How a non-technical founder can make their first technical hire

In this episode, Tyler helps Rick evaluate how to build a new software application from scratch. Since Rick is a nontechnical founder, his biggest roadblock is figuring out how to build the application without raising money.

After going back and forth, the following framework emerged for nontechnical founders trying to hire a first employee:

• What is the idea (i.e. problem and solution)?
• What type of application needs to be built to deliver on the idea (i.e. requirements)?
• What technical skills are required to build the application?
• How much are these skills going to cost?
• How are you going to finance these costs?

Some of the takeaways include: 

• If you're a non-technical founder, it’s very hard to bootstrap early product development without giving up equity. 
• CRUD (Create. Read. Update. Delete) software applications require a generalist “full stack” developer while more sophisticated software applications may require a specific specialty.
• There are two big buckets of skills for product development: design and technical. 
• The design bucket is made up of two categories: 1) user interface (UI) design and/or user experience (UX) design; and 2) graphic and/or visual design.
• The technical bucket is made up of three categories: front-end development, back-end development, and infrastructure.
• There are a number of ways to staff these skills ranging from finding an experienced generalist co-founder, which is most expensive, to outsourcing, to hiring entry level talent at the low-end. Each approach comes with it’s pros and cons.
• One downside of going with less experienced talent is “technical debt”, which can increase costs down the road. Another downside is slower progress due to the learning curve.
• To attract top talent, you either have to: a) have a compelling idea and be willing to give up significant equity, or 2) already have some traction and be able to pay a competitive salary and bonus. 

What is the idea?

Tyler: In this episode, we’re going to talk about the ideal technical co-founder or first employee for a software company, and how to find them.

Rick: I’m excited about the topic today because I’m not technical. For purposes of this conversation, let's assume it's a software application in the business-to-business (B2B) realm. Obviously, [what type of software you want to build] is going to be a determining factor. But for the purposes of this conversation, let's condense it to, “what's the right technical co-founder for a B2B software company.” This is on my mind because I just ran into a [technical] problem with Group Current. But, it's also on my mind because as I think about LegUp Ventures, which is my parent company that owns and operates [my startups], I'm starting to think about other types of software applications that I might want to build. For example, I'm still very interested in the employee benefits space outside of health insurance. I have an idea about education benefits where a company could give money to employees, tax-free, and let them go into a marketplace similar to the health insurance marketplace and peruse courses from all types of vendors [ranging] from Coursera to SaaStr to, even in-person events or books on Amazon, buy them, and then get reimbursed tax-free by their company. I've thrown this around with a lot of people, especially millennials who are interested in going to take advantage of these new tools, and there seems to be a solid demand for it. I cannot find anyone who's delivering on this. I know exactly how this is going to work and all the technical specs. The big roadblock for me is knowing how to go about building the application in a way that I can prove [product market fit] before I raise money.

Tyler: Yeah. So it seems like there's at least two parts of this. One is what skills would the ideal technical co-founder have and all that? The other one is how do you find that person?

Rick: Yeah, and I would say there's a third element. So one is, yes, skillset. Two is how do you find them, and then the third is what do you call them and how do you pay them? Is it a co-founder? Is it a contractor? Is it an [outsourced] shop? Is it an employee? And what's their title? Is it engineer? Is it co-founder? Is it CTO?

Tyler: Right. Okay, so where do you want to start here?

Rick: Skills.

What type of software application are you building?

Tyler: So you're talking about a web-based application, right? And this is something that absolutely doesn't require genius-level technical knowledge to build. Do you know the term CRUD? This is a CRUD app.

Rick: CRUD sounds bad. Is CRUD bad?

Tyler: No. It's Create, Read, Update, Delete. It's basically the four main database functions, and a lot of software out there is nothing more than putting stuff into a database, taking stuff out of a database, and then putting a [user interface] (UI) on top of it.

Rick: Yes, and I would say that the UI for this is critical, because it's going to be a low ACV (or annual contract value) product and self service is really key.

Tyler: Yeah, so the UI design might be more important than the actual technical implementation here because, with most CRUD apps, and I consider a CRM to be one as well, you don't need a Google-level genius computer science PHD to build it. Maybe you need someone who has more empathy for customers and stuff like that. Do you think the person you're talking about is going to design it, or do you think someone else is going to?

What skills do you need to build the application?

Rick: So, maybe I could talk about what my skills are. It sounds like this is going to be variable based on what compliments I need. I am a terrible designer from a “look and feel” standpoint. I can wireframe a usable product. I can wireframe a vision for something, but in terms of making it an exciting experience for a user, from colors to a style, to even specific placement of elements, that's not me. But in terms of writing requirements, describing the high level technical requirements, describing the user persona, the strategy around marketing this, that's all I'm really strong at. I would love someone that is as passionate about the user experience as me, but I can't do the design, I can't code the design.

Tyler: So you either need a designer and a programmer, or a jack-of-all-trades who's going to be able to do both of those? A lot of companies would have two different people for these two different roles.

Rick: Well, let's assume for this conversation that I'm looking for one person to fill this void, and I'm open to calling them a co-founder. I'm also open to calling them whatever is appropriate to call them. Employee. Contractor. Outsource shop. If this is going to be one person, what are all the skills that they would need to be able to design, code, and, I guess, launch?

Tyler: Yeah. So where you leave off is basically a requirement doc. Maybe you could do the wireframe, but it sounds like where does stuff...