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Ask HN: What approach would you take in my situation?
13 points by pawn on May 24, 2011 | hide | past | favorite | 25 comments
First, a little background into myself, then I'll tell you my story.

I've been working a corporate job for 6 1/2 years and have been interested in trying to do a startup for a large majority of it. My biggest obstacle has been that all of my friends are either happy with their job or uncomfortable with the risk associated with a startup.

So, last Friday my cousin calls me out of the blue and says he's got a website idea. We get to talking, and he explains that he and a friend of his have this idea but don't have the technical know-how to do it. He explains the idea then asks if it sounds like something I'd be capable of. He originally presents the idea as if he'd contract the development out. I tell him it does sound like something I could do and that I might be interested in partnering with them. So, he arranges to further discuss the idea in person with his friend. We met today.

The idea has promise, but there were some things that set off flags for me. Would they set off flags for you? One, the friend didn't seem to place much stock in a technical co-founder. His offer was 10%, with the logic that he was taking more risks in going after the money and that somebody he talked to said they could built the site for $7000 and walk away. I replied back that not having a technical co-founder would probably be a bad idea for him,and that before meeting him, I was thinking we'd all be equal but wondered if 20% might be closer to acceptable for them. He replied that the two of them would need to talk about it. The other thing that was discussed before that was whether he had any intention of seeking VC or angel money to be able to pay me to work full time. They didn't plan on going that route, and were hoping I could work on it on the side while continuing my full-time job, though they were hoping that I might still be able to finish it within a few months if at all possible. There was more in the discussion about the idea itself, a little brainstorming, and at the end we ended with the two of them saying they'd talk to each other and get back with me.

So, at this point, if you were in my shoes, do you think you'd move forward with these two or walk away? Was I being selfish or selling myself short?



Simple math: --Are you comfortable working for $70/hour? --Do you think this can be built/polished/updated in 100 hours? $7,000 / $70 = 100 hours

-- Can this idea be sold relatively quickly for $70,000? -- Will you be willing to wait for your pay-off? $7,000 is %10 of $70,000

Honestly though, sounds like you will be treated as a second rate citizen the entire time while also doing the majority work. If you're cool with that, that's your business. If you just want to start a start-up, but don't have any ideas, email me and I can help you come up with some ideas.

Lastly, family and business don't mix. If either party isn't completely satisfied with how the process turns out, you ( and your family ) will hear about it for the rest of your lives.


Ask yourself: WWZD?

Immediately start implementing the website.

Negotiate with them for as long as possible, so they don't hire outside help.

After promising them (verbally, no written communication) to start working on the website, don't do any work. When they ask about progress, be evasive.

Launch the website, owning 100% of it.

Profit.


This is legit advice.

I'd like to offer some names for your project: ConnectBook.com or conbook.com maybe even facecon.com


Honestly, if it would take you a couple months to implement it full time and they think they can get it for $7k otherwise its probably not a realistic estimate on their part and you'll never be respected for what you brought to the table. An idea is not worth 80% and making it come to life certainly isn't worth 20% if you truly want to do a startup you have a community right here to find friends and make connections.

You can set up a repository and both work remotely part time to see if it works out.

My point is mainly this, you are the only thing stopping you from doing a startup, so just do it.

But their idea (even if it's a good one) is not the only one that is a feasible startup so why work on it when you know going into it youre going to be under appreciated from day one.

Just my $.02


With this attitude, they will hardly succeed. I've been through this situation in the past.

You will be blamed for 100% of the stuff going wrong on technical side, and will be given 10%. Moreover, I don't think you will be able to keep yourself motivated with this kind of attitude within the team. You won't be a considered co-founder, just a technical guy to finish thing off. Remember "Ideas are worthless".

Don't settle for 10%, not even 20%. Its not about money, but how much they value your work. Coming up with an idea is not a big deal, but execution is.


It doesn't sound like they put much, or any real value on what you'll be doing. Let them go with the $7k guy, if you want to do a startup then do your own.


I've got to agree. Joining a project where tech is valued so little compared to ideas is doomed to be a crappy situation for you in the long run. If nothing else, it would be a good wake up call for the friend to spend the 7 grand and see what he actually gets for it...


