I often get phone calls from potential clients who are looking to find a Web site developer to work on a project in exchange for a share of the revenues. This is one of my most frustrating phone calls because my advice is almost never acted on. Maybe some commenters below can add some weight (or alternative approaches) which might make this advice more effective. Let’s delve in:
Let’s say you have an idea to build a site that sells a product. The product is the best product ever and you know that if you get it in front of the right people, they will buy it. The only major expense you have is making a Web site. You have little money to invest in this project but you know you want to do it and you know it will be successful. The best idea you can think of would be to find someone to make the Web site for you without charging you for time and expenses, and instead, they will share in any profits that you make. You know that when your product is successful, you will have to pay them more money than you would have if you paid at the beginning, but it is the price to pay to get your project off the ground. Sounds like a Win-Win, right?
In fact, it is not a win-win. It is almost always a lose-lose, unfortunately. The flaw is your business actually needs two separate things: an investor and someone to make the Web site you need. The skill sets for each person is different:
| Investor | Web site developer |
| Has money to spend | Is a great Web site developer |
| Trusts you and is willing to let you run the business your way | Is willing to follow your directions, but has a lot of experience to share with you |
| Believes in your idea | Understands your idea |
The chances of finding one person who is all of those things is very small. In fact, almost all great Web site developers won’t be willing to take the risk that your business won’t be successful. Your best bet is to divide and conquer: find a great investor (more on this coming in my next post) and then find a great Web site developer.
What do you think of this advice?
#1 by joan on March 12, 2010 - 1:44 pm
I’m not convinced that your advice is correct. You are making an assumption that the Web developer is being asked to be an investor of the company. I don’t see it that way. I see two experts exchanging what they have as assets to benefit one another. The owner is willing to give up equity to receive services by the developer. If a developer has the time and resources to work on a viable project then this could very much be a win-win situation!
#2 by Nadav on March 18, 2010 - 5:43 am
As a web develop I have been asked to do this plenty of times. While Joan is right, if a developer has the time, it COULD be a great opportunity. At the same time, most good developers don’t have large blocks of time that they can dedicate to projects that won’t pay their rent in the very near future. The developer, if he has any sense, is going to want a large piece of the pie in exchange for delayed gratification. The entrepreneur would be better off trying to find an investor to come up with a few thousand dollars (in exchange for a small piece of the pie) to pay a developer (who is more than likely better than one who would do it for “free”), and not have to give away as large a piece of the pie. This scenario better benefits all parties involved.