I’ve been involved in a startup where my task where restricted to the “accountant”, and it seems the tech guys did alot of wheel spinning. One of the 1st questions that needs to be asked is “How is the biz going to make money?”…Whats the product? How’s the audience ?

As a business guy, it amazes me of the increasing number of tech startups that obtain millions of VC funds, only to answer the “How am I going to make money” question later.

Although I’m a not a MBA, (i’m an accountant) and I can see how they seem overrated, due to the fact that of whats taken place in the “internet space” is changing at pace faster than the textbooks they learn from can be updated.

What evolved into Microsoft won’t happen today, w/the acceptance of open source, etc…

I hopefully has studied the internet space, enough to be able to define a business model for my upcoming launch.

So I think the biz guy and tech guy, are both important. and should be valued equally..

Last thought- With the improvements in finding freelance tech guys,and outsourcing, open source, etc.. ….Will the value shift more towards having a Biz Guy first, followed by finding a component outsourced tech solution.

Does a business guy have a place in the first 3 month’s of a startup?

Yes. He has a place on day 0. If you look at those fortune 100, and EVERY single other successful company ever there has been a thing called Vision. It might not have been perfect, and it may have changed over time but this Vision is the beginning of the whole process.

The skills of a techie can identify a market need simply by being out there and saying “Hey what if I could do X?” He then might say to himself “Oh thats how I would do it” and then he could start designing/coding. In the early stages (First hours, days of work) he will start to form a vision of what it will look like and why it has value. He can then go on to develop a product which provides this value.

The skills of a business person can identify market need in a different (but often more effective way) by being able to analyze needs and gaps. He in some way has to be out there however. A sales guy for example could very easily spot an opportuniy for a spin off, know how to add value, know why people would buy it, and form a vision about what it would look like not from coding some stuff, but from how a customer will take value from it.

There are both bad business educated people which you all seem to refer to as Idea Men. And there are also glass tower techies.

I think the Fortune 100 list is misleading, because a start up today is not what a Microsoft was in 1980. And I strongly believe Google is an exception to the general rule.

When it comes down to it, I think it depends how you define what a business guy is. Is a techie guy with guts and some pick it up as he goes know how a business guy? Not to me. He might be a great entrepreneur turned CEO. Is Bill Gates a business guy? Absolutely, and he always was, from the very first day. Why? Vision.

I think alot of technical dismiss the body of knowledge that is required to be successful as a business person, manager, etc. It is a brutal task as a company grows, but not particularly cumbersome in the early stage. When I say business person I mean Executive Visionary, Strategic Leader. The old HR manager is clearly not needed, neither is the director of finance. They are needed later, sure.

So does a startup NEED a business person at the start? Yes. A start up is a business. Do they need someone with a business education. Not necessarily. Business students can seem frustrating because we are taught from cases about McDonald’s, Coca-Cola, blah blah blah. They have no sense of what a start up is so they come in and start getting to administrative work, which in the beginning is unneccessary.

You have all gained great consensus on the Sales issue, which is beyond crucial. As one poster said “Techie has product, idea man presentation” Let me tell you that you are far better off with a presentation that took a few days to slap together and a chance to learn what the market needs, than you are with 3 months of useless code.

A start up needs technical know how, and business leadership. What form that comes in is not important. I would suggest that a strong techy with a good technical competency in a niche area, and a business educated entrepreneur sales person, as partners, could very well be quite a formidable duo because after those 3 months elapse, there will be no holding back, roles will be defined, market will be known, and you will be off to the races, and have a distinct advantage over idea men with craigslist hackers, and techies who are still hiding in the garage.

Competitive Advantage.

A bizguy on the payroll waiting for the product to go to market, a consultant, and additional not optimal used techguys are cost you cant afford.

So I believe its not a matter of a bizguy vs a techguy. its about weather or not the resource is needed. if not, off with his/her payroll!

What I question is whether a business guy has an significant part to play in the earliest stage (the first three months) of MOST startups, unless he is the “idea guy”. And if he is, I’m saying that when the idea guy isn’t part of the team who actually builds stuff, the company and product usually suffers.

I think if we look at the startups who have “made it”, they tend to have hands-on founders (coders/designers) who also led the charge on the vision and NOT pure-play idea guys.

I’d say “how could you possibly not” and expect to be more than marginally successful. Products generally don’t sell themselves. The occasional anecdote to the contrary is not a good business plan. Also my reasoning comes from my first start-up which didn’t pop because we didn’t delegate enough which affected both the business and the technical quality. I haven’t made that mistake since.

But also I don’t automatically attach as much meaning to degrees (or schools) as most people seem to. I see all degrees as simply Bayesian proxies for skills I’m looking for with a inevitable rate of false positives. The MBA degree has an especially high rate of false positives. In fact, there are some schools that set off loud warning bells. Stanford MBAs are the worst and most lethal tech-oriented MBA, IMO. Harvard MBA are scary also.

You *do* have to be very careful before you delegate the business role though. I recently advised a “hibernated” start-up on re-start strategies. The primary reason they had to hibernate was that all their VC money was squandered by an “Idea Guy” CEO who was brought in by the VC (you’d know them if you heard the name – one of the reasons I encourage bootstrapping).

