The Death of the Business Founder

The commonly accepted structure for startup teams is one business founder and one technical founder. Theoretically it makes sense: one guy builds the product and the other sells it. But it’s not that simple.

Some time ago I wrote that founders can’t live in silos. If the business guy doesn’t get the tech side and vice versa, it can lead to a host of problems. Having spent the last few months talking to entrepreneurs, I’m going to take my concerns one step further and say that the business founder is dead.

We’re seeing more and more startups built by two technical co-founders. That doesn’t mean they can sit by themselves in the dark and code all day and night. Quite the opposite. But technical people are becoming more and more savvy on how to build their businesses. They’re learning about and actively figuring out things like customer development, viral loops, user acquisition, marketing, etc. They’re taking over the responsibilities of traditional business founders but remaining close to and active with product development and code.

The value of a classic business founder without any technical know-how is dropping significantly. That might change when a company hits product/market fit and is ready to scale, but early on, startups are succeeding without pure business founders.

The “new” business founder is someone that gets technology and can build products. It’s someone that can hack together a WordPress site with landing pages for A/B testing. It’s someone that gets analytics. It’s someone that can be in charge of product management (not “project management!”) Either traditional business founders need to acquire these skills ASAP or get out of the way, because technical founders are moving into these domains aggressively. And they should: technical founders need to understand, embrace and excel at these elements of the business.

When you think about your startup and you’re asking, “Who will speak to customers?” it shouldn’t be an either-or question between two founders. Both founders should be speaking to customers. Both founders should be conducting early customer interviews. And when you’re asking, “Who will be involved in designing the UI, product flows, hacking the MVP?”, the answer is everyone.

The traditional business founder is dead. But that doesn’t mean that startups can focus on technology and ignore business. Quite the opposite. Most risk in startups today is market risk, not technical risk. The key is that the people identifying the market risk, problems to solve, market opportunities, customers, acquisition tactics, pricing, etc. are the same people that should be building the solutions. Everyone in a startup is a business founder. Everyone is a technical founder.

November 24, 2010 Posted in Startups by

  • http://yopdesign.com/ Yofie Setiawan

    So much agree with this, i took long long time to think if i need some business guy to help my business to grow, coz it seems they don’t really understand what i am doing, it’s me/myself who really understand about it…

  • http://www.tandemlaunchtech.com Helge Seetzen

    I think this depends a lot on your field. Tech companies have three main functional areas: Technology, Business Development and Operations. The web2.0 space has massively reduced the complexity of each of those three areas so that a single person/skill set can address all three. That’s not really true in other fields.

    A business guy in Web2.0 can fairly quickly learn the basics of coding/webdesign/UX and take on some of the technical activities, but try to make that same transition when “tech” means genetical engineering, nanotech or quantum computing.

    A tech guy in Web2.0 can do a lot of “biz dev” because he can connect to thousands or millions of customers from the comfort of his PC. Try doing that when your customers are executives at large companies splattered all over the world.

    I am not talking about later stages, just different technology fields where those dynamics are still necessary even at the beginning. I

    do completely agree with your assessment when it comes to the Web2.0 field though. In fact, I marvel every day that any of the more traditional concepts are still in use in such a radically democratised field (e.g. I think your Year One Labs concept shows that even basic concepts like “founder” takes on a whole different meaning in Web2.0).

  • http://twitter.com/austingunter Austin Gunter

    I wholeheartedly agree. Working with pre-seed and seed-stage entrepreneurs and startups, I often can see a direct relationship between the founder’s ability to not only SEE the problem inside the business, AND their ability to FIND the solution technically.

    I think part of the reason this is true is the amount of time that it takes to communicate a problem from a business standpoint into technical language, from the business founder to the technical founder who can build a solution. It’s hugely inefficient to spend time transitioning insight from one team member to the next, especially when a hybrid biz/tech founder can see the problem and has the skills to build a solution.

    It’s not so much how long it takes to build and then measure for business application, it’s how long it takes to transition from building to measuring that makes the difference. As Lean startup posits, the ability to transition from one step to the next is more important than how long it takes to complete a given step. It seems that the business founder who has to transition his idea to someone else loses time that the hybrid founder never would. Repeat this time loss, and the startup runs out of time sooner.

  • Pascal

    I agree for startups in the web 2.0 field. I had a lot of pain with an earlier project with my business partner. He didn’t understand what my work was and why I had to change technologies when I found problems with my initial solution. He didn’t had the same vision of the web than me. I understood the evolution of the mobile devices such as phones and tablets. He didn’t. I disagreed with almost all of his decisions; this made me left the project.

