Co-Founder Fun & Games
Until someone loses an eye!
Kidding (kinda, sorta, maybe)! Noam Wasserman, author of The Founder’s Dilemma, found that 65% of high potential startups fail due to interpersonal tensions within founding teams. Similarly, Paul Graham, shared that co-founders split up in about 20% of Y Combinator’s investments.
Conflict is inevitable, and desirable, if it’s “good conflict”. Aka, if it’s about challenging old ways of thinking or doing things, being innovative, and elevating each other.
Tension says to me - unresolved conflict. More along the lines of Meg Ryan in French Kiss, “Fester, fester, fester. Rot, rot, rot.”
Put It All on the Table
Everything. Don’t rush in. This is like a marriage (a cliché yes, and true). It is important from the very beginning to be aligned on your vision for the business and your values.
Equally important, is understanding and appreciating each founder’s vision for their own life, their values, and goals.
Is this going to be a lifestyle business, high growth, or a unicorn? Are you looking to exit within 5-7 years or IPO? Is it about having a long-term impact and/or legacy?
Make sure you are working on the same timelines. If one person is financially stable, maybe has family support, and one is putting everything he or she has into the business and needs it to be profitable year one, you may have different visions of how to scale.
Do you want to take on venture capital to get there? Do you have different appetites for risk?
What level of commitment can you both agree to? This is often a source for tension. Be honest. What you are able to do, or want to do, may change overtime. I work primarily with female founders, when one (or both) have a baby, priorities may shift, and time definitely becomes scarce. Talk about how you will handle it upfront and check-in often.
Ownership Over Control
What is each of your strengths and weaknesses? What does each of you like to do? Ideally co-founders will have complementary skill sets and experiences. Rather than stepping on each other’s toes, clearly define roles and responsibilities as the business scales.
Esther Perel, a renowned relationship psychologist, has identified 3 categories of issues that dismantle co-founder relationships. One of which is power and control, which can be managed, in part, by establishing clear roles and responsibilities.
Having your respective domains and autonomy demonstrates that you trust your co-founder. That autonomy and room to run also drives them (and you – hello - you are both entrepreneurs, you love that sh$t!)
With clarity, your team will know who they report to and who to go to for direction and decisions that need to get made. Dividing and conquering means you can move faster and more efficiently.
It also means deciding in advance what decisions will be made together (the big bets, shifts in strategy, new initiatives, etc.) and how they will be made. Do you both have to agree (or agree to disagree and then commit) or is there an ultimate decision-maker?
CAUTIONARY REMINDER: you are both ultimately responsible for the wins and losses. It’s about having a united front, recognizing each other’s good work and having the other’s back when it doesn’t go exactly as planned.
Communication is Key
Communication needs to be frequent, intentional, and honest between co-founders.
I often hear co-founders tell me they can’t find the time for each other. As one female founder put it, we need time that is not me driving home at the end of the day rushing to see my kids. Even when co-founders share the same office (pre-COVID!) they don’t always have time to pick their heads up from the day-to-day and focus on the less urgent, and more important.
Schedule it and don’t cancel unless it’s an emergency! You should discuss business concerns – current challenges or fears, what’s not working or where you think you should double down. Get into the personal – not some big heart-to-heart each time, but check-in with how they are feeling, how is their family, hobbies, etc. Finally, talk about your relationship. A quick-ish “are we good?” normalizes the conversation. Hell, “am I doing anything that is pissing you off?” “Or driving you mad?” (fester, fester, fester) “How can I support you better?”
Particularly, as conflict arises, communication becomes garbage. Bad conflict is marked by blame, criticism, and defensiveness. Be open, be vulnerable, show respect and humility, this relationship deeply personal as well as business.
What’s the ideal? A female founder I know said that her co-founder was her safe space to work out her fear of failure. Another client said her co-founder give her a sense of calm and strength. Talk about #relationshipgoals.
Are not sure if you and your co-founder on the same page or that your communication is rock solid? Set up a 30 min, no obligation, strategy call.
