A tech-cofounder is: Expensive, Risky, Frustrating and write vicious code
As a software engineer, I started as a tech-cofounder accidentally in my first project. It was a good opportunity for me. I learned a lot; there was my evolution from simple geek to business geek. Then two times more in different projects, and I can tell you is not a win-win. I got much more than my counterparts.
Let's explore why founders decide to gift/sell part of their young company to someone because he knows how to code and the risks of this decision.
90% of the CEOs or founders bring a tech-cofounder because of money problems; they believe that they will get more committed talent for a lower price. Nothing more wrong than this idea.
Let's see why:
1- They are expensive in the future.
You are paying too expensive for a very cheap service. There's nothing more expensive than the value of your future company. Better Build your team in LATAM, where the hourly rate is lower than the US or UK. Later in this article, I will explain how it works.
2- A single coder will write a vicious code.
When the problem is the money, all the tech-cofounder starts coding alone, and sooner or later they will kidnap your project with code that only he/she understand. A few months later, his opinion will be more powerful than yours because he "knows the code" he will be deciding what is possible or not in your company with technical excuses. By hiring a team, even if it is small, you can get documentation, minimize the vicious code, and maybe your software will get some value in the future.
3- It is risky.
You'll see that moment named the valley of death of all the startups, is a phase when you die or triumph. Some members will get disappointed, and the Tech guys are very demanded, so they receive many employment opportunities, projects as freelancers, or other cofounding options.
If the guy who knows deeper your software leaves you in that challenging time, is the end of your dream. You need to raise your bet by giving more shares, start giving him more money or accept the defeat, bring a new guy and start a new slow learning curve, and you will hear a lot of: "I don't understand why he did this function like this."
I guarantee three months after the original guy leaves you, you will hate him.
And we can write forever reasons to avoid the tech-cofounder, but let's explore alternatives.
Three alternatives to the tech-cofounder
1- Invest time and energy getting seed capital instead of getting problems with the tech-future-problem-cofounder
2- Go to universities and get some interns to practices. In collaboration with one of their teachers, you can create a good team, and they can even write a thesis. You will not compromise part of your company and will get scalable software. Be creative with these collaborations.
3- Build your dev team in Latin America preferentially in Nort West Mexico. You can get great developers with the startup mindset by the influence of Silicon Valley in the region, for the half or even less of the value in the UK or US (Forget about India, we'll speak about this in another post)
If you succeed, that standard 20% of your company you give to the tech-cofounder will be too much because the software he wrote 100% sure will be replaced, and if you do the maths, it would be less money paying a salary than with part of your company.
As an ex-tech-co-founder I can tell: I took more advantage than my counterpart, only for the experience I got, the natural less risk of that position.
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Coming soon my article: "When a tech-cofounder is a Good Idea"
Spoiler: When the relationship is organic and both make a great team since the conception of the idea. Never bring late tech-cofounder.
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