Did you know the average successful startup (i.e. from inception to acquisition or IPO) lasts longer than your average marriage (that ends in divorce): 8 years vs 9 years for SaaS. Outside of that being unsettling proof for the sorry state of marriage these days, it should make you take pause.
How long have you known that guy or girl you’re thinking of founding the company with?
Are your life paths and careers really on the same trajectory?
Do you want the same thing for the business?
And are you even a good fit together?
There are millions of questions potential startup founders / co-founders SHOULD consider before ever signing anything or writing a single line of code. Like: do I actually like this person? Could I see myself spending the next 6–12 sleepless, over-caffeinated years with them, getting by on Ramen and raw grit alone as we fought to secure funding, build and launch the product and scale faster than any organization ever should have to?
These seem like relevant questions, right?
So why is it, half the time when you ask founders (especially young and inexperienced ones) about their origin story, it all started with an idea, a napkin, a late-night beer… and the next day they were in business?
There’s a reason most startups fail, and it isn’t just because startups are hard. No, startups die (almost exclusively) for one of two reasons:
- Running out of money
- Co-founder disagreements
That is pretty much it. If the team is unified and there is cash in the bank, a pivot if always possible. But not when you hate each other, not when you’ve decided you want different things in life. And not when you ruined the cap table so miserably that the chances of future financing are slim to none.
But you are smarter than that, right? That is why you’re here. You’re considering co-founding a business and not sure if/how to get started. Well, you’ve come to the right place.
Building a Cofounding Dream Team: 7 Keys to Choosing the Perfect Cofounder
1. Founding with friends and family is usually terrible
For most people, mixing business and pleasure is a bad idea. There is so much that can go wrong and so many relationships that have been destroyed because of something to do with money. In nearly every instance, it doesn’t make sense to invite that level of risk into your business.
Because let’s face it, if your startup fails, that doesn’t mean you need to dishone your daughter or argue through dinner about “what’s right for the business and the family.”
Plus, you remember how it was when you were kids… Somebody always tattled to Mom, who was then forced to play the mediator between you and your brother. Many (if not most) family businesses often have similar dynamics… because you’re all the same people you always were and we get used to being in those roles.
So, unless it’s a family business that’s been around for generations and worked out the kinds of inter family cooperation, avoid partnering with parents or siblings at all cost.
Because could you really fire your dad if he was letting down the business? And of course, everything above applies to friends as well, at least the friendships you’d hate to lose.
2. Teams require skills and roles
Just because you get along well with someone, doesn’t mean they’d be a good co-founder for your business. Because in business (especially in startups), it is all about getting things done. That’s why having three technical co-founders or two MBAs with no idea how to code an app is a terrible choice to start your business.
And yet, it is what so many young entrepreneurs do.
Because you had the idea together.
Because you’re afraid of doing it on your own.
Because you both think alike.
The truth is, diversity of opinion and skill set is critically important to the success of any startup or business. That’s why great sports teams are constructed of talents — people that play a specific role in the team’s success. Your startup is no different.
As if that wasn’t enough, there is an even more important reason for having diverse skills on your founding team — divvying up responsibilities. If you’re both great at (and love) sales or product development, you eventually start treading on each other’s toes, unless the roles are clearly defined. Because there is so much to do and things often get fuzzy — like who should do what or how much each individual contributes to the team.
And nothing worse as a founder than having a co-founder (with equity) that doesn’t pull their weight.
3. Do you and your co-founder have the same goals?
I’ve built and sold a couple businesses in my day that from the perspective of the serial Silicon Valley unicorn hunter, would be laughably small. I bootstrapped (i.e. self-funded) the businesses while living in South East Asia and managed a few nice-ish exits for myself. Imagine if I’d tried to partner with Bezos or Zuckerberg…
Our goals would have been so massively misaligned that we’d have failed before we even got started or had endless fights over the direction of the business. We both wanted different things and were at different stages in life.
And this is a CRUCIAL question to ask yourself when considering a potential co-founder. Because a 23-year-old Stanford dropout has very different needs, wants and risk tolerance than a 40-year-old single mother (or father) of two. You literally CANNOT build the same business, at least not in the same way, because what may be perfect for one would be anything but for the other.
Which isn’t to say being a 23-year-old is better or more advantageous. Sure, you may think that because startup founders are often portrayed as the young guy (or girl) straight out of college (or dropping out) with the big idea that changes the world.
But that is pretty far from the truth. In fact, your average startup founder is 45 years old (although only 34 for unicorn founders — Source: Bloomberg) with 20+ years of experience under their belt. Which not only helps them know what to build, it often helps with funding or accelerating the entire endeavor — because everyone comes out of college broke.
It is important to note that goals aren’t only about outcomes and risk tolerance. It isn’t just agreeing to build a billion dollar business or be the next Larry and Sergey, there is another side which is arguably more important.
4. Do you and your co-founder have the same values?
What do you stand for? What are your values?
It is the co-founding team’s job to create the culture for the entire company. And getting company culture right is make or break in business, especially for startups. It’s what decides if your team runs like a well-oiled machine or is pulled in multiple directions at once. In essence, it is what makes your team a team.
So what kind of culture do you want to create? Have you and your confounder even talked about this? Are you on the same page?
Oftentimes (especially with mission-driven businesses like the ones I work with) one co-founder is completely bought into the mission while the other is more in it for the thrill or the money — which inevitably leads to conflict. How could it not? Try optimizing a cake for flavor and weight loss at the same time… it always ends up in a crappy tasting compromise.
So what do you value more than anything else?
