Come for the Ride…

We’re still scouring the web and networking events looking for awesome entrepreneurs to join our startup. As we’re checking out various areas on the web and seeing what other people are writing and asking about, there seems to be a common theme among the newbies which is: how much equity or options should I give away to attract raw talent?

Well, I’m sure the answer differs for everyone, every industry and especially for people who think their ideas MAKE the business and everything else is secondary. However, my experience has taught me that it’s much better to share. Think about it… would you rather have a 40% stake in a King Monster sized Twix or would you rather have a complete piece of a fun size Twix? If you opted for 100% of the smaller piece, you are definitely not seeing the BIGGER picture.

So what is a fair split in equity? 33% across the board would be fair on paper for a three person company, but that seems a bit too simple and well… not fair in practice. I’m not sure if there is a magic formula for this question but I can tell you what we’re doing.

My original plan and the one we’re using for now is 40% (me) ideas / 30% developer / 30% marketing. This split is of course, pre-funding and pre-slicing the pie for other roles in the company. My thinking is, the business would not exist without the idea, at the same time, without programming and without marketing, the business would also not exist. So because I’m in need of all three key positions to sustain the project, I’m happy to give away large pieces of the pie (or Twix) for those that would work towards the shared vision.

However, ownership percentage aside, the above split is also how I envision the work to be split. Many, MANY startups focus on 98% programming and nothing else. I’ve been there, it doesn’t work. You can’t sit in a bubble and code all day and expect your product to meet some demand and suddenly gain interest if you never get any feedback or market it. We all should know by now: If you build it, they won’t come unless they have a reason to. Therefore, just as I believe my CTO should get 30% of the company for months of hard work, my VP of business development/marketing should also do about 30% of the overall work and get 30% of the equity.

In the end, hopefully all the hours will add up and something nice, possibly a monster Twix will await us on the flip side.

Speaking of marketing and networking… while Randall has been busy hammering away at the technical stuff, I’ve been out in the field talking to people and avoiding sitting in front of a computer. Though I must admit, after just a couple of weeks of these events, I’m a bit networked out…

Wednesday night was an AiMA meeting where I met some marketers and learned about Business Lead Gen. (Great stuff!)

Tonight was the Atlanta Deck Party which was also a pretty cool networking event. Surprisingly, the crowd was a lot older than I thought since I expected half to be GaTech students.

I did make Randall come out for this one cause I figured it’s probably more his crowd than mine. Also, I see a common theme between all my programmer friends which is: they don’t network enough. In any case, it’s great to see such a huge turnout for the Atlanta area… Maybe I don’t have to move to Silicon Valley for awhile after all!

http://www.techjournalsouth.com/deckparty/atlanta.php

Well, it was my first face to face tonight with our adoring public. Wei and I met at the TechJournal Deck Party at the ATDC (atdc.org) at Georgia Tech this evening to network with some like minded entrepreneurial individuals. There were a few note worthy people like Lance Weatherby who works at the ATDC and Alan Pinstein, another web entrepreneur. I even got to chat with some Peak 10 girls who have some nice solutions up in Norcross if Wei and I decide to go with the CoLo. There were deffinatly some VC people there, a lot of developers, some marketing people sprinkled in and some students who showed up as well (perhaps for the Bass and Stella Artois). All in all, it was a great learning experience and I look forward to speaking with some of my contacts again.

Wei, Mike Schinkel and I were discussing though, that it’s hard at a meeting like this that has so many people who might not actually be anything we need. And when you spend a lot of time chit-chatting and find out 10 minutes later that, though they are an interesting person, they offer nothing to Wei and My venture. If nothing else, it’s nice to hone the people skills and it’s a good way to teach yourself to go up to complete stranger and talk to them.

Okay… so it seems like we’ve hit our first official hiccup in this project. In the past, I can at least attribute the screw up or misunderstanding to one thing or another; this time I am completely baffled. Our designer, the one who delivered great layouts (that I will post about soon), the one who turned those layouts into compliant HTML, the one who has AMAZED us with his creativity… has now gone MIA for the last 5 days. The weird thing is, the only thing left to deliver from our short and sweet project is the CSS code and the only thing we’re asking for are status updates. In theory, this should be the easiest portion of the project since there is quick way to determine from the code what’s right and wrong.

I really don’t get it. I thought he would finish on time, we would pay him, life would be great and down the road I would refer him other business. The designer has been very impressive thus far with his creativity but more recently became a pain to manage as the project heads towards the end. Where did the communication break down? I’m not really sure… My guess is maybe he’s hit a bump in the development and are now avoiding us. Either way, if we don’t get what we need soon, we will have to look elsewhere, which will suck for everyone involved.

