Software development · Building a team

Software community lab?

David Schwartz Multi-Platform (Desktop+Mobile) Rapid Prototyping + Dev, Tool Dev

April 8th, 2015

Sorry, this is a long post. Please bear with me. I'm a software developer with 30+ years of experience. I'm reading all of these questions about how people can find a "tech" or "software" person as a co-founder, and want to cringe. Terminology is a big problem here, as well as a fundamental misunderstanding about software developers. I'd like to address that briefly, then describe an idea I just came up with to help solve the bigger problem and get your feedback on it.

Experienced software people come in two flavors: (1) people who program for a living and won't work for free; and (2) people who are very creative, have enough ideas of their own to work on for three lifetimes, and may be having trouble paying their bills. You won't get either one to partner with you for 100% equity! The first group just won't do it. The second group can't afford to, and even if they could, you're fooling yourself if you think you can convince them to invest a bunch of time and resources in YOUR idea (in which they have zero control) rather than invest the same time and resources in one of their OWN ideas (in which they have 100% control).

As an aside, these are the same people you're worried about stealing your ideas. Even if they did, they wouldn't be able to do anything with them. They're generally harmless in this respect. (We think, "My ideas are FAR BETTER than yours, anyway!" However this statement occurs to you, it's a big impediment to us stealing your ideas.)

What's left for you to choose from is retirees; near-retirees; unemployed people who are broke; and young turks who have very little overhead (they may be living with their parents), very little experience, and very little ability to advise you about the breadth of technical issues your idea may encounter. So they're not going to be good candidates to act as a "business partner" or "co-founder". Maybe a "coder".

Anyway, what I find most folks need is not a co-founder, but a rapid prototype of their software that acts as a proof-of-concept and moves them further down the road.

So I came up with this idea for creating some kind of "Software Development Lab" that operates like the model used by Tech Shop. However, instead of having a bunch of expensive mechanical tools there for use by the community, there would be a small staff of software experts who can help you flesh out your idea, write up design documents, and whip out functional prototypes in a matter of days or a week.

The Lab is "Community funded" somehow, and the staff is paid a modest amount to be available to consult with members who need help, as well as create software. (The staff would also be available for direct hire on an hourly basis.) The software they build isn't like full products that take months to build; rather, it's quick-turn proof-of-concept prototypes that are semi-functional -- enough to look and work ok, but not production quality.

The work itself is done on a kind of "pay it forward" basis where there's an expectation that any immediate funding you get will include some monies to reimburse the Lab, as well as some equity the Lab gets to benefit from your future growth.

This is different from most incubators in that the Lab isn't being "incubated". It's a resource for startups to use BEFORE they get to the incubation stage. And the Lab isn't helping with the startup in an end-to-end sense; rather, it's just helping the non-techie founders explore the technical side of their product in far greater depth than they could get from kids with little real-life experience, as well as get access to quick-turn prototypes built by experts.

So what do you guys think of such a service? Would it fit for your needs (as opposed to other things you may have considered).

The pink elephant in the room, of course, is how does this get funded? We'd be looking at around $400k per year for a staff of 4-6 people per Lab, plus office space. Startups cannot pay for these services at this point in their evolution. After a year or so, I'd expect that there would be enough startups that got enough funding to start repaying their costs, so it could become self-sustaining. But what parties would have enough of an interest to provide initial funding?

Mike Moyer

April 8th, 2015

This is great. Why not take it up a notch and allow MVP developers to share equity in the startup? My model, Slicing Pie, will allow you to determine exactly how much they should get for their work: http://founderdating.com/formula-for-the-perfect-cofounder-equity-split/

I've been doing this on a smaller scale with my company, Lake Shark Ventures, LLC. Frustrated with a lack of technical cofounders, I hired an over seas team to work on MVP tech projects for my own ideas and I take equity in other startups. It works well on a small scale. 


Joanne Frederick Healthy people. Effective healthcare.

April 8th, 2015

David, 
I love the idea and was going to suggest the Slicing Pie concept as well, but the Mike just beat me to it. 

The other thing I would offer is that the service is built around Agile methodology so everyone would be happy at the end. 