5. How do you work and communicate?
Are you an eight-to-fiver while your cofounder kills RedBulls from noon until midnight?
Prefer working in a team while your cofounder likes to work from home?
Do you avoid direct confrontation while your cofounder thrives on blunt honesty?
There’s enough stress launching a startup as it is. The last thing you or your company needs are additional headaches over the day-to-day things like how, when and where you work or how you make decisions.
You don’t have to be the same person, but you do have to be able to work together.
6. Trust tops everything
Going back to our marriage metaphor, founding a business with someone is all about trust. With your livelihood, reputation and future literally on the line, you need to know you’ve got each other’s back.
Because you both have access to the company bank account.
Because there’s no boss there counting your hours.
Because success or failure is 100% dependent on both of you.
Because you need someone there to catch you when you’re falling.
The truth is, entrepreneurship is a f*ing rollercoaster. Starting a successful startup is the most difficult thing you can do (short of raising a child). Everything can (and will) go wrong. You’ll be running out of money, lose a big contract, have an investment fall through…
And that is all Monday morning.
How could you ever do that without knowing the other person had your back?
7. Cofounder dating before you propose
It makes no sense to consider spending the next decade of your life slaving away on your startup with someone if you’ve never worked with. Like an arranged marriage without the sex, it would be almost destined to fail — for pretty much all the reasons we mentioned above.
Face it: You have no idea how they work, how reliable or efficient they are or if you can even stand working together in the same room for 8 hours.
Then there is the critical “it” factor. You either click, or you don’t.
And all of that is impossible to know if you buy it before you try it. That’s why I ALWAYS recommend potential co-founders work together on a project or two (for at least two weeks) to see how things go.
Because it is easy to part ways after two weeks. Neither of you have invested a lot in the business or the relationship. Unlike if you part ways three years and two investments (or kids) later. You’re pre-equity, pre-employees, pre-investor expectations… there’s nothing on the line.
And playing low stakes Poker is the cheapest (and best) way to learn.
BONUS Cofounder Nice to Haves:
8. Balanced temperaments
This is the so-called Type A and Type B personalities. Some people (like me) are wired for urgency, action and impatience. We constantly need to be doing and pushing forward and can run a little hot from time to time. The exact opposite of the more Type B, laidback person who is less competitive, reactive and stressed.
As with everything in life, both are needed and complement each other — the Yin and Yang, the push and pull.
Because while you need that killer instinct and urgency to land that key client, close that round and crush the incumbent, you also need that level-headed leadership to weather the inevitable storms, maintain team sanity and avoid overreacting and losing sight of your mission.
It is not 100% necessary to have differing temperaments, but it certainly helps avoid the unstoppable force vs immovable object problem of two Type A “alphas” fighting over who wears the pants.
And two Type B’s can be just as bad, as execution is everything. Sometimes, it pays to push too hard, stress to the max and burn the candle at both ends.
9. Complementary networks and connections
As they like to say here in Switzerland, there’s nothing stronger than Vitamin B (i.e. Beziehungen, i.e. relationships & connections). This is especially true in business and even more so in startups. Whether or not you raise funding, get the meeting or have a 4M or an 8M pre-money valuation often comes down to who you know.
And if you and your cofounder both run in the same circles, you only know the same people. Ideally, you’d both bring something to the table. Like connections to money and investors or in-roads with corporates and possible partners. Or maybe you’re plugged into the local tech scene or have a great reputation with your potential clientbase. Whatever it is, everyone brings their own background and set of experiences to the table, just like skill sets and responsibilities.
So think about that when considering your ideal cofounder. What type of person would be the perfect fit for you and your business?
Once you know that, all that remains is figuring out how to find them.
How to Find Your Ideal Cofounder
The best way to find a killer cofounder for your startup is to ask your network. Maybe there’s someone you already know who’d be interested or maybe someone knows the perfect person. Either way, being as open and public about what you are doing and that you’re open to finding a cofounder is the best way to get started. (And no, no one is going to “steal” your idea — unless IP is involved, talk your heart out — It all comes down to execution anyway).
Other than that, attending networking and startup/founder meetups, getting involved in forums and places where your clients are active and even potentially scouting the competition can be great places to start.
Add to that job posts on places like Angellist and Linkedin, a little startup matchmaking with sites like CoFoundersLab and cofoundme and you are off to a good start.
The most important thing when looking for a cofounder however is to be patient.
It’s better to spend months seeking a cofounder while simultaneously building your business than to “get married” and “divorced” again within the first couple years.
Plus, there is an added bonus: The longer it takes to find the right person, the more leverage you as the primary founder have with setting the terms — i.e. equity allocations, responsibilities, product roadmap etc…
Who knows, maybe you end up building the business so successfully on your own that you can just need to hire someone to complement your weaknesses. Trust me, that’s much cheaper in the long run, at least when big numbers are concerned.
Closing Cofounding Thoughts
You don’t need a cofounder, but they are nice to have. Founding a business is incredibly hard. Doing it on your own is even worse. But for plenty of people (myself included), it works just fine.
That said, if after reading the article, you still adamantly believe you need a cofounder or two (more than four cofounders is a terrible idea, and even four is pushing it due to equity splits and issues with decision making), now you know what to look for. Because it is not just about moral support, it is about so much more.
And this is your business we’re talking about, so it pays to get it right.
Go build your dream team!
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December 28, 2021 at 12:19 pm
Very descriptive article, I liked that bit. Will there be a part 2?
December 30, 2021 at 11:18 am
Thanks Jenifer and glad you liked it. Do you mean about how to go about finding the perfect cofounder?
January 14, 2022 at 6:40 am
To the point as always 😉
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