Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show where I help those entrepreneurs, startup founders, even if you're working and you are basically involved in a side project - you're the person who's relevant for this show. Many people have gone on to do amazing things. I've just spoken with a fan of the show who has even started up his own company and is flying to Silicon Valley to raise a ton of money.
It's wonderful that we have an appster tribe that is passionate about app-preneurship, as I like to call it. In this endeavor, there's many of you who are listening who will perhaps not be technical. In fact, I confess that I don't come from a technical background; I used to be a banker. So I love meeting people that can help us non-technical people start technical companies. In this endeavor, I have been introduced with a wonderful podcaster, the host of the Scott Barstow show. He's a fellow podcaster, he's going to help us with finding out how we can set up companies if we're non-technical.
Scott, it's a real pleasure to welcome you on The App Guy Podcast.
Scott Barstow: Paul, thank you so much for me asking to be on. It's a pleasure to be here.
Paul Kemp: Scott, you're a fellow podcaster, you've got a great setup there... Tell us first about your podcast, because I feel like we could learn a lot and it may be something we want to listen to.
Scott Barstow: Absolutely. I started a podcast about nine or ten months ago, talking with primarily founders of technology companies and exploring not only the back-story of the company, but also going in-depth on the struggles and the challenges that they had building out the actual product, whether that was dealing with trying to find a technical co-founder, or making mistakes in building too much product, or not enough, or whatever the myriad number of mistakes that everybody makes. My show is primarily focused on just exploring that topic with technology product founders.
Paul Kemp: Scott, one of the biggest challenges I do feel that are faced by those listening is finding a technical co-founder, and I have many examples of people coming to me and saying, "Look, I don't want to pay for a developer. I'd rather have someone who can become a co-founder and is passionate about the project as I am and will be my technical co-founder, and he/she can deal with the technical side." Is that a big challenge that you find when speaking with your audience?
Scott Barstow: It is, and I'd like to divide this particular question up. A non-technical founder - and I hesitate to use that, because I think if you're building a technology product company you are a technologist, whether you want to be or not... But it's useful for the distinction that we're talking about. I think there are two ways to approach finding somebody to help you build out your product.
One, as you mentioned, is to find a true co-founder. In my experience, the mistake that a lot of people make is that they take the mode of speed dating. They show up at a bunch of meetups, they pitch their company and they hope to find somebody interesting, that cares about it the way they do. They sort of rush to get married, and then inevitably it ends poorly.
The way that I think about the technical co-founder role, in particular, is that generally, I think you need to know that person before you've started thinking about the idea, or at the very least they're involved extremely early in the process with you.
That's a true co-founder - somebody that's there with you at the beginning, that is strapped to the mast with you, believes in it the way you do. In my experience, you don't just typically find those people walking around on the street. It's a relationship process that you start six, nine months ahead of when you might actually start building the product. It's getting to know somebody, getting to know their family, getting to know what makes them tick... All the things that are going to matter when you're in the middle of the blizzard and you need somebody there with you that cares about it the way you do.
It's cliché, but I think you need to think of co-founders like a marriage and treat it that way. There's a potentially different path to take as the founder of a company if you've got your idea a bit more further along and you really just need somebody to step in and run the engineering of the product. I would encourage people to think of that as you're hiring really your lead engineer, or you're hiring your chief technology officer, but you're not necessarily trying to find a co-founder.
The difference is that when you frame the discussion as "Hey, I'm looking for a co-founder", that drags with it a certain expectation on how much equity that person will receive, and how much influence they'll have in the direction of the company, whereas if you're hiring a lead engineer or a CTO, that carries with it a different set of expectations in terms of how much of the company you're going to have to give up, what the compensation package might look like and all of those things.
If you want somebody to be a true co-founder, just know that that means giving up a lot of the company and that means getting married, as opposed to perhaps looking for a lead technologist and making it more of just a true hire, if that makes any sense.
Paul Kemp: It does, and I'd love to give people some real actionable advice. We do have a ton of people listening who are at that stage where they have an idea and they want to build upon the idea, but they sadly go out to the market, they realize it's going to cost them a hundred thousand dollars or whatever it may be to hire an agency or to hire a developer it's going to cost them X... We're talking tens of thousands of dollars, at least. Do you have an example of a company that maybe you've worked with recently, a founder who has had that challenge and has successfully managed to get married to a co-founder who they found, and it's worked out really well? Are you able to walk us through a case study maybe or some example of someone doing this recently?
