Season 1 - Episode 8 : The Case for a Co-Founder
I know. You want to believe you can do this all yourself. Maybe you've got industry experience, maybe you know how to build a product - hell, maybe you could do it by yourself. But do you want to? In this episode we'll discuss the pros and cons of co-founders. We'll also discuss some of the unique challenges and benefits of starting a business with a sibling.
Background Story
Having a co-founder is essential. The sum is greater than the whole of its parts. Chris and I work really well together because we clearly know our individual strengths and weaknesses. From his point of view being a solo entrepreneur for many years prior to teaming up with me, he often found it exceptionally difficult to be the “tech guy” and CEO. For me, I needed someone to “build the thing”. We needed each other but we were also better off because we were working together.
Outline
What does the data say about Co-Founders?
What to look for in a Co-Founder
How’d it go for us?
Busted Myth
Myth: You can do it yourself. Maybe, but it’ll be rough.
Secondary Myth: Solo-Founders are better. Not really - See data section.
Learnings
Table Settings
Let’s set the table. 80% of all billion-dollar companies launched since 2005 have had two or more founders. And while this does also suggest you can go it alone, most of the data around solo founders points to the fact that they actually do have a ton of support - from employees, benefactors, corporate alliances - they just don’t literally have a co-founder. In either case, there’s a team, whether they’re called co-founders or not. It’s safe to suggest that you can do this literally by yourself.
For many entrepreneurs, the team is only, well, themselves. They may go to others for advice - perhaps a mentor, other friends they know who are entrepreneurs, old professors/teachers, work colleagues or family - which is all fine and dandy. But when it comes down to getting the work done, it can be helpful very early on to get a teammate who complements your strengths. I strongly urge you to consider a co-founder (and no, they don’t have to be your brother).
What to look for in a co-founder
In the context of a co-founder this means that you should not find a co-founder with the same skills as you. Frankly, two sales people or two software developers as co-founders is a recipe for failure; you need a logical delineation of duties based on your strengths and weaknesses and you want to avoid the duplication of the same strengths, as that defeats the purpose of a co-founder. Read as: don’t start a company with another you.
In effect, Chris and I matched well in terms of alignment. This is a very important consideration. Does one of you look to do this as side hustle only, while the other wants to lean in with 70 hours a week? Does one of you want to build to sell, whereas the other wants an empire? Does one of you want to just do good for people, while the other just wants to maximize profits? Does one of you want to be the “idea person” while the other person does the actual work? You need to be on the same page.
While the minimum requirements for a co-founder are complementary skills, the best case scenario would be co-founders that can “dabble” in the strengths of each other - we call this overlapping founders. Rather than an absolutely fixed demarcation of what each individual can do, having some overlapping skills and competencies is exceptionally valuable.
Our Experience
Needless to say, it worked out pretty well.
We needed and developed tools to manage arguments (mostly, we found data)
Our overlapping skills helped us to better empathize with one another and find our strengths.
We could also lean on each other for mental health
Finally: splitting equity was a must. No voting. Rule by consensus. If you're not willing to give up half the equity, then do you trust them? You're getting work-married. We had complete trust.
Summary
Co-Founders are good. It’s hard to do this alone
You need to be at least complementary, but you’re ideally slightly overlapping.
Ensure alignment, or you’re in trouble.
Data And References
Don’t Buy the Myth That Every Startup Needs a Co-Founder
by Travis Howell, Christopher Bingham, and Bradley Hendricks, April 20, 2022
https://hbr.org/2022/04/dont-buy-the-myth-that-every-startup-needs-a-co-founder