Apparently this bozo wasn’t even able to create a business plan or pro forma in the 2 years he was there. He was able to burn through nearly $8M. On what the founder still isn’t sure but it seemed to include a lot of purchases, expenses and perks that ultimately didn’t get the product out the door. You ought to *at least* get one lousy business plan and pro forma from a hired CEO, BTW. I created first pass drafts of both that afternoon while I was talking to the founder.

We had a bubble in tech in the late ’90s. Bubbles draw in a lot of bottom-feeders and money-chasers. Thus, the tech industry is littered with businesspeople who just want to have a tech company and who want to find some hackers to “do it for them.”

I have personal (and miserable) experience with this phenomenon. I got sucked into such a startup for a while, and ended up wasting a lot of time.

Okay, I’ll fess up. I have an MBA, and yes, I consider myself an idea person. However, that doesn’t mean I’m not a doer as well (strategist, writer, trade show planner, chief cook and bottle washer, willing to leap tall buildings in a single bound). They’re not mutually exclusive. In fact, the two sides inform each other. Just like ideas and dare I say marketing (and sales, which is part of marketing), and the technical, must inform each other. It seems to me the most successful companies find a way to make these work together, not as opposing forces. For how can tech alone understand how to create a product/service the market wants, and by the same token, how can tech marketing exist without someone to build it? It’s not a black and white thing. Sure, it’s possible that these talents exist in the same people, but in my experience it’s extremely rare for a whole host of reasons. That’s why it takes a team that respects each other for the talents they have — whether that’s technical or (god forbid) non-technical.

All you non-technical people out there, please stop making excuses for the talent and hard work you do. It just makes it harder for the rest of us.

The Idea Team
The Idea Validation Team
The Implementation Team
The Sales and Marketing Team

All these teams may be just two guys in a garage. Or even person (though that is a less likely scenario). For a good idea to succeed you need validation. You need a way to describe it to people. You certainly need to have people promote and sell it.

It also depends on what you need from your startup. I have done four. Three of them (moderately successful) was just me with a small group of developers. The one that did better than the other three was actually started by two Wharton MBAs and I came in for generating and implementing ideas.

Your post sure has been getting around the block. I had to jump over and check it out. Wow there are some passionate people reading your insights. Congrats.

It seems to me there are many different arguments and I personally believe that you need both sides to hack it in the tech startup world.

Just a fact: If you want to do anything it requires resources, so having only hackers is no good for generating revenue, and having a sales heavy team with no understanding of how to create a quality product is shooting yourself in the foot.

I like what Alyssa commented about your post. Read here: http://blog.seattlepi.nwsource.com/startherup/archives/136357.asp

All said, a Technical person can be a Business person also. I happen to be one of those. I started off a a programmer and inherited my business aptitude through trial and error. Of course i hire bean counters and CFO’s to crunch my companies revenue models out into pretty spreadsheets, but as Alyssa says it takes a special kind of individual that no orilley book nor Ivy College can teach you. I have several Ivy guys working for me and never attended any those schools myself. It takes Passion, courage, and guts.

It comes down to the Entrepreneur skills that cut the mustard. In the tech world it requires both biz and hack skillz.

As Napoleon Dynamite says ” Girls like guys with skills. Bowstaff skills, nunchuck skills, computer hacking skills…”

Truth says that tech businesses likes entrepreneur with the multiple qualities. If you can not drill down into the code to find a bug one minute, then walk into a VC presentation the next and close a funding round, well heaven help you.
I hope you have a great team who looks up to you like your the next messiah or something. Its tough out there and it takes a real Entrepreneur to challenge themselves. The competition is fierce and you do not have the luxury to claim in the tech startup industry that “I’m a biz guy and I leave the coding to the hackers” nor can you say “I wrte the best code in the world it is worth all the gold in Ft. Knox”.

Arrogance and denial will crush a company in 2 months flat. Competition is crazy, and your perfect little ideas can be nullified in days flat when companies like Google and Microsoft are willing to throw Billions to control the market place.

I have worked with thousands of companies in the space I will tell you, great ideas today are ghost town tomorrow, unless the leaders of the organization are the best of the best, and the top side of the tech start up company is equally balanced.

We startup entrepreneurs must learn that at a tech startup it requires vision, product genius, and technical chops to get the job done.

It is important to understand the threat of competition. As a Software Architect at heart, I can look at any (I mean any) business model online and decipher the software patterns within minutes. I can put my 4 developers to the task of replicating the technology, while that is going on, I can put on my Marketers hat, and spin a better message, sales pitch and Power point in a few hours.

You gotta understand, there are people out there like myself, who wouldn’t even bat an eye at stealing your concept and earning bigger cash and more traffic than you ever could.

In my organization everyone on the dev team is involved in the product design, unfortunately, biz team does not get involved in the code design. So in a tech start up the importance is to find the balance of the two that work for your individual biz model while keeping your competitive edge.

I happen to be the rare biz/tech combo that is deadly in this industry. I keep my skills honed sharp by coding daily and personally presenting and selling our service every week.

In the end knowing when you need help and when to delegate is critical.

I look at my status every day, so I know where I need help and where fall short on either dev or biz. And knowing is half the battle.
That my two cents.

Ciao,

Dylan Rosario
adUup.com – Founder & President