Scott Barstow: That's a great question. I'm wracking my brain to think of a concrete example... I live in the Raleigh-Durham area of North Carolina and there's a company called EmployUs, and the founder of the company is a guy named Ryan O'Donnell. He went through the typical that I'm sure a lot of your audience goes through, which is - he had an idea, he tried to work with a contracting shop, that went poorly and he kind of threw up his hands and was like, "I don't know where to go next."
He and I talked extensively about "How do you go find the right person to come alongside you?" He had enough funding that he could afford to hire somebody, and I think that's an important step. I don't think a co-founder expects to be compensated; they work for free the way that you are, at the beginning of the company. But when I had the conversation with Ryan, I really encouraged him to find somebody that thought about the future the way that he did, and was willing to take less now in return for more later.
The conversation that he ended up having with the guy who is now the equivalent of his technical co-founder - there were a lot of tests, a lot of gates that they went through at the beginning of the process, and it looked a lot like an audition, honestly. So what I encourage people to do is work alongside the person that you are contemplating giving this incredibly important role in your company; ask them to work alongside you for a meaningful period of time with no commitment either way. They're going to invest time, you're going to invest time, and you're going to figure out if you can work together in that process.
In Ryan's case, he went through probably five or six people before eventually settling on a guy who's working alongside him today. The relationship side worked, the work ethic was the same, and he was able to figure all of these things out through just working alongside. I think he eventually compensated him a bit for some of that audition work, but the expectation was, "Look, there are going to be hard times ahead. I need to know that when things are hard, that we can work through the difficult times together, rather than getting contentious and blowing the whole thing apart.
So I just encouraged him to set up some scenarios that would tease as much of that out as possible - inducing false pressure, inducing deadlines that were unrealistic, which everybody has in this process. Those are some of the things that come to mind immediately.
Paul Kemp: Scott, that is genius. I love that piece of advice and it's the first I've heard of that in terms of auditioning the potential technical co-founder. Would you actually be in a position to tell them it's an audition, or do you go more under the radar and pretend...?
Scott Barstow: In my experience, it's best to be right up front. The kinds of people that you want working alongside you are people who can appreciate the fact that you're taking this seriously. If you have the conversation and frame it in such a way as to say, "Look, I'm trying to understand if we can work together, and I would think you would want to do the same. Before we get married, let's go on a few dates and let's spend some time together, and let's have a fight or two, and let's get into an argument, and let's act like we're going to act and work like we're going to work, and let's see how that works. If we get to the end of this and it turns out that it doesn't work out, then let's agree what it looks like to part ways. I pay you well below market rate for the work that you've done, I own the work product... But the goal here, both of our intents is to get to a working relationship and one that we can understand that we can go forward with, rather than let's all pile in and hope that it works, and then six months later we have to part company, and all the divestiture of ownership and all of the mess that that drags with it."
Paul Kemp: What I'm thinking of is a previous company that I've worked for, and I gave not ownership but directorship to one or two employees. The feel-good factor lasted maybe a few months, and then it started to decline; you know, that kind of wanting more... So I'm wondering how long a term do you think this audition can last for, for it to be a genuine assessment?
Scott Barstow: I think most people want to get to some sort of decision within a few weeks, so what typically happens... Assuming the person you're trying to bring on as a co-founder has another job, or has other commitments that they have during the regular week, a lot of times what I encourage people to do is work two or three Saturdays together and have very concrete things that you're trying to get done. "At the end of today, we want to deliver this feature. That means we have to go through a design process, we have to go through requirements, we have to think of how the user's going to interact with it, we have to sketch some wireframes, we have to argue about what makes sense. But at the end of the day today we want to have the strawman of this feature built out, so that somebody could click through and maybe use it a bit. We can put it in front of a user and see what they think."
I find that having concrete deliverables at each point tends to induce conflict naturally. When you're working on something and deadlines are tight and you're trying to get something done, that's when people's true nature tends to come out; whether or not you understand that you're auditioning for the position or not, at some point in that process you will be who you are, and I feel like that's what you're trying to expose. You're trying to show them who you are, and you're trying to figure out who they are.
Paul Kemp: [unintelligible 00:15:34.09] really interesting is I'd love to know how you find about getting the ideal contract in place for that arrangement, because clearly you're asking somebody to make a big commitment, and I'm guessing it could even be just as a side project, working in the evening if they have a full-time role, or working at weekends. Do you have any advice on where to find a good contract, say, to agree on this arrangement?
