Whats harder for a startup: Hackers learning to run the business side, or Suits learning how to code?
In determining what makes a bootstrapped startup fail versus one that succeeds, I often think about what really are the critical points that make or break the project. At least, in regards to the “web2.0″ model where you just write some SaaS website that ends up getting a bajillion users and you drive off in your Maserati. This all probably in no way applies to a startup thats say, trying to build reusable rocket ships. You know, those funny startups that actually aim to make a physical product.
From my perspective, there are three major components that all have to be in line for success to occur:
- The Good Idea
- Technical ability to actually write the thing: A featureful, high quality, well tested product.
- The business sense to actually execute on it. To market it correctly, to secure the funds to keep it alive to fruition, the ability to land clients and sell your product.
Now in all honesty, those first two always seemed to me to be inconsequential. Hell, #1 practically isn’t even a requirement, considering all the awful, horrible products I’ve seen advertised on tv for $20 german rags, and they certainly seem to be making a profit. Ideas, it seems, are rather a dime a dozen. Everyone has a great startup idea, and in reality 1000 people before them thought up the same thing anyway. Great ideas are great, but great ideas do not a startup make.
Now the technical aspect of it, I’ve always kind of taken for granted as well. At least in the circles I run in, everyone is technical. The only cost to coding the website is simply the time it takes to code it — the technical difficulty of these things is rarely above trivial. In fact its always been a generally assumed truth that the reason there are so many web startups is because the barriers to entry for making a web startup are so shockingly low. Anyone can whip out a text editor, check out extended-bort and add some CSS styles. Its much harder to say… boostrap a startup that makes a new kind of microchip processor, or a new kind of windshield wiper. To me, the coding of a startup’s site is the least of my worries.
The business part, especially the sales, is the part I’ve always known I’d need help with. I just don’t have that skill set, I don’t have the connections or the rollodex of magical leads that will buy a license. I don’t reallly even know how B2B sales pitches work, how to get the ball rolling. My marketing, accounting, and hiring knowledge is limited to twitter, quickbooks, and monster.com.
So from my perspective, the business end of it certainly represents the biggest hurdle. However I realized today, that for someone from the opposite side of it, the technical coding of the site is now a high barrier to entry. They have to raise capital in order to hire programmers and be able to pay them to see the fruition of the project. At that point can you even consider it bootstrapping?
It turns out, of course, that both requirements are equally critical to the success of the startup. With no technical competency, your business people have no product to sell. With no sales people, your fantastic product will sit there with no clients. Stalemate.
The question then, is whats easier: for the technical person bootstrapping their own website to learn the business aspects? Or is it easier for an MBA grad, with zero technical background, to be able to pick up a book and suddenly be able to have the ability to write a scalable, full stack web application, along with all the SA hats one has to wear to even get the thing running…. and then throw on some creative abilities as well for CSS and logo design.
You can guess which side I’m throwing my bets on. The technical bootstrapper will at least be able to get his product into creation before needing any serious VC backing. And probably even through grassroots marketing get some customers via word of mouth, twitter, blogs, hell just emailing out around to people. The technical bootstrapper may not be very good at executing the business side but at least they can take a stab at it and hopefully get some revenue coming in, learn the ropes a bit, and then be in a good position to either hire a sales/business person, or take VC funding and hire a sales/business person.
Maybe I’m dead wrong here. If you’re a budding CEO of a 1-person startup with a great idea, maybe you’ll easily be able to go out and find a team of developers who know what they’re doing to build your idea for you, and get paid in stock options to boot. Maybe it will be an awesome website that will hockey stick its way into revenues within 90 days and get that 1% share of that $6b market you know about.
I just don’t see it. With no technical competency to bootstrap yourself with, you’re stuck unless you give up the bootstrapping idea and go get funding of some sort to be able to pay out salaries and wrangle up some nerds. Suddenly, making a web based startup doesn’t sound like it has low barriers to entry, at all.
