Reflections on advising startups Part 1 (Questions I wish new entrepreneurs would ask)
Draft list of questions I wish entrepreneurs would ask me, their advisor when starting a new project.
I've been providing pro-bono tech advice since 2013. I find it rewarding to give back to my local community, and in all of those years, I've found that not only does it help me stay close to trends in venture capital, I also discover my knowledge gaps and biases.
As part of my 2022 goal to become a better advisor, I would like to share a few questions I wish entrepreneurs would ask me. Why? Because after working with 70+ start-ups, I've found these questions lead to better discussion. I'm not focused on whether my answer something you will like or dislike, these questions are optimized to lead to better, meaningful dialog.
Below is a work in progress. It's a draft list of questions I wish entrepreneurs would ask me when starting a new project.
Q: I have an idea and $50k in cash to spend. Who should I hire first?
I would not hire anyone technical at this point. I would try and solve the problem with out-of-the-box tech solutions such as these below:
|Brand||Product Category||What Can You Sell?||Offers Integrated Payment|
|Airbnb Experiences||Experiences Marketplace||Virtual / IRL Experiences||Yes|
|Airbnb||Product Marketplace||Short-term Rentals||Yes|
|Ebay||Product Marketplace||Used Products||Yes|
|Facebook Marketplace||Product Marketplace||Used Products||No|
|Fivver||Services Marketplace||One-time or Continous Services||Yes|
|Craigslist||Everything Marketplace||Products, Services, Experiences||No|
|DoorDaash||Multi-Vendor Marketplace||Food/Beverage + Delivery||Yes|
|AWS Marketplace||Software Service Marketplace||B2B SaaS Services||Yes|
|OpenSea||Product Marketplace||Digital-only Products||Yes|
|Onlyfans||Experiences Marketplace||Virtual Experiences||Yes|
|Paxful||Financial Trading Marketplace||Crytpo Arbitrage||Yes|
Q: When do I need a CTO?
Some business operators like to build new businesses from the top down. They'll designate themselves as CEO or President, they then hire VP of Sales, Operations, etc., and this hiring approach will continue to cascade until they have middle managers and employees. This model works well in non-creative industries, but it often fails in tech. A better approach is to hire from the bottom up. First, hire one or two developers to work closely with to build the product.
You'll need a CTO once you have multiple engineering managers to manage.
Q: So then, why do investors tell me to find a CTO instead of just hiring my outsourced development team?
CTOs and Lead Developers are expensive. As expensive as lawyers. So a strategic way to stretch your money is to offer equity to developers in exchange for cash. Investors want their dollars to stretch as far as possible in a high-risk venture.
Some investors are biased about dollars going out of the country. Some investors are biased about remote work. Some investors want to ensure that they can protect their intellectual property.
Q: When do I need to think of hiring an engineering manager?
When you have three full-time mid-level developers, you can stretch your money further by hiring two mid-level devs and an sr dev.
Q: Aside from the technical skill required to write code, what do you look for in an engineer?
Firstly, someone who can communicate bad news. Secondly, someone who can demonstrate the ability to scope a problem and break it down into bite-sized chunks that eventually resemble a list of tasks. Thirdly, someone who strives to simplify complexity –not make things more complex. This last one is most important to me. Similar to the adage, "time is money." My experience has taught me that "clarity of thought is money."
Q: What is a full-stack developer, and why do people keep telling me that I need to hire one?
My investor pitch includes using artificial intelligence; what technical pre-requisites should I consider before entering the AI space?
Q: What is the difference between a Chief Technical Officer (CTO) and a Chief Product Officer (CPO), and how do I know which one I need?
If you are building a consumer product, you likely need a Chief Product Officer.
If you need to hire a team of technical people to support your internal staff (aka infrastructure), you likely need a Chief Technical Officer.