Keith,

You make some very good points. I would point out that there is a difference between a product demo and a product though. A lot of startups outsource the first iteration (or parts of it) of their web based product(s) to an outsource firm and/or an offshore firm so that they can get something up and running that will be a vehicle for the post Angel or Bootstrap phase of their business. As a result they have a working product, users and benchmarks that they can use to sell what it is that they are doing to their investors. In many cases this means their initial product (demo version) may be in .net/php/coldfusion/whatever their tech budy knew (or they knew personally).

With respect to recruiting, I think you've also got to consider that the initial technologies who is hired or brought in as an equity employee without a technologist to screen them. This is where it takes some time on the part of the founder(s) to learn how to interview. They should most definitely talk to other co-founders and ask them about how to interview, but they should also take the time to talk to and/or retain a recruiter who can help them sort through the good, the bad and the ugly when it comes to candidates for their internal roles. People coming out of college usually involve peers and friends so they are usually pretty well off in this department because they are already vetted. People who have been in the real world for a while should visit a local bookstore and pick up a copy of 'Hiring The Best', it is an easy book to read with some helpful insights.

Last, but not least, they should start with something simple that will work. If a startup founder's ideas are too broad or general then they are going to run into a situation where they are stretched too think ino matter how much money or technology expertise that they have.