Hi there. I'm starting a series I titled "Startup Academy", it's aimed to help potential entrepreneurs follow the right path to building a successful startup. Enjoy the first episode!
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In this insight, I'll be talking about the importance of having a co founder, and how to go about finding one. And then of course, when you think you've found the right person, you need to know how to structure your relationship with that person. So I'll talk about that too.
You might be thinking, what could possibly go wrong? Well, there's some very important issues you need to grapple with before engaging in a professional relationship with someone you will likely spend more time with than your closest loved ones.
Finding a co-founder
Right, so you have this great idea for a business, and you've started to put things in place. But doing that alone can be tough. Often, you may not have all the necessary skills, time, resources, or network to give your idea a fighting chance at survival, never mind thriving. The fact is, no matter how brilliant your startup idea is, every entrepreneur needs a strong founding team to turn a vision into reality.
Ultimately, it's the founding team that determines the success or failure of a business. Finding a co founder can be a great way of sharing your passion, and spreading the risk of the company right from the start. Why is it important to have a co founder? So lets take a look at some interesting statistics and quotes.
Many highly successful startups have more than one founder. According to a recent study on founding teams of top performing startups done by venture capital investor Tom Tunguz, he found that most successful companies had an average of 2.4 founders. Steve Blank is a Silicon Valley serial entrepreneur and Stanford professor who argues that the sweet spot for success is somewhere between two and four founders per business.
In the experience of Thomas Koulopoulos, founder of the Delphi Group, startups do better when they have two balanced and fully invested partners. Being able to rely on each other to share the burden, temper risks, collaborate creatively, take on specific areas of responsibility, and to motivate each other is absolutely critical during the early stages of a startup's growth. Koulopoulos states that having two founders rather than one significantly increases the odds of success. He's found that startups with more than one founder tend to raise 30 percent more investment, grow customers three times as fast, and are less likely to scale too fast.
Venture capitalist and co founder of Y Combinator Paul Graham famously once said "Few successful startups were founded by just one person." The old adage "two heads are better than one" holds true. Bringing a co founder on board who has complementary skills and a willingness to invest time and resources in the company can be a great way to spread responsibility and ensure you get the moral support you need to meet investor expectations.
Investors like knowing that you aren't the only person super psyched about your idea. Paul Graham has gone as far as saying that from an investor's perspective, having one founder is a vote of no confidence. It gives potential investors the sense that you couldn't persuade any of your friends to join you on your journey. And if you haven't been able to do that, the odds aren't great of you being able to enthuse customers with your idea or convince investors of your 'investability'.
What are you looking for in a co-founder?
Now that i've talked a little bit about why you need a co founder, I'm going to cover some tips on how to go about finding one. Now first of all, you'll need to determine what your needs are. So grab a notepad, and work out the answers to these questions. What overall skills are needed for your startup's success? What are your strengths and weaknesses in terms of your skill set and business competencies? What skills and competencies that you lack are vital for achieving business success? Which tasks within your business are you able to perform? And which parts of running the business might require expertise you don't have?
It's often the case that a startup founder might have a good business idea, but may not know how to build a viable product or service. Or that the entrepreneur might have extensive technology experience, but lack business acumen. And sometimes, when you're in the honeymoon phase of getting your idea off the ground, you don't realize the gaps in your skill set until you take the time to write down the answers to the questions i've talked about. Answers that will nine times out of ten lead to acknowledging your need for a co founder, establishing what roles in your startup need to be populated, and helping you figure out what kind of person you should be looking for to fill that gap.
Getting specific with your search. After establishing your personal deficiencies as a startup founder, and identifying the organizational gaps, you should have a rough idea of what kind of a person you might need to partner with in order to succeed. When you reach this point, it's time to get specific with your search criteria, and ask the question, what exactly am I looking for in a co founder? This is where you might start to consider specifics like: What is the minimum required education qualification? For example, are you looking for someone who's completed a university degree? How experienced does the person need to be?
Here you might consider how many years of industry experience that person might have and work out how much exposure that person needs to have in specialized areas of knowledge. When it comes to what personality traits to look for in a co founder, it's important to realize that it's natural to want to surround yourself with people who look like you, think like you, and behave like you. But building a balanced team often requires that you apply a counterintuitive approach, which may mean seeking out a co founder who is completely different from you in terms of temperament, risk aversion, likes, dislikes, as well as introversion and extraversion.
It might also be worth considering the value of promoting diversity by looking at a partnership with someone in a different age group, or a different gender, or even someone with a different ethnic or cultural background, so that you can leverage their experience and benefit from a different worldview. Now this is by no means an exhaustive list of what you need to look for in a co founder. Now a lot will depend on what skills and competencies you bring to the table, as well as the unique needs of your business. A good way of approaching this task is to write it down as an ideal job description. How to find the right person. Just as important as knowing what to look for in a co founder, is knowing where to look. Your direct personal network is a good place to start. It might very well be someone in your circle who is a good match for you.
Also, it helps to talk about your business ideas whenever you get the chance to. Keeping your social circle clued up on your startup efforts can provide valuable candid feedback whilst increasing your chances of finding someone who's enthused by your ideas and wants to join you. If canvasing your immediate network doesn't yield a partnership, ask people in your network to be on the lookout for a suitable co founder.
Another search tactic is to ask your mentors or investors to put you onto great people. Given how well they know you in terms of your personality and business aspirations, they should have a good sense of what kind of person you should partner with to grow your business. Other good places to canvas include industry events like seminars, conferences and business boot camps.
Also spread the word that your startup is hiring via social media platforms. If all that fails, and you have the budget to spare, hire a recruiter to find someone for you. But beware, warning bells go off in investors' heads when a startup founder has trouble enlisting a co founder.
Should you do it alone?
Steve Blank sums up the folly of thinking you can grow a successful business on your own in this quote: "A single founder is like one hand clapping." Meanwhile, Thomas Koulopoulos underlines the importance of not stunting the growth of your business by trying to go it alone, when he says: "Having the entire pie to yourself is tempting, but all of a very small pie is rarely as good as half of a much larger one."
As tricky as it may be to find a solid co-founder, it's certainly worth the effort. Building a strong, well balanced team will ensure that you have the operational flexibility and moral support to steer your business to success. I hope that this Insight has empowered you with some helpful direction on finding a co founder who will contribute complementary skills, invest sweat equity into your business, and share the responsibility of taking your startup to greater heights.
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