Co-Founder relationships

65% of startups fail due to founder conflict, states Noam Wasserman, Harvard Business School professor and author of The Founders Dilemmas. So how do you make sure you are part of the 35% that make their Co-Founder relationships work and thrive?

Co-Founder relationships usually start off well but souring relationships are often a problem of misalignment that has built up over time. If you don’t prepare before you start your relationship it’s like building a house with no foundations. It might stand up for a while when the weather is warm and dry, but as soon as bad weather hits it is likely to start having problems. Get it wrong at the start and it can cause issues for you as a leader and for your wider team so it is crucial you do the ground work before you start.

This quarter, at least 50% of the single start-up Founders I have been advising have been searching for a Co-Founder. This isn’t unusual. Building a company is hard, especially on your own. We have been discussing ways to approach finding a Co-Founder and as it is such a universal problem I thought sharing those discussions, ideas and my personal experiences would be helpful.

A Co-founder relationship is like a marriage…

..you are going to have ups, downs and everything in between. You have to put in the work to maintain a healthy relationship. But most importantly when you get married you write your vows - a set of guiding principles that help you along the way. It is this process that is often missed in Co-Founder relationships.

So, whether you are a single Founder looking to find a partner to help you build your vision, or you are already in a Co-Founder relationship and maybe haven’t given it much care or attention, these principles can help start a discussion to either set you up, or reset your existing Co-Founder relationships.?

6 PRINCIPLES to set you up for success

1. Align on your company vision & values. This might seem obvious but if you are even slightly misaligned that can have a negative effect further down the line. Your Co-Founder needs to love your idea too. They also need to be able to feel it is theirs - you can’t just ask someone to come and build your vision if you are partners. Ask any potential candidate to pitch their own version of your vision -? this is a great way to see how aligned you are, test their acumen but more importantly, in this way you give them ownership. Each Co-Founder should weave their ideas into the vision. Secondly you need to discuss how you want to grow the business (fast, slow, venture funding, boot strap etc), what core values you want to instil in the company culture - wellbeing, diversity, the working model. These all tell you who you are dealing with and are crucial to setup for success.
2. Agree your financial goals (and write it on a piece of paper) This is crucial. Most people find it difficult to talk about money. If you don’t it can cause a lot of issues down the line. For example, if Founder 1 would be happy to exit at price X but Founder 2 wants to exit at price 10X it will impact your decision making. Founder 2 might block a sale when you get offer X or 2X, and might also want to make different decisions about how you scale. We did this on day 1 at Fiit and never had to discuss it again.
3. Clearly agree on roles and responsibilities. On day 1, month 1, maybe year 1, as a Co-Founder you take on a lot of different responsibilities and often responsibilities might blur between you. It is imperative you define where your role starts and stops. Getting really clear on who is doing what will improve the speed at which you execute and it helps your team by having defined leadership roles and areas of responsibility. When we were building my previous company, Fiit, a simplified version our how we structured it was - Dan (CEO) led investment and engineering hiring, Ian (CMO) built the brand and go to market, myself (COO) built the production and fitness team, and supported Dan on fund raising meetings. We knew who was doing what. But, there were a few missing pieces to the puzzle that we would realise later.
4. Prioritise your wellbeing from day 1 (and build it into the culture). Again, this might seem obvious but almost all start-up Founders I speak to deal with high levels of stress, pressure and a lack of time. Their lives are hectic. This is normal as there is so much energy required to build and create. Ensure you prioritise wellbeing - eat well, sleep well, exercise daily. I always prioritised exercise and this is the number 1 thing that helped me through the hectic rollercoaster of start-up life. Lead by example in this and you and your team will benefit.
5. Put a decision making process in place (and ‘back the majority’ Jim Collins BE2.0). Start-ups are essentially a decision making exercise, you have to make 100 decisions per day so this will save you time and many disagreements. If you can’t decide quickly you will likely stumble. Remember, you can’t all be in agreement for every decision, it would be unhealthy if you were. Classify the weight of certain decisions and decide who needs to vote. A majority wins. My advice is to decide which person would have the casting vote / overriding decision making power for a tie on a certain key topic.
6. Regularly work at your Co-Founder relationship. When you are looking to find a Co-Founder this means you need to spend plenty of time together getting to know the other person and not just in a work setting. You will likely spend more time with that person in the years ahead than your own family and friends so understanding each other’s core values, likes and dislikes, and what each person wants for their own life, not just the business, is crucial. Have regular check-ins and give each other honest, constructive feedback as it is unlikely you will get it from anybody else. And, if you have continual problems, get external support.

You might want to create your own set of ‘pre start-up principles’ that help you define the type of Co-Founder relationship you want to build and nurture, but remember, the more work you do at the start the less disagreements you will have later on.

Good luck!