How to Recruit a Developer Entrepreneur for Your Startup

Lately I’ve spent a lot of time thinking about internet startups and entrepreneurial software developers (or as I like to call them, “developer entrepreneurs”).

And lo and behold, no sooner did I sit down to write about it than I received an email with my “prompt” for this post. It went something like this:

For several years I have been refining a business idea to be conceived as an Internet startup. I have met with numerous developers over time and even after they express support for the business concept, my challenge has been in persuading web developers in partnering in the opportunity as entrepreneurial venture.

Could you suggest to me an approach I could take to persuade Developers, to see such opportunities as business ventures instead of a project/job?

How should I go about selling the business concept enough to have development of the application without initial funds?

If you’re a non-technical founder looking for a developer entrepreneur, these are questions you should ask yourself. Having been on the developer side of the coin a number of times, here is my take.

Code, Marketing and Money – Pick Two
If you take nothing else away from this post, remember this:

There are three components to bringing a web startup to market: code, marketing and money. You need at least two of them to succeed.

Often, if you have one of the three you can find someone willing to partner with you.

If you have coding skills, find someone with marketing skills who’s willing to become a partner. If you have money, pay someone to do the marketing.

If you have marketing skills, find a developer who’s willing to become a partner. If you have money, pay someone to do the development.

If you don’t have coding or marketing skills but Uncle Buck just left you a mad stack of cash, put together a good team, give them a truckload of Benjamins, and send them on their way.

Before you approach a potential partner, figure out which of the three you bring to the table. If you don’t have any of them, re-consider the idea of an internet startup (or any software startup). I say that because a good idea does not count as one of the three.

You’re looking for an experienced, professional software developer, right? If you’re not an experienced, professional marketer, then why would a developer devote hundreds of hours of spare time to your project?

To summarize: if you are a non-developer looking to woo a developer, the first and most fundamental asset you need is experience bringing a product to market, or money.

Buy In
Since most people reading this article will not have said truckload of Benjamins, let’s assume you have marketing experience. In that case, how should you go about courting a developer for your risky, unfunded startup? In much the same way you would court an investor: show them that the idea will succeed.

Show them a business plan (even if it’s just a long email), research, numbers, specs, sketches, designs. Show them you have done your research and are dedicated to the idea.

You’re trying to convince an investor (not of money, but of time) to fund your company. Your idea has to sound so good that this developer, someone who sees things in black and white, can’t help but volunteer hundreds of hours of their nights and weekends. Don’t bring a three-sentence summary and a quote from Us Weekly as your market research.

If you have trouble convincing developers to partner with you then one of three things is happening: your idea isn’t very good, you’re not presenting it well, or you’re presenting it to the wrong developers (see the next section). Once 3 or 4 programmers have heard your idea and walked away, start asking yourself what needs to change.

Where to Find Entrepreneurial Developers
Two bad places to look for entrepreneurial developers: your local financial institution’s I.T. department, and Craigslist.

Enterprise I.T. developers make a lot of money, and they won’t easily leave a six-figure job to do unpaid work. You’ll wind up with a long development schedule since they can only work 10-15 hours per week, their #1 priority will always be their day job, their productivity is not very good in the evenings because they’ve been coding all day, and it’s hard to depend on someone when their wife’s knitting club gets in the way of a deadline. Moonlighting is more akin to hobby development, so think twice before going down this path.

Depending on your locale you might be able to find someone on Craigslist, but more likely you will find a beginning coder who won’t have the ability or dedication to bring your product to market. It’s worth a shot, but except in rare circumstances you’ll be better off with the suggestion below.

After moving to New Haven I spent a few weeks searching online for local tech entrepreneurs (Craigslist and Google). I had no luck connecting with people and decided that no one in New Haven was starting tech companies.

When we recently moved across town due to some landlord issues, I happened to move into the house of the founder of a local tech company called Higher One. That was all it took: with this single connection I met with half a dozen entrepreneurs, angels, and developers in the course of 10 days (and many more since then).

The moral: figure out how to break into your local network.

Find a local group or search the web for “[your city] entrepreneurs.” Look for tech-focused entrepreneur groups on Facebook or other social networking sites, but go beyond that and meet people face to face. Sure, this requires you to leave your house, be social, and invest your time, but the dedication of the people you meet will exceed those you find building flat-file importers at IndyMac.

