What No One Tells You About Having a Co-Founder
For many founders, the ultimate question to ask yourself when starting up is, should I have a co-founder? While the prospect of solopreneurship can be alluring, oftentimes having a partner is more advantageous.
But before you jump in, keep in mind that co-founder conflict is a leading cause for startup failure. Many resources are quick to list the up-front legal precautions you should take, but few will warn against the interpersonal pitfalls that can blindside even the best-intentioned team. While having an operational agreement (i.e., a business prenup) is sound advice in the event that things go sour, asking the following five questions at the start may help ensure you never have to use it.
1. 'Can I buy you a drink?'
No, this isn’t just a cheesy pick-up line. Think about it. You and your partner are going to be seeing a lot of each other. Is this person someone you’d want to share a drink with? Prioritizing expertise at the expense of compatibility may be a disaster waiting to happen.
This person may be a super-genius with a crazy work ethic but might also be moody and unable to collaborate well. Just like a romantic partner, then, your business partner should be more than just “good on paper.” Pick someone smart and likable whom you can get along with. You will be seeing him or her every day for several years to come.
2. 'Do you like your business risky?'
They say opposites attract, but if one of the two of you is a daredevil who operates from the gut, and the other is a conscientious bookworm, you may quickly find yourselves at a stalemate when it comes to making risky decisions.
So, ask yourselves: If you will be providing a service, will you take on that lucrative client that’s a little outside your actual area of expertise? If you sell a product, a small labeling change might mean a halt in sales for months. Do you "eat the cost" or sell off your current stock, knowing there might be a potential fine?
These examples are uncomfortable, but disagreements on this front can leave one of the two of you feeling panicked and the other feeling stifled. More than with any other factor, disagreements over risk can cripple the direction of a company.
3. 'Are you committed?'
It’s easy to get excited about building a business from scratch. Envisioning your newfound freedom and creativity is exhilarating. But, soon enough, your nights will get long, and the work will be daunting. Startups do not have a work-life balance and leaving at 5 o'clock is a fallacy. Make sure you and your co-founder are on the same page about whether this is a business or a hobby.
Just because your business partner is generally enthusiastic does not mean he or she will be a dedicated director of sales. You may have to rely on your intuition here, as the other person’s enthusiasm may cloud his or her better judgment. How does your potential partner handle other things in life? Does he or she have a love affair with designer clothing or have stacks of unpaid bills at home? Look for any warning signs that your potential new partner may lose interest as soon as the business becomes inconvenient.
4. 'Who’s the boss?'
Chances are, each partner is bringing a different set of skills to the table. That’s why you got together in the first place. But if both of you have 50 percent equity, how do you settle a dispute? You could always flip a coin, but a better solution might be to divide the responsibilities based on each person’s expertise.
When it comes to conflict resolution, it’s important to respect the boundaries of your skill sets. Remember, you were confident enough in your co-founder’s abilities to start a business with him or her. So, if your dispute is over the budget, and your partner is your head of financing because of a solid background in bookkeeping, let go of the reins and trust him or her on this one. The more time you waste over making the “right” choice is time you aren’t making any choice at all.
5. 'What’s our five-year plan?'
This question isn’t just for over-zealous blind dates. Significant life changes can cause a major shift in priorities. Things may be running smoothly when it’s just the two of you, but what happens if one of you gets married? For starters, time is a precious commodity that your partner’s new family may not be eager to share. If kids are involved, even the best-intentioned business partner may find himself spread too thin. Perhaps your co-founder promised to borrow equity from his property to help fund the business. That may be fine until his wife decides she wants to go back to school. Are you prepared to have a financial threesome with your co-founder's new spouse?
There’s nothing that says two best friends can’t run a fun and successful business, but like any relationship, expect disagreements. Are you willing to put in the work that goes along with having a partner? If not, that’s okay too. If you can stomach the risk on your own, there may be no reason to compromise. Check in with yourself and see which option feels best for you.