Below is a question from an entrepreneur, edited to protect the innocent (if you are a member of TheFunded.com, you can read the complete thread):

Q: An investor has been pressing me to invest and needs A DECISION IN THE NEXT DAY OR TWO, plus he is reminding me to stop publicizing my site and keep it strictly confidential.

He wants to put $xxK of his money into his developers in [third world country] to redo and significantly strengthen the site for rapid growth, in return for 10%.

He would not give me names of CEOs he’s funded as references.

He went to [fancy school], and claims that once the site is done, he can then draw on all his connections and angel funders to help it grow rapidly.

I am attracted by the offer, since I do not have the time or money to do all the social media etc necessary to make this site grow rapidly.

My tech cofounder engineer (with whom the investor will not speak) is against the idea.

How can I say this politely? Run. You are bein ripped-off.

How can any entrepreneur possibly fall for such an obvious scam?

Here are some hints:

• References don’t check out (if you don’t know how important references are when you are dealing with business people, read this).
• The money is fake, since the money supposedly invested goes right back into the pocket of the investor.
• High-Pressure sales tactics. There is no reason for the quick deadline, except to cloud the judgment of the entrepeneur. If you have never been exposed to such tactics, go to a used car dealership and ask about their deal of the day

Sadly, this entrepreneur had everything he needed to succeed. He and his technical co-founder seem to have designed the web site just fine on their own. And now the entrepreneur is considering dumping is co-founder for hollow promises.

Don’t fall into that trap.

Good programmers don’t need marketing. Great applications sell themselves.

I used to think that way too.

When I was an R&D engineer, I wrote the code. I made the product. I thought that sales and marketing were basically overhead.

Then I switched sides, worked with sales people for a while, and witnessed how hard it is to sell a product.

Those sales people had the same attitude: without them, there would be no customers and no money. Therefore, they were the ones really making the product come to life.

Reality is somewhere in between: Without sales, you don’t have a product, you have a prototype. Steve Blank makes an excellent case.

The Microsoft vs. Linux war didn’t help with the disdain toward marketing among software geeks, hackers and slashdotters. It feels good to believe that Windows succeeded mostly because of marketing and money spent by the mega-corporation.

If Linux had the marketing muscle of Windows, it would rule the world.

That’s beside the point.

Marketing Matters

You may have the most robust operating system, the best wiki or a twitter-killer, it doesn’t matter if no one knows about it and no one likes it.

You must design something that people want (market research), in a way that they can understand (usability) and make sure they can find it (market communication and public relations).

These are not overhead. If you get any of them wrong, you’ll have frustrated users at best, or no users at all. Not a fun situation.

Four Step Recovery Program

Here are four steps to help recovering programmers. They won’t turn a hard core hacker into Steve Jobs, but it’s a start:

1. Users are good: Whether you are trying to pay your bills or you code for the fun of it, recognize that you have an audience. It’s no fun writing code that no one uses. It’s so much more exciting to receive praise for your work from real people.
   So you will eventually have to open up and start listening and care about your users. They won’t be perfect. They may be clueless about programming. They’ll ask for features that sound basic to you, but they are your users. You will learn to love them.
2. Meet people face to face: There is so much you can do online. Sometimes, face to face interaction is more powerful than the best crafted tweet. Set yourself a target to attend at least one developer or entrepreneur meeting each month.
   Once you get into that habit, increase to two meetings per month. Be open, discuss your vision as well as your immediate problems and you’ll be surprised by the results.
3. Set aside one hour daily for active marketing: Software developers love to spend days and nights coding great stuff. Focusing on marketing, sales and customer activities is not quite as exciting. Put some discipline in place. A good starting point is to devote one hour per day of your time to work exclusively on marketing. And I don’t mean read the Web to learn about SEO.
   Spend one full, active hour contributing to forums, pitching to people, e-mailing journalists and other key influencers that may be interested in what you do.
   Does your web site have a success story from a real customer? Did you follow-up with the people you met at those meetings?
   The first week, send at least two e-mails a day to people you have never met. By the third week, your goal is to receive one e-mail a day from people you don’t know. Once you figured it out, just scale.
4. Chat with 3 Users: Geeks are particularly good at imagining what their ideal customer wants. Stop!
   Go and actually chat with a handful of your potential users. Listen to their interests, their concerns, why they would use your product, etc. You’ll be amazed every time. Just make sure that you talk to more than one or two. Does the target or three customers sound low? That’s because you haven’t done it yet.

There are many resources out there about SEO, A/B testing, how to write a press release (or not), create buzz, etc. Start paying attention. Because if you don’t, someone else will.

When I co-founded my previous company, I had the hardest time interviewing candidates for sales positions. We went through four different VP of Sales in the first two years. One of them had no qualms about putting complete fabrications on his resume.

If you are like many software geeks, you find the company of business people a little awkward. But as you embark on the journey of creating a Fair business, making money is critical and a good business partner can make the difference between success and failure.

Steve Jobs is not a coder but everyone agrees that he turned Apple around single-handedly. The same truth applies on a smaller scale: your project can greatly benefit from being sold, marketed and pitched the right way to the right people.

But how can you pick the right partner?

To the untrained eye, all business and sales people look the same: they talk and present great, but you don’t know which ones to trust. It’s very possible that the most sweet talking salesperson will be the least ethical, most lazy and worst partner you could ever find.

References

The number one trick to choosing the right business partner is reference checks. If you can find a friend of a friend who will vouch for that person, you’re in great shape. That’s an element of trust. Tools like LinkedIn are great for that. I can’t emphasize this enough. Don’t take the potential partner’s word for it, listen to other people who have worked with the candidate.

Really. Pick up the phone and actually talk to them.

Do Some Comparison Shopping

The second trick is to compare. It’s easy to be impressed by “Joe”, the sweet talking business person you met at a tech MeetUp and feel you must hire on the spot.

Don’t. You are making the mistake of comparing Joe to yourself: sure, Joe has a ton of business contacts and looks great in a suit. Compared to you.

Instead, find a second potential partner. Then compare. Suddenly, Joe’s amazing contacts don’t look so great compared to Bill’s. But Joe understands your product better.

This process will help highlight differences and weaknesses in both candidates. Only then can you make an educated choice.

Trust But Verify

Finally, don’t give away the farm. Great business partners deserve all the equity they can get. But just in case they don’t work out, make sure there is vesting in place. If after a month you are not satisfied with the results, you can end the partnership and all you have lost is some of your time. But being stuck with the wrong business partner who owns significant equity for life, that could be the kiss of death.

Are there any other tips you encountered in that situation? Any horror stories you wish to share?

[EDIT: on the same topic, this post is a good read]