flipped! The technical person is the one who breathes life into an idea and should get the lion’s share

Then you want an employer/employee relationship, not a cofounder relationship. I would run, not walk, from a company with a founder arrangement where some subset got "the lion's share" for reasons like this.

Having seen plenty of businesses throughout my life, both successful ones and less successful ones I'd say the most important traits are:

  - the ability to execute
  - having drive, focus and flexibility to adapt
  - being able to manage a team and keep it focused, motivated and on track

In a perfect team the business founder has a very good understanding of the tech side and the technical founder a good understanding of the business and marketing side. Product is nothing without sales and sales nothing without product. Despite this being obvious I have seen several companies fail on this.

Last not least it depends on the product. The more complex the tech is the higher the share of the technical partner should be and vice versa the more specialist business domain knowledge is needed, the higher the business partner's shares are.

This post is hilarious and details exactly why so many startups die in infancy. Yes yes, engineers are brilliant and without them nothing ever gets built.

And even still, sometimes things get built and never turn into a real business precisely because of this hubris. And 99.9% of the time, the ones that DO grow over time would have grown much much faster if "the business guy" had been there all along.

The reality that I've experienced is: Most any function in a software company can be learned to an effective degree by anyone, if you take the discipline seriously, have the right mentors, and dedicate time to do so. Engineers can learn to be good founders and salespeople. Marketers and managers can learn how to commit code.

The reason, I tend to think, why business-focused co-founders might be less valuable than tech-focused co-founders in a tech company is, in my experience, that all founders surface their own biases in how their companies are designed based on the comfortable experiences of their past; and you need those biases to lean toward the tech in tech companies, because tech can automate anything per the previous paragraph.

I've seen this surface subtly: "Yeah, Stripe integration to take money makes sense, but its just not a priority right now. Sales can handle invoicing." (it never becomes a priority because once you give DepartmentX that responsibility they'll fight to defend their turf).

I've also seen it surface less subtly: A VC-backed software startup with mid-eight figures of funding, all the investors thought the company was selling software, but it turns out the salespeople were never trained on that, and were instead told to only sell white-glove services, using the software, from another department. "Bigger contracts" etc. Engineering leadership was oblivious to this happening for at least two quarters, because who knows, users were still signing up, "sales handles the invoicing", they weren't tracking the right things, maybe some layer of intentional deception. Chicken & egg "the software doesn't sell" "you weren't even trying to sell it". Engineers are expensive -> Engineering layoffs. They're now a zombified services company, who took on 70 mil in venture capital to sell software, with zero full-time software engineers. The CEO's professional work history? Selling services of this exact kind for some provider for twenty years. They took rocket fuel to start a bonfire, and it blew up the block.

Having started businesses with the explicit lack of biz-co-founders I beck to differ. That is of course unless your da Vinci-like super modal capabilities allows you to feel unlimited joy when doing business plans, taxes & marketing alongside your (hopefully) core competency of product development.

I’m not sure it’s fair to say Zuckerberg’s only advantage over the Winklevoss brothers was his engineering skills. I think he quickly understood the whole dynamics of that potential business and had a more clear vision. Being able to digest a lot of seemingly disparate information (e.g. how college students responded to the “hot or not” prank) and create a compelling vision along with a path to get there, that’s both very hard and very valuable.

But I do agree with the overall sentiment that these ex-McKinsey “business co-founders” often lack the most valuable skills. I’d even go as far as saying they are generally quite bad “idea guys”, in the sense that they are more Winklevoss than Zuckerberg.

I even have a sneaking suspicion that Europe is so far behind the US in the startup game partly because the “ex-McKinsey guy on top” anti-pattern is the social norm here.

The entire article can be boiled down into: a "business" co-founder is someone who brings in business. Otherwise they're the "idea guy" and idea guys are worthless.

Last summer I met two cofounders to take the leap as a potential founder. I wanted an equal equity split among the founders. They wanted to split the equity like 40/40/20. That 20 would have been me, the only technical founder building the entire product.

I walked away.

I have been on both sides. And I agree.

