When an Economy needs Co-Founders — And Seems to have a Tech Talent Gap
A characteristic of local economies that I never experienced much before leaving Palo Alto, California: “we can’t find co-founders!”
Many know that I’ve spent half of my professional life in Silicon Valley and the other half in the new economy’s most appealing innovation region: Central Texas. I’ve touched a few times on the stark differences in the way the cultures and environments behave, professionally; so when a wonderful thread started in a social media group, “we need more co-founders,” it sparked a different flavor of all too recurring discussion… I can’t find investors here; we have a tech talent gap here; there aren’t enough people herewho want to be co-founders.
“There are plenty of properly skilled, talented employees out there with strong enough experience (in marketing, engineering, design, operations, business) who are disenchanted with their day jobs and thinking “man, what if I were my own boss” who would be good candidates to groom for exploring cofoundership. They may not want to bear the full burden of the company as a founder does. They, like founders, may just need the education, or the confidence, or the nudge to explore something more and take that risk.”
How do we build a better funnel for the just as important but meaningfully different co-founder role?
Change the culture and our expectations a bit. Frankly.
I read Roman’s brilliant observation and wondered first if it was true and second, if it is true (and I think it is), WHY are people not taking risks together??
It’s not that we don’t have co-founders, I posit, it’s that we don’t create enough value for people to share the risk rather than doing it themselves.; NOT because people are more successful themselves, because we let them think they could be.
ONE: Stop perpetuating that Patents and Products do startups make. A team of one isn’t a team; and a one, of an idea or an MVP, isn’t likely to go anywhere.
TWO: Doing that though means putting more faith in the critical role of others (perish the thought LOL). Not just being willing to give 15% to a co-founder: splitting HALF. A product without an attainable AND monetizable AND defendable market isn’t worth anything… likewise, a business with a market but nothing scalable in which to invest, isn’t worth a ton either. Half of something is better than 100% of nothing… get a team of both and odds are you have something.
THREE: That means though that the equity has to be worth *something.* And a simple notion to keep in mind about the value of equity is — Exit or No?
Austin doesn’t do terribly well with that last decision, frankly, because we just want to be encouraging that we can build things.
What we might want to do more of, to foster people taking risks together, is encouraging founders think backward — Don’t think about how to start; think about how to get out — successfully. If the market won’t bear any exit… is it worth starting?? It could be worthwhile, granted — maybe a product needs to be built or people just want to start a business and get paid — but if the market won’t bear an exit, there is no outcome for investors. Think about that implication.
If the founders don’t want to exit, if they refuse to exit, if they want to retain control/ownership, etc., then that shared ownership is far less likely to be worth anything. There’s nothing to capitalize from if we can’t get an ROI of our investment of time/experience/talent in building something.
Of course, we can build a successful bootstrapped company and pay ourselves (and there is NOTHING at all wrong with doing that — UNLESS we founders aren’t on the same page about what we’re doing). A bootstrapping founder who expects to always be owner/CEO, until they’re done, likely can’t raise funding (financing, yes, but that’s a different topic). A person committed to getting acquired or going so big as to IPO = investor ROI.
So what happens when the founder is unclear about which they want?? It’s tough to do either and even tougher to get a co-founder on board who has their own ideas in mind.
Is your community one in which you REALLY don’t have potential co-founders and tech resources or does it just seem that way because such professionals are not interested in being available where you want them?
In Austin, I’ve found, it can seem that we don’t have people wanting to be co-founders because it’s inexpensive here (easy to start your own thing), our cap tables a little wonky (generally), and ventures are a little laissez-faire about Funding or Bootstrap. It’s muddy. And when it’s muddy, people tend to figure, “do it myself and find co-founders for what I want” rather than taking a risk with someone else who’s not sure what they want to build.
Generally speaking, everyone would rather be a co-founder than do it themselves. The answer to a lack of co-founders lies not in expanding the pipeline of candidates, it’s in exploring why everything thinks they’re better off doing it their way.
Is there really a tech talent gap?
Considering a great many new ventures, in our internet dependent economy, are in need of technical resources and we hear in many cities how we have a tech talent gap.
Do we, really?
In Austin, again as an example of my point of view, The University of Texas has become one of the most substantial producers of technical talent, in the world. Austin Community College is teaching people to code, Austin Coding Academy, Hack Reactor and Galvanize are here. And on the other side of the coin, my city and yours is flush with people under paid, under employed, or working but below the poverty line.
We know we have a challenge, don’t misunderstand me.
My partner in MediaTech Ventures, Randy Blankenship, “The time has come, evident in Austin, Texas, where we’re starting, and clearly critical in these reports thanks to Community Impact, to assist our local area workforce in short term subject-specific technical training that will fulfill the needs of companies who are having difficulties in finding employees to fill the void The time has come, evident in Austin, Texas, where we’re starting, and clearly critical in these reports thanks to Community Impact, to assist our local area workforce in short term subject-specific technical training that will fulfill the needs of companies who are having difficulties in finding employees to fill the void.”
The question we’re exploring here is if we’re addressing the gaps in a way that actually addresses them.
Something is off.
Do we really have a tech talent gap or are we failing to appropriately VALUE what we have?
Austin has TONs of technical talent; and I’d bet your city does too.
Most of the developers I know either want to do their own thing, or keep that option, they’d rather have 2 or 3 different projects, they’re all working for big companies, OR they work for development firms (agencies)
And it’s that last point that struck me as interesting… in a region where startups result in innovation with great value, engineers favor taking those risks. In a region of the world where tech jobs are paid well (better than the coasts?), people fill those jobs. So what does it mean when a region of the world has a great many development firms — teams of developers for hire.
They get paid well by dev firms so generally, rather than being available to entrepreneurs as developers, they have good jobs — working on many projects. Granted, this is an assessment relative to the coasts, and exacerbated by my points above: If we don’t give 50% of opportunities that are actually worth something, to technical partners, they can easily get paid working on many cool projects. The presence of dev firms means that they are doing that; and thus not obviously to fill “tech gaps” — which only exist because full-time company jobs are paying too little and startups are failing to create enough value.
A signal of that lacking value? Austin is generally considered to have too few “mid-career jobs” (and certainly does not pay engineers as well as the coasts). If you’re starting out your career as a developer, wouldn’t you go where the pay, potential, and career growth seems better?
1. Some engineers may never want to do a startup or become a cofounder
2. Most engineers don’t want to do your start up or become your cofounder (interest may not be there or founders are pitching wrong)
3. Find those that have similar business interests to you and don’t hold back equity. 10% of $1B is better than 100% of nothing. It takes time to find/build the right team.
4. Don’t give up”
In innovation, we “don’t have enough” isn’t the challenge to address. Explore instead that we don’t have enough (or seem to have enough), because…
Originally published at seobrien.com on September 11, 2018.