How to get a shitload more chances of succeeding

In the first 4 years of my startup life, despite my own rookie errors, I saw many other entrepreneurs doing something that I didn’t understand. They were creating a company in order to be able to create a product, which to me seemed absurd. I always thought the correct way was to create a product in order to be able to create a company, not the other way around.

Then, on a beautiful day, I saw an interview of Fred Wilson, which confirmed to me that I was right. You have to create a minimum team to start with, build the product and test it against the market. If you have good feedback, a real demand for your solution and cannot keep up with this demand, then you start to build a company with the people, the processes and the structures that compose it.

Build a complete minimum founding team to build the product

Before starting, you should be able to build a minimum, but complete, team that can create the product almost entirely by itself. You need people who can fill one or more of the following roles:

• The market expert: the one who has already done something in this market, could have worked for a company in the space, or who is a potential customer of the new product.
• The business guy: the person who will talk with customers to understand their problems before creating the product; who will show the MVP to potential customers and get feedback; who will try to sell the product; who will try to figure out a customer acquisition channel.
• The tech guy: the person who will develop the product, from backend to frontend, web and mobile, and everything in between.
• The designer: the one who will figure out how to make the product magic. That means: study the user flow, evaluate user interaction and then create the interface.

I am a big believer in a team where 2 or 3 people wear the hats of all these figures. In Fanchimp we’re just two people, where I am the business guy and tech guy and my partner, Nicoletta, is the market expert and the designer. You don’t have to be born into one of these roles, but you have to understand that embracing this philosophy will increase your chances of succeeding.

The problems arise when there’s one of these figures missing in the founding team. Usually it’s the tech guy, probably because this person is harder to find (or because you have bad judgment). The usual solution here is outsourcing the development of the product to an external company. However, that company, despite how awesome and fast it can be, can never replace the tech guy in your founding team.

The problem here is not directly the costs of the outsourcing company, but the time required. More generally, what I call “the experiment time lag”. Having a technical cofounder allows you to launch the product in 1–2 months (from the moment you go full time). But when you have to rebuild another product (because the market doesn’t want your solution) or you have to change it radically, you’ll need another month. If you have to make an A/B test on the landing page, this means 1 day of work, or less, not a week.

When you do the same with an external company,” the experiment time lag” goes up significantly. Do you need to develop the first version of the product? This means a delay of 3 months, plus the usual delay of 1–2 months. Do you need to do [put whatever you want here]? Well this is [put a shitload of time here] of waiting. This is natural: you’re not the only customer of the outsourcing company. Your product is not their primary focus like it is for you.

Having a technical cofounder gives you 50% more chance to succeed, because you can do 3 times the number of experiments in the same amount of time (and yeah, 50% is just a complete random number to say “a shitload”).

Tech employee

Yes, you can hire a good tech employee as soon as you start, but you will have to pay him a near-market salary and maybe even give him stock options. This lowers your runaway period. What is even more important is that he will never be as involved or committed as a cofounder would be. He’s just an employee who will struggle with tough decisions like: “it’s Saturday: should I go have fun with my buddies or develop some boring feature to arrive a day earlier to the deadline?” Or something like: “should I accept the work offer at Facebook, where they would give me a shitload of money to work on something that a billion people will use, or should I continue struggling with this startup, hoping that I’ll have a salary in 3 months?”.

Conclusion

I know it’s tough to find a cofounder, but this is one challenge that you as entrepreneur have to face, not just walk around.