Fundraise, find a cofounder, or both?

[jralphs]

Here’s where I’m at…

I recently finished my business undergrad and have been working full-time on my hardware startup for the past five months. More specifically, I’m building a total-body strength training machine that uses embedded sensors to track key exercise metrics in real-time. It uses this data to deliver personalized insights and custom tailored programs that smartly adapt to your progress. Think: bowflex, but smart, compact enough to slide under your bed, and has an apple-esque design (all ano aluminum construction).

I learned Solidworks, built the physical product (including the sensors), and have been testing it at a number of independent and multi-chain gyms in Toronto over the past 1.5 months to validate key features and business model assumption. Feedback has been very positive. I’ve secured $33,000 in pre-orders from different gym owners interested in a commercial version.

At this point, I’m confident that the product can be successful in the commercial and home markets, and I’m ready to move forward with the next steps. This includes raising capital to finalize the design for manufacture, building the adaptive iOS app and workout programming, and setting up manufacturing.

I have a list of potential investors and all my investor materials ready, however there’s one thing I’m missing – I don’t have a cofounder. I have a contractor (not cofounder suitable) helping me with the basic hardware components and algorithms, however, strictly speaking I’m the only founder. This is an issue as having a technical cofounder is critical for moving the product forward.

My question is: Should I devote time now to finding technical prospects before pitching to investors or should I start pitching and continue my search for a cofounder in parallel? I may only have one chance with some investors and not having a partner could be a deal breaker.

Any advice would be greatly appreciated.

Thanks,

Jeff

[DevX101]

The dogma of "cofounders or death" is overrated. If you have the prototype, customer pre-orders, and investors, get some cash and hire engineers.

Sure, if you come across someone with an amazing track record by all means re-evaluate this, but I think you can get away as a sole founder with employees here.

It seems you've come a long way. Great job.

[bayesianhorse]

So if I try to apply the advice Sam Altman gave in his lectures, I'd suggest you to be careful in finding a cofounder. If you don't already know somebody, any choice is very likely to be a bad choice.

You probably already put a few thousands of dollars into the product. Any cofounder/partner would have to bring a substantial benefit to the table, probably unlike anything a first-time cofounder with little experience could give to you.

My advice would be to look to an active investor, a business angel maybe. Such a person would either have experience and contacts to develop the business side or the software/hardware side.

Having no cofounder isn't that big of a catastrophe, because it is unlikely you will quickly find someone who is highly qualified, willing to take the risk and is as passionate about the product as you (hopefully) are.

[jralphs]

Really great advise. Thank you.

[jralphs]

DevX, I appreciate the advice. Finding someone down the road probably makes more sense. Otherwise, it's just disruptive to the entire business. I guess the problem becomes more of a financial concern. Engineers aren't cheap and I would need to raise more money and adjust my valuation.

Cellis, crowdfunding makes a lot of sense and I plan on doing one for the home user version of the product.

Benologist, I guess it's always been my plan to get a technical cofounder. The supporting software platform is just as improtant as the physical machine. Since, I'm not an engineer, I think it makes sense to have someone building out that side of the business. And to the point above, it's more economical in the beginning.

[benologist]

Have you found the tech stuff to be a bottleneck / usurping a significant amount of your time that could be better spent on other stuff?

[jralphs]

The tech stuff has not been a bottleneck. I've spent the last 1.5 months in gyms testing the product, while my contractors have been building the tech mvp (hardware + algorithms). They'll be done in 2-3 weeks, so I need someone to take over at that point and start building the app.

[benologist]

What would a cofounder do for you after the app's done? What's the negatives of just getting an app developer on contract next?

[jralphs]

Expanding the functionality of the app. The first iteration will be very simple with only a few features.

[jtchang]

What do you need a technical cofounder for? Like what is the critical piece for moving the product forward that you don't currently have?

You should continue to look for good people and size up if they would be a good partner. You should also start talking to investors. Not having a cofounder is just one data point.