Scott Barstow: That's a great question. I'm not an attorney and I don't profess to understand all of it, but what I typically have in place, and I think if you're starting a technology company there are a few things that you have to have in place, regardless of how you go forward. One of them is intellectual property assignment, and the other is just the fact that the company owns all of the work product, whether that's your work product or my work product - the agreement is that all the work we're doing the company owns.
I think one of the fundamentals that a leader has to do probably right after the company formation is have some very basic intellectual property agreements and maybe a contractor agreement in place that they can just use to manage this engagement. There are myriad examples; you can go to LegalZoom, and there are a number of other places online where you can download sample agreements. Of course, every jurisdiction is different, and you have just the mess that is the legal system, so I always recommend that people have whoever their corporate counsel is - even if you get something from LegalZoom, have them review it and make sure there are no gaps, just as a way of ensuring that you're covered off.
Paul Kemp: Let's try to help those who perhaps want to go along this road but don't know where to go to meet these ideal people. Do you have any good tips for us on where to go online or events that would really help us meet the right potential technical co-founders?
Scott Barstow: My general recommendation when people ask that question is you need to be where these people are hanging out, and generally that looks like -- if you're in a reasonably active tech area, almost every technologist is going to one or two meetups in the area. I typically recommend, go to the meetups of "hot languages" and that would be something like a Ruby meetup, a NodeJS meetup. That's one area that's obvious.
I think the other is showing up at mixers and whatever's going on in the entrepreneurial community in your area. In our area, we have a meet once a month, and it's usually at a pub somewhere. It's a great mix of founders, technologists... It's really a cool mix of people. Showing up at those kinds of events and just having honest conversations about what you're up to, and not necessarily trying to pitch the company or hire that person on the spot, but just talk about what you're doing and see who's interested, who's ears perk up when you talk about the idea. Then, if you run into somebody and you have a good conversation with them, I think the next thing is you send them a note and you have lunch, or you have early morning coffee, and you have maybe a bit more in-depth conversation.
If you still like the conversation, then I think you start talking about the fact that, "You know, I'm kind of in the market for somebody to run my technology product. I don't know if you'd be interested in something like that, but if you are, here's how I'm thinking about it. If you're not interested, do you know anybody who is?"
I think generally showing up at events that are more entrepreneurial in nature, there are more developers who are willing to "take the leap" at those events, rather than big corporate events or things like that.
Paul Kemp: I was really wondering, as well... In your experience, have you met anyone who has perhaps made the mistake of not offering a co-founder position to someone that's more technical to balance out the equation? Because I can imagine a scenario like, "Hey, I want the whole company to myself, or maybe give some away for the funding, to the investors, but I don't really want to give away a big chunk to a technical co-founder, so I'm going to go alone." Have you met any companies that have perhaps done that and then ultimately regretted their decision?
Scott Barstow: I've probably met too many companies that count on both sides of that question. Certainly, there are a lot of founders who don't think they need somebody else alongside them. I remember I was sitting at a meeting - this was probably seven or eight years ago - with somebody from Google Ventures. Somebody asked the question, "What do you look for in a founding team?" and the guy said without hesitation, "The best companies have founding teams of at least two, no more than three."
I think that's the way you need to think about it. I've tried to do my own thing and I happen to be able to build software, but I'm not great at being able to run a marketing campaign or go sell the product. I think you have to be self-aware enough to know that you can't do it all, especially if you achieve any measure of success. You need somebody else alongside you that's complementary to what you do because there's no way you can make it alone.
So my counsel to those who want to "keep it all", I think at some point... The quote is, "One can go fast, but two can go far", and the question is "Do you want to go fast, or do you want to go far?"
Paul Kemp: Yes, and I'm thinking back to the over 500 episodes I've recorded with founders now on The App Guy Podcast, and I can safely say that the success stories are usually as a result of a team of two or three. A lot of founders do praise their co-founder, who's been along and helped build the company together. And actually, they've said that it's not just for monetary reasons, the great revenue, but also the fact that you've gone along the journey with someone else as well, who can share the ups and downs. As you say, it's a marriage, and you've got someone to share that journey with, is that right?
Scott Barstow: Yes, I absolutely agree with that. As I said, I've tried to build companies on my own, and I just feel like it's so hard and there are days that are so dark, where you feel like you don't even want to get out of bed because nothing is going well, and you need that other person to call your phone that day and say, "Why aren't you at work? Let's get moving. We're not going to have a pity party, let's get rolling! We've got work to do today."
