http://www.daryllu.com/wp-content/uploads/2018/10/entrepreneurial-ninja_logo_sm.png 0 0 Daryl Lu http://www.daryllu.com/wp-content/uploads/2018/10/entrepreneurial-ninja_logo_sm.png Daryl Lu2016-02-23 13:13:002016-02-23 13:13:00Two Entrepreneurs Working With Two Devs (Part 2): The Big Consideration of Early Partners
Continuing last Thursday’s post on two entrepreneurs working with two inexperienced developers early on… The devs are experienced programmers, but just as important, they’re inexperienced in early-stage startups.
The problem for entrepreneurs isn’t finding early partners… it’s finding the right partners. Finding partners (of any functional resource) who will fight it out in an early-stage startup to get to product-market fit and beyond is tough.
The entrepreneurs in the presented cases should manage expectations of the dev partners as soon as possible – set expectations the road ahead will be long and tough.
In both cases above, the devs will not work full-time, and they want equity as a discount to cash. The problem is that early-stage startups need iterations to launch, learn, build, and repeat – most will struggle to find meaningful traction before product-market fit which could take 18 months. As that happens, passion and patience will be tested on both sides – the entrepreneurs and the devs. Lack of traction can dishearten anyone, especially those working late into the night on a project but not seeing “meaningful” shifts in customer acquisition, yet.
A recurring piece of advice I’ve heard over the years from mentors (during Body Boss and every business since) is having an operating/ partnership agreement before any partnership moves forward. You can go further in a contract by detailing deliverables and compensation (outright payment, equity, or mix of both). Here, contracts could include incentives for achieving milestones to ensure all parties stay committed to the cause while including opportunities to sever relationships if needed.
To be honest, contracts suck and can be deterrents for some partners. However, they can play critical roles later in light of success and failure. If individuals do want to move forward as partners, they’ll appreciate the importance of contracts.
Early partners are very tricky, and there’s no formula on the right one(s). There’s a mixture of trust, personality, can-get-shit-done attitude, and grit to overcome obstacles – each hard to measure. But if the entrepreneurs above are serious about their ideas, they need to be cautious bringing on inexperienced early partners.
What are some other areas to be cautious of with early partners? How would you qualify and move forward with an early partner?