Respect the engineers or why the ideas' value is a dime a dozen
This post is the results of a conversation with a friend that has some ideas for a startup but no experience in the startup world. He was trying to involve me asking me to develop one of his ideas. This post is the collection of my thoughts after our conversation; fellows startuppers will find it a little unnuanced, it is true, it is not for them. This post is for the novice who has a good idea and want to develop it.
Ideas are worthless
Let’s start with the worst-kept secret of the startup world. Ideas are worthless, their value is a dime a dozen. Yes, to start a company better you have an idea, possibly a good one. However, still it is common knowledge that ideas are worthless because if an idea is any good, at least a million other people had it before you. Novices do not get this, they see the super-successful companies and get the idea. People with startups experience knows that for every company that succeeds exists at least one hundred companies that have failed developing the same idea. For the fan of “Blue Ocean Strategy”, there’s nothing such as a blue ocean, it is a bloody red ocean.
Search engines had existed well before Google was born, and even the concepts of ranking results based on incoming links was not totally new at the time. Moreover, social networks existed well before Facebook (e.g., MySpace, who remembers MySpace now?).
Still, there’s something relevant to success that is related to ideas: the insights. Ideas are not enough, but the insights behind them are still relevant: what do you know that others don’t? Which challenge everyone faces and how you are going to address it?
These questions are the kind of tough questions VCs will ask you, the market will ask you, and you better got an answer. Or at least, you are better knowing them so you will not get caught off guards.
If not Ideas, what?
So what makes a successful company? The mainstream answer is a great execution, I prefer to focus on the product and I say an excellent product. However, there is no contradiction; good products are the result of deliberate, thoughtful choices and a perfect execution. There’s some more but, they are details.
Ok, but what makes a perfect execution? I do not have a clear-cut answer, I usually know when I see one, I recognize few common traits in them, but they are not enough. They are necessary tough!
The most important one is a careful and deliberate use of the available resources, both material, and human. This concept has been true in the past, is true now and will be true in the foreseeable future. A startup could succeed against competitors only if it is nimble and use at best the available resources.
Why the engineers?
Now the question is which is the most valuable resource for a startup, the one that is expensive to acquire and develop and yet provides the highest returns? There’s no doubt that this resource are engineers, top class engineers to be more specific. They are the one that know how to translate your idea into a product, usually in an efficient way and generating value. Not only they are valuable but they are a scarce resource (especially in Silicon Valley but also elsewhere) so they are expensive. This fact creates strange dynamics: you could judge how healthy is a company by looking at who is joining and who is leaving; companies spend humongous amount of money in benefits on top of compensation to make their engineers happy.
Will It last? Hard to say but also to believe. In many areas, technology is replacing experience; for example check the recently introduced Amazon Machine Learning for Data science or Docker for System Administration. What is sure to me is this is the present and every startup co-founder should bear with it.
Many first-time entrepreneurs believe they could outsource the development of their idea or that they could easily hire someone to develop it. Outsourcing is not a good idea, developing a new product means changing it quickly and being fast in releasing new, more refined, versions. Working in such a way with an outsourcing company means wasting a lot of money. Hiring engineers without a tech background means communication problems; nothing that couldn’t be overcome, but it slow-down the work and could create tensions in the team.
The last question that need to be addressed is: why marketers, sales, etc. are not a resource as valuable as engineers? The answer is: “they are”. You need to market your product and sell it to your customers. Moreover, the best way to keep your team and your investors happy is growth. However, bringing on board a lot of users is useless unless they remain, and unhappy users rarely suggest your product precluding the exponential growth needed by a startup. Before the growth stage, the company needs to build its product and for that it needs engineers, designer, and product managers. A good co-founder needs to be at least good at the last and the design need at the beginning are few. So engineers are the ultimate scarce resource.
Successful startups are rare, unicorns are even rarer. Many skills go into building one. Having an exceptional product is not enough in the long run. Vision and strategy make the difference, and the ability to implement them is what saves the day. However, in the short term you need the product to be at least able to think of the long run. Right now, the resources of highest importance for the success are engineers, so every co-founder needs to learn to respect them. The only caveat to this suggestion is for engineers co-founder; they understand the value of engineers but could get lost in the other steps needed for a great product, but this is another story.