I built something!
Now what do I do...?
One thing I love about working with engineers is you rarely end up having a conversation that goes "I have this great idea... I just need someone to build it."
Instead, most discussions start from, "I built this! Now what?" Because of my background, this question is often is getting at "What would it mean if I raised money? Should I raise money?"
I love these conversations. They usually involve a set of discussions around the person's goals, their financial situation, and the product/market. If you're in this space, feel free to reach out. You might be able to follow my questions from reading them, but we can probably get into a lot more nuance by talking.
There are usually four possible paths:
Yes, this should be a VC backed company.
Maybe, this doesn't look like a venture-scale company, but is definitely looks like a company (and some other financing might be appropriate).
Maybe, but first you should keep going with this as a serious project to answer where you want to take it.
No, this is more of a personal/hobby project which is still great!
Starting down one path doesn't always exclude the others, but I've landed on ~7 discussion topics that help wade through what might be the best option/next step for a project.
VC Backed Company
In some circles there's a belief that "2 good engineers and an idea can raise $2M." For some subset of people and ideas, this is definitely true!
It's also usually where I start, because it's the easiest option to rule out for many people. That's contrary to what most people guess a VC would do, but from my perspective it's terrible to push someone down the venture route if they don't really want it.
"How do you see this getting to $100M in annual revenue?"
The venture model is predicated on an outsized amount of return. The "best" companies from a venture perspective end up being the home runs. While for a while we mostly talked about valuations, it's a lot easier to have a concrete discussion about an amount of revenue vs. an abstract valuation (sometimes this dives into talking about revenue multiples).
This is very rarely top of mind for people who start building a project (it certainly isn't for me). Often an engineer at this stage will start from "well I was hoping to charge my friends $20/year" - but at $20/year you'd need 5 million developers (~25% of all developers) using the tool. There also are very few high value companies that monetize that way vs. large enterprises.
That alone isn't a problem! Usually at the beginning you have a product, and then you start to have a company, and then you start to think about huge expansion. But, by starting to talk through the ramifications, many potential founders will realize they definitely don't want to try to get to this scale or be responsible for building a team that sells enterprise products. If you know you don't want that, venture is probably not the right choice.
On the other hand, if a founder gets excited by this idea of potential and everything to explore within it, they may well be suited to thinking about building a venture backed company. They might already have people using the product and have seen it pulled into a company. Or perhaps the first thing they've built they don't see getting to this level, but they start to see how it could be a starting wedge to a larger idea.
Do you want to build this thing, or do you want to solve a problem?
Another approach to this is sorting out whether the engineer is motivated to solve a problem, or has a specific tool they want to build. There's nothing wrong with either, but very rarely does a product stay "the same" from when you build it for yourself to when it works effectively for large numbers of users.
If someone is mostly motivated by "I wanted to make X" vs. "I want to solve X" it can be hard to get to the point of a venture-backed company. As you build out a venture backed company, you end up keeping a large vision but many details are decided by your team and in connection with what your customers need. On the other hand, if the founder is really motivated by a big problem, there's often a way to work in the space that could result in a $100M ARR company. The existing project/product is a first experiment.
Another way to put this is that I tend to think "I want to make X" aligns more with King, and "I want to solve X" aligns more with Rich in the classic founder's dilemma.
A third question that can help here is in the best case, where do you want this to go in 5-10 years? Some people know they'd like to have a steady income, and others lay out how every developer in the world will be using the tool.
I'll also note that this conversation can happen without anything built, too. You can have a track record of being able to build, know the space you want to work in and the problem you want to solve and have a great conversation about venture without having built it yet. I just find a lot of the time engineers build something out to help them think about the idea.
Bootstrapped Company
If it becomes clear that the venture backed route might not be the best option, the conversation tends to go towards other options for what someone has been building.
Do you have personal runway to do this full time? If not, how can you get there?
Some of what drives people to ask about raising VC is wanting to be able to devote full-time effort to a project (or hire others to work on it) but not being able to afford it otherwise. Since that doesn't necessarily correlate with the VC model/characteristics above, sometimes the engineer has to find another way to finance what they want to achieve.
Sometimes this means setting aside an amount of time to continue to pursue the work from savings. This could mean staying at a job while continuing to work on the project on the side. It could also mean setting out a bootstrapping plan with milestones for users/revenue that gets to a sustainable place on a certain timeline. It could be looking at Github contributions or Patreon. It might even still be appropriate for angel investors who have different motivations than VCs. Either way, if the driving reason for raising VC was being able to afford to work on something, talking about other financial options to get to a sustainable pace for the work can be valuable.
Does anyone other than you use this yet?
For me, a lot of questions around "what should I do with this?" come prematurely. For many engineers, it's easier to build something than to impose on others to try it out - which is where "Okay I built it, now what?" comes from.
If you're going any of the routes, it makes sense to get someone else using the product. First one, then three, then five, etc. Often times people will start at "I need users" instead of "I need a user" and build from there. Starting from this question helps to chunk out a path of who is using it next. The first few users can really help you get a sense for if you have the beginnings of a company.
Community driven project
If a the work doesn't make sense as a venture backed business, and it's unclear if there's a business to bootstrap (especially if there aren't outside users yet), it can still help to have external motivation. Often when people are reaching out to me it's because working in a vacuum makes it hard to keep going. One form of this is homing the project within a community until you get further along.
Who cares most about you/this?
This may have already come up in the conversation of "does anyone other than you use this yet?" But overall, figuring out who else works in the space can give you motivation, new ideas, and feedback on what you're doing.
One example is other people who care about the same class of problems. For lots of people I talk to, the Future of Coding community is a great place to be, as are the supporters of Make A Better Computer.
Another example is people who work with the same sets of technologies - especially smaller or up and coming communities. The redwood.js community is very welcoming and has people who work on a variety of types of companies and projects, but all support each other. Guild.host is a new platform that many technology focused communities are starting to use.
Another one could be the type of business. Microconf is a gathering place for many bootstrapped b2b SaaS founders.
Finally, it could be an identity-based community. I'm in plenty of slacks for former PMs, and others for women who are starting projects and businesses.
Lots of these places have places to showcase weekly wins, progress, or give demos to other people before you're able to have coworkers to have a weekly cadence with. The key is to find one that can support you in the work.
Side Project
Finally, some projects don't have to be a huge thing! It seems silly to say this, but I end up in a conversations with people who feel like they're "supposed" to be making something more of what they've built. In our current culture, there does tend to be a push towards always doing more. It's fine to have a project you tinker with and don't expect more from!
We'll go through all of the other pieces and they don't necessarily want a VC backed or bootstrapped company, nor do they really want to join a community. At this point the question that comes up is.
Why do you feel like you need a next step?"
Sometimes you just need someone to remind you of that. If you think there should be a next step, try to look at if that comes from an internal motivation vs. an external pressure.
Stuck somewhere in this set of options and interested in chatting more about your project? Hit reply! I’m always happy to talk the options through (and maybe we’ll find another category in the process!)