Developer risk profiles: why you won’t find a technical co-founder
There have been a lot of posts recently from individuals looking for technical co-founders to take on their start-up idea.
The thing is, if you’re looking for a developer to be your technical co-founder they’ll have a whole range of options open to them. Dependent on what they value most highly right now, those options will rank higher or lower for them personally.
The below should be seen as snapshots on that scale of tradeoffs. The header indicates the thing they might value the most and I’ve set out the advantages that come with each to provide a view into why becoming your CTO probably won’t be one of them.
They value stability (Less Risk)
They’ll be looking at working full-time as an employee, at an established company (technology or otherwise) or a really well funded start-up that’s been around for a while. Think Google, The Guardian or TransferWise.
It means they would have an at least market rate salary, be surrounded by team members they could learn from and have the support of the organisation to spend company time and money on improving their developer skills.
There would also be a clear career path, toward management or technical expertise, which can be achieved by hitting set milestones in performance. There’s also the advantage of having a brand name company on their CV for future roles or ventures if their risk appetite changes.
They value autonomy (Medium Risk)
They could be looking for work as a contractor. Contract rates, even at a junior level, are double what they’d earn in a full-time role as a day rate. The multiples increase as they become more senior and have particularly in demand skills.
They can also pick their own hours, projects, and tools depending on the type of contract (some look more like employment than others).
The risk is higher as they have to spend time looking for future work and don’t get the same benefits an employee would e.g. sick/holiday pay. They also might be on a week or two notice period.
But getting more money for the time you work and the freedom that comes with it means this will rank above being an employee for some.
They value gaining experience quickly (Medium-High Risk)
They’ll look for a more newly funded start-up where they can join and make an impact as an early employee. They’ll still be getting a salary but it’ll likely be below market rate and have an equity portion instead. Even if the equity ultimately isn’t worth anything the developer could find themselves leading a team or becoming head of product and getting that experience on the job that they could then take elsewhere for a market rate.
It’s also exciting being part of a company that’s changing quickly, even if the risk that they won’t see out the year is there.
They value working on their own idea (High Risk)
If someone values working on their own ideas as a sole way to make money then they’ll be starting their own company.
When you know how to build things you’re constantly having to stop yourself from building something every time a service or product annoys you. So there’s normally a surplus of ideas.
It’s high risk, as a lot of companies fail and it’s a lot of work. But comes with the potential of a reward from making something people love enough to pay them for it and building the kind of company they would have wanted to work for themselves.
Working on someone else’s idea as CTO
Based on the other opportunities listed above, this doesn’t really come into it as a rational option.
It has all the risk of working on your own idea but without the satisfaction from making the thing you really want to make and the drive that comes with that.
It’s closer to working freelance on someone else’s idea, without being paid. And while losing the income they would have otherwise made as a contractor or the benefits they’d have got as an employee.
(NB: This is also why nobody will steal your ideas).
Maybe there’s someone they’ve known well for a long time, and worked with before. That person might be in a position to present them something interesting enough to them that it becomes a joint venture. Or maybe they decide to start something together and list all those issues mentioned before that they’ve stopped themselves solving over the years. If they then come up with an idea that they both find compelling enough to solve that could work out.
But that person won’t be someone you’ve just met.
So it really is hard to see why it would make sense for anyone to join as CTO, for equity only, to build someone else’s dream.