People love the notion of the sole innovator, but this notion is wrong. Successful companies are usually started, and become successful, with the contributions of at least two people. Yin and yang, maker and seller, dreamer and pragmatist — call it what you will. After the fact, people may recognize one founder as the innovator, but it takes a team to make a new venture work.
Derek Sivers, the co-founder of CD Baby, said it best: “The first follower is what transforms the lone nut into a leader.”
In some instances the first follower is the first customer, but most often the first follower is the second employee of a company — that is, the co-founder.
There are few factors that can make a company more successful, fun, and epic than an awesome co-founder. There are few factors that can make a company more unsuccessful, aggravating, and pathetic than an incompetent, lazy, or dishonest co-founder. This article explains the art of the picking a co-founder.
Co-founders need to have both similarities and differences in order for a company to succeed. First, here are the ways that you and your co-founder should match:
- Vision: Although this term has become an overused word uttered by wannabe visionaries, in the context of soul mates, it means that founders share a similar intuition for how the startup and market will evolve. For example, if one founder believes that computers will remain a business tool for large organizations, and the other believes the future is small, cheap, and easy-to-use personal computers for everyone, they aren’t a good match.
- Size: Not everyone wants to build an empire. Not everyone wants a lifestyle business. There aren’t right and wrong expectations; there are only expectations that match or don’t match. This doesn’t mean founders can know what they want at the start, but it’s nice if they’re at least on the same page.
- Commitment: Founders should share the same level of commitment. Does the startup, family, or a balanced life come first? It’s hard to make a startup work when the founders have different priorities. One founder wanting to work for two years and flipping the startup for a quick sale and the other wanting to create a company that will endure for decades will create problems. Ideally, founders agree that they’re in it for at least 10 years.
There are desirable differences because a startup faces so many challenges that different skills and perspectives are essential. Here are the ways that you and your co-founder should differ.
- Expertise: At a minimum, a startup needs at least one person to make the product (Steve Wozniak) and one person to sell it (Steve Jobs). Founders need to complement each other to build a great organization.
- Orientation: Some people like to sweat the details (microscopes). Others like to ignore the details and worry about the big issues (telescopes). A successful startup needs both types of founders to succeed (gyroscopes).
- Perspective: The more perspectives, the merrier. These can include young versus old, rich versus poor, male versus female, urban versus country, engineering versus sales, techie versus touchy, Muslim versus Christian, straight versus gay, Android versus iOS, and Macintosh versus Windows.
The process of picking a co-founder is fraught with risk because undoing a cofounder is a difficult and time-consuming process. It is similar to the selection of a spouse in many ways — including the risk of divorce. Here are some concepts to keep in mind.
- Do not rush. Founders may have to work together for decades, so add them like you would pick a spouse — assuming you’re not a serial divorcee. Like marriage, it’s better to get married too late than too early. Take your time because breaking up is very hard to do.
- Do not add founders to enhance fundability. The reason to bring in additional founders — and any other employee but especially founders — is to make your startup stronger and more likely to succeed. Ask yourself, “Would I hire this guy if we didn’t need funding?” If your answer is no, you’d be insane to hire him.
- Assume the best, but plan for the worst. Founding teams blow up all the time. Your startup may be the exception, but just in case, make everyone (including yourself) vest his stock over time. This prevents people who leave in less than four years from owning a large amount of equity. This is the entrepreneurial equivalent of a pre-nuptial agreement.
I leave you with one more practical and tactical tip. I call it the Shopping Center Test. Suppose you’re at a shopping center and you see someone you’re considering as your co-founder, but he or she has not yet seen you. You have choices: rush over to say hello, depend on serendipity to come face-to-face, or got to another store.
If you’re strong initial reaction isn’t to dash over to the person, do not make him or her your co-founder. This is the second most important relationship you’ll ever make in your life — maybe the most important, in fact. So go slow, do it right, and hopefully do it once.