I'm ready to do it now... Where do I sign up? 
Best of luck!
Joanne

gnf .dk Software development - Noah ITAM/DCIM

April 8th, 2015

I am sitting here and reading comments. And they are all very good. Good insight and understanding of how things work.

But reading the original question by David - what I hear is basicly creating an online (non profit?) community where startups can get their "Best idea ever" a runaround - before he/she throws money after it. Is the community in need of getting paid for that service - should be dependant on the amount of "tasks" - if it works it can be sold ;-)

I am prepared to be a part of creating the interface, running it on my servers and be a part of the community - world wide even. 

Let us help to be creative with ideas..

Eric Wold

April 8th, 2015

There are lots of services doing exactly this already.  Here is one and they don't even require equity: http://betabulls.com/pages/pricing/

But why not raise money and also be able to help the many brilliant but disadvantaged who can't afford the $10k?  Nobody loses when you invest in a great potential founder and take just a fair/reasonable amount of equity for doing so.

What you are talking about (+built in funding) is what I hope to build and was discussing in this thread:  http://members.founderdating.com/discuss/2687/Can-a-full-stack-Accelerator-work-better-than-existing-VC-models-for-early-stage

An a-la-carte full stack accelerator.  Choose your terms on the way in the door.  If all you need is a short engagement and an MVP, great.  If you need more, great.

I think you can get the $400k, or even more.  In 24 hours since posting the above thread I've been contacted by people in multiple regions, including officials associated with economic development in two US state governments.  You could have a very nice business just focusing on the founders and their need for an MVP.  I think you can change more lives if you also align interests with the investment community and give them a reason to support what you are talking about.

Adam Darrow Business Analyst by day; stress coach

April 8th, 2015

I think this is a good start, and I appreciate your concern for us non-techies and the time you already put into this idea! The one really concerning part is the assumption that these start ups will get funded somehow with no team, no revenue, just a prototype (unless I'm missing something). Even if the non-techie inventor has a great understanding of the market, from everything I've heard, the bar has been raised - you need a team, and in most cases traction and some revenue before you will be considered "investable". Of course there are exceptions, but the message has been very clear and consistent. Not sure how to accomplish this, but I think there needs to be a quirky.com for software ideas whereby a community votes up/down to bring an idea to market. Thanks again for starting the discussion! AD

Karen Leventhal

April 8th, 2015

To piggy back, I would be happy to give equity for someone who could actually help implement the vision.  I started my company (an online b2b marketplace connecting buyers and sellers of sustainable/responsible goods) in part because I saw a lot of people trying to get entrepreneurs to pay (either in cash or equity) for advice. To be candid, it's easy to give advice, hard to get in, roll up your sleeves and do the work. Most of the entrepreneurs I knew needed on the ground help.  Any resource that could help me actually execute the work, I would be happy to compensate with equity. 

That being said, I wouldn't envision you existing on equity alone (and that is a long term payout) otherwise, you might become resentful of the entrepreneurs you are trying to help. affordable services + equity might be a good hybrid. 

Tim Cullen Principal Software Engineer

April 8th, 2015

As a software developer with 25 years experience myself I think this is a great idea.

David Schwartz Multi-Platform (Desktop+Mobile) Rapid Prototyping + Dev, Tool Dev

April 8th, 2015

Wow, these are some really great comments! I wish there was a way to reply to each one individually. Some are predictable only because I just didn't want to make the original post twice as long as it already is.

I'm looking at solving a very small piece of the pie here, although I'm realizing that maybe expanding it a bit might also be helpful.

Step 1: we'd review your overall proposal and examine your product/market fit. We won't do any work unless / until there seems to be a fit somewhere so we don't waste a bunch of time. Start pitching to whomever will listen and refine your story.

Step 2 (if needed): we'll build a "sketch" of your idea that you can show people for feedback. This is a non-functional prototype, perhaps built with Photoshop. Use that to go out and interview people to develop product/market fit. We'll iterate on that a couple of times if needed; after that, it should be clear whether the idea has legs or not.