I have been a "business co-founder" for many years. I learned to program at a professional level 5 years ago. Today, i spend most of my time as a "tech-co-founder".

Now that I am on the tech side (and argubaly, product development side), my value is through the roof. Here is what I mean:

- The business co-founder types will convince you that "selling" the product is the main thing. They are right. But sales starts with WHAT you build. That is, with product development. What you decided to build and what you are able to build is very much a part of the marketing. - Selling a well positioned product (where position starts during product development) is much easier that 'force-raming' your product to people who do not want it. 'force-raming' is the main marketing skill most people have. - Ideas mean absolutely nothing. - Marketing is important but it's not hard to learn the important parts. In fact, I can give it to you right now: (1) start your marketing at product dev time. Decide which specific problem you will solve, then solve it, (2) Find a community to share your finished MVP to them. Don't just spam the community, join it for a while, make friends, chat, add to the conversation and (3) refine the early product with the early users from said community. Then supercharge marketing with some ads (FB or Google).

^^ this is the 0-1000 user plan. And developers can do this without a "business co-founder"

The value of a business co-founder lies in their ability to build business relationships and extract value from them.

The value of one founder to another lies in complementary skills and perspectives engaging start-up issues in a productive way, which usually means deep levels of mutual understanding and trust -- which can be antithetical to business relationships and personal comfort. So: hard.

The CEO/COO split reflects the difficulty of scaling this.

Is the solution to talk early? Maybe, or maybe that interferes with trust-building. The key thing I believe (here and elsewhere) is to avoid projecting what you want or fear into what you have. If it's important to success, validate it. For that, it helps to have people willing and able to be honest and truthful, particularly about unknown unknowns -- even if it is otherwise their mandate and mission to project confidence and gain trust.

This is crazy. I’m a technical cofounder of two businesses and in both cases the product would be completely dead on arrival if it wasn’t for the business cofounder. They intimately understand the business landscape and have all the contacts and context required to find customers.

As is the case with most complex problems like this, the correct answer is: it depends.

In this case, it depends on what the crux of your business is. Sometimes the crux is building world-class technology. Sometimes the crux is customer acquisition.

If the crux of your business is customer acquisition, then an exceptional business co-founder will actually be the most important ingredient to long-term success.

This is one of the biggest weaknesses I've noticed in YC's mantra. In most industries, just building something people want doesn't lead to success - you have to excel at customer acquisition also. And, in these industries, as you business matures, you realize that customer acquisition, at scale, is actually the hardest problem to solve.

Absolutely agree with this article! My startup days are more than a decade ago but even then it was already well known - hence why tech founders with a bit of experience stay far away from these people.

The best part of the article: > [...] you should demonstrate it in one of two ways that are relevant to your venture:

> Generate a big waitlist (> 1,000) for B2C play > Get > 20 businesses to sign an LOI for B2B play

Ideas are cheap.

This is the business MVP worth spending 50% equity on and worth investing your time to build the tech prototype.

My best tip to handle business guys pestering you with ideas is to say "Great idea, bring me some clients and I will build the solution, then we can revenue share".

I usually never hear from them after this.

> As you can imagine, this is highly unattractive to skilled engineers who know their worth. No one sane wants to leave a high-paying cushy job to work for (not with) a bossy guy while battling the already intense stressors of Entrepreneurship.

I can relate to that. I am creating a small product and more than the salary, I want to escape 9-5 because I want to exercise product and technical agency that I do not have in my current job, and going from that to not have an increased level of agency working for someone, especially for a co-founder.

A non-tech co-founder can bring value in two ways; their social networks and deep market domain knowledge.

Finding a good niche and refining a concept to find market fit isn't easy. As a tech guy, it's often not clear where the business value is.

I recently implemented a feature for which I didn't see the full value initially. Once it was done, my co-founder said something like "This feature will make our target audience's eyes pop out of their heads." I can actually see it now but it wasn't clear to me before, yet it was always crystal clear to him as he himself fits within the target market.

Anyway we'll see where this goes, there are a lot of factors at play but in any case, it's nice to have that degree of certainty that yes, we're addressing a genuine need.

