Got an idea for a tech startup and you’re not an engineer?
I am a huge believer in the value of non-technical founders in startups. Not just because I was one but because I genuinely believe that to get across the early stage ‘valley of death’ you need diversity of talent. How you position, market and hustle is as valuable as how you execute incredible customer experiences through product and technology. It was a key part of our success at MoneyBrilliant and ultimately led to our acquisition.
I now have the good fortune to meet and work with a number of early stage startups as they develop their propositions and products. I feel compelled to write this post because one of the themes that is emerging, where founders are non-technical, are the difficult decisions to make regarding technology.
Ever heard of the saying, “you don’t know what you don’t know”? If you’re a first-time founder, you’ll engage with this statement almost daily as you try to move ahead. If you’re a tech startup with no tech experience in-house, it poses a pretty significant challenge.
From a lack of tech knowledge, you’ll outsource the development of your idea to people with product and technical skills. They are now responsible for executing your solution. Your solution is fundamental to validating you have a business. Ergo, you are outsourcing responsibility for your survival. See the problem here?
We made a bunch of mistake ourselves at MoneyBrilliant around technology in the early days and learned the lessons the hard way. Every experience is different, and maybe you strike it lucky getting the right talent around you, but here are some things to think about to avoid a technology trap.
1. Find a quality, technical co-founder
Easier said than done I hear you say, and you’d be right. There is an absolute shortage of good technical talent, let alone developers that are prepared to work on well-under market salaries for the promise that their equity will pay out at some stage.
I was discussing this issue recently with the CEO of one of the world’s leading startup accelerators and I liked his pragmatic view. “The good startups will find one”, he said. He’s right.
It strikes me you have two opportunities available to you here. Be where tech talent hangs out and perfect your pitch; not your pitch to investors but you’re pitch to engineers. You need to convince them that your problem is huge. Why you’re the person to solve it. And why partnering you in this mission will be incredible. Then you need to date a bit before you sign the certificate. Co-founder fit is a key component of success.
2. Be really diligent in choosing an outsourced tech partner
The biggest threat I see to early stage startups, beyond solving a problem no-one cares about, is using technology and digital talent or agencies who lack the passion, knowledge and agility needed to build tech for startups.
An outsourced partner might get you to an MVP for early problem-solution validation. You need to ask them about their understanding of developing tech in a startup context. If you get an expensive proposal for fifty features and a ‘finished’ product at the end, you can be sure they are not the agency for you.
If you understand the principles of Lean Startup (and if you don’t, you must), then you will appreciate that you cannot build-measure-learn effectively with an outsourced tech partner. You need your product and technical people close and deeply connected to validating your solution. Back to point number 1!
3. If you can’t find a great tech co-founder, get a product one.
If I had to choose between a great product manager and an engineer in the early days of a startup, I’d really have a hard time saying no to the product manager. She, or he, is the art in the art & science formula. We had a terrific one at MoneyBrilliant.
A great product manager knows how to craft a digital experience to deeply engage and delight a user. They have a strong eye for design and sharp instinct for user experience. They will drive your tech, even average tech, to make beautiful things and this can have the effect of setting you apart from your competitors and truly making you famous.
I see some non-technical founders, in their first startup, believe they can create the product to their vision, directing design and development. They have no exposure to the art of digital product management. This can be a disaster, especially if a product is created without ever talking to a customer. I can appreciate that this seems fun but you are trying to create an innovation here that leads to a business. It’s serious stuff.
4. Weigh up pros and cons of onshore vs offshore development
It may look very good on paper to use offshore development resources that are a fraction of the cost of local talent. You need to really think hard about this one. While offshore might look more cost efficient, you’ll spend significantly more time coordinating it. You’ll waste time on communication and you’ll add pressure to yourself with early morning and late night Skype calls. You may not get the quality you need to confidently sell your tech to customers, partners and investors.
There is also the risk of security and legal issues around IP, customer data and privacy provisions. Make sure you thoroughly investigate this before off-shoring and put the right protections in place.
Finally, the Research and Development Tax Incentive (R&D) is absolutely critical to startups in their early stages. They can be significant cash injections back into your venture, giving you precious runway. You must be developing your tech onshore to take advantage of this.
5. Learn a bit about tech
You do not have to take a coding course, but improving your knowledge of technology, and the lingo, will make for a much smoother relationship with your tech people and help you make smart decisions. If you think a tech stack is that pile of old amps and televisions in your garage you’ve got a bit more work to do.
Developers and engineers will have strong views about the stack and what to build in. Those decisions, surprise surprise, will be orientated towards their own skill set. It might be fine but you should understand this and ask good questions about the pros and cons of different choices, impact on scalability and even the ongoing cost and scarcity of developers with that coding skill set.
So that’s it. Simple eh? You’ll know it is anything but simple but the good news is these challenges are really common and overcoming them brings a great sense of satisfaction. You’ve got a big opportunity ahead of you with the right technologists around you. Don’t pick the wrong ones and if you do, make sure you haven’t promised them too much of your business and you have thought about what happens if it doesn’t work out. Set the right structure so that rewards come from clear outcomes towards a sustainable business.