[tags]internet startups, startups, programming, entrepreneurs[/tags]

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19 comments ↓

#1 Michael on 03.13.08 at 1:08 pm

Every now and then Sun Microsystems has a Startup Camp event where startups can participate in an unconference style event and apply to be part of their startup program (discounted servers, etc). I know at the NYC event in October, an up and coming startup found an amazing developer and 3 weeks later, they had gotten a ton of PR because they were working out of a 100 sq foot apartment in NYC. Bookmark http://www.sun.com/startup for their events and program info!

#2 boxlight on 03.13.08 at 5:59 pm

Any advice for this senior seasoned enterprise developer who would love to find a capable energetic business/sales guy with an idea? Let me be Woz to your Jobs. boxlight _at_ gmail.com

#3 Rob on 03.13.08 at 6:03 pm

@boxlight – Nice.

Look for your local entrepreneur group. It’s crazy how many leads will get thrown at you once they hear you’re a developer looking for a startup. We are the minority.

#4 Noah on 03.13.08 at 6:53 pm

Would it be fair to say that Code and Marketing are necessary to succeed, and that if you have Money, you can use it to fill in where your team falls short?

#5 Dan on 03.13.08 at 9:56 pm

Thank you for mentioning that having a good idea does not count. As a developer entrepreneur I get pitched at least 2 or 3 good ideas a month, except that the person doing the pitching almost never has neither money or marketing experience.

Its relatively easy to figure out if someone has money, but how do you measure marketing experience? I don’t just look for people with sales background, because selling over the phone or one-on-one is way different than marketing online. You need to understand SEO, Copywriting, Affiliate Marketing, PPC, and much more. What I usually look for is someone who’s managed to actually marketed and sold something online… enough that they were able to quit their job and live comfortably on their online income — its not as rare as you’d think.

Also I think its important to find someone who is a peer. If you’ve spend years honing your development skills, always striving to improve and produce excellent work — as I have — you want to find someone who’s does the same. You never want to feel like the “superstar” of the group.

#6 Paul on 03.14.08 at 11:40 am

Quote: “Show them you have done your research and are dedicated to the idea”

The “dedicated to the idea” part is without a doubt the most important line in this post. If the originator of this fabulous idea later decides they’re no longer interested after the developer has committed time, it sucks. Massively.

As a Developer, if I’m going to commit time to anyones project, I want to know they have made a significant investment, in either time invested marketing and building business relationships, or in cash. Otherwise, it is too easy to be left flapping in the breeze.

Boxlight – very interesting idea.

#7 Rob on 03.17.08 at 12:51 pm

@Noah – Definitely.

#8 Webmonk on 03.19.08 at 1:30 pm

Thanks… It was very informative

#9 Justin on 03.31.08 at 5:37 pm

You get right to the core of the issue here. Every founder needs to bring huge value to the project. When people without skills approach me with an “idea” that they want me to spend my precious time working on they get a harsh dish of reality served.

#10 Mircea on 05.10.08 at 5:55 pm

You’re right, Rob. In a team people needs to complete each other. I was lucky to find a partner with business skills and connections in the business world.
We both have several ideas what to do (and have several good domain names – which is inportant) and we will start soon.

Hey, Noah, may we will need you too :)…

#11 Lee on 07.30.08 at 3:39 pm

Having done a number of “build the software to capture venture interest” projects I can say that software devevlopment needs change drastically over the lifecycle of the product. In the beginning when entrepreneurs typically are working with FFF funding and have limited $$ they are looking at developing something useable that demonstrates their idea but may not be scalable or practical for a full implementation. Software in this phase should be as feature rich as possible, but a few flaws and warts and “magic happens here” areas are ok, as long as you have a solid business plan for moving the software forward to the next phase. You need to develop fast, and in an interactive “inventive” mode. Testing and documentation are frequently short-shrifted to allow more features to be demonstrated. In this phase building using the “Skunk Works” approach works well – small team, rapid prototype, budget control by controlling scope.

After the first round of funding you may well throw away much of what you did in phase I of the tool – based either on the fact that it won’t scale, or that testing showed it wasn’t needed or practical, or that it didn’t fit with the final marketing model. You have to go back to a more traditional design/build model where each phase is carefully laid out, a full testing regimen is put in place, controlled alpha and beta releases, full documentation and scalability testing and planning are carried out. This may even be an entirely different team that develops this phase – and the original developer may feel less comfortable with it.

