The Hardest Verticals to Find Complementary Cofounders

Posted by Jessica Alter /November 5, 2014 / Cofounder Advice, Engineering, Research, Statistics

Last week we revealed the most popular verticals to start companies in and how they’ve changed over the last year.  This week we took this one step further and examined vertical interest by primary skill set – business, engineering and design. With all the talk of “how to find a tech cofounder” or how to find a cofounder in general, it’s important to see how interest areas vary and where there are misalignments and opportunities by primary skill set.

Quick Definitions

  • For the purposes of this analysis, entrepreneurs are grouped into 3 primary skill sets:
  • Biz = business development/product/marketing/sales
  • Engineering = software, mechanical, electrical
  • Design = UI/X Design + Industrial design
  • Alignment = we compared the rank (top 20) for each vertical by primary skill set. Where there is less than about 5 points difference in rank there is alignment.

Engineering & Biz

Differences In Vertical Interest – Engineering vs. Biz Entrepreneurs

Eng vs. Biz rank

 

Areas of Misalignment

Cloud Services. One of the biggest surprises is Cloud Services having a -5 score (meaning it ranked 5 spots lower for business focused entrepreneurs than it did for engineering focused entrepreneurs).  No shortage of these companies starting and of course, being to sell SaaS services is key.

Hardware-focused verticals. Last week’s post saw hardware-focused verticals – consumer electronics, wearable tech, smart home and robotics experience the biggest jump in popularity.  But when examined by primary skill set there is significantly more interest from engineers than biz entrepreneurs. Perhaps it’s because business folks are really blocked to develop even an MVP in this space. But at the same time hardware is an arena in which sales/operations/design is extremely important. Consider this an opportunity. Media, Travel, Commerce and Advertising (not in top 20). All have significant  misalignment in the opposite direction – more business-focused entrepreneurs are interested than are engineers. Quick takeaway- it is likely tougher to find technical cofounders in these verticals.

Sweet Spots

That said, their are many verticals with close and near perferct alignment in popularity, including:

  • Mobile
  • Small Business
  • Enterprise Software
  • Productivity Tools
  • Data and Analytics
  • Education
  • Payments

Designers

When it comes to engineers and designers there is an interesting expectation that this is the perfect partnership.  Oddly enough, if you  compare the two charts below there is more alignment in terms of vertical interest areas between business and design than between engineers and design. While some of this may be due to some design-appreciators categorizing themselves as designers, we don’t believe this skews results all that much.

Differences In Vertical Interest – Engineering vs. Designer Entrepreneurs

Eng vs. Design rank

Differences In Vertical Interest – Biz vs. Designer Entrepreneurs

Biz vs. Design rank

Missing Design Thinking

Hardware. Once again, hardware-forcused verticals have serious misalignment. This time between engineers and designers.  Fairly shocking given the design renaissance spearheaded by Apple and brought home by Nest, August and many others. But it’s possible that these are more exceptions and several successful hardware cofounders have started without design cofounders on the team. Moreover, Wearable Tech has better alignment than the other categories – general Hardware, Robotics and Smart Home. Seems to be there is more interest from designers in consumer-focused, visible products.

Financial Services and Payments. Square aside, designers just don’t seem all that excited about the payments arena. This is true across the board – between designers and engineers and designers and biz. Definitely harder products to get your head around. We’ll be watching how this changes with the advent of Apple Pay. An Overabundance Media and Travel. Add Media and Travel to the list of proof that designers may be more interested in consumer-focused verticals. Consider this an opportunity for engineers passionate about these spaces.

Sweet Spots

Verticals where you should have no problem matching engineering/designer interest:

  • Mobile
  • Enterprise Software
  • Productivity Tools
  • Commerce
  • Education
  • Healthcare
  • Data and Analytics

A BIG Caveat

This does NOT mean we think that interest area is the only dimension that matters when you’re matching cofounders – to the contrary, fit and personality are the hardest to match on. But interest areas are a starting point and there are clear opportunities and even potential verticals that are just going to be more difficult to find a complimentary cofounder. At the end of the day, though, entrepreneurs need to go after problems they are passionate about.


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