If your co-founder isn't within the target market then you're basically just guessing what users want and that's a bad approach.

Sometimes it's more complicated than that though, and that's when you need social networks. For exampls, I've built solutions in pure tech (dev tools) but it's very different. Dev tools is a weird market because it's heavily monopolized by big tech and the target audience (developers) have little say over what tools they get to use on the job. So the fact that I'm in the target market doesn't actually add much value there. Even if the target audience loves something, it doesn't necessarily translate to sales. You have to have experience with developer tools from both a corporate and non-corporate perspective to understand that.

Somebody has to manage the business relationships and go out and sell. Somebody has to be in charge of marketing, payroll, and PR. Somebody has to be the public face of the company, out networking and attending trade shows. If you’re a technical founder and all this sounds like fun to you, then yeah, a non-technical cofounder would not offer much. But there’s something to be said for having more time to put your head down and build.

If you have a shred of your own morals you’re less likely to have to compromise on those with an MBA who’s guaranteed not to have any.

My first and second "start ups" (90s) were peopled by very technical people and no "professional class" (e.g., HR, BizDev/Sales, etc.) beyond finance. I joined a third as an executive and it, too was missing HR and Sales.

We added sales (later HR, sigh) and it was (eventually) transformative.

My point is that you can have the greatest technical team and lack of sales and shitty toxic culture will mean no growth/stagnation/running out of cash.

You can also be (this is probably the default state) a pure MBA-play where you are a "sales driven organization" that has shitty product and shitty technical culture.

You can rarely have a successful business (unless you are large enough!) without some degree of both. So stating that "business cofounders" or "technical cofounders" are less valuable/overrated reads like low effort click bait that resonates with really inexperienced "professionals".

Jeepers, I worked on two startups where I met a “business” person (first was a finance-type, second was a doctor, and we (I) proceeded to do all the work in gathering requirements, building prototypes, etc etc. In both instances, neither of the “ideas” people had any experience of being in any kind of project, and both wanted to discuss equity way too often. And in the event, neither of them as CEO did a blind bit of work. Classic management-by-walking-around. When I suggested to the second one that we might want to find an actual CEO he went nuts and started raving around how he had done all the work of setting up the company and coming up the idea - reader, there was nothing on paper, he hadn’t written anything down, he just wanted to explain it and have everything magically happen.

I realize this is all subjective, but the hardest problem in every startup is solving a real customer problem. I’ve never been part of a startup where the engineering was the hardest part, and I’ve been part of very high-tech companies.

An accountant maybe doesn’t add much, but a business major who deeply understands a customers need can be more valuable than any engineer.

The real problem with most "business co-founders" is that they are lazy and don't put in effort. Full-stop. I've seen this happen with enough of my peers that a "business co-founder" is never called a "business co-founder", but rather an operator or salesperson.

I don't man, I am fairly technical and have failed solo startups several times because I'm not good at the selling part (and I guess by extension build what people want). So in my limited experience, a co-founder that can sell well is really valuable.

For B2B, it generally makes sense to have one person whose job it is find and talk with customers while the other can focus on building/iterating the product. It helps to be technical for this but they have to actually like talking to people and ideally have a decent network for what you're selling. This isn't exactly sales but it's closer to 'sales' than it is engineering and so generally benefits from that background/skillset.

So in theory it makes more sense to team up with someone with that skillset than partner with another engineer but then one of you has to give up on the thing you're good at to do founding sales which you may-or-may-not be inclined to do.

IMO you want a business cofounder who has a tech background, but they have to be a sharp dollars person. Somebody has got to close deals, negotiate hard with suppliers, and keep the lights on. All things that engineers often don’t do so well.

This article seems AI generated, at least in part.

The opening image incorrectly refers to Erlich Bachman from Silicon Valley as "Erik."

OP goes on to claim:

>Paul Graham wrote in 2008 that Sam Altman was the best fundraiser he’s ever seen in his 30+ years in the valley. Sam was just 23 years old at that time!

