Here’s How Non-Tech Founders Build High-Tech Startups Without Going Broke

Non-tech founders need knowledge and time, plus money, to start a high-tech company.

Written by Joe Procopio
Published on Aug. 04, 2023
Here’s How Non-Tech Founders Build High-Tech Startups Without Going Broke
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It seems like anyone with an idea that includes even a brief reference to AI is finding their way into investor pockets to launch the machine-assisted version of any task you can think of. From AI for coders to AI for pets, the possibilities seem limitless right now.

3 Tips for Building a High-Tech Startup

  1. Bring on at least one founder who’s a subject matter expert (SME).
  2. Leave enough time to build something that sells so you have money to build more.
  3. Build, launch, measure, prove viability and repeat to make the most of time and money.

Which, of course, means that everyone reading those kinds of stories can come up with a passable idea for a brand new, never-before-thought-of AI startup. And get rich.

Those people are coming to me for advice a lot right now. And that’s fine. I don’t hate this kind of thing, but I gotta warn you, there’s nothing new here. High tech spawns a gold rush every few years. It was the gig marketplace before AI, then crypto before the gig marketplace, then mobile before crypto, then social before mobile. 

I’m a huge fan of the democratization of technology that allows a non-tech, usually more business-oriented founder to get their ideas into the arena of technical entrepreneurship.

If you’re coming to me asking me if you should try to build out your high-tech idea as a non-technical founder, I’m rooting for you.

But here’s what I don’t want you to do.

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The $50,000 Trap

Until recently, democratization of tech meant that anyone who could scrape together about $50,000 could hire people to build the tech they envisioned. 

But more often than not, it turned into a trap. Unless the founder’s idea was extremely prescient, and unless every last decision the founder made was correct, that $50,000 usually dried up before the first paying customer was acquired. 

That’s $50,000 lost. I’ve seen it dozens of times, and usually by the time the story gets told to me, it’s too late to fix. So let’s fix it before it becomes a failure.

 

The Non-Technical Founder Dilemma

A very successful non-technical entrepreneur recently asked a question at Teaching Startup — my project to democratize startup advice — about spinning an AI company out of his current company. He’d never taken on an investor and wasn’t going to for this project, but at his current run rate, $50,000 was not out of reach to get this new company off the ground.

So first, I got that out of his head. 

Then he crystallized perfectly what made him, and all other non-technical founders, candidates to fall into the $50,000 trap.

  • He doesn’t know much about AI/coding/programming.
  • He doesn’t have time to create, learn and manage this new business.
  • He doesn’t want to risk a ton of money on it because AI is fast moving, with high levels of competition, and again, it’s not an area he knows well yet.

So first of all, his self-awareness is something that’s only going to serve him well. Furthermore, he’s described the perfect high-tech startup recipe. As a non-tech founder, he needs an equal mix of knowledge, time and money. 

 

Knowledge: The Subject Matter Expert

A subject matter expert (SME) is usually wrapped in the role of at least one of the founders. Here’s what happens when it isn’t. 

I left Automated Insights, one of the first AI plays, in 2017, three years after we exited. While figuring out what to do next, I wanted to put together a technology and a team to try to ride the same ride over again. I already had the team. But what technology would have the same promise that AI did ten years ago?

Of course, in 2017, the answer was blockchain.

I had a former colleague at Automated Insights who was a machine learning technologist (would be our CTO), I had an operations jack-of-all-trades (our COO), and I had a digital sales and marketing professional (our CRO). 

After six months, we came up with nothing. Now I know why. We didn’t have an SME. 

We had the right pieces in place, and in fact, we could have built an amazing AI company on the spot. But we had no blockchain knowledge, and while we didn’t spend a lot of money, we wasted six months.

When you’re a non-technical founder with a high-tech vision, you are indeed the CEO, because you know what you should do if you want the business to succeed. What you need is an SME who knows what you shouldn’t do if you want this business to succeed.

 

Time: Finding the Right Partners 

Now, normally I would say start with no-code. But for a non-technical founder, if time is an issue, doing no-code on your own might take more time than there would be to capitalize on any first-mover advantage. 

That said, I still believe no-code is an option to reduce costs, and I’ll get to money in a minute.

You need an SME, a COO and a CRO. Maybe all of that gets handled by you along with your CEO duties, and I have no qualms about that. You might not sleep for a year, but it’s your life. 

The CTO role, that’s the part you’ll need to hire in, partnering with a couple of tech people or a firm who would build out your vision for a percentage of the business or percentage of the profits, maybe with a small stipend on top.

Coding isn’t cheap and it’s not something you can really do on the side once you’re up and running. So that’s a big ask of a talented person or firm, but whether you do this piece by piece or throw $50,000 at it all at once, the requirements are the same: Build something that sells so you have more money to build more of it.

So when I say find the right partners, I mean people who believe in what you want to do and will commit to getting it done right, piece by piece. Find these partners first and then negotiate their rates. 

The leverage you will have in those negotiations depends on your track record as a business leader and the economic strength and viability of your idea. If this is valuable enough, you may be able to negotiate a deal that offsets a chunk of the up front cash with a percentage of equity or profit. 

Then you’ll both be incentivized to build quickly and properly.

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Money: MVP at High-Tech Speed

What you're going to want to do is the perfect marriage of minimum viable product and go fast and break stuff. You’ll want to put a plan together at the beginning — build, launch, measure, prove viability, repeat. You’ll reference the details of this plan from the ideation phase to partner selection and negotiation and onwards.

The faster you can get to proving people will pay for what you want to accomplish, the better, even if you’re not immediately using high tech to get it done. 

To close the no-code loop from the last section, you might not even need a tech partner for the first few stages of this plan, but again, if time is critical, you might engage one, lay out your plan, and have them no-code it up quickly. 

Build, launch, measure, prove viability, repeat.

This is how I operate, whether it’s a bootstrapped project or working with a venture-backed team we will run with no-code/low-code options before we turn our highly overworked development team on a feature. I don’t want to do that until I know that the feature will not only have an ROI, but will be profitable instantly.

That’s a strategy you can execute with millions of dollars from investors or hundreds of dollars from your own pocket

That’s my basic framework for building a high-tech company. If you’re non-technical and you want to be able to build high-tech without a lot of investment up front, you’re best off investing in an SME, finding a balance between vendors and partners and iterating your MVP cycles very quickly. 

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