How to turn a developer into a founder: Advice from those who’ve done it

For six years, Peter Relan specialized in turning developers into founders. At his YouWeb incubator, the investor/tech veteran found talented developers such as Jason Citron and turned them into the creators of companies.

It isn’t easy to make that switch. Citron did, founding OpenFeint, a social platform for mobile games. He got thousands of developers to sign on board for OpenFeint — and then he sold it to Gree for $104 million.

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Relan considered that one of his best successes, but he said in an interview with VentureBeat that not everyone can do it. The transition from developer to founder will be the subject of a few sessions at our upcoming DevBeat conference on Nov. 12-Nov. 13 in San Francisco.

Relan strongly believes that turning a developer into a founder is a delicate process. More often than not, the person who becomes the CEO of a startup has a business background. We asked number of game industry experts about this.

“The entrepreneur must want it,” Relan said. “They really have to want to be coached into becoming a founder CEO.”

Relan said that the developer must align their “DNA” — such as an ability to code for backend products — with the goals of a startup. If the developer has enterprise experience, then it’s not a great move to shift into consumer products.

“With Jason, he focused on the leaders of the developer community and then took the whole market,” said Relan, who is now institutionalizing the developer-founder emphasis in a new incubator, Studio 9+, which works with projects for nine months or more.

Developers have the opportunity to become founders more than ever these days because of modern advances such as app stores and self-publishing platforms, Citron said.

“I had an incredible desire to chart my own destiny, which sounds cheesy, but in today’s world that means to have my own company,” he said. “This begot a willingness to do things that were way out of my comfort zone at the time. I remember the first time I had a meeting with another developer to pitch OpenFeint, I was so nervous. I had never formally ‘sold’ anything before in my life. But you gotta power through that stuff to progress.”

Citron said he knew he didn’t have all the skills to build a successful company, but he learned on the way  about finances, marketing, sales, and hiring. He surrounded himself with people who could help on those fronts, and he read a lot of books, too.

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“I focused my efforts in areas that were intrinsically fun for me,” he said. “This made the realities of the day-to-day grind mostly rejuvenating. It also enabled me to deeply understand what my customers’ problems were.

“So how do you turn a developer into a founder? The question is a bit odd, actually, since it implies that it’s something you can just do to someone else. I think it starts by finding someone with these traits who wants to become a founder. You can facilitate and guide that developer on his path to becoming a founder by actively coaching them towards success.”

Communication is critical

Keith Katz, a founder at Canadian game incubator Execution Labs, said he has had to think about the question of turning developers into founders just about every day. He said that startup teams often come together with four or five people. One of those developers steps up to be the CEO, and the Execution Labs team has to foster that founder’s own personal development.

One thing that developers almost always have to work on, he said, is communications skills. They need to learn how to do one-on-ones with team members.

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Katz said his team gets the founder to describe their startup from the start. By the time they really need to communicate about the new company, the founder will have learned how to communicate well and articulate its mission. That will make recruiting and fundraising easier.

Founders also have to learn about budgets and allocating resources among a small team. Founders also have to be able to run projects without having to write code — which can be a challenge for developers used to wrangling code every day.

Kevin Bachus, a creator of the Xbox and current senior vice president of entertainment and game strategy at the Dave & Busters restaurant/game chain, agreed that developers must focus on their communications skills.

He thinks they also have to learn basic tools for running a business and give up on hands-on coding roles in favor of finding people who can do it. One thing a CEO must learn, he said, is how to manage more than one game development at a time. Most developers never have to consider that, and they fall down as a result.

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Michael Chang, the managing director at investment firm Mavent Partners, said founders should understand what they don’t know. They have to be curious, get help, and realize that fundraising is all-consuming. He counseled a lot of founders as they pitched him when he was both a venture capitalist and when he was a corporate acquisitions director for Electronic Arts.

Randy Pitchford, the CEO of Gearbox Software and maker of the hit Borderlands games, has started three companies. “It takes a rare, stubborn, and unsatisfied mind to go out into the wild with a startup built around an untested idea,” he said.

Pitchford also acknowledged that fully understanding the risks might have stopped him from becoming a founder.

“Confidence and ignorance are useful in equal parts,” he said. “The kind of environment one finds oneself in when venturing into the unknown and uncertain is very stimulating. Some of us happen to be built for that kind of environment, or, indeed, require it.”

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There are never ideal conditions for most developers to become founders. Alex St. John, the founder of Wild Tangent and a startup veteran, said, “Fear and responsibility did the job for me. You tell the developer to quit their job and start their company. Nothing teaches you to be a founder like having your savings tied up, a demanding investor, and two or three employees with families to support.”

Operational support required

Tim Chang, a venture capitalist and managing director at Mayfield Fund, said the key to turning a developer into a founder is to hook them up with seasoned business founders.

“If the goal is to build a venture-scale, standalone big-ass company, then a developer founder is equivalent to a technical and product founder, who often has no experience in crafting business models, distribution channels, build up teams, or scaling up companies,” Chang said.

He pointed to Markus “Notch” Persson’s Mojang, a company that has huge revenues from its hit Minecraft game and doesn’t need to raise money. Normally, the business person would be the one at the helm. But because Mojang is so successful, the company can just focus on making a killer product and funding development of new products. In such companies, the developer is the king and hires additional business and operations people to handle the business tasks.

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Meanwhile, Brock Pierce, an investor and head of the Clearstone Global Gaming Fund, said that developers will strike out on their own if they find a boss blocking their creative efforts or if they see their peers striking gold as entrepreneurs. But he warns, “Most people, no matter how talented, do not have the composition or skills to be a successful founder.”

Brian Fargo started game companies such as Interplay Productions and InXile Entertainment. He said that developers should take a look at the big picture and figure out where they can best apply their time. Should they be testing product or hiring a team that can do these things? The answer will be readily apparent.