Micah Said,
March 5, 2009 @ 10:18 am
I think it’s also easier for a tech-startup to recruit a biz team than for a biz-startup to get a tech team. The tech guys can actually build something, then use that to lure in some biz people for equity. A working prototype is valuable, even in the anyone-can-do-it Web 2.0 world. I think it’s probably much harder for a biz person to pull in tech people, since all they’ll have is a story.
Of course, if the biz person has one or more successes already under their belt, it becomes that much more compelling of a story.
Jonathan Goff Said,
March 5, 2009 @ 10:54 pm
Brian,
Coming from the rocket startup you linked to (I’m their propulsion guy), I think which is more important (suits or geeks) depends a lot on the industry. For a capital-intensive startup situation like what we have, I think you really need some strong skills on both the engineering side as well as the business–most of the space startups I’ve seen that have only had one or the other have done poorly. On the one hand, I had a friend who was a great engineer who had been trying to raise money to build an RLV for over 40 years (he actually started working on commercial space projects back before the first Moon landing!). He died last year having never achieved his goals. OTOH, I’ve seen a few space companies that had lots of business talent but little engineering background. Some of them have done ok, some very well indeed, but most of them put up a pretty website and then disappear back into the ether within a year or two.
So, I don’t know if this answers your question as far as Web 2.0 companies. I really don’t know much about them thar intarwebs when compared with propulsion engineering (which end of the intertubes does the hot flamey stuff come out of again?), but I figured you might appreciate the datapoint.
Thanks for the link again!
~Jon Goff
http://www.masten-space.com
Lance Weatherby Said,
March 9, 2009 @ 10:57 am
Here’s the deal. I am a suit. I will never learn to code. At least not at a meaningful level that would make something magical.
In my day job I see lots of ideas. More then one every business day. There is no way to sugar coat this, there are lots of bad ideas. Like 90% of them. So a good idea might be rarer then you think.
In my day job I also see both hackers and suits. The hackers typically are out trying to raise money before their company is ready and the suits are trying to raise money to hire geeks. Both approaches fail.
I believe that takes both types to make a meaningful startup. A business geek and a technical geek. You can’t do it without both. And the only way to lure either of them is to sell them on the concept, articulate the vision for making it bigger, and give them enough equity to make things interesting.
Maxwell Said,
March 10, 2009 @ 10:16 pm
Nice post. I think you go in a couple of directions on this, but I’m just going to address the one most compelling to me: “Between suits and developers, who’s more likely to take on the roles of the other?” And notice that I’m not qualifying that at all by adding something like, “And who’s more likely to succeed?” I’d just like to look at the likelihood — some might say, willingness — to engage in the roles of the other.
In that regard, the first three sentences of Lance’s response typifies the suit attitude to that question. Though I put myself squarely in the dev camp, I don’t think I’ve ever verbally placed limits on myself by saying something liike, “I will never be a suit or take on their suit-like responsibilities.” At least, I’m pretty sure I’ve never written it out
Am I being too selective? Well, more generally, when I go to the Ruby users group, it seems like _at least_ half of the developers there are aspiring entrepreneurs. Again, I’m not trying to qualify what their suit-ness level is or how successful it is; I’m just noting that at least half of them are looking to engage in suit behavior, which I would summarize as: starting and promoting a company. And if you talk to them, they’re unlikely to say, “Yeah, I’ve got this great idea and I’m looking for a team of executives to run it for me.”
Now, I’m not sure I even know an analogue for the Ruby users group on the suit side, so I’m just going to call it the MBA users group.
Now, at the MBA users group, what percentage of suits are aspiring developers? How many of them would crack a book to make their idea happen? I’d reckon on _easily less than_ half — and I stress _easily_, because I think it’s more like less than a tenth. Yes, I’m betting that at least 90% of them are in the market for a engineering team to fulfill their vision.
Lance Weatherby Said,
March 11, 2009 @ 7:24 am
Just to clarify, my comment about coding was not “attitude”. I am just not very good at coding and as much effort as I put into it the vast, vast majority of people that have formal (or informal) development training will always be much better then me. In any startup people have to be willing to do whatever it takes to get things done. You can put me in that camp.