Anyone done a Joint Venture or similar?

[meanttobeworking]

I have a Plan B idea. It's an app. In my day job, I act as PO or BA on this kind of project, so I can plan the project, define the product, write feature stories, produce wireframes and logic diagrams, data models, and also do QA. I'd also be responsible for marketing, driving uptake from customers, user research and so on, as well as all the legalities of setting up merchant accounts etc.

But I can't code - at least not unless I dust off my old ASP.net 2.0 skills from nearly twenty years ago.

There's a bunch of work I want to do up front (to validate the business idea), but, I don't want to do that before knowing how I'd get it developed. I do not want to be one of those people that asks developer "mates" to built it for me for 'a slice of the future profits', but I don't have the capital to pay for the development up front, and I don't fancy looking for an investor.

Has anyone had experience of a model that works? What numbers would make a JV worthwhile for any developers reading this? I'd want a fair arrangement that properly compensates the developer for their time, but also a recognition that I'll be putting a lot of work into the project too.

In terms of scale, I'd imagine it'd be about 3 months of development time to get an MVP up, and another 6 months to get it to a point where it could be considered a revenue stream. I would not expect the developer to work on it full-time, so it would definitely be a slow-burner.

My initial thoughts are a model that allows the developer to quickly recoup / get paid for time they've spent to date, after which, they retain a percentage of the company as a passive income. Future development would (one hopes) be paid for on a normal day rate arrangement.

For example:

- Developer expects a day rate of £100 (I wish)
- Developer works a total of 60 days over the course of several months, and we reach MVP - and is therefore owed £6000
- Priority for income from app is given to paying down debt to developer, until such time as the £6000 is cleared
- Once the debt is cleared, developer retains x% of the company ownership and shares in future profits

Is this something all developers would run a mile from? I can understand why they would, but doing my research in any case!

[Lance]

Find a developer who is actually interested in half the business.
Get an NDA signed.
Start up a LTD company with 50/50 shares.
Get a shareholders agreement written (remuneration, exit plan, what happens if one gets bored, illness, death)

then work on it.

pretty standard for a startup without capital.



You might not want to give away half the company, but you have nothing right now.
The model you describe sounds like a way to get it for free cos you could just fold the company before paying the dev and start again with his code.

[meanttobeworking]

The model you describe sounds like a way to get it for free cos you could just fold the company before paying the dev and start again with his code.

That's dark!

Thanks v much for the advice.

[courtg9000]

Sweat Equity or Effort Equity Swap to give it its posh name.
I have been around these deals.
I can talk more about it.
BUT
I have dental surgery in 30 mins.
Fire away with questions and I will reply later when the pain dies down
I'm happy to help.

[jmo21]

<waffle snip blah blah OP is doing most of the REAL work blah blah/>

Is this something all developers would run a mile from? I can understand why they would, but doing my research in any case!

Depends. Finding someone to do this without knowing them first is the difficult part.

It's more often the case that the founders would know each other, and that is the foundation for owning a business together.

Years ago, a permie chap I worked with kept trying to engage me over an app idea he had. He was an annoying twunt though, and I couldn't stomach the thought of working with him for any longer than that contract.

And had a young NHS doctor contract me on LinkedIn recently about something similar, how his app idea could revolutionize the NHS etc. I didn't reply.

[meanttobeworking]

<waffle snip blah blah OP is doing most of the REAL work blah blah/>

That's a bit harsh - I was just making it clear I wasn't one of those that thinks that just having the idea but adding nothing else was worth a majority share of the profits. I also made it clear I respected developers and wanted to ensure they got a fair cut. It comes across a bit like you think development is the ONLY real work, in which case you're guilty of doing exactly what you've accused me of by belittling all the effort needed to get something off the ground that DOESN'T involve writing code.

Thanks for the reply in any case, I'll cross you off my list

[jmo21]

It honestly wasn't meant to be, and I did intend to put a smiley in there.... lets call it a bug in my comment!

99% of the time, the development bit is the easy part, and believe me, as a dev who has desperately pondered making money off building my own ideas, and it turning out I have exactly zero, I am painfully aware of the need for an ideas guy/gal.

[meanttobeworking]

Ha - no worries, let's just blame QA

You're right about being best to use someone you know though. I just don't want to be the permie chap you mentioned, so I'm trying to do it right.

Appreciate the clarification, and hope an idea comes to you soon!

[Paralytic]

You obviously don't want to/can't share what the idea is - but 3 months to MVP another 6 to a profitable revenue stream is extremely optimistic IMO. As a PO/BA, you've got years of experience in underestimating how long software takes to build

Unless someone is desperate for some experience, I can't see them signing up for jam-tomorrow when there are literally thousands of people out their developing apps that ultimately only get a handful of downloads. So, as stated by others above, you're best bet is to find someone as excited in the opportunity as you are, and go in 50/50 (or maybe 60/40 in your favour).

Alternatively, hope that the upcoming recession means the market plummets and you'll get someone to code for their dinner.

I assume you've considered the outsourced/fiverr type model? This is probably your cheapest route to market but unless you're 100% focussed on quality (and if you're not a coder, how will you know?) then you'll end up with a mess of a codebase that is impossible to maintain and will likely have latent security/scalability issues you don't identify until too far down the line.

[meanttobeworking]

You obviously don't want to/can't share what the idea is - but 3 months to MVP another 6 to a profitable revenue stream is extremely optimistic IMO. As a PO/BA, you've got years of experience in underestimating how long software takes to build

Unless someone is desperate for some experience, I can't see them signing up for jam-tomorrow when there are literally thousands of people out their developing apps that ultimately only get a handful of downloads. So, as stated by others above, you're best bet is to find someone as excited in the opportunity as you are, and go in 50/50 (or maybe 60/40 in your favour).

Alternatively, hope that the upcoming recession means the market plummets and you'll get someone to code for their dinner.

I assume you've considered the outsourced/fiverr type model? This is probably your cheapest route to market but unless you're 100% focussed on quality (and if you're not a coder, how will you know?) then you'll end up with a mess of a codebase that is impossible to maintain and will likely have latent security/scalability issues you don't identify until too far down the line.

Thanks for your advice, and apologies, I only just saw the reply for some reason. What I meant by 'revenue stream by month 9' was that that's the first point that SOME income would be generated, rather than breaking even and becoming profitable at that point. But nevertheless, I understand your point, and I think I worded it indistinctly.

As you and others have said, "50% of something is better than 100% of nothing" seems to be the key theme here, and my likely route will be to get someone (or a company) onboard on that basis.