    Now, I work on something else. I just got the feedback from my coach that I shouldn’t focus on getting a salesperson / business guy, but focus on the business problem I am solving instead. It turns out that all I need isn’t a salesperson, but a coach to guide me. The only thing I am looking for in a business guy is to handle all the administrative tasks and help sell the product. Administrative tasks can be handled by an “adjoint administratif” (don’t know the word in english). Selling the product gets easier if you practice your salespitch, which isn’t impossible.

  • Pingback: In Defence of Business Founders | Dan McGrady · dMix - Toronto Startup, Ruby Developer and Designer

  • http://accountingsmallbusiness.net/ Yarndi1

    I have worked a lot with small trade businesses and many of them have been partnerships. Sooner or later they have a falling out and the business implodes; often leaving a financial mess for both of them.

  • Greg

    Willingham said he’s still bullish on some of the stocks that bolstered his returns last year, including Southwestern Energy Co. and Petrohawk Energy Corp., both of Houston, and Fort Worth, Texas-based Range Resources Corp. The companies last year rose 66 percent, 53 percent and 45 percent, respectively.

    http://commodityconsultant.com

  • http://throughput.us/ Jeff ‘SKI’ Kinsey

    I agree that with more investors chasing fewer deals, this trend may be true at the moment. But as other have pointed out, there are a lot of factors in the mix of any successful launch. This is another one of those metrics we should track. Nothing more, nothing less.

  • http://simplifiedecommerce.com Colin8ch

    Whew, when I first started reading this I was in a panic…thinking that it was going to suggest that
    developers get out from behind coding and get into inbound marketing, raising funds… full time. But upon further reading, I couldn’t be in more agreement. If fact I don’t really know if there should be a spot for a “non technical” business founder that can’t jump in to manage product, create and maintain a wordpress site, bust out a simple HTML landing page or setup and evaluate some analytics, etc. The biz founder may have a different focus, but has to at least be able to dig in and get his hands dirty when required and most importantly, be able to communicate between the Developers, Customers, Board Members and Investors.

  • http://www.henleyinterim.com Matthew Simmons

    I think this is very true – I do a lot of work with startups – mainly in the tech space – and increasingly they are looking for commercial resource to help with ‘productising’ the idea and in getting it to market.

    Matthew Simmons
    Interim Marketing Director

  • http://www.snap-marketing.co.uk Debbi

    Hi,

    This is such a thought provoking article. We are finding at Snap Marketing that a lot of new business is coming from entrepreneurs specialising in a particular field. Although the are highly qualified in their field, we find they really need lots of help with marketing. The great danger is that because many of them can do html or build a site in wordpress, they create their own brand as well. Brand is the most important asset any startup has and they should invest in it properly.

    Debbi

  • http://www.horsepigcow.com missrogue

    “News of my death has been greatly exaggerated.”

    This is one of those opinions that have little to do with rules or with past or future success of a business. I can think of as many examples of companies who were successful with business-led teams as were successful with technical-led teams. To assume that business means selling makes me think that you don’t understand what business people actually do.At the end of the day, it’s GOOD FOUNDERS…with vision…and perseverance…and resourcefulness…and an ability to execute…not to mention the skills to interact with the customer and figure out how to get product/market fit. The only things that make or break companies are lack of product/market fit, inability to execute and running out of money. You overcome all of those pitfalls no matter whether you are business or technical side.Certainly, it’s ideal to have everyone coding, but it doesn’t mean that people who can’t code can’t contribute to the product development and a successful company. This dichotomy is an unfortunate one.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    I used the word “sell” at the beginning, but could have also said, “one guy builds the product, the other does the ‘business-y’ stuff.” Business is not exclusively about selling. I’ve written plenty about achieving and working towards product/market fit that I think my thoughts on that are reasonably clear.

    And I also did not say that everyone has to code. I DID say that everyone has to be able to build the product though. But that could be building a website or landing pages and doing A/B testing. That requires little to no code, and doesn’t actually involve (usually) the core product itself.

    I also never said that people who don’t code can’t contribute to product development. But the fundamental problem with business founders is when they can’t execute anything. So off goes a business founder to do customer interviews. He’s out there, doing “customer development.” He then comes back and translates that for people who are going to respond to the feedback. If the person that goes out and does the “customer development” can’t come up with ways to assist with the execution throughout the entire customer development process there’s a problem.

