Nick
Developer and product person. Wants to join an idea as a co-founder.
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I have extensive experience in early stage businesses having founded and exited one business in mobile tech, and successfully exited another tech business as CTO. As a result I have a well developed understanding of what it takes to get off the ground, become successful and achieve a successful exit.
Answers in the Nest
Is it worth licensing my patent tech for quick revenue?“If your patent is sufficiently strong then licensing it to companies who already have customers is a great path to revenue. You avoid all the costs of complexities of launching your own business / brand and finding your own customers. Note that you only actually have a competitive advantage at the point you're up and running in competition with them having overcome all the early-stage growing pains that building a business can entail. However consider the negatvies: - If there's a risk that a competitor can use your patented tech for a while and then create their own modified or improved version to avoid paying your license any more then there could be a high risk involved. - If there's a chance of getting into any legal wrangling over whether a license customer (or anyone else, for that matter) who implements their own solution is infringing on your patent with their version, the legal costs could run into tens / hundreds of thousands or potentially millions to contest. Without an established business behind you to supply funds for this you'll be unable to raise enough funds to prosecute. - Is there a fixed window in which your patent offers competitive advantage? If this isn't a long time, then you will only have a limited revenue stream from the license arrangement, and it may make more sense to build your own business in order that you can continue to develop other competitive advantges. If your technology is genuinely uncopyable without risk of being ripped-off but with a limited window in which it will offer a genuine competetive edge then you might actually be best off selling it outright for a large fee to a large player in the market to give them the competetive edge. I think the answer to your question is that you'd need to do some financial risk-reward modelling to establish whether this model would be worthwhile vs building your own business with all the costs and risks that that has in its own right. To my mind if the patent is strong enough and difficult to copy without infringing then yes licensing or patent sale would make a lot of sense.”Why does it seem EVERYONE is looking for a CTO?“Having an experienced technical co-founder (note that I'm not calling it a CTO at this point) on board early on does the following, in my view: 1. It builds the all-round strength of the team in terms of the skills represented. Whilst the business may not be a pure tech play, most businesses involve some technical implementation and strategy and not all non-technical founders have the experience or skills to navigate this. This is important to early-stage investors since they're investing in the team as much as they are in the idea. If the team has an important skills gap then it's less investable. 2. It will allow you to create a technical strategy and vision for your solution - be that bespoke development or knitting together a bunch of over-the-counter cloud-solutions. Having a cohesive technical plan will also make the idea more investable. 3. If the decision is to outsource MVP development you will still want to identify the right technologies and platforms so that the MVP can be taken on and developed into an actual product - again non-technical founders often don't have the skills or foresight to navigate this successfully and I've seen many projects founder post MVP for not being able to find the right resources or know how to take on extending the prototype into a fully fledged product. 4. Insight into how much time and resource it may take to build a given solution in the chosen manner will help identify whether your outsource solution is too expensive (or too cheap - both can lead to problems). It will also identify the possible budget and headcount for hiring an in-house team at a later date. This is part of your financial projections. 5. As @James identified above there are a whole host of other considerations around hiring the right people, security, data compliance, product development, platform architecture, resilience, extensibility, scalability and performance, etc - whilst these might not be day 1 considerations for your technical presentations to investors it pays to have these in mind when making your other early decisions to avoid costly mistakes. Whether the same technical co-founder becomes the long term CTO of the business is entirely another question, and this is often where slightly different experience and requirements come to bear. This rule applies to all C-Level positions, however. The founders are not always the right people (in fact in my experience they're more often NOT the right people) to manage the scale-up phase. I'd agree that for relatively technology-light businesses having a technical advisor or 'fractional CTO' as @Fred points out may be sufficient to get you most if not all of what you require. However I would definitely advise against the path of non-technical founders who go straight to oursourcing an MVP without taking additional technical consultation. I've seen this go wrong more times than I've seen it succeed.”