Finding a co-founder is pretty much like finding a spouse… at least in the sense of the seriousness and the thought that will go into the decision making. And despite all the precaution and thought, there is no guarantee that things will work out well. You can only hope, and give it your best, assuming that the other person gives his/her best too.
Accepting someone as a co-founder is probably going to be one of the most important decisions in your entrepreneurial journey, and often in your life journey too.
A co-founder is NOT just another co-worker. Even if the share-holding is not equal among the founders, a co-founder is going to be an equal partner in the decision making, strategy planning, dealing with the challenges, carrying the load, putting a 100% into the venture, etc. The success or failure of a venture can often depend on the quality of the relationship between the co-founders.
I suggest two major points to ponder on, when accepting someone as a co-founder:
On the functional front :
- Ideally, a person who has complementary skills, that you or the current team do not have, is likely to be more useful for the venture. (e.g. if you are a techie, find someone who is a business person).
- Find someone who has worked in a startup, or clearly understands what working in a startup could be like AND, accepts it happily. Often folks who have worked in larger companies, with well-defined processes, proper infrastructure, an army of people in support functions, super specialization of divisions, etc. are unable to deal with the uncertainties, roll-up-your-sleeves-and-get-it-done style, and the multi-tasking nature of the work environment that startups typically are.
- Find someone who will not need the backing of a great brand name and large resources (e.g. big marketing budget, large sales force, etc), to deliver results. Find someone who is a self-starter and is not likely to look for a ‘boss’ to guide him/her. Believe me, many senior professionals actually perform better when there is someone to guide and drive them… and nothing wrong with that. You just have to find someone who does not depend on someone else to set the agenda and targets.
- Find someone who has the ability to deal with challenges and the maturity and calmness to manage routine stresses and failures, which are manifest in every entrepreneurial journey.
- Find someone who is a team player, someone who is likely to get along with a number of people in a flatter organizational structure. Someone who is secure enough to share the credit for success, and brave enough to accept responsibility for failures.
- Find someone whose measure of success is to increase the size of the pie, and not about increasing his/her share in the pie.
- Find a co-founder who can think AND do. Often senior folks from the industry who want to be entrepreneurs, accept a co-founder position in startups, but may not be happy doing the operational stuff. Some seniors from larger organizations feel that operations is what they used to do when they were junior, and now that they have moved up the ladder, their role is to think and strategize, and delegate operations to juniors. This does not work well in a startup.
On the personal front :
- Ideally, find someone from the same socio-economic background. This is important because when the challenges hit you, people with different financial circumstances may take different views on the situation. E.g. if the startup does not appear to be likely to scale up as much as earlier thought of, a co-founder with substantial wealth may not find it worthwhile to continue while another co-founder with modest means may still find it lucrative to continue. On the other hand, if the startup starts getting into a cash crunch, someone with a weaker financial position may not be able to continue for long with a lower income or no salary. These are practical issues. Either you find someone with similar circumstances/background, or discuss upfront what the response to different situations could be.
- Find a co-founder with similar aspirations and motivations. This is critical, and in my mind, a non-negotiable condition. People with differing levels of aspirations are likely to try and pull the company in different directions, as the startup progresses.
- Find a co-founder with similar professional aggression and drive.
- Find someone with similar views about life.
- Find a co-founder that you will feel comfortable sharing your joys and sorrows with. Find someone who you can count as your friend.
- Find a co-founder that your spouse is comfortable with. Especially if the co-founder is of the opposite sex. Your spouse being uncomfortable with co-founders will not directly impact the company but could cause stress in your personal life. Avoidable.
- Go by your gut feel. See if you feel nice about the person.
Most importantly, do not accept anyone unless you think that he/she is a GOOD HUMAN BEING. Everything else is secondary. If you have heard negatives on ethics, value-system, social behavior, ideologies etc – RED FLAG yourself. Do not get tempted by professional performance.
Happy Co-Foundering !!
*****
Reads on the same topic:
How to choose a co-founder in a startup
How to choose your business partner
*******
asha chaudhry
prajakt,
you might like to read alok’s piece on co-founders – https://www.therodinhoods.com/forum/topics/mr-and-mrs-co-founder-how-do-you-do
Mr. and Mrs. Co-Founder – How do you do?
I have been married for the past 21 years (I am 43 years old) and I think I’ve done pretty well so far ☺. Yeah, I bet I got a better deal than my wife (I mean, who wants to be married to a crazy entrepreneur?), but that’s the way life is.
In this month’s column, I want to explore the fine and delicate relationship of Co-Founders, using the metaphor of Marriage.