    And I still believe in the increasing advantages that technical founders have over non-technical ones. I do think it’s much easier to learn the “business aspects” of a startup than the “code” aspects. I’ll never be proficient enough in any programming language to build my own products unless I spend considerable time learning how to code well. But technical founders – with the resources available to them – can more quickly learn how to execute on the business aspects of a startup.

  • Jason

    Mark Pincus

  • http://www.blockbeta.com/ Robbin Block

    I have worked with lots of startups, including Web apps, and there are many skills and resources needed to make them successful. The development of those skills, whatever they are, are the combination of talent, education, knowledge and experience. To say that “…it’s much easier to learn the ‘business aspects’ of a startup than the ‘code’ aspects” speaks to a misunderstanding of what’s involved. I could just as easily say it’s easy to learn code if I apply your criterion (whatever that is).

    This is not a new discussion. I’ve been dealing with coder-arrogance for years — the idea that their skills are more valuable in some way than everyone else’s. Get over it. There have always been successful entrepreneurs with hybrid talents. The trick is to know when you don’t know something. Then seek out complementary talents; respect them, not dismiss them. That what makes a successful founder team.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    I like the term “coder arrogance” although I’ve never really experienced that from coder founders. Hired programmers … different story.

    Thank you for your feedback. I’m not a developer though; in fact people would call me the “business founder.” So I’m seeing my own demise (in some ways.)

    I’ve been running companies for many years, so I don’t have any misconceptions in terms of what it takes to run a business. I do think it’s easier for technical people to learn how to run a business than it is for non-technical people to learn how to code. I think it’s quite reasonable to say that there are more technical founders than non-technical people that became coders.

    And my point is not that there’s no room for business founders – but that they have to be a lot more responsible for things that in the past would have been the exclusive domain of technical people. In fact, the lines are now becoming so blurry – and this is really my key point – that I don’t see the need or even the optimized benefit of having a “business founder” and a “technical founder.” Both people are “founders.”

  • Karen Scharf

    It’s very inspiring. Everyone in startup must be a technical founder in their own way. Nice words! You are able to deliver it well. Good job.

  • http://www.facebook.com/raden.yoga Dg Yoga Ti

    Let me start by saying nice post. Im not sure if it has been talked about, but when using Chrome I can never get the entire site to load without refreshing many times. Could just be my computer. Thanks.
    http://newjobsvacancy.com

  • Carolyn

    When Al Case died unexpectedly this summer he was close to fulfilling his dream of opening a second location of his longtime business.

    Just several weeks after his sudden death, Case’s daughter Brittany and wife Joelle saw his dream to fruition. The two women went forward with plans to open a new location of Al’s Painting on Portsmouth Avenue in Exeter that Al Case had been working toward when he died.

    Case, who had operated Al’s Painting for over 20 years, was always working to grow his business bigger and better, according to Brittany, 20. He had just made arrangements to lease a second space on Portsmouth Avenue in Exeter when he suffered a massive heart attack at age 42.

    What would your family do if you died unexpectedly? Never mind the typical concerns like life insurance and burial. As entrepreneurs what we really want to know is whether or not they would be be able not just to carry on the business, but to continue growing it.

    Regards,
    Carolyn Ruschp
    http://commodityconsultant.com

  • http://www.e-steroid.com legal steroids

    I totally agree with you esp. the last paragraph. A man who got both technical and marketing talent could become a successful business founder on his own for sure. However, based on my own experience, people always got one side of brain and another one missing = the best coder usually knows nothing about how to sell/promote or find JV for a great startup and the best marketing genius usually not that brilliant in terms of coding, logic etc. It reminds me of the Facebook lawsuit LOL

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  • Kate

    Liked the article – and it makes sense. When you go lean, there’s no room for free riders. I’d say this resorts to very very early startups, but as soon as there’s some traction and growth – it’s usually a good time to bring in some business people

    http://commodityconsultant.com

  • Private B Bonny

    The Amateur Era continues to unfold!

    Business people are the ones with the specialist skills needed to “[identify] the market risk, problems to solve, market opportunities, customers, acquisition tactics, pricing, etc.”. It is a serial cause of failure that companies make technologies and not products. Any VC that expects his or her tech team to also be brilliant businesspeople is heading for a hard lesson. Why not also put the sale pro in charge of the accounting? And the CFO can lead marketing! And HR can run logistics!

    Yeesh.