Let them go with the $7k guy, fail when they realize that a technology business is way bigger than an idea

Then they'll come back with a better offer


It might be useful for some money, if he's paying up front. But the equity is probably not worth anything. All they have is an idea. Their contribution isn't worth 50%, much less 90% of the startup.

If you want to start a startup, you are better off going to hacker meetups, or getting a job at another startup in order to gain more relevant experience and connections.


What are they going to be doing? Does either one have any business skill at all? Is there any reason to believe they are capable of running the business while you handle the development side. Is one of them a designer, or an expert on the subject-matter?

If not, then it's really just a guy with an idea and I'll give you 10% to build it. That would definitely be a no for me. I'm probably approached about once a month by a friend who has a great idea for a website. They don't realize that I have way more great ideas than I have time to build them.


Walk. These guys are amateurs looking for an easy ride after watching The Social Network.


Um.. Which business type character in the social network got an easy ride?


The Winklevoss brothers.


Pawn, don't be a pawn! The only way I could justify him giving you 20% is if he has customers secured. Secured means money in the bank account and not verbal commitments.

And I'm not sure I understand him saying he has more risks. Is he putting more hours selling than you coding? Is he committing capital? Is he quitting his job?

I have a project I'm currently looking for an equal technical co-founder. email me if you're interested.


As long as they actually believe that they'll get, well, anything at all really for $7000, then that's what they're valuing your contribution at. Its not surprising at all that they would offer you 10% for this $7k "investment". They probably feel that they're being generous and doing you a favor.

Until your cuz and his friend get some grounding in the real world of web development, I'd steer well clear.


Unless these two people have a ridiculous amount of skills you're not mentioning, I wouldn't touch this with a twenty-foot-pole for any amount of equity.

It certainly sounds from your note like they don't know what they're doing, and will end up dooming your company before it starts.

Besides, as mentioned elsewhere in the thread, this guy is family. This situation likely ends with you mutually hating each other. Who needs that?


They aren't doing fair business. Either they have customers or funding lined up, or you take an even split.

A guy who gets paid $7000 to build the site is not the guy that keeps the servers running, is not the guy that backs up the database, is not the guy who organizes further engineering efforts should the site take off.


I think you shouldnt waste anytime working in a startup on/with a idea/team that you dont believe in. Youre potentially going to be taking a lot of risk by going the startup route - an unimplemented idea from your cousin's friend is probably worth a week or two of brainstorming. I would say walk away.


Thank you all for your feedback. The overwhelming majority of you seem to be telling me the things I was thinking before, but not necessarily sold 100% on. I was concerned that I might be biased towards thinking the technical side is the majority of the work merely because I'm a developer, but you all seem to be of the same opinion.

For those asking about the other guys' contribution, they were essentially saying that they had potential investors who said they were interested in investing, but wanted to see a product first. Not exactly money in the bank, but a little better than nothing at all. I don't know how sound the logic is, but the "risk" on their part was stated to be financial, while mine would be time.

Once again, thank you all for your advice. You've certainly helped.


Use the spare time that you would have given them, for 10% of failure, to build your own side project, then either build that into a business or leverage the experience for the next thing.


An idea without execution isn't worth anything.

You'll be doing all the work up front and then all the work maintaining and improving.

You're also not a flight risk as it sounds like you're in it for the long haul.

They also sound like they're not convinced, which means they either haven't though it through or they're not worth the risk.

Good luck with the decision. I would vote a no for them as it sounds like you deserve better and if you keep looking, you'll find some cofounders worth taking the startup risk with.


Lack of understanding of the value of technology and execution that shows from the discussion you described would be a HUGE red flag for me.

I wouldn't move ahead with a team like this that has no experience and little understanding of what's needed to be successful.




Take cash up front. Be professional about delivering. Make sure that the rate appropriately values all your weekends and evenings.

Keep your day job.

These guys don't know anything: having their $7000 developer "walk away" is a disaster and they think it's a feature.

What happens in the future is anyone's guess, but the mostly likely outcome is that nothing happens. The next most likely is that something modest happens. Etc. Many of the eventualities will require continued development; you're the first choice and you'll have the upper hand.




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