Meet the Team, Follow Progress and Enjoy the Ride

This blog is about the lives of a few entrepreneurs who are aiming to establish the next trend in social networking and the concept that will make it happen. Since our venture is all about connecting people together, we want to be involved and connected to you and we want you to be involved and connected to us. We'll be sharing with you: who we are, how we got started, how we’re doing and where we’re going...we're taking you along for the ride!!

Saturday, August 25, 2007

Sorry...,But, I've Been Burned Before

One solution, to having a lack of funds, for a web 2.0 company made up on non-developer/programmer types trying to develop their concept, is to work on expanding the team and grow partnerships with the other key personnel needed…however, this is proving to be just as difficult as raising funding itself.

I have narrowed it down to four main reasons why enticing developers into accepting a partnership/equity into the company for work is next to impossible:

1) The individual has been burned before by another entrepreneur or company. Many of the programmers I have been talking to have all had some sort of bad prior experience, which is making them very hesitant about trusting someone again, and accepting equity into a company as payment.

2) Developers are in very high demand. Lets face it…many start-up entrepreneurs are approaching developers with the same offer and for the most part all developers (particularly the very good ones, we would want in the first place) are securely employed and making high salaries. This makes them a little more hesitant about taking a huge risk like working for a start-up that is not funded. They could just easily join a start-up that has been funded and still have stock/share options.

3) They are already working on their own start-up part time or a buddy’s start-up. So even though one idea might have a better chance of actually making it big and/or make money; they rather stick with what they are currently involved in. (Can't blame someone for having loyalty!!)

4) Development companies who have teams of developers have a business owner mentality. They seek payment for services because they have to cover their overhead and many are no longer, or were never real risk takers in the first place. Although, they have a team they employ and could use to develop the requirements of a start-up they are the least interested….they have many expenses to consider.

This is all of course just my point of view and what I’ve encountered. I have met amazing and fabulous programmers and developers who have been very helpful in countless ways. I just wish I knew how to convince them to take a chance with us…


Mason Browne said...

This is quite true. Web 2.0 is all the rage, but we're not stupid.

Some of the companies will fail miserably due to lack of funds or poor execution. If I've been paid in futures or shares, I'm out months of work, and most likely poor from living off savings.

Your bit about helping buddies and already being paid well is true, too. I'm starting a business with a buddy of mine out of VA, and at the same time keeping up my contracting work. If I stopped helping my friend, I could easily pull in six digits right now - enough to live comfortably, for sure.

Instead, I'll settle for high-fives, help my friend build our company, and turn down work from w20 startups.

Jacob Chapel said...

I can see why it is hard to get someone to join in on the fun (it's fun running a startup right?) but it's not impossible by any means. I think the biggest thing you have to consider is that maybe you have to take a chance on someone as much as they are taking a chance on you. Let me explain.

I am currently apart of Not At All Strange, another budding startup, who had similar needs as yourself for a developer to handle workload. Well Richard and Candice looked around for a while and somehow came upon me. Now I would never claim myself to be a highly skilled developer or highly prized, there are reasons why I think this. For one I haven't worked on any major projects outside of just personal hobby work, I don't have any formal schooling in it, and last of all I have a full time job not in the industry.

Does that mean I am not qualified? Well it depends on how you look at it, and luckily from Richard's point of view I was, not because I could claim years of industry experience or a degree to stand on. He looked at what I could offer, that was passion, desire, the ability to learn what I didn't already know. I am not trying to toot my own horn here, but to show that sometimes what you should be looking for are people that will be just as inspired as yourself to make this work. I still have a full time job, I cannot afford to work full time on this, but I will give almost every free hour to it so I can see it succeed. I feel that Not At All Strange is just as much my baby now as it is theirs. Richard took a chance on me, just as much as I am taking a chance on him.

I wish you the best of luck Ann in finding someone to fill that void in your company.

Sherry Heyl said...

There are a couple of solutions. One is to approach people in general in a what's in it for them/recruiter mentality. My background as a recruiter made all the difference in the world for me as I have been developing What a Concept!

Even people in a job, on a contract or whatever have something they want to do but are not doing. Find out what it is and then figure out if that fits with you concept, if you can sell it to a client, and if it is a win-win for all. This develops the trust among all the players as well.

The other thing is to help them promote what they are doing along side what you are doing. Almost the same idea but it is not dependent on finding a sale to develop the relationship.

Bill Kocik said...

"3) They are already working on their own start-up part time or a buddy’s start-up. So even though one idea might have a better chance of actually making it big and/or make money; they rather stick with what they are currently involved in. (Can't blame someone for having loyalty!!)"

Don't forget that it may well go beyond simple loyalty. You're likely running into developers who are staying where they are not simply out of loyalty, but because they actually believe that what they're currently working on affords them a future that's as promising (or even more so) than the one you're offering, and so they see no motivation to jump ship.

Andrew Badera said...

You know some of my own history here ...

Obviously you believe in your idea ... but after the dotcom bomb, can you really expect a stranger (with any talent) to accept equity only in exchange for their sweat and time?

It's my take that, unless you are already acquainted with talented individuals who know YOU -- not just your idea -- your best bet in this sort of scenario is to sell your idea to angels and VCs, and put that money in the hands of your techies.

The angels and the VCs are the people who can afford to have vision, patience, long-term goals. Your average programmer ... well, we gotta eat. And in the end, even if we work just as hard as YOU on YOUR idea, we will never benefit as much on YOUR idea as YOU will, if and when it hopefully pans out.

I've run into too many startups where the people behind it expect a programmer to exert the same amount of effort and dedication and initiative they do, in exchange for equity, but not an equal share of equity. Hey, if your idea needs not just my sweat, but my ideas, my innovation, to succeed, I expect to be treated as an equal partner in a 100% equity scenario. If you can't swing that, then you have to raise cash, simple as that.