Marriage is right there in your face. You are either married or you aren’t. Everyone knows folks who wish they were married or wish they weren’t. Marriage ‘Aunties’ abound. Those who have had terrible marriages become marriage counselors! Everyone knows something about being married!
So, what’s the connection between Marriage and Co-Founders?
1. It’s about surviving, really.
I meet a lot of people. That’s my job and also my passion. I’ve noticed how young people go on and on about how they met each other, who smiled at whom and how they shared their first train ride, etc. A couple of years later, those stories seem to vanish.
On the other hand, when I go for spiritual treks, I meet couples married for over 30 years, who barely speak to each other. But they are supremely happy and completely in sync with other!
Co-founders essentially need to last. And last for a long time. If you look around at the biggest entrepreneur success stories – Microsoft, Google, Hewlett Packard, Infosys, Naukri.com, etc… they all share a common theme of long-term co-founder survival.
Good things take time. Great things take forever.
If you want to build long-term and great entrepreneurial value, you must partner with a co-founder with whom you can last forever.
2. It’s about what’s common – not uncommon!
Many entrepreneurs, VCs and management experts believe that great co-founders are those who have distinct complimentary skills. If one co-founder is aggressive, outspoken and extroverted, the other co-founder could be soft spoken, introverted and mild. From a skill set point of view, having a co-founder who is great at Business and Finance is a perfect match with someone highly skilled at Technology and Operations.
All this is common sense and makes good theory.
What really matters is not how many ‘uncommon’ skills and idiosyncrasies co-founders have between them, but rather how many ‘common’ traits they share.
I say this because of my experience in marriage. I believe that if husband and wife have to really get along, they must share a common set of values, morals and outlook towards life. Yeah, it’s fun to have a wife who likes Air Supply while the husband likes ACDC but the point is, they both enjoy music!
When difficult and personal decisions come up, couples who ‘think alike’ pass through well.
In business, finding people who can fill up your lack of skills is difficult, but not impossible. Lots of great professionals are available on hire. If you are an accountant building a website that predicts the weather, it’s easy for you to hire a meteorologist and a technologist.
But if you want to make it the most successful weather forecasting business on the planet, then you need a co-founder who is more ‘like’ you than ‘unlike’ you. You need another twin, a photocopy of yourself, someone who shares the same DNA as you.
The reason being like in life and marriage, business also imposes a set of values, rules, morals and character expectations on its owners. It’s best if co-founders share a common set, so that when critical decisions arise, both co-founders think alike.
3. The Citizenship Test is passé – Try my Conference Room Test
I’ve heard in the US, when disparate people get married and claim Citizenship benefits (automatic grant of citizenship because the spouse is an American citizen), these couples are put through a rigorous test! They are asked questions about which partner snores, what is the wife’s shoe size and whether the husband lifts the toilet seat up when he takes a leak or not?!
The test is to conclusively prove that the marriage is not a commercial one (‘marriage for convenience’) where the couples happily separate after gaining citizenship.
For co-founders, I have a similar test. It’s called the ‘Conference Room Test’. To check if co-founders are really compatible and will last long-term, do this:
Separate the 2 or 3 co-founders into separate conference rooms and ask them a really tough question. Eg: “Your brilliant CFO has secretly borrowed some money from the Company and is secretly planning to return it. Now that you know, will you tell the board? Will you fire the CFO? Or, will you just let it pass?”
Trust me, truly compatible co-founders will answer this difficult and tricky question almost identically.
It’s this sync that makes them successful.
4. Being Nasty is being good
I have terrible fights with my co-founders. To one of them I said, “You are my partner; I have the right to tell you anything I want, and expect you to do the same.”
Co-founders can tell each other what no one else can. That’s exactly what great marriages are about. And the reason it works is because it needs a heart of steel to tell the truth and another heart of steel to listen and accept it.
When you know that the other person is truly being genuine, that steel melts and becomes gold.
So if you are planning to build a great business, find a great Co-Founder. If you are happily married, use the same principles. If you are not, get counseled, fix your marriage and settle in.
All so that when someone asks the both of you, “Mr. and Mrs. Co-Founder … how do you do?” – you don’t fumble or merely look at each other or keep so quiet that a star can be heard twinkling! Instead, you will smile (and show your newly polished teeth) and answer in unison, “Very well, thank you…!”
asha chaudhry
and rohan bhansali’s post as well – not on finding one but still, on “do best friends make great co-founders?”
[this just became the hub of co-foundering!!!!]
https://www.therodinhoods.com/forum/topics/8-tips-to-a-successful-friendtrepreneurship-are-best-friends
“Friendtrepreneur” [Pronounced: friend-truh-preh-nur]
Noun: a person who starts a business, taking on financial and emotional risk to do so, with a friend
The most frequent question I am asked by friends, family, ex-bosses and aunts, “Doesn’t working with friends affect your friendship?”
