As a startup founder, picking your co-founder is your most important decision. It’s more important than your product, your market, or your investors and it’s definitely one of the first wrong decisions you will make as a founder.
The power of two
The ideal founding team comprises of two individuals preferably with a history of working together, of a relatively similar age and financial standing and with deep mutual respect. One is good at building products and the other is good at selling them. Two founders usually works because unanimity is easily achievable, there are no founder politics, interests can be more easily aligned, and founder equity stakes are still high post external (VC) financing.
One founder companies can work, against the odds with well-known examples like Mark Z. and so can three founder companies. However, in three founder companies, the politics can be tough. Four founders is an extremely unstable configuration and five is plain wrong. When four-five founder companies do work, it’s usually because two founders dominate over the rest.
Shared work history and aligned motives
You don’t usually marry someone you just met, right? So first is the dating period where you need to go through something challenging in the initial collaboration stages, like a Zero-Sum Game situation. These situations will provide insights on the true motivations between individuals which are usually revealed by ones actions and not declared upfront.
Two founders: one builds and one sells
The best builders can prototype and perhaps even build the entire product, end-to-end. The best sellers can sell to customers, partners, investors, and startup employees. Learn enough of how the other side works, so you have an opinion for your co-founder selection. If you’re not seriously impressed by what you see, then just move on.
Selection Criteria: Intelligence, energy, and integrity
It’s not the kid from the neighborhood you grew up with, or the person you like the most. And it’s definitely not the tech whiz most willing to work for free. Your co-founder is someone of high intelligence, energy, and integrity. You personally need to share all three of these traits yourself in order to evaluate him/ her, correctly.
Select “nice” people and don’t settle easily
Partner with someone who is irrationally ethical, but do avoid overly rational short-term thinkers, since there are limitations to this way of thinking in a highly unstable startup environment. Be especially careful of the savvy sales whiz . If the person doesn’t feel right or you feel you are compromising, keep on looking. A startup’s DNA is set by its founders, and the company’s culture is an extension of the founders’ personalities and traits.
Breakups are hard so be smart about it
If you’re going to breakup with your co-founder, do it as early as possible and avoid getting messy. Recover the startup equity into the option pool through founder vesting to keep the startup going, and recruit someone else to fill the spot. Hiring decisions are hard and selecting a co-founder is the hardest of all. Venture forth!!
Want to learn more on how-to-do, drop us an email and we will be happy to share our knowledge and insights with you!
Christos Lytras – Managing Partner