I was recently talking with a friend who’s thinking about launching his startup. He told me he was looking for a co-founder, and asked me what I thought was the best way to find designers with an entrepreneurial fibre.
I suggested maybe he shouldn’t look for a co-founder, and focus on finding a freelancer instead.
My advice was to hire someone for hard cash for a month or two first, and if things go well, only then ask them to transition into a co-founder role. Let me explain why.
Take all the people around you who have the necessary skills to become your co-founder: coders, designers, marketing guys, whatever you need.
Now remove those who have no interest in the startup lifestyle. Hey, where’s everybody going?
Now keep only those who want to try the startup adventure, but are not already working on their own startup.
Pretty small group, right?
Launching a one-man startup now has a very low barrier to entry. So we end up with a world where everybody wants to be a startup founder, and nobody wants to be a co-founder.
Looking for a good freelancer takes time. But looking for a good co-founder takes even longer!
After all you’re giving away part of your company, so it’s a big commitment. So not only do you have to make sure they’re competent, but you also need to get along well with them on a personal level.
All the time spent looking for the perfect co-founder could be used to hire someone and get some actual work done instead.
If things don’t work out with a freelancer, you can easily try out someone else next. And hey, at least you’re on your way to a working prototype!
When you tell me you’d like me to join your startup as a co-founder in exchange for equity, here’s what you’re thinking:
I’m offering you a once-in-a-lifetime opportunity to share my dream and make it big, and I’m even willing to offer you a huge chunk of priceless equity!
But here’s what I hear:
I have this nifty little idea but I don’t really have any money. So to try it out, I’m looking for other people to work with me for free. Hopefully it won’t fail miserably like 90% of startups!
I know, I know: you really believe in your startup, and would do anything to make it succeed. How can I even doubt you!
But answer this: who seems more committed to their idea, the startup founder who works tirelessly on their project, or the one who works tirelessly and on top of this spends $4000 out of their own pocket to hire a great coder?
Personally, there’s no doubt in my mind which startup founder believes in his idea more.
Let me first say that I’m not an expert in this field*. But it seems obvious to me that the less equity you give away, the better.
*Although I did see the Facebook movie.
You know that great college friend of yours who’s a genius coder and would be perfect as a co-founder? The one that’s stuck in a boring office job? If only you could make him see the light and embrace the startup lifestyle…
Too bad he has a family to feed and bills to pay. Even in the Silicon Valley, you can’t yet pay for groceries with startup equity.
But what if you offered him a salary, at least for the first couple months? Not a huge salary, just enough to put food on his table and make sure he doesn’t get evicted.
That might be enough to tip the scales and convince him to join you.
Asking someone to join you as a co-founder means asking him to invest his time and energy. And one of the most effective ways to convince someone to invest in your project (whether as a co-founder or actual investor) is to be able to demonstrate traction.
If you hire a freelancer to build a prototype first, you’ll be able to approach potential co-founders with a much more attractive offer: “here’s a product that already has X amount of users and is growing fast, how about helping me develop it?”
But I don’t have the money!
Hiring a freelancer is not that expensive. You can hire someone for a month for a couple thousands dollars, and a month is plenty of time to build a prototype if that’s all you’re doing.
If you say that you can’t manage to come up with even $3000 or $4000, that tells me two things: first, you don’t have any monetizable skills, so you don’t sound like a very good person to build a startup with.
Second, you’re not very resourceful, and that doesn’t play in your favor as a startup co-founder either.
I’m not saying you should sell breakfast cereal, but you can at least try to borrow seed money. If friends and family won’t invest in you, what makes you think a complete stranger will?
Chicken and pigs
I think another big reason why startup founders are reluctant to hire freelancers is that they’re afraid they’ll only be in it for the money.
It’s the old Chicken and Pig story: you’re looking for someone who’s committed to your project, not just involved!
Dan Pink’s book on motivation also backs the idea that external motivations (like money) are less effective than internal ones (like believing in a project).
But is it really that simple? I’m sure there are lots of stories of co-founders who ended up not being that committed after all. And as a freelancer myself, I like to think my contribution to startups goes beyond mere passing involvement.
So my goal with this post is not so much to have you stop looking for a co-founder (despite the title), but to at least convince you to put the freelancer option on the table.