The fact that some are offended by the deal you made the anonymous internet tells me you are on to something. Thank you for experimenting and being creative.
A couple thoughts:
* If you have a month to work on a project, consider taking this offer. Nothing helps motivate people (myself included) like a deadline and a partner. Don't get hung up on the equity split or other boring details -- just go do it. And be thankful you have the free month to work as you will; not all of us are so fortunate!
* I am skeptical using 50-50 as a basis for a partnership in general, much less with someone on the internet I've never met. You are probably a chill dude, but I had similar optimism for too many girls I met online... :) Everyone claims to be funny and open to new things. If I had goals to work on this project fulltime, I'd be very concerned that the two of us might not work well together (I have no reason to believe this, but this is a risk based on past experience). I'd prefer some way to break ties. Either 49/51 split or something. If I had goals to work on this as an anonymous internet side project like my github work that happens to generate income, then rock on with 50/50 because it's simpler and anything else gets in the way of the product.
* Would you mind documenting the outcome of this experiment? PG often cites YC's internal data as influencing their decisions. Not having access to that data and believing I see a large number of survival biases on HN, I'd be curious to see someone as honest as you document what actually happens. If anything, I imagine the outcome from the experiment will better inform you of improvements than any comment from HN.
* Best of luck! I love creative experiments. No one here knows how this will turn out, but I know we all are interested to follow along.
I'd take you up on the offer, but for a couple things. Maybe it just means this isn't for me.
1 - That 50 - 50 split is a killer when I'm doing most of the work.
2 - You talk about taking a month or two and full time working on this project until completion. Trust me when I say I'd love to do that, the issue is I can't just go jump back into the same job as if I didn't ditch everyone here for two months.
Like I said this is probably just not for me, but those are two things you may want to consider for version 1.1.
You're asserting that customer acquisition is easy and low cost. It's not.
For a product that can be built in 2 months (per the guidance here), it is going to take much more time to develop the sales and marketing and acquire enough customers to make it profitable.
I think this underscores why this may be a great deal for a (young?) developer with limited business experience. I learned a lot of hard lessons like this once I stepped away from an editor.
I see where you thought I was asserting anything, when I said the 50 - 50 split was a killer for me doing most of the work. I hadn't really meant it like that but since your right in that customer acquisition isn't easy for people that have never done it then I refer you to a comment I posted below. That this is really for someone who has a crummy low wage job and would stand to gain a lot out of the deal.
As for me personally (which I said off the bat was the kind of answers I was bringing. Personal opinions on why I myself wouldn't do it.) I feel comfortable with my ability to sale to people and gain good traction and growth.
you're right - this is not right for everyone. I wouldn't do it either - but 10-15 years ago, this would have been great for me.
But this is a killer opportunity, especially for someone younger who can live on the 5k and is not worried about family and mortgages yet.
This could be better than an MBA for many people who want to bring a real product to market.
Note: I have no context at all on the OP, so I'm making the jump that they have a strong business background and would not be flailing around once it was time to execute.
I dunno - you're doing most of the technical work. Looks like OP is doing all the marketing. That sounds like a sweet deal to me; if I had a convincing MVP lined up in my head I'd probably go for it. (After due diligence on whether OP is a flake or not, of course (no offense intended to OP)).
I like the 50-50 split (although another poster's suggestion of 49/51 makes sense to me as well, a clear owner of the project if they need to split up). He's not giving you a job offer. He's giving you investment money to make a project, and promises of royalties after he has marketed it.
Think of it this way: would you have made $8000 in a month or two without his investment? Would you have potential for continuing income on that project afterwards? If the answer is yes, then this isn't the deal for you. If the answer is no, then what's the harm? If you're in position to negotiate this as a deal breaker, you're likely in position to find something more flexible. If you're unemployed and want some money while you work on a project you've been dying to work on, you've just come out ahead. There are plenty of job offers for freelance/contract programming that don't offer 50% royalties, or royalties at all.
For me it's not the split, or the lower rate vs what I'd normally earn. But I'm like you in that I can't just ditch existing clients for a couple of months and expect them to be there when I get back should this not work out.
You might consider that "building the product" is not really "most of the work" here. There are three things:
- Product
- A Market for said product (solving a problem for a customer who has money)
- Getting your Product to that Market and convincing customers you solved their problem
In reality, you are probably doing about 33% of the hard stuff (and the other 66% is hard too, making sure you have the correct MVP and promoting it)
Until you've put a product out there, you don't really know how hard the other two are and how critical they are to the success of your venture. hmexx is offering to do that part for what I consider a reasonable cost to test the waters.
