Finding a Co-Founder
One day, a 21-year-old college dropout living at his parents’ place in Los Altos, California, was fiddling with electronics in his family’s garage. In that moment, he had an idea: He wanted to build a personal computer that would revolutionize the world of technology.
There was just one problem. Sure, he took some creative courses after dropping out of college. And his father showed him how to take apart and rebuild radios and televisions in their garage. But something was missing: He didn’t have the skills or experience to build his own computer. That’s what kept him from turning a hobby into a business.
But one day, a friend introduced him to another friend who worked at Hewlett Packard and knew more about electronics than he could ever imagine. The duo—Steve Jobs and Steve Wozniak—hit it off and started hanging out after work. This simple introduction was the start of a very fruitful friendship. But it was the most unseemly combination.
It was clear Jobs and Wozniak were complete opposites. Wozniak, who was five years older than Jobs, designed computers while Jobs tinkered with gadgets. Wozniak was more of the technical mind while Jobs had the business vision. Wozniak was shy while Jobs was extroverted. But both of them had one thing in common: a love of electronics.
Given Wozniak’s background in designing and building computers and Jobs’ passion, creativity, and vision, the two friends had the emblematic hand-in-glove relationship. And in 1976, Apple Computers was born in Jobs’ garage. Today, we know that Apple Inc.’s market success is strongly attributed to their leadership as co-founders and teammates.
How many successful startups do you know that are operated by just one person? Software magnate Larry Ellison was the only chief executive of Oracle from when the company started in 1977 until 2014. But it was clear that even when he resigned, Oracle had an entire army of management people supporting the CEO.
But what’s wrong with saving a little money and getting a bigger piece of the pie by being the sole founder? In his article on “18 Mistakes That Kill Startups,” YCombinator co-founder and venture capitalist Paul Graham says: “It’s a vote of no confidence. It probably means the founder couldn’t talk any of his friends into starting the company with him. That’s pretty alarming, because his friends are the ones who know him best.”
Now imagine you’re starting your own business. What is the most important part of a company? It’s not the money. It’s not the investors. It’s not how much your company is worth. All those things are meaningless if you don’t have the right business partner.
Think of it like this: Rome wasn’t built in one day. Businesses take time to grow, and at the foundation, there has to be a partner who supports you and shares your vision. Jobs couldn’t have conceptualized, designed, and built all those iPhones, iPads, and MacBooks on his own. There’s no way. He had to come to terms with his abilities and limitations.
Practically speaking, many venture capital firms and investors are opposed to working with companies that have a single founder. Unless you’re a repeat story of success in the world of entrepreneurs and a hotshot with millions of dollars, investors will fear there’s a risk that the sole founder could burn out or get hit by a bus due to some freak accident.
A perk of having a co-founder is sharing the financial burden. It’s no secret that starting a business is expensive. It takes years for an idea to mature and reach the product development stage. In that time, your idea may need to go through multiple test phases. With a co-founder, you can split out-of-pocket expenses of running those tests. This would allow you to get a functional prototype going until you can actually raise funds. Working with a co-founder ensures you will be able to move the idea forward.
A third reason a co-founder is important is say you had a really bad day. Your co-founder can completely sympathize with you, share your burden, and keep you levelheaded. Although you could always vent to your family and friends, there’s no one who understands exactly what you’re going through like your co-founder. Who else can you call at 3 a.m. to share your frustrations or even an epiphany moment in the shower?
Before you look for a co-founder, you should do these three things:
1. Make a list of qualities you want in a potential co-founder. Take time to do this because it will require honestly assessing what your skills are and admitting your shortcomings. What are your strengths? What are your weaknesses? Lay it all out.
2. Find people who share common values and passions as you. More than having a flawless resume and impressive cover letter, you want to be able to share life with this person. It helps if they hold similar beliefs, whether it is faith, principles, or standards.
3. Look for someone who isn’t going to say yes to everything. Don’t hire someone who’ll kiss up to you or compliment you on how you parted your hair. You want someone who doesn’t think exactly the same way you think. This may seem counterintuitive because that could create room for butting heads and conflicts. But it’s important to know your co-founder has a backbone and can hold his or her own.
Once you’ve considered what qualities you want in a co-founder, it's time to take out the dirty laundry. Here are five common problems to discuss as you enter into a business partnership:
1. "My idea is better." It’s worthless fighting over whose idea is better. Execution is everything, so stop arguing. Try executing an idea that isn't quite there yet. You might see that you get a lot farther than you think. And you’ll be surprised how much you learn from the mistakes.
2. "Who gets to decide?" Divvy up responsibilities based on your areas of expertise. This becomes easy if you hire a co-founder who possesses strengths in areas that are your weaknesses, and vice versa. Trust your partner to make half the decisions. Otherwise you’re going to get burned out trying to do everything yourself.
3. “I work harder than you.” Unless you notice a pattern of behavior where your co-founder is deliberating taking on fewer and fewer responsibilities, try not to jump to that conclusion. It’s difficult to measure what 50 percent of the work looks like. Today your co-founder may be doing less, but tomorrow he or she might be the one saving your butt.
4. “Who gets what?” Co-founders usually split the equity. There’s no reason to divide the equity unequally, because there’s way to measure the worth of an idea in the early stages of a business. Equity vesting agreements will prevent future disagreements about how things should be divided.
5. “I’m leaving at 5.” It ain’t over till it’s over. Startups have no work-life balance. If you or your co-founder have the mentality that work stops at 5 pm, a startup may not be the best plan for you. Let your co-founder know you need 100 percent of their time, even if it means sleeping in the office some nights.
Another thing to keep in mind before picking a co-founder is to make sure you aren’t adding too many cooks in the kitchen. Two to three co-founders is pretty standard. Any more and it could get expensive, as well as inefficient. You don’t need two people with marketing backgrounds and one software engineer. Instead, try to find someone who can wear multiple hats in the company. It's to everyone's benefit if that software engineer also has experience in marketing, social media, and writing.
The most obvious question remains: where do you find a business partner? Here are four places to start:
1. Personal network: Start by pitching your idea to your family and friends. They know you the best, so don’t be afraid to ask. Reach out to college roommates or childhood friends. Reconnect with a former colleague or talk with people at your church, synagogue, or mosque.
2. Second-degree connections: Ask yourself who in your personal network has a Rolodex full of potential candidates for the position you’re looking to fill.
3. Strangers: Some people find their co-founders on networking websites, startup social events, or co-working facilities that focus on new businesses.
4. Job postings: Try searching for potential candidates online using your LinkedIn account, or see if you find anybody on Monster.com, CareerBuilder, Indeed.com, or niche job boards.
As you think earnestly about how to choose your co-founder, rest assured that two heads are better than one. Take to heart the words of Joshua Wolf Shenk, author of Powers of Two: Finding the Essence of Innovation in Creative Pairs: “Creative thinking itself is a kind of conversation. So that when we look at two people we can begin to understand what actually happens in the creative mind when we’re alone.”