Non-tech Cofounders – Don’t Hire an Agency

http://blog.kera.io/post/33365312918/non-tech-cofounders-dont-hire-an-agency

by camwest • 14 years ago

13 27 14 years ago

blog.kera.io

mgkimsal2• 14 years ago

In a situation right now where I'm working with 2 co-founders (I'm not one myself, just on the sidelines) and they're bringing in an agency. The agency has offered to work for free, because they see a lot of potential in the project. I still think it's a bit of a mistake, even taking the money aspect out of it. The 'find/iterate' mentality from the article is the primary reason why.

maxcameron11• 14 years ago

Hey there,

Is the agency really working for free? Or are they taking equity in the project?

mgkimsal2• 14 years ago

Should have indicated that - I don't know the details of the deal, but I do believe there's a 'x hours for y% equity', but it may be 'x hours now for delayed profit sharing'.

jfdimark5• 14 years ago

Hey, good post! I'm in total agreement.

I am starting a company and was in the same situation as all non-technical founders: hire an agency, give away half the company to a tech co-founder, or learn how to build it myself.

I went with the third option. Not only is it extremely gratifying to build it with your own hands, but it means I can make quick decisions and changes on the fly, the only cost is my time, and the vision and execution are 100% aligned!

maxcameron11• 14 years ago

Hey man,

Wow, I really admire your determination to learn how to build it yourself. I can only imagine the amount of time you're devoting to it. You're in an interesting position because as a solo founder you're responsible for so many aspects of the business.

How do you balance working on the product versus acquiring customers vs operations?

Kudos either way!

jfdimark5• 14 years ago

Well, sleep is optional of course!

Otherwise it's just a case of being efficient with time and prioritising tasks, because everything works in lock-step i.e. have idea, get feedback, refine; create mockups, get feedback, refine; build mvp, get feedback, refine etc. so I take each step at a time.

Having said that, I will be looking for a more accomplished developer to join me as a co-founder imminently because the range of tasks and the timeframe do make it impossible to do everything myself.

Best of luck with Kera by the way, it looks like a great idea.

CookWithMe• 14 years ago

I'm technical, I build stuff myself, so take my opinion with a pinch of salt.

If you have built a non-technical throw-away prototype (paper, wireframe, ...), at some point you may find your testing is limited. IMO, a technical THROW-AWAY prototype is ok to be outsourced, because it'll take all the short cuts it can, and when you are done testing you want to change at least 50% of it anyway, so throwing away and starting from scratch is the right answer.

That said, I don't know if there are any agencies that do this. But you could probably find a freelancer that enjoys this type of work. You definitely need a tech co-founder when you build the real thing, though.

maxcameron11• 14 years ago

You make a great point. But I'm trying to think about why you'd be building a throw-away prototype. Either you'd want to prove a technical challenge, or you'd want to make sure you're building something that a customer wants to buy. I can't really see the logic in outsourcing the first use-case, I mean that's the core tech of your startup, and I don't know many agencies out there that specialize in that type of heavy lifting.

But from the cust-dev perspective, where do you see lightweight prototypes (powerpoint, paper, wireframes, omnigraffle, etc) falling short?

ovi2562• 14 years ago

I used to work in a web agency in France. By chance, all my projects were e-commerce startups that outsourced their development and ops to us. One may argue that dev was not a core competency for them, but I personally doubt it. Even with our best effort, we were not as invested as an in-house tech co-founder would have been, not by far.

Of course, other reasons prevailed, and anyone who knows French business pecularities would see some more reasons for this state of affairs. For one, most French startups, especially e-commerce, are founded by business school graduates, ex managemant consultants, basically the MBA crowd. They mostly don't want to have a tech co-founder, as tech work is seen as low-status. Some of their failure modes are directly related to this. So is their focus on b2b partnerships and bizdev even for e-commerce.

There are, of course, French startups run by tech people, and I know plenty who do well and run circles around direct competitors that fit the above patterns.

maxcameron11• 14 years ago

I think you proved the point. The startups that focus on technical leadership run circles around those that don't.