YMMV, of course, and you're free to take on 100% of it all, but reducing risk is how you get a product launched. I personally like hmexx's approach here.
That said, reducing risk isn't what hmexx is doing. Since the risk of quitting your job and starting on your own product is failure to create a good enough product and NOT have a job to go back to. He's not made any warranties about you being able to resume your previous job (nor could he, or should he.)
Again, look at my other comments, where I plainly state this is not for everyone, like people who already can market and recognize an MVP. And it's best for younger people who have crummy jobs and little marketing and/or business experience, and little to lose (like a nice good current job.)
> Most freelancers will not build and/or follow-through with their ideas, because they perceive their opportunity cost to be too high.
I wouldn't quit my job for this (if I had a job), but as a freelancer I'd consider taking a month of no client work and building it at what amounts to a reduced hourly rate.
>Since the risk of quitting your job and starting on your own product
Software developers who don't intend to go into management should not be permanent employees. You should be working as a contractor so you don't have to worry about things like this. As a contractor, you don't get paid for days you don't work so no one cares as much when you're gone (so long as it's not negatively impacting a project). I usually take 8-10 weeks off per year, so taking advantage of this offer would be easy for me and have no impact on my "day" job.
Upfront will be small (possibly nil) to prevent time-wasters. We can agree milestones based on nature of project. Once code is flowing onto a shared repository for a couple days, I'll feel comfortable starting the money drip.
C/S corp in Delaware sounds reasonable. A yet to be drafted, founder's agreement to be signed at project start also to protect both parties.
World, great... i have been having this idea running through my head for some time, but need to iron it out a little and do some research .. Am on a 3-6 month project here, will contact you after.
You're getting paid $25/hr, a $52,000 salary if the job were to last a year. Maybe not Silicon Valley money, but good money for anyone who can even begin to consider this deal. More money than I make in a year. That's good enough. The 50% is icing on the cake. He's hiring a programmer, and paying you to stay on as technical co-founder.
>He's hiring a programmer, and paying you to stay on as technical co-founder.
Nonsense. He's doing an angel investment and taking 50%. That still might be attractive since he does more than just an angel investment but don't pretend he's doing anyone a favor, this is for his own benefit as well as the potential partner.
I wouldn't say hiring a programmer is doing them a favor any more than an angel investor is. The benefit from this comes in him letting you pick your own project, that's the difference between rent-a-coder and this deal. It's a rent-a-coder contract with the option of leading into steady employment.
Again, you're seeing this dangerously wrong. This isn't an employment opportunity, this is a startup where one of the founders is using an interesting way to find a co-founder and the idea itself. You bring the idea, he brings the cash.
He's not giving you a job, he's playing the role of seed investor and co-founder.
No, we're not arguing semantics. You're saying he should just be getting a salary and the OP is an incredibly generous person for also offering him half of his own idea. I'm saying that's nonsense. It could be a good deal if you have no other options but 50% is huge.
You have to question why the idea would never have seen the light of day. If it's strictly because you have a cruddy job that pays minimum wage but you are smart and capable then yeah this would be the kind of opportunity one would be able to take advantage of. If you are like many of the people here, in that we aren't making terribly low amounts of money and can save up then it's not money that's keeping you from your dreams, it's you.
I guess what I'm trying to say is it REALLY depends on the person. This isn't for everyone.
The barrier to launching is rarely money - especially these days - sometimes just having one person pushing you is all it really takes - and it sometimes is worth paying for that let alone being paid.
Seed money plus active involvement in growing the business and creating traction could warrant such a split -- especially for an idea that was sitting on the shelf. Fifty percent of something is better than zero percent of nothing.
It would be much easier to evaluate the offer if you told something about yourself. Just an anonymous gmail address isn't trustworthy enough. For example what marketing experience do you have and where are you located? If you live in Japan, you likely are not interested in a business project aimed at the Hungarian market.
I would recommend that in Version 1.1 you clarify the legal ownership & indemnification terms.
$5k to build, with payment upon MVP completion... spend an additional $3k, including costs to establish a legal entity with joint ownership with no worse than a 50/50 split and friendly buy-out terms...
If you have questions or HN-style critic on the structure/proposition, write below and help me build proposition version 1.1!