OS-Cubed is looking deeply into the idea of creating an entrepreneurial development service company, catering specifically to this market. If you have ideas for what that company should offer – I’d love to hear them – be blogging soon on the ideas and will post the blog link later.

#12 Edwin on 08.11.08 at 11:45 pm

Thanks for the informative article. In my case, I am a developer but I’ve been wanting to put together a team of coders but I’ve been finding it difficult to get people to join the project without them viewing it as a paid project. How would you suggest that a developer with an idea gets other developers interested? Should I just continue to build my prototype alone and then show this to potential developers later on?

#13 Lee on 08.11.08 at 11:55 pm

@Edwin – even developers have to eat. You need to find a way to make sure that they have enough to support their families and promote their careers if you want to build a dedicated team.

The promise of a “rosy future” only will go so far. This is especially true if you have development without marketing. I’ve seen so many cool tools just get built and then lie there….

#14 Edwin on 08.12.08 at 5:32 am

@Lee – thanks. At the moment I am trying to offer talented developers some cash, but I dont have much to even eat – I am still a post-grad trying to complete my course, though the idea/tool has a great market to corner.

Do you mean I should try and get a few marketing speacialist on my team in order to make developers believe that the product could go somehwere?

Also, what are the main issues with outsourcing parts of your development? Who owns IP rights etc….

#15 Lee on 08.12.08 at 8:25 pm

@Edwin –

Here are the issues we’ve seen with “student designed” software ventures:

1) Students generally don’t have the programming background to write code
efficiently. They take longer and are more “Distractable” from the main
mission – especially if they’re not being paid, have trouble with school workload, or are looking for a more lucrative long term job.
2) Ideas are a dime a dozen. To get funded you need to prove to a bunch of
people you’ve never met that you have the whole package. The whole package
includes marketing, sales, distribution, support, infrastructure,
scalability, stability, security, etc. Not that you have to have those
already, just that you have the right team in place to actually deliver
those, and a plan to deliver them. Betting on students out of college is
usually the toughest one for a venture firm to go for.
3) You want teams that will be with you over the long haul, from demo mode
to full production and understand the development process along that entire
lifecycle, as well as the funding process and what the funding sources
expect. Students don’t have the experience (in our experience anyway) to
properly understand that full lifecycle till they’ve lived through it once
or twice.
4) You may have to give away more of your precious commodity – initial
shares in the company – to attract students to come work for you for free or
very little. By the time you are through with Venture funding you will
probably own between 40 and 60% of your company. If you give some of that
away now you will own less (and make far less) come exit time. The venture
company will still want their share they don’t care how much is left for
you or your private investors and programmers.
5) Shares in a company ONLY PAY OFF WHEN YOU SELL THE COMPANY. That might
be 5-7 years from now. Are your students willing to wait that long on the
CHANCE they might get a pay off (a pretty remote chance when you look at the
number of startups, the number that get funded and the number that actually
succeed once funded.

So what are the upsides?

1) Student run ventures tend to have cutting edge new ideas and aren’t as
hampered by old-fashioned ways of doing things.
2) It’s usually MUCH easier to acquire grant funding in a college setting.
Grant funding is FREE MONEY they ask for nothing in return other than that
you agree to SELL THE SOFTWARE TO THEM OR PROVIDE THE SERVICE later FOR A
CHARGE! It’s better money than FFF funding, it’s better than having a team
try to work for free, it’s better than venture capital (Which carries a
hefty surcharge) or bank money. It’s the best money there is, and if you’re
at a good college, your best way of funding your startup demo team.
3) College areas are usually filled with other entrepreneurs and relatively
inexpensive resources to help you succeed, and the towns they’re in have a
reason to keep you there.
4) Generally you don’t have the proper infrastructure in terms of vendor
relations, hardware, development software and specific training to put
together a decent effort. You’ll spend much of your time doing things like
building dev systems and backup routines that the established companies
already have filled out.
5) Do you have a business id, tax plan and accounting, employee HR, hiring
practices, a team with depth in case one programmer leaves, business
insurance, etc. etc.? IF not – you need them. Do you have time to put all
that together yourself AND lead the company?

So how do you control the downside while taking care of the upside?