Why do you think that's the case? Faster iteration?

ovi2562• 14 years ago

I don't have enough information to say, but faster iteration is a solid bet. Plus better visibility into technical feasibility and cost, which leads to doing technical daring things as soon as they become possible. This becomes an unfair advantage fast for the tech startups, as the MBA crowd gets their tech bearings mostly from monthly magazines which are years beyond the state of the art. This means they only do tech things once they are common practice, so they'll never have a tech advantage.

As an engineer, I'm biased, of course, but this looks to me like: tech founders have to learn some biz, marketing and management skills, which is feasible, to be able to judge business opportunities and execute on them. The MBA crowd already knows how to do this, but they need to learn tech skills, in order to judge tech opportunities and execute on them, which is harder for them.

Edited for spelling.

yo-mf• 14 years ago

I agree for the most part. The motivations and ethos of startups and agencies / dev shops / et al. are not aligned. Thus you have a huge potential for failure, which I have experienced first hand as an entrepreneur and seen repeated numerous times as an investor.

maxcameron11• 14 years ago

Heya,

Pretty cool that you got to see the consequences of that approach from both sides of the table.

psweber2• 14 years ago

I just went through this from the agency side, and I totally agree with the author. I think just the list of people that were brought on the project prove the point.

All these people were involved: Account director, Project Manager, Business Analyst, Marketing Specialists (3 of them for some reason), Copy writer, Content Strategist, User Experience, Art Director, Technical Manager, Front end developer, Back End developer

The agency burned through enough money to hire 4-5 employees for a year. We had a few meetings with the client and 8 people from the agency. The math there is pretty painful for the client. 8 people for an hour (at $165+ each per hour) means that each meeting costs well over $1k.

Hire a freelancer (like meeeeeee) or get full time employees. Agencies best serve large companies that can't (or don't want to) maintain design and development teams in house.

maxcameron11• 14 years ago

Thanks for the kind words. Wow, that sounds like a huge meeting. I can only imagine.

Did they ship early and often? Or did they hold back and try to get it "perfect"? And also, is that startup still alive today?

psweber2• 14 years ago

Standard agency waterfall process. Definitely shooting for "perfect". The product just launched. It was funded by the client's extremely wealthy family and the upkeep fees should be tiny compared to the upfront cost they paid to the agency, so it should be able to stay afloat for a little while.

The real problem is the weak product idea. The agency wasn't in a position to tell the client their idea was bad because they wanted the money.

dasil0033• 14 years ago

Sounds like you hired the wrong kind of agency. You don't want a "new media" or ad agency. These guys are used at gobbling up the huge corporate budgets to create big splash marketing that doesn't make sense for any company with less than 8-figure revenue. They do amazing work, but it is utterly pointless before you have the business model locked in to the point that you can scale.

But this is not what all agencies do. If you lack a technical co-founder then you want a technical agency. A ThoughtWorks or Hashrocket or Go Free Range is going to be much better at understanding the nature of a tech startup and they will be able to help you iterate in a reasonable with much better talent than you will ever find by yourself.

dasil0033• 14 years ago

Very good points in this article. But the problem is that if you are a non-technical founder without connections you are extremely unlikely to convince anyone very good to join your startup. It's probably better to hire a technical (not design-focused!!) agency and pay a premium as you will get much better and more maintainable code than if you hire a junior-level or just plan mediocre software dev off the street. The trick is identifying the right agency.

maxcameron11• 14 years ago

I don't know if I agree, only because while it isn't easy to find a technical cofounder, it's not impossible.

If it were easy, then everyone would do it. But if you work hard, attend lots of meetups, have a strong vision and are actively trying to push the business forward, it can't be impossible.

dasil0033• 14 years ago

Well let me put it this way. As a non-technical founder, your chances of identifying a great agency and that agency being willing to work for you are one or two orders of magnitude greater than your ability to identify a great developer and convincing him to be your co-founder.

Of course if you have an inherently interesting idea, a Jobsian charisma, or an uncanny nose for talent, then that can shift things in your favor. But I can say with some authority that the number of new entrepreneurs these days far outweighs the number of talented developers who are entertaining new startup job offers.

Non-tech Cofounders – Don’t Hire an Agency

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