Should we start up together?

Last week, I was invited to a meetup organised by Accel , largely attended by PMs who want to eventually start up. Someone asked how to choose a cofounder, and how to be 'sure' about taking the leap. I mentioned something Srivatsan Sridhar and I had done in the early days to determine whether we should start up together, which gave us a lot of clarity about what we are getting into, and continues to guide us at every step of the journey.

Here is what we did:

1. We together wrote down a set of profound questions for ourselves in a doc. Questions that we thought are important for each of us to answer, and whose answers will be useful at every point in the journey of starting up together and running a company.

2. We made copies of the doc for each of us, and thoughtfully wrote down our individual answers to the questions.

3. We then took turns and read out our answers to each other, question by question.

This process ensured that our answers remained authentic and independent of each others', and we could share them with each other in our own voice and expression.

Wherever we had disagreements or big gaps, we spent time to understand each other's POV, debated, and tried to get on the same page. Any red flags or reasons to not start up together, if existed, should have come up during these answers and discussions. If there was no big gap and we were largely on the same page, we could be cofounders! Note that we already knew each other well, which was important before kicking off this process. Else it could have been much harder to have these discussions candidly.

Here is an exact copy of the document we had created at that time:

Founding Principles

There are multiple ways to build a company. However, co-founders need to be as aligned as possible. The below questions will bubble up preferences and surface disagreements before we start going too deep.?

Let’s go!?

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Motivation

• Why are each of us doing this??
• What makes each of us believe in this team, and this (broad) space?

Values

• What kind of company and team do we want to build??
• What should people inside and outside say / think about it? What is the legacy we want to leave behind??
• What kind of founders do we want to be? What matters most to us??
• What type of VCs do we like / dislike??
• What type of people will we hire??
• What type of customers do we want / not want?
• What are some non-negotiables when it comes to dealing with people?

Roles

• What does each of us bring to the table, and what does each of us want to do in this company??
• How do we maximise outcomes for the company and leverage our strengths while also making sure each of us has fun and learns, and we complement each other?

Tolerance and continuity

1. If things don't go well, how long can each of us survive??
2. How do we decide whether to keep trying or not??
3. What happens when one / two of us want to give up / discontinue?

Decision-making and accountability

• How do we make decisions among the three of us??
• What happens when we don't have consensus or even majority??
• Should one of us be the tiebreaker / last call? If yes, who??
• How do we keep ourselves (individually and collectively) accountable??
• Would this be different for different aspects of the company?

Compensation

• What is our philosophy for compensating ourselves? (both salary and equity) What is fair at different stages of the company, and how do we decide that? How do we make sure we don't get too selfish, or too conservative??
• Cash Compensation philosophy for employees
• Equity Compensation philosophy for employees
• Performance rewards for employees?
• Variable pay?

Product & Direction

• As we are figuring out what is the problem we want to solve, how do we arrive at conviction about the direction we want to take??
• How do each one of us think about dealing with the situation where one / two of us is not excited / passionate about this?

Us

• What is our working style??
• What do we think about doing IC (Individual Contributor) work for the foreseeable future??
• What are our expectations with respect to the time we spend??
• How do we think about prioritising our relationship with each other as we start getting busy building?
• What are our weaknesses?
• What are our biggest fears??
• How do we review our performance (the 3 of us) in the most objective and fair, yet honest way and how to do it frequently?
• What if we find one or more of us not scaling to the level the business wants? How do we identify this? How do we bring this up for discussion? How do we solve it?
• How do we think about bringing in an additional founder somewhere down the line?

Fundraising

• Dilution philosophy
• How do we deal with bringing friends and family into the business (as employees) - strict No or qualified Yes?

Company

• Where do we incorporate? India, US, Singapore, etc.
• Growth aspiration
• Areas we are passionate about and any early thoughts on giving back to the society / ecosystem / world / planet??If so, how and in what form?
• Remote vs Hybrid vs Offline
• Single / multi location - India vs International

---------------------------- End of Founding Principles----------------------------

If you read till here, you might have noticed that the questions refer to three cofounders, but Srivatsan and I are only two. This is because we were three at that time, and through this exercise plus a few other conversations over many weeks, we realised that it would not be a good idea for the three of us to start up together. So Srivatsan and I went ahead. The third person continues to do amazing things professionally, and remains a good friend to both of us and an advisor to Skydo.

Thanks to Manasi Shah for inviting me to the event, and to Mona Gandhi , Raghav Chandra , Sai Srinivas Kiran G and Shekhar Kirani for being excellent co-speakers. And thanks to the attendees for asking me tough questions, in particular Brijesh Bharadwaj ?? PGC, GDC for urging me to share these founding principles with everyone ??

Hope this helps you in getting started on your own entrepreneurial journey, and building conviction in yourself and your cofounders. I would love to know your thoughts on this, and anything you would add to the list of questions. Particularly if you are already running a company or thinking of starting up right now, I would love to hear from you!

By the way, Shekhar Kirani asked me if I will also be sharing my answers to the questions. I responded, I will do it when we are successful. So hopefully, in a few years??