Entrepreneurship is a journey, and is often shared with other people. Choosing who you surround yourself with as an entrepreneur is critical, but choosing who you will found your business with is paramount. In fact, some VCs consider the business idea secondary to the team itself.
Whether you’re a first-time founder or a seasoned entrepreneur, choosing who you’ll go to battle with is, quite possibly, the most important decision you will make in the process. The co-founder relationship is like a marriage based on a large pool of shared resources. If you’ve had spats with your significant other over money, imagine you’re fighting over millions of dollars that have the potential to make you millions more.
“Behind the glamorous facade of founding and working in startups, being a founder (and especially a CEO founder) is one of the most stressful and LONELIEST jobs in the world. Having co-founders means you have people who are going through the same struggle and challenges as you are every single day with you,” said Tim Chae, entrepreneur-in-residence at 500 Startups.
There is no standard formula to help you find your startup soul mate, but here are a few things to consider when choosing a co-founder—or multiple co-founders.
Go with who you know
“The most successful true co-founder situations are ones where the people have known each other in other contexts, prior to the company at hand,” said Andreas Stavropoulos, a managing director at Draper Fisher Jurvetson.
This isn’t a license to go out and found a company with your childhood friend, it’s more of a charge to connect with someone on the interpersonal level beforehand. Spending time socially is not enough, you should spend time together working on a project—spending time together for the business. According to Dane Atkinson, CEO ofSumAll.com, this can make or break a company.
“Co-founders are the foundation block that rocks most failed companies and strengthens winning ones. You MUST have a lengthy relationship with a co-founder PRIOR to founding. The ideal is a being part of another fox hole work environment where you can learn about each other through trials. As counterintuitive as it sounds, friends are your second best bet. In both cases you want to have common ground at the moral ideology level with a serious dosage of respect.”
The goal is to learn to work with someone before you learn to start and run a business. Relationships are hard, and it is best to work out the kinks before you decide to put it on the line starting a company. There is a honeymoon period for founders, when you feel like your ambition to disrupt will carry you to exit; but that period will end. According to Stavropoulos, investors are looking for a team that can weather the storm together. They want founders to “get through their first couple of fights before the money is in.” Stavropoulos said he is looking for a track record of getting things done, not just an impressive idea or rock star résumés.
Skill, style, and ego
Human beings tend to gravitate towards people that are similar to them. According toresearch on twins published in the journal Psychological Science, even our genes play a role in who we seek relationships with. With founders, the goal is to find the right amount of similarity.
“You’re looking for complementarity of skills, but similarity of styles,” said Stavropoulos.
In complementarity of skills, he means skills that enhance one another and help to fill in the gaps that may be lacking in your skill set. In addition to filling out your repertoire of skills, founders need to be looking for someone who can help complement other aspects of their business mindset. But, according to Scott Friend, a managing director at Bain Capital Ventures, it goes beyond just complementary skills.
“The crux of my opinion is to focus on complementary skills, capabilities, AND egos,” Friend said. “While the first part probably sounds obvious, it really comes together with the last (ego). It’s critical that co-founders not only have complementary skills—the classic ‘inside-outside’ split is common where one co-founder is the lead on sales, marketing, fundraising, business development and the other focuses on engineering, operations, product, etc.—but that their egos are wrapped up in different areas too.”
What Friend is getting at here is the concept of partnering yourself with someone whose sense of identity or victory is tied up in a different aspect of the business than yours is. That concept of “ego” has to do with where your pride in the business comes from. Does it come from giving presentations about your business or from building a team and meeting a deadline. Typically, the spotlight is only big enough for one person, and you need to establish who that person will be early on. The tech industry’s archetypal examples of this are Steve Jobs and Steve Wozniak at Apple and Bill Gates and Paul Allen at Microsoft.
Join our event ‘Tech Startups & Co Founders’ @ G Bar at the Grosvenor Piccadilly, 3-4 Coventry Street, W1D 6BL London, United Kingdom on 19 May 2015