7 things I learned about co-founders in my previous startups
Are you passionate about joining a startup? One of your friends who has just started a company calls you up. He is looking for a co-founder. You are enthused about the idea and team. You resign your job to join him as the co-founder. But you failed to think over a few important points before making this risky decision.
When I started my first venture, I did not understand startup culture and the challenges it held. I shared my interest in starting a business with one of my close friends. He was thinking along the same lines as me, so we joined hands to start a business without even a concrete idea of what our product would be.
We worked on different ideas, pivoted multiple times and came up with an ERP solution for K-12 schools. Our startup failed, teaching us many lessons, some of those related to finding and joining as a co-founder.
- What works in corporate, does not necessarily work in startups
One of my co-founders was the director of a well-established recruitment firm. He had hired thousands of candidates for the world’s top companies. But we failed to hire a single right person for our startup, because we used a hiring process customized to the corporate world.
The best employee in our startup was a friend’s referral. In fact, my co-founder's hiring skills completely backfired, doing more harm than good. We spent a lot of hours on job portals, scanning resumes like crazy and talking to tons of people, but no one joined us.
Till the last day of our company’s operation, my co-founder was under the impression that if we had had money to run the business, he could still have been able to hire people successfully (for our startup) using his corporate hiring skills.
- Future skills matter more than present skills
Unfortunately, it’s almost impossible to judge the potential skill of any person. So instead, while we don’t predict future skills, we avoid giving too much importance to present skills as well. Startups demand different sets of competencies at various stages. Co-founders need to be fast learners in order to acquire new in-demand skills.
“Being a CEO of a startup means being the Chief Everything Officer.”
By regularly talking to a person, we can find out how quickly he/she can pick up new skills. We can gauge reactions, and detect resistance to trying new things when we work with them. Of course, no one can be an expert in all areas, so we will have to hire domain experts at some point in time. But startups do not have the luxury of hiring experts in their early days.
- Open to experiments
I enjoy working with people who freely experiment with ideas, product, marketing, and customers. One should not be stringent with one’s ideologies. Someone once said -
“The mind is like a parachute; it only works when it is open.”
Thus, co-founders should be willing to learn new things, possibly discarding their ideologies after some evaluation on the way. Learn from experts, learn from reading, learn from each other. If one of your co-founders says he knows everything, then you’re probably in the wrong place.
- 50/50 equity is bad idea
Okay, I’m guessing you do not agree with me. It is a weird thing to say, I concede.But it’s something founders invariably realize after running a company for a sizeable chunk of time. The truth is that each co-founder is not equally valuable for his startup. Joel, Co-founder of Buffer, explained why one should avoid the 50/50 co-founder model here.
It doesn’t matter how close you are, or if you started working with the company at the same time, or even whether you contributed the same amount of money at the time of the company’s inception- co-founders should not have equal equity. Their equity should be proportional to their present and future contributions.
This is easier said than done– maybe this co-founder equity calculator will help.
- Work together for some time before discussing equity
It is better to start working on your startup’s product right away, before worrying about ownership. If you find out that another person is attempting to grab more equity, then it’s lucky that you’ve learnt this early on. You can quit now, rather than regretting later.
Great teams make valuable companies. What would you prefer? 10% equity of a company worth a 1000 crores or 50% equity of a company worth one crore? (considering lifetime value)
So what will you choose? An honest, transparent, helpful co-founder who offers you 10% or a corrupt, mean, opportunist co-founder offering you 50%?
- Join on vision
I joined my second startup as co-founder, working with someone who had been running his startup alone for one year. It was a mobile app for learning science through word games. I had met my co-founder at a startup event, and had shared my interest in working with a startup in the education domain.
We were both anticipating learning from each other. We talked for hours, and all our discussions were around startups and education possibilities in India. We were not in agreement on all points, but we enjoyed our discussions.
I joined him because of his vision and purpose. He offered me a position as co-founder because of my honesty and willingness to work on his mission.
- The myth about complementary skills
Everyone talk about finding a co-founder involved in marketing if you specialize in technology, or a technically oriented co-founder if you have business acumen. I am a software engineer by education and experience, but I now enjoy working in marketing.
It’s about the mindset, not the skills on paper. One co-founder should have a mindset of an artist with a belief in crafting beautiful products. One co-founder should be quality conscious, whether it is regarding the product, customer care or team management.
One co-founder could be a crazy developer who eats, drinks and sleeps code. One co-founder should be growth-oriented, seeing customer growth opportunities in everything – product, website, social media, customer interaction, vendor interaction, and investors. He should be able to attract customers from anywhere and everywhere. This person is known as the growth hacker.
The really important thing is that all co-founders should have a common vision. It’s also obviously great when one co-founder possesses a profusion of the qualities mentioned above.
It is nice that you are considering joining a startup as co-founder. This is going to be a roller-coaster ride; you will laugh, you will cry, you will be afraid, but in the end it will be thoroughly enjoyable. Here are10 questions you should ask before signing in as co-founder. I have just shared my experience as and with co-founders at my previous startups. Everyone has different experiences, a different story to tell from starting and running startups.
I would love if you shared your story in the comments!