Building It Well: Deeper Issues, Part I

By Dharmesh Shah, OnStartups.com

In the first (of hopefully many) comments to one of my prior articles, Daniel Howard wrote:? “”I encourage you to find deeper insights into things that look smart on the surface but turn out badly.”

I don”t know Daniel, but will have to somewhat grudgingly agree with his comment.? I should assume a certain degree of sophistication and intelligence of the readers of my articles and try to write something of value by digging into deeper issues with the hopes of having something semi-insightful to say. ?

Having had my share of “tough” decisions ” some of which turned out right, and some of which didn”t, I think there is plenty of opportunity to dig a little deeper and look at issues that Micro-ISV founder/owner/CEOs face that are more subtle and nuanced.

In his comment, Daniel was stating the obvious, which is calling me on the fact that I was stating the obvious. ? As he noted, of course we should hire that QA person instead of thinking about short-term gains and of course we should not halt marketing expenditures simply because we think we”re going to sell the company “any time now”.? These are “obvious” decisions which the savvy Micro-ISV founder intrinsically understands.

So, lets take a look this time at a deeper issue:? When is it time to bring on your first co-founder/partner/employee/co-conspirator?

In the life of many Micro-ISV founders there comes a day when an opportunity presents itself to help spread some of the work and bring in a co-founder/partner/employee/co-conspirator. ? The first time one goes through this, things can be both very exciting and very frustrating. ? On the one hand, there is the excitement and gratification of sharing. ? There is a very basic human need to share our success (which has the effect of amplifying one”s joys of achievement). ? We like to show others how smart and capable we are, and this is near-impossible without having someone intimately aware of what makes us tick and seeing things from the inside.? Though friends, family and significant others can play a supportive role, this is often short of completely gratifying because they don”t truly appreciate exactly how brilliant we truly are.? J ? On the other hand, there is also frustration because the partner doesn”t quite “get it” completely. ? He or she doesn”t write code as well as we do, doesn”t understand the problem as well as we do, etc. ? And, as fate would have it, there are often mixed results in retrospect of bringing in that early co-founder/partner/employee.

So, here are some considerations when trying to make this difficult decision:

  • The best partners that you will bring on are contributing value from day one. ? Despite learning curves, lack of knowledge of the company, lack of knowledge of existing products, etc. ? the best partners will likely be able to bring you value from the moment they start. ? If, within the first week, they are not creating measurable value (improving the product, deepening relationships with customers, increasing the hours that you get to sleep soundly etc.) then there is something that is likely wrong.
  • We tend to like people like ourselves ” for a reason. ? Though there is great power in supplementary skills (i.e. bringing on someone that is good at marketing, if you aren”t), it is often difficult to allow these kinds of people to help you if you don”t have some baseline trust. ? And, for many Micro-ISV founders, this baseline trust is predicated on a core set of technical skills and ability to improve the product that you can witness first-hand and see. ? Sure, they may be the best marketing/sales person that ever was, but they won”t be able to help you if you can”t respect their abilities. ? And, you likely won”t be able to respect their abilities unless they have some skill that you do understand and can assess. ? So, the most successful people you will have join your cause will be those that can contribute to the product directly ” and then later take on tasks that you might not be able to objectively understand or assess.? Please refrain from posing the argument that not all people can be good at both creating the software and marketing/selling/finance/operations etc. ? In essence, Micro-ISV founders are looking, to some degree, for clones of themselves. ? In reality, if they could find a way to increase the hours in their day, they”d do it all themselves. ? But, they can”t, so they decide to bring in outside help.
  • Try before you buy.? This is in the interests of both parties. ? Before you hand someone (regardless of how wonderful they may seem), a big chunk of equity in the company expecting them to do miracles, its best to let them jump in and do their thing. ? Often, whether someone works out or not is an issue of chemistry, skill, stage of life and myriad other factors. ? The only way to know whether someone will actually be able to help you and share your passion is to let them demonstrate it. ? Thankfully, this is a two-way-street.? Its also in that persons interest to see if they like working with you, can contribute value and generally like where you are headed before they get too deeply involved. ? If someone pushes you too hard, too early to be a “partner” in the company, take pause. ? The right person wants to have skin in the game, but only after they have figured out it”s a game they want to be involved in in the first place.?

The good news here is that you can often use role-reversal and empathy as an effective tool. ? Put yourself in their shoes.? If it were you, what kind of concerns would you have? ? What would you want to know?? What type of “respectful escape plan” would you be looking for before jumping in? ? If the person you”re looking for isn”t manifesting a similar set of questions/concerns/passions, etc. that you would have if you were in their place, its likely its not a good fit.

But, there comes a time in most successfully Micro-ISV shops where you can use the help and you”ll be missing out on opportunity by stubbornly holding onto the reigns too tightly for too long. ? Learn to find, attract and retain like-minded people.? It can be a lot of fun and very gratifying.

Dharmesh Shah is a serial software entrepreneur. ? He”s currently working on his third Micro ISV, hubspot.com which is building a hosted software platform for VSBs (very small businesses). ? When Dharmesh is not writing code or running software companies, he”s a graduate student at MIT in Cambridge, MA.

Comments

  1. Dharmesh, I really enjoy your writing.

    Deciding on the right co-founder can be one of the most important decisions that a start-up will make. Finding the right person can add huge value, while getting the wrong person can lead to years of misery. Along with the points that you make, I would add that you need to find someone who is comfortable with power sharing and who understands the benefits that can come from constructive conflict.

  2. Hiring your first person is a deep subject. This article really launches the topic. I expect you could write at least 3 more articles, if you wanted to explore this area more and weren’t in too much of a hurry to touch on all other other very interesting MicroISV topics!

    Like, for example, contributing from day one is a very good goal. But how realistic is that? If you didn’t require them to contribute from day one, are there advantages to doing that? What are the advantages/disadvantages of the new person as a founder-substitute, as a partner or as a specialist?

    The subject of “finding a clone” is very interesting, too. Is it better to be a like-minded friend or should there be more “social distance” between you two? What are the tradeoffs of trying to clone yourself using a team of 3 or 4 people rather than finding 1 guy who’s like you? What if finding a clone takes a really long time, say, years? How do I find a clone? What if I find somebody who seems to have a lot of good skills but isn’t a clone?

    And, as long as I’m at it, your third bullet is very interesting, too. What if somebody wants to be an employee, not a partner? Is that bad? Is there some way for “working out” to be somewhat objective (rather than being all subjective)? If the person needs some structure, is that worth providing or is that always a death knell? What if you (the founder) are impossible to get along with? How can you know if you’re impossible? Should you care if you’re impossible? What can be done (both you and the person) to make it more likely to work out?

    There is certainly a lot to talk about.

  3. Dan,

    You pose some excellent (and highly insightful) questions. Will try to factor them into a follow-up article later this week. Won’t have good answers, but at least I’ll try not to hide behind ambiguous statements and generalities.

    Stay tuned…