  • http://www.instigatorblog.com Ben Yoskovitz

    I never said companies should build technology and not products. You can read a host of other posts I’ve written on customer development and product management that will attest to my focus on products (and not tech.) But I do question the specialist skills you’re referring to, especially very early on when a company is first starting. Please note: That my caveat (which is true of most of what I write here) is that I’m referring to Web and mobile startups.

    When a company first starts it usually doesn’t have a “sales pro” or CFO or even a lead person for marketing. These are roles that expand and segment over time as a company grows and needs to specialize those responsibilities. When it’s 2 guys in a garage, you don’t have any of those things, because the founders wear all of those hats.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    I never said companies should build technology and not products. You can read a host of other posts I’ve written on customer development and product management that will attest to my focus on products (and not tech.) But I do question the specialist skills you’re referring to, especially very early on when a company is first starting. Please note: That my caveat (which is true of most of what I write here) is that I’m referring to Web and mobile startups.

    When a company first starts it usually doesn’t have a “sales pro” or CFO or even a lead person for marketing. These are roles that expand and segment over time as a company grows and needs to specialize those responsibilities. When it’s 2 guys in a garage, you don’t have any of those things, because the founders wear all of those hats.

  • Private B Bonny

    Business is case-by-case. Which startup? What business problem? Which founders? If technical people, have they hired before? Managed? Sold anything? Done deals–successfully? Which business founders? What have they done before?

    Ben, the team has to fit the problem and the problem the team. Generalities are useless.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    I agree there are no hard and fast rules that are suitable to all business. We can see patterns and strategies such as customer development and lean startup that are improving how startups (again I’ll preface by saying in the Web + mobile industries) get off the ground and accelerate forward. I’m not speaking in generalities, but in terms of patterns that I see.

    A business person that can’t build a product is becoming less and less interesting in the world I live in. And business people aren’t learning how to build products as quickly as technical people are learning to build businesses.

  • http://www.ink365.gr/ ink365.gr ??????? ???????

    This is not a new discussion.There have always been successful entrepreneurs with hybrid talents. The trick is to know when you don’t know something.Get over it.

  • Sue

    this is my favorite quote of yours: “Everyone in a startup is a business founder. Everyone is a technical founder.” Nothing is truer.
    we started http://iget2work.com and were 2 tv professionals who knew NOTHING technical about the internet. i learned html from a book and hopped on twitter and got to TALKING to everyone about how to make a success with the site. 2 years down the road, we’re still plugging away trying to make it as an infotainment site. Someone once said the internet is awesome because all links are created equal. whether you have a zillion dollars to pay for advertising or just plug away blog by blog, conversation by conversation, eventually you’ll either make it or decide it was a great try and move on to something else. a LOT of unemployed people are trying to make a ‘go’ of sustaining themselves via the internet. we have found that nothing beats the old fashioned way of doing business in the new world of the internet. but things like twitter and facebook can really help you reach people. great post. thanks!

  • http://www.meratvforum.com Waleed Raza

    BIRMINGHAM, Ala. — Golden Flake has offered its condolences following the mysterious death of its founder’s son.

    Thomas Major Bashinsky, the son of Golden Flake founder Sloan Bashinsky, was discovered deceased in a Highland Gold Club pond Monday.

    Late Wednesday Golden Flake President Mark McClutcheon said in a statement, “We offer our prayers and sympathy to Major’s family on their loss.”

    Bashinsky disappeared from his office in the Luckie Building off Highway 280 at Lakeshore Parkway on March 3.

    His car was then discovered abandoned on 11th Court South in Birmingham four days later.

    Then Monday, golfers noticed his body floating in a water hazard pond at Highland Golf Club.

    The Jefferson County Coroner’s Office said it would be Friday, at the very least, before they could determine Bashinsky’s cause of death.

  • Bill Lawrence

    There has been start ups that have done very well with verly little tech skills. The key is your desire to learn and work at the same time. By getting the right info, keeping it simple and putting it to work formula has worked very well for many of us.

  • http://www.wbsonline.com WBS

    I think one point that is important here is that the author is referring to founders with an understanding of technology… This is very different from a “coder.” Good founders know where their skill set ends and someone else’s begins, but the further the founder’s own skill set extends the better for the company as a whole.

  • http://pulse.yahoo.com/_HWFXQVG34CTRFXSDXAC6MDCH7M Alda Don

    Well the article about founder of death business has great. Really it was a good time spend to read above article.

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Ben Yoskovitz
I'm VP Product at Codified (makers of VarageSale).

I'm also a Founding Partner at Year One Labs, an early stage accelerator in Montreal. Previously I founded Standout Jobs (and sold it).

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