"Skilled developers are Silicon Valley's scarcest resource. With big companies throwing around giant salaries and startups competing fiercely for talent, the technical ability to build what they envision is often a make-or-break issue for new ventures."The title of the article really should read "Silicon Valley's Scarcest Resource: Ideas Big Enough to Take a Risk On". Since I run software development for a start-up (full disclosure: my view points are fully tainted by SaaS development), I fall into the technical category that many in the article argue is the make-or-break issue. I would argue that the real make-or-break issue is a deep understanding of the customer pain being addressed by the start-up and the market size of that pain. The technology to address that pain can, and usually does, morph and is often of second order importance. In an early stage company, the key is to listen carefully to the customer, understand the core of their issue, and make sure you address that pain in the most straight-forward manner.
Depending on the stage of the start-up and the pain being addressed, the first phase might be a proof of concept that doesn't even fully function, but instead enables the founders to present their vision to likely customers and get some level of validation and commitment. As long as the team has some level of understanding of what is possible (and that admittedly takes some technical acumen, but far short of actually doing the coding) they can easily manage a process of hitting those first milestones by outsourcing early development. The bells and whistles and infamous "scaling" comes later in the process. Often the outsourcing of this proof can be done at far lower total cost than having it done "in house", when you consider not only high salaries but also the cost of equity stakes.
A quote from an investor states:
"I will not even talk to a company if they don't have developers in-house... Most investors bet on a team -- how can you bet on a team that's outsourced?"
That seems to be a very narrow outlook on what you are betting on. The important question is where is the intellectual property? Was Facebook's success because of the coders? I don't believe so. The founders hit on an unmet need and were very savvy in how they met that need and grew the platform. It didn't matter if it was built in San Jose or Bangalor. The IP was in understanding the customer base, closely monitoring their behavior and the business model behind building a social network that had built in barriers to entry.
Let's be clear - in some instances not having a technical co-founder is a non-starter. I can't imagine investing in a company trying to handle improving a data compression algorithm without someone who was very technical and understood both the math and computing challenges, BUT... it just so happens that the customer pain the company is trying to solve is a very technical one. Companies that require a huge up-front investment before they can show any milestones of success is another example of a company that requires a technical co-founder. I couldn't see investing in a bio-tech venture requiring millions of dollars to even hit clinical trials unless I felt confident in the tech team.
One of the great advantages of software is the ability to easily modify it and deliver in a modular fashion. This is hard when you are big and have lots of customers to worry about, but is essential to a small early stage company.
What's my point? Innovation shouldn't be held up or a good investment passed on because it doesn't have a technical co-founder. If you are passing because of that, the opportunity probably isn't really all that strong!
