I'm not an expert at start-ups, but I do have a few failures under my belt, and there was one common issue that each of them had to address: how to divide equity. Guess what? It's not that easy.
For some groups, disagreement on equity can even stop work or kill the project entirely-- which is insane given that the intent of start-up equity is to enable contributions, not prevent them.
Trusting people is hard
We've all been burnt in one way or another by trusting the wrong person at the wrong time, so it's understandable that we have a difficult time trusting eachother when working together to build something new that is potentially very valuable.
It's interesting how different this atmosphere of subtle mistrust is from the atmosphere of the open source world, which on the whole manages to crowd-source a vast amount of work for literally nothing.
In the open-source world, trust is essentially quantifiable. It's easy to review anyone's GitHub profile and see what they do well and pull-requests provide a publicly available code review. In the start-up world, the intentions of participants are not peer-reviewed prior to enacting them, and their complete history is not publicly available.
This lack of transparency is holding us back.
So how do we fix it?
I think we need a system that tracks and rewards start-up contributions in a similar way that GitHub tracks and rewards open-source contributions. Going one step further, I think there needs to be a system that enables anyone to contribute to a start-up, in the same way that anyone can contribute to an open-source project. Can you imagine the amount of work that could get done if only we could all just trust eachother?
This is what my team is working on
And we could use some help. If you want to get involved, send me a message on Twitter.