May 10, 2014
“I have an idea for the next Facebook — if you build it for me, I’ll make you a partner!” This is a sentence that almost every programmer has heard. In the tech industry, it is almost a not-so-unwritten rule that every company needs a business development person and a coder to become successful. This is an understandable assumption.
According to Indurit Holdings, “Companies that are started by two partners, as opposed to a sole founder, are almost three times as likely to succeed.” Often the first step taken by entrepreneurs is to seek out a partner to complement their skills. Companies like CoFoundersLab exist to help business-minded entrepreneurs find technology-minded entrepreneurs, and vice-versa. Even with the countless number of matchmaking startups, meetup groups and general solicitations, it’s rarely easy to find a partner.
The biggest commodities in the startup game are quality programmers. More often than not, you will come across an “entrepreneur” (I use this term loosely) who is looking for a coder to bring his or her idea to life. As an entrepreneur without technical skills, there are a few reasons that it may seem nearly impossible to find a technical co-founder.
1. Supply vs. Demand
There are a lot more business people than technical people. In 2012, as reported by the National Center for Education Statistics, there were 366,815 college students who were awarded a business degree, which constituted more than 20 percent of all graduates. Computer science and engineering graduates, however, only constituted 8 percent of all undergraduate degrees. This means — potentially — that there are two-and-a-half times more business entrepreneurs looking for programmers to build a product for them.
2. Control Inequities
In the early stages of a startup, there is no guaranteed money. Founders work their asses off for equity that might, possibly, eventually, somewhat be worth real money one day. In this situation, the programmers take a lot more risk than their business counterparts. A technical co-founder can build a world-changing product, but if the business side of the company cannot advertise and sell it, then the company goes bust. The business partner is responsible for selling and raising capital and thus, has more control over the success of the company.
3. Risk Aversion
Unlike their business counterparts, programmers are much more risk-averse. This is directly rooted in their jobs. When nearly everything can be tested, checked and has to run properly, risking failure is not an option. Similarly, just the choice to pursue a career in computer science was a safe decision because, as we already discussed, there is ample opportunity to find a high-paying job. Programmers who decide to take the risk have a lot to lose.
4. Opportunity Cost
Because programmers are a sought-after commodity, they can fairly easily find a well-paying and safe career. According to Indeed, the average salary for a computer programmer in New York is $119,000. Even if a startup is able to pay a technical co-founder $60,000, the coder has a significant opportunity cost. Not only are they losing $60,000 per year, but they are also losing any additional income they can make from their investments. These programmers are taking a gamble that their startup will not only be one of the 10 startups that become successful, but will also become successful enough to recoup their lost salaries and additional income that they could have received.
Finding a partner is hard, but it is not impossible. Like any good negotiation, it is important to understand the perspective of the opposite party and make sure that their concerns are addressed and outweighed by the positive opportunities.
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