I don't really believe in this one chance with an investor. A lot of them like to get to know you and your business over a span of time. It really does depend but seeking out good people (tech or otherwise) is always a valuable thing to spend your time on.

What area of the country are you in?

[jralphs]

The next step is building out a basic app that will display the metrics being tracked by the sensors and using that information to provide adaptive programming. To understand what I mean by adaptive programming take a quick look at fitstar.com. I wan't to build a very basic form of that functionality, but the beauty is users won't have to stop and manually record their exertion level, repetitions, and working time between each exercise. My machine will automatically track those metrics, so the experience is seamless.

Based on your feedback and the feedback of others, I'm going to pull the trigger and start setting up meetings with investors. I think that's a logical next step and finding good people is something that I can continue to focus on in parallel to other things.

I'm in Mississauga, ON.

[scolson]

Ditto crowdfunding.

You might also consider finding a tech person who can become your CTO if you are not especially strong in technical areas. If you are thinking you might go this route, you might consider doing it before a kickstarter campaign so that you can add some degree of legitimacy (and they can hopefully hype it).

Edit: Why limit your kickstarter to a home version? Different tiers = different markets. Have a plan to not need the croudfunding route, but if you can pull it off, use it to accelerate growth.

[jralphs]

I agree with your point. I think with the crowdfunding route having a CTO is crucial. Like DevX mentioned, after raising money I would be able to find someone who is compatible and has a good track record to fill that position.

I would love to launch the commercial and home versions simultaneously. However, the components need to be different for the commercial version because the product needs to be more robust. Therefore you're essentially designing, building, and shipping two different products. It makes things more risky, but there is a possibility to make it work if the same body component (which is an aluminum extruded frame with embedded track rails)can be used for both machines.

[jmjerlecki]

This early with only you doing everything, you need to pick is your product for consumers or is your product selling to gyms. It seems you've had some success selling to gyms, so would think your traction is showing you may want to continue down that path. Not sure if you have shipped a physical product yet, but it's hard enough getting one version right, let alone two.

If you go consumer, crowdfunding for the consumer side is the way to go. I would think if you had a successful crowdfunding campaign, you would be able to convince a good technical guy to join you (as clearly you've done a ton of hustle on your own).

From the fundraising perspective, at the this early of a stage investors mostly are investing in the team (which right now is only you), unless your product/traction is through the roof. At the early stage is also when you get most heavily diluted, so want to think about how much you are giving up vs. how much do you really need the cash? Again, it sounds like you have traction, so may want to figure out how to keep bootstrapping this vs. taking a big hit equity wise.

feel free to hit me up (email in profile) - I love the space you are going after.

[cellis]

Have you considered crowdfunding? Physical products and hardware startups tend to do much better these days going that route.

[ecesena]

I'd definitely look for a tech co-founder. At the bare minimum, you'd gain in credibility. If you feel ok with the hw, look for a sw eng. I assume it won't be hard to know someone in the gym(s) you're targeting, that can fall in love with the idea and be not only a co-founder, but also a user/tester.

[jralphs]

Good idea. I'm actually testing at the University of Toronto gym, so it wouldn't be a bad idea to reach out to the comsci department.

[latifnanji27]

Jeff, I run the largest peer to peer for tech startups CEO's in Toronto @ the Ryerson building. I'm happy to have coffee with you if interested since I imagine there is more context here that is missing (don't like just giving advice until learning more....) email is [e-mail].

[jralphs]

I sent you a message.

[benologist]

It seems like you're doing great with your current arrangement, what do you expect from a cofounder that this contractor, or another one, or an employee, can't do for you?

[wooyi]

Read what @sama says about cofounders. Solo is better than someone you don't really know. Trust me. Getting someone you just met on HN is very risky.

[mytotoro]

I'm based in Toronto as well and this sounds pretty cool, can we grab coffee?

edit: email: yk.he @ live

[disobedient]

Better to hire somebody for the job than split control with a co-founder.

[coryl]

This sounds neat, can we see pictures somewhere?

[jralphs]

Sent you a message.