For those of you running your own freelance gigs or running your company, the following are the top 4 ways to DESTROY a working relationship (from the perspective of your customers.)

1. Over promise, under deliver. (Timeliness) I’ve actually had a few projects I outsourced in the past that have come back perfect to spec and gave me exactly (or more than) what I wanted. What separated those would-be perfect feedback from the average ones I gave were the false expectations set by the bidder when the project was posted. Now, I understand in order to bid for the project, you may need to make your bid more attractive; however, over promising and under delivering will leave a sour taste in your client’s mouth no matter how creative or technical you are. As it stands, I’ve already set myself up and padded the delivery date by 2 or 3 times the desired date to meet my own expectation. However, if you tell me you can meet a certain date and then miss it; that’s just really poor business. If the technologists can be more honest about these due dates and/or services that are provided, the world would be a better place.

2. Communication, or lack there of… This is probably by far my biggest pet peeve when it comes to working remotely with a virtual team. If nothing else, communication is the KEY thing companies NEED to keep wide open and free flowing; especially when working remotely. (See in the picture above how Guru.com has ratings available for Communication on both sides of the gig? It is THAT important!) Why do you think there are so many tools out there that focuses on improving communication? Phones, email, cell phones, SMS, AIM, Skype, twitter, iChat, G-talk, video conferencing, so on and so on. Your customers want demand information; in the absence of information, they’ll want enforce control. No one likes to work with someone watching over their shoulder. However, if you give your customers the cold shoulder and are unresponsive to their inquiries, then that is the environment you are creating for yourself.

3. Professionalism. Now I’ll admit, I’ve worked with some amazing college students and even more amazing high school kids. The talent out there that gets computer programming and the whole “dot com” businesses are plenty. What makes you better than them or vice versa? Simple, professionalism. One would assume a freelancer would have more professionalism than a kid or that someone who runs a business would have more professionalism over a part-time freelancer. Are they right? No, not always, but the impression of professionalism helps when you want to win clients.

I remember sending some RFP’s (request for proposals) awhile back and getting a few well written responses back. No, not all of them were good, but that’s beside the point. During the same RFP process, I also remember this one guy who didn’t really read the requirements but wrote back anyway giving me his standard copy-and-paste pitch. I told him “No thanks. You simply don’t meet the level of service we’re used to dealing with.” Once he got my email and email address, he then proceeded to contact me via G-talk to try to close the deal. As if that wasn’t annoying enough, he didn’t even pay attention during the chat!!! Seriously? You’re going to contact me after getting rejected, start a conversation then make ME wait for a chat response while you get up to get an apple or whatever the @#$@! you’re doing? I’d honestly be surprised if that guy ever got any business from those methods.

P.S. - No matter how cool you think you are, don’t IM me until we’ve established a working relationship; that is just not cool.

4. Technical Expertise For small projects that doesn’t have the luxury of a large budget and/or development research time, please don’t BID on it if you don’t know how to do it. Bidding for the sake of bidding is stupid and it will lead to more bad than good especially if you’re a small business starting up. If you don’t have the technical expertise on staff, let the opportunity go to someone else who does. Ultimately, you want clients who require technology you’re comfortable with and in turn, will refer you to other people knowing you are a pro at what you do. If you are new to something and don’t have a great grasp of it yet, don’t waste both of our time. What will end up happening is you will mess it up, then probably violate a few of the other points mentioned above due to the lack of technical expertise which will lead you to shame, anxiety (for both parties), and a bad rep for your business.

On the flip side, if you work on things you already know intimately, you’ll be able to enjoy referrals from your other customers who also love your work. Isn’t that what you ultimately want? …To be able to work on your business and your core skills instead of spending day and night attracting new customers? Finding new clients is hard work and it’s costly!!!

Think about it and don’t make the above mistakes.

edit: Are any of your xhtml gurus or can you refer us to those who can convert design to compliant code for cheap in case our design is really MIA?

Do you like this blog? Does it inspire you?

As we start this venture to start a dot com business, we are also looking to network with other like-minded people. If you feel that we are worthy of being introduced to other entrepreneurs, please tell someone about us; or better yet, write about us on your blog!

No, we’re not looking for a free link-back or looking to make money off of this blog. (no ads!) However, we would love to meet other people who are on the same journey as us and maybe help each other out as things progress.

Thanks!

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