The answer is yes, it most certainly does.
So does that mean you should avoid Friendtrepreneurship?
Not at all. That would be something (though not exactly and I repeat “not exactly”) like not marrying the girl you really love because you risk losing what you have with her.
Honestly, the question of whether good friends make good co-founders is a big fat grey area. And the answer, like the answer to most of life’s amazing questions is – It depends. There is no definite yes and there is no definite no.
Having run Gozoop with 2 of my closest friends – Ahmed and Dushyant – for 4 years now, I can safely say that the journey together has been amazing. In fact, I am closer to them now than I ever was. Does that mean we haven’t had differences and arguments? Of course not.
Truth is that despite it’s inherent advantages, partnering with friends throws in it’s own challenges – all solvable though.
Here are a few things you would want to consider / adopt while working with friends so that you are well positioned to build a good business and maintain your awesome friendship at the same time:
Choose a good business partner, not just a good friend
A good partnership takes much more than a good friendship. The comfort that comes with working with a friend helps resolve many issues but not all.
Ask your self the following questions – Does your friend share the same business vision and values? Do your strengths and weaknesses compliment each other? Does you friend have the basic traits you would look for in a business partner: honesty, reliability, commitment, adaptability, etc.?
Communicate – no matter how uncomfortable a conversation it maybe
It’s going to happen. You are going to make excuses to avoid an important conversation because you don’t want to hurt your friendship. “I will bring it up if he does it one more time” – is not the best way to deal with a situation that can affect your business. Building a good business takes commitment and as far as friendtrepreneurs understand that fully, an honest conversation will not jeopardize the friendship.
Write things down
It’s always a good idea to write down all decisions (big and small), targets, deadlines, etc. in an email and share it with your partners. As friends, things can get a bit casual sometimes. Writing things down ensures that all of you are committed to the decisions in the same manner and this will reduce misconceptions that could arise in the future.
Formalize your business relationship
For the sake of your friendship if nothing else, formalize your business relationship. Whether it’s a Partnership deed or a Shareholder’s Agreement, formalizing business terms greatly reduces the opportunity for misunderstandings and loss of trust in the future. In fact this is insurance for your friendship even if your partnership fails.
Pre discuss all things money
When and how will profits be distributed? What will be the monthly withdrawals? What if one partner needs a loan? Which expenses are reimbursable from the company? What if one partner wants to sell to a potential buyer while the other wants to wait and sell at a higher valuation?
Different founders come from different places financially and their monetary needs and motivations could differ. It’s Best to pre discuss all money matters.
Don’t make it all Professional
Working with friends has a lot of inherent benefits. To be strictly professional would be an unfortunate waste of these benefits.
Recently I was having a tough day. I went to Ahmed’s cabin and started venting. He shut my laptop and took me took me to this boutique cafe (I forgot the name) for coffee and croissants. We spoke about women, surfing, travelling, Ahmed’s younger brother Hasan and a few other things that make us happy. Post that I was all set to work again.
Make all important decisions over Ice cream
Whilst making big decisions such as Shareholder Agreement clauses (and sometimes even things like where the annual trip should be) there are bound to be uncomfortable conversations, disagreements, etc. My sincere suggestion to all friendtrepreneurs is make all-important decisions over ice cream. No discussion ends badly in the presence of Mint Chocolate Chip topped with Fudge.
At Gozoop, we have all our meetings with our lawyer over ice cream. It’s tradition.
Don’t mix Personal with Professional
It’s the unique ability to be comfortable enough to argue business issues and still be able to pull each other’s legs at the end of the day that makes friendtrepreneurship work. This is a tough one no doubt. But sometimes you got to put everything aside and find time to just be friends.
Disclaimer: Gozoop happened quite naturally for us. Back when we started we didn’t know better and just went with the flow. Some of the points I have listed have been adopted by us only recently. Looking back, we were really lucky. And though I wish all you friendtrepreneurs more luck, I humbly suggest you to adopt these points early in.
What are your thoughts?
Prajakt Raut
Thanks Asha. All very, very relevant points.
Piyush Rajesh Gupta
I had read this article sometime back from where I can draw parallels .
https://www.forbes.com/sites/groupthink/2013/04/10/getting-off-on-the-right-foot-how-to-find-the-best-cofounder/
Of what I understand the VALUEs of each of the founder should be aligned , else when the money starts coming it turns into a bad marriage
Ranjit Patel
It should be a perfect marriage.. glitches will take us to different directions..