Step 3: we'll take the results of your interviews and build a functional prototype. Get more feedback. Do more pitching. If the idea has legs and you're effective at communicating the product's benefits, you'll get some funding at some point. YAY!

While I like the idea of building out an MVP, that's not what I have in mind. It's an order of magnitude more involved than just a functional prototype to demonstrate proof-of-concept. Not ruling it out, but perhaps a better role would be for us to act as project managers for you at that point.

I like that idea of "Two Weeks 2 Beta" where it costs $10k to implement one user story. That seems quite reasonable. I cannot see this working with a team overseas. The cost savings on the developers will be eaten up in overhead and delays. The thing I like most about it is the fixed-cost and time-bounded nature of the proposition: people on a budget need to be able to predict what their money will buy them in the given time-frame. Software is so "mushy" that it's almost impossible to come up with reliable estimates, which is why it's common to get quotes from developers that vary by one or two orders of magnitude in both time and cost.


Karen Leventhal

April 8th, 2015

To validate some of the ideas being offered.   I think the "getting to MVP" journey can be broken down into sub steps, which can be "sold separately" if desired. David and others mentioned them, but here is our journey: It may or may not be helpful to anyone. 

1) Idea. That's all the team

2) Product Market Fit (Multi Staged): We did several sets of interviews/ and surveys, going deeper and deeper into the issue. And we will probably do one more before we get to MVP.  This is very important, saves a bunch of time.  This might be an iterative process.   I actually paid a graduate student to help with in depth interviews.
I'd been happy to tell what I paid if you're interested in details.  It was a great use of our limited funds. 

3) Pre MVP Pilot.  You might be able to skip this step with in depth interviewing, but we literally went out and did the functions that the site and company would do-- without hte technology.  This is the ultimate method acting of business. We sold like our sellers normally would, using the existing options. We communicated between buyer and sellers, and we came to understand what kind of communication typically happens or is desired. We did all our processes manually- just like many buyers and sellers do now-- and we learned a lot. This was super resource intensive-- we did it for about 6 months.  We had revenue and clients. Was it worth it? Don't know, but we learned a ton. 

4) Photoshop Prototyping. We hired someone (and in fact several people) to photoshop key pieces of the prototype.  A lot of this was done in conjuction with creating a pitch deck. So if you can combine these services, might be desirable. We spent a few thousand dollars on this. It was well worth but only because the person we worked was excellent and had a wide ranging background in UI/UX, and been both on the tech and non tech sides of start ups and really knew his stuff.   With a less qualified person it could have a waste of money. We then showed the photoshop prototype to our existing clients for feedback. 

5) The step we haven't done-- build the MVP. The good news is by doing it this way, we've got some built in beta testers.  But it's definitely been a long road. 

But basically, these seems like steps that can be parceled out. Forgive me for using this analogy, but it's kind of like an assembly line or series of finishing courses. The start up team can move through each one separately and decide it they want to continue with the lab and vice versa.

George Calvert

April 9th, 2015

David, I like your idea, though I suspect the devil's in the details :-)   A few thoughts:

Re funding, try asking a few angels (and particularly angel funds) whether they could see such a service as a worthwhile way to create a stronger pipeline for their portfolio.  They might be game if the service offered a higher return than they can negotiate today (because engaging before product proof and initial traction is riskier).

At least for start-ups where the software itself is the innovation -- I think the lab should be developing prototypes, not MVPs.   To me, the "viable" in "MVP" means an MVP contains the functionality to deliver the core value proposition and has the architecture to support real-world use for the initial 4-8 months of beta and GA.  OTOH, "prototypes" support a demo involving a few users and some sample data -- they don't scale, they skimp on security, etc.

FWIW start-ups that invent new software or knit existing stuff together in novel ways IMHO really need someone -- on the team -- dedicated to thinking thru the design / architectural / build-vs-buy / etc. decisions.  This person doesn't have to be an engineer, per se, but he/she must understand the technical issues and the business-level ramifications of them.  These concerns are usually beyond the scope of a prototype and at odds with the agenda of an outsourced tech team, particularly one geared for throughput like the Lab would be.