One of, if not the most, important decision any solo founder can make early in the life of their company is deciding whether or not it is necessary to add a co-founder. There are lots of GOOD reasons to do so, and a few BAD ones. Ultimately the most important factor for making any decision early should be based on the effect of that decision on the health of the company since that should be the main concern of any founder. However, often that isn’t enough since a founder can simply hire people for the good of the company instead of bringing them on as co-founders (it’s A LOT easier to get rid of them if that becomes necessary). Let’s take a look at some of the GOOD reasons and some of the BAD reasons for bringing on a co-founder below:
Passion is in there, but the most important piece is COMMITMENT. If you can find someone that is as committed to the mission of your company as you are, you might have found a potential co-founder. The process of starting and building a company is difficult and can be lonely, so the opportunity to do that with someone who is as committed as you are can be a competitive advantage. And that is the standard you should begin with by asking: “Does adding this co-founder give the business a competitive advantage?”. If the BUSINESS doesn’t benefit, then the default for bringing on a co-founder should be “No”.
Again, the FIRST good reason to think about a co-founder here is the competitive advantage it gives the business. No founder can do everything, but the default for adding skills is hiring. Adding a co-founder that has a complementary founding skill, however, can be extremely helpful. The clearest example would be adding a technical co-founder when a non-technical founder can no longer get away with selling the idea based on wireframes. Sure, it is possible to get MVPs done through development agencies/teams, but if you have traction and need to build the tech to scale right away, it might be worth investing the time and energy to find a technical co-founder. There is a unique need for the “360Scramble” (aka, total focus on everything) when a company is in the early founding stages of any company, and having a co-founder with complementary founding skills during that time can make the difference for your company.
Loneliness is undoubtedly a problem, but a founder should be careful not to put that very personal burden on the company. Let me give you an example. I knew of a great founder in the educational tech space that had a wonderful business serving a fairly broad region of schools. It was early days, but she had some success and was starting to spend more time outside the classroom (which was her comfort zone) and feeling more spread thin. Totally understandable, and in fact, common for founders. This founder had a really good personal relationship with a friend whom she thought could help provide some general administrative help to run the broader business, and therefore free up the founder. So, she asked her friend to come along for the ride in the business as a co-founder.
If you have ANY experience in the space you know exactly how this story ends. Things went great for a number of months but as the years progressed, tensions started to rise around decision-making and the direction of the business. The personal relationship hadn’t translated to a clear and coordinated vision for the business, and both ended up breaking down. The solution to the personal problem was available and understandable, but without taking the time to consider the needs of the BUSINESS first, the founder had laid a trap that was really difficult to escape.
Companies start in ALL sorts of ways, and one of the most common I’ve heard of is a founder with a great idea that finds someone who believed in their vision early on and jumped in with both feet. This is exciting and of course, makes the founder feel grateful to that early believer for their vote of confidence, sharing of their skills, and opening of their networks to help fulfill the founder’s vision. After the business starts to hit PMF and find its place in the market, the Early Believer starts to gently “press” on the founder and remind him of all the effort they put in, and the founder (understandably) looks for a way to reward the Early Believer for their efforts. There are many ways the founder could reward that Early Believer (salary, one-time $, equity, etc), but instead that founder decides to bring on the Early Believer as a co-founder out of a sense of obligation. A personal obligation became a business obligation, and that often turns sour.
There are no guarantees in business, but the co-founder problem is a critical issue to address with very clear standards. I encourage any company I work with to consult their team of investors, board members, or other interested outsiders that will help them understand the needs of the business and whether (or not) the potential co-founder serves those needs directly.
Build4Good | AdamP | Managing Director | Techstars Equitech Accelerator
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