That's not what the linked article says. That post has a single paragraph about Sam Altman that says he's good at fundraising but never says he's the best pg has ever seen[0]:

>Sam Altman has it. You could parachute him into an island full of cannibals and come back in 5 years and he'd be the king. If you're Sam Altman, you don't have to be profitable to convey to investors that you'll succeed with or without them. (He wasn't, and he did.) Not everyone has Sam's deal-making ability. I myself don't. But if you don't, you can let the numbers speak for you.

Also, Graham was 43 when he wrote that essay, so he hadn't spent 30 years in Silicon Valley. Viaweb was based in Cambridge and Graham lived in Cambridge at the start of YC. I don't think Graham even moved to Silicon Valley until 2009, five months after the post OP claimed was based on his 30 year tenure there.[1]

These errors are either due to AI hallucinations or lazy writing.

I think the better article on this topic is Jeff Atwood's "Cultivate Teams Not Ideas."[2]

[0] https://www.paulgraham.com/fundraising.html

[1] https://web.archive.org/web/20170306095108/http://old.ycombi...

[2] https://blog.codinghorror.com/cultivate-teams-not-ideas/

Your solution to bad business co-founders is for them to become sales people?

The traits and failures you are describing could be attributed to anyone including an engineer.

A good business person moves mountains while keeping builders free to build.

It feels like the business layer has always successfully commodified the developer layer, but developers don't seem to have any desire to commodify the business layer. It seems like the developer layer naturally wants to eliminate the business layer entirely. It is basically extinction if you let developers sit on the other side of the coin, so I suspect anyone on the business side of things will have to be a cut-throat survivalist (there's no other way).

The most numerous kind of people there, are nontechnical people who think they are technical, and nonbusiness people thinking they are business. Sometimes both at same time. Clowns. When you do custom development, these make up the majority of clients and they are the best clients to work for.

A business cofounder who actually goes out selling and puts in the same effort and time the tech people do is worth a lot. Unfortunately not many business guys are like that. It seems that they get taught in business school that they are the leaders and the tech stuff is just secondary.

how timely. a few days ago I had a meeting with two non-technical founders wanting to make some cloud based finance software.

The double whammy, is that with the powers of ChatGPT on their side, they honestly thought they figured out the big architecture problems and were very unhappy at me pushing back at their design decisions. They wanted me to validate their ideas, not ask what the core user scenarios were (to figure out what tech was needed for an MVP)

"Idea co-founders" are less valuable than they think.

Unless they are carrying a number (funding, sales, users etc.) they aren't even doing "business"

In the B2B case, if the co-founder knows the industry and has connections to potential customers, that is very valuable. A business degree per se is not.

I’d say, what’s most important is to find someone who has opposite strengthens.

If you aren’t strong in marketing or design, it’d be ideal if your cofounder was … etc.

Really, the business side is responsible for sales, investment, and maybe product.

But if the business side can't sell or raise money then they're worth;ess

I'd love to build something from scratch but don't have a lot of ideas, where do you find a business co-founder?

Everyone is less valuable than they think, especially in a tech startup

Great blogpost with some nice insights.

Though I had to roll my eyes at the “inventing AGI” part.

Also it’s Steve Glass not Steve Grass and when a word ends in an s sound you don’t have to add another s after the ‘ when making it possessive. So it would be “Steve Glass’ idea” instead of “Steve Glass’s idea”

I’m sure you’ve heard this.

Rough pre rev valuation!

Every engineer +$500k

Every MBA -$1m.

True but lions share requires teeth

See also https://www.breakneck.dev/blog/no-tech-cofounder and related HN discussion https://news.ycombinator.com/item?id=39902372

And even less than that

Sweeping statements in HN posts are less valuable than they think.

Very pro-labor/anti-capitalist take. Not that it's wrong!

> In reality, it should flipped! The technical person is the one who breathes life into an idea and should get the lion’s share.... The riches are in the execution. The work done.

Labor is what makes capital useful. Otherwise it's just a pile of money sitting there.

besides speaking good english, what else do non-technical folks bring? maybe a good family name? /s