1) Work with a company that specializes in software development in the area
of software you are creating. Choose them based on what they’ve done
before, and how much entrepreneurial software development experience they
have. Get ball park – not fixed price – estimates from them for developing
a realistic demo that puts the major features of your idea to the test. Be
sure your company understands the difference between inventive
entrepreneurial development and software for production with fixed
specifications development. Be sure YOU understand the difference.
2) Find and recruit marketing if your forte is not in that field. You need
someone who understands deeply how to monetize the idea, and makes sure to
keep your focus on that – not just cool features.
3) Try to get an experienced entrepreneur on your board. One that’s brought
a company to fruition preferably. Look at 1 and 2 for those things if you
can’t find someone separate, but best would be an independent in a similar
but not competitive field.
4) Go to your college and work with them to find grant money to fund your
startup. You can get grants now for up to 250K in initial funding. Expect
to spend at least that much putting together a provable demo of your
software. Go for multiple grants in different applications of your idea.
5) Be sure you’ve hammered out all the legaleze in terms of who owns what
and when they own it with your developer. Understand they may hold a
portion of your software in escrow until payment is made and that they have
cash flow issues (IE they have to pay their programmers, so you’ll need to
pay them promptly).
6) Be honest and straightforward with them about your financial situation so
you can both plan a scope that will fit within the finances presented. This
is key. You must have a trusting relationship with your developer team so
that they all understand how this will all pan out.

#16 Scott on 01.05.09 at 6:10 pm

@Edwin,

Give me a shout, maybe we can hook up. Always wanting to start another project. I got plenty of idea’s but right now they are one at a time for me.

http://www.spoiledtechie.com

#17 Is a Developer-Entrepreneur Right For You? | KillerBlog on 01.13.09 at 11:56 am

[...] Here are some of the advantages: [...]

#18 Scott on 06.27.09 at 3:50 pm

Hoping many of you checked the box to notify for follow-up comments.

I’m an aspiring entrepreneur with a relatively diverse background. I took my first web-based business concept from startup to market and, within 8 months, turned a $2,000 investment into $60,000 in sales, and was two days from receipt of funds on our first round of financing before our investor backed out (uncertainty with his other investments, the continued crunch in 2004). I’m also an IT guy by trade, starting out on the support side in 2004, and recently (Nov 2008) delving in to programming (.NET/CSS) for my company. I’ve also spent a few months in the world of affiliate marketing (PPC), but didn’t like the methods of my ‘mentor’ (here’s how you market to kids to get e-mail addresses! – aka SPAM) so have backed out of that to re-evaluate my position and direction.

This background has provided me with an understanding of a lot of the different functional areas of a website; the coding of the back & front ends, the marketing, the business side… Yet I wouldn’t qualify myself as a true expert in any of these areas.

I came to this site because I am an idea guy with what I perceive to be is a pretty good idea, and rather than spend far too much time attempting to develop the demo on my own, I was looking for a developer entrepreneur to combine efforts. After reading this post, I’ve come to the conclusion that I have a lot of work to do, and I’m hoping to get some feedback from some very knowledgeable folks such as yourself.

I’ve built an 80 pg business plan before, so I’m not a stranger to putting in hard work for an idea. With that said, what kind of plan would you, as a dev-epreneur, be interested in? I’m almost certain you wouldn’t want a full grandiose business plan, right? Perhaps something more of an extended-summary that fleshes out the concept & has the foundation for the eventual marketing & finance plan?

My question doesn’t come from a standpoint of not wanting to put in the time. I find I tend towards perfectionism when it comes to things like this, when in reality nailing down the core competencies of the business should be enough to display the characteristics you’re looking for: dedication, intelligence, hard-work, teamwork, as well as a plan for directly providing the marketing or the money (which, in my case, would be the marketing).

If the idea of a demo is to secure the first round of financing, I want to learn what the most effective method is for getting to demo. Any advice or thoughts you’d care to share would be most appreciated.

Take Care,

Scott

#19 Anonymous on 09.08.10 at 2:46 pm

Thank you for the tips on recruiting for a startup. I am definitely the marketing component. Now I know I really need to have the biz plan sound, if not lengthy, before looking for coders. The money will have to come later. It sounds like a working demo is almost a must have in order to even hope for financing. Good reminder that getting out of the house, and away from the computer, may be the best move to finding partners.