You're going to be that person on some days, and your partner is going to be that person on other days, and it's invaluable. I don't believe that you can build a successful company... People have done it, but by and large, the best companies are built with partnerships.
Paul Kemp: Scott, before we say goodbye then, one more question. This is more kind of switching gears and finding out about you... I would love to know -- someone who is a podcaster, into technology, running a successful business, I wanted to know what your day is like. Could you describe to us a typical day? We'd love to know and get inside what it must feel like to have one of your days and how different it must be to the kind of guys in corporate, who have got their typical nine to five. What's a day like for Scott Barstow?
Scott Barstow: A day for me... I've got a few things that I work on. One is my content offering, which is the podcast, and I've got a blog that I write about this topic of building technology products as a non-technical founder - that's a certain portion of my day.
I'm a part-time venture partner in a venture capital firm out in California, so I do a bit of deal work and technical diligence on deals that the firm is looking at. One of the great things about that is that you get to - just like you do on your show here - talk with amazing founders all the time about what they're working on, and I'm constantly amazed at the ideas that people come up with and the problems that they're solving that I just never think about in a given day. It doesn't occur in my life, so I don't really think about it.
So I have the venture work, I've got this content platform that I'm slowly building, and the third thing is that I do a lot of what I call fractional CTO work. So I will step into startups that are either in trouble, or they've got a fire burning in some part of the business. That could be they've got a team that's not working well, the product is not coming together the way it should, they have to hire their next team member and they're not sure who they should be looking for... So I will step into the middle of technology startups and just get them through whatever they're going through.
Typically, those engagements can be anywhere from two weeks, and I've been on some as long as six to nine months - embedded inside the company, working alongside them as a C-level technology executive. So those are the things that generally make up my day.
Paul Kemp: Scott, I can't help but squeeze one more in... I would love to know currently what are your biggest challenges, in terms of all the stuff you're doing? What are you really focusing on and what's causing you headaches at night?
Scott Barstow: There's a lot of those... [laughter] One of the things that I really struggle with is how to - and I know you've done a great job with this - create awareness for this project that I'm on, this quest that I'm on to help non-technical founders not set all of their money on fire in the first six months they're trying to build their company. It's something I feel strongly about; there are paths through that problem that don't require you to burn all of your savings that you saved the last five years for, trying to get ready for this moment where you take your shot, and then six months later, because you made a bad mistake, you made a bad decision, all that money is gone and you're going back to work at some corporate job.
The thing I lay awake at night trying to figure out is how to reach as many of those people as possible and get the word out and really help as many of them as possible. I care deeply about people chasing their dream and having a shot at it, and my small part to play in that is the fact that I've been in this industry long enough to see the mistakes that people make - and generally, they are the same... There are eight to ten things that people do all day, every day, that cause the most problems. So the thing that I try to figure out is how to get out and get in front of as many of those people as possible.
Paul Kemp: Scott, you've mentioned eight things - we might have to post that somewhere that people can find, maybe in our show notes. We can't finish the podcast teasing people about eight things they do wrong.
Scott Barstow: It's probably more than eight. It's probably 25. Eight is probably a simplification. But yes, I'm happy to share some links with the most common things that I see over and over again. I'm happy to do that with you and your listeners.
Paul Kemp: Wonderful, great. Well, I'll put that on the show notes. It's episode 511, which can be found at theappguy.co and just look for Scott Barstow - you can search for that, or it should be at the top of the website. Scott, how can people best reach out and connect with you? What's the best way of getting in touch?
Scott Barstow: I am on every major social media platform, @ScottBarstow. I've managed to squat on all of those over the years, I think. So you can find me on Twitter, Instagram - any of those, certainly. I'm active on Twitter, so that's usually the best place to get a hold of me. Then you can find all my content work at ScottBarstow.com. You can find my show, The Scott Barstow Show on iTunes or Stitcher or wherever your favorite podcasts are found.
Paul Kemp: Scott, it's lovely chatting with you. This has been one of the topics I've been meaning to cover with the thousands that listen to this. Thank you so much for being part of what we do and sharing your great content, and all the best for what you're doing in the future.
Scott Barstow: Thank you very much, Paul. It's been a pleasure being on.
Paul Kemp: Okay, bye for now.