The Business of Finding a Co-Founder
“There are few factors that can make a company more successful, fun, and epic than an awesome co-founder. There are few factors that can make a company more unsuccessful, aggravating, and pathetic than an incompetent, lazy, or dishonest co-founder.” Guy Kawasaki
Around 6 months ago I decided that I wanted to find Co-Founders for my current venture. This is because successful companies are usually started by more than one person and I personally believe in the magic that happens in collaboration. Founding a startup with big ambition requires a team of ambitious people. After making this decision I wrote down the kind of people I would like to work with. Initially I scribbled down skills that are complimentary to mine but I went further and wrote down personality traits too.
Great, awesome, so then onto the search… is there a Tinder for Founders? Even if there was I’m not convinced it would be a successful way of finding Co-Founders. So I took myself off to lots of networking events to see if I can meet potential Founders there. London, where I’m based, even has a Co-Founder dating event which sounded promising. A long story short, I got up on stage several times, delivered my elevator pitch and asked my ask: “I’m looking for a technical and product design Co-Founder” After many of these sessions I was bombarded with consultants and people selling me their ‘guys in India’. Probably rockstar consultants and really smart guys in India but not what I was looking for.
I spent some time frustrated and then had a brainwave. I’m part of Ada’s List, an online community for women in tech. I’ve been to some of their London meetups and it’s a great. supportive community. I got pretty psyched at this stage and had visions of building a stellar all star female founding team. I put up a message and heard back from a handful of women all enthusiastically loving my startup idea and wishing me luck. I got support but again no potential Co-Founders. I had a think about my imaginary kick-ass female founding team and realised it didn’t really matter what gender, age or ethnicity. In general, the more diversity on a team the more perspective we have as a business which is ideal but gender wasn’t part of the criteria in my search.
CONTACT MY CONTACTS
Now, what I did next seems pretty obvious in hindsight and yet weirdly I didn’t start with this approach. I went through pretty much every contact I have and explained what my new startup is and asked for introductions to anyone they think might be interested in working with me or has related experience. This being my third startup and my generally curious nature means I have quite a few contacts. I finally had some meetings scheduled!
I went to each meeting with the potential of meeting a future Co-Founder and left most meetings having not found a match. A few months in I met a couple of people who seemed like they have the relevant complimentary skills, a technologist and a product designer. They seemed to have a similar vision and ambition to mine. One of them suggested having a couple of workshop days to flesh out some ideas and see if we can work together. We did and it seems we could work together. It was exciting to take a startup idea to something bigger than myself and I felt optimistic.
Following the workshops our design Founder got in touch saying that he feels his skills would be better utilised on a part-time basis as they’re more niche. He suggested working on an equity basis plus a fee once we got funded. It felt like a more complicated relationship than I wanted and it was fairly important to me to have equal founders who have invested interest in building the product collaboratively from the ground up. I had a think about the arrangement and the argument for it from his perspective and decided it could work so I agreed.
With one of my Co-Founders in a full time job and the other working part-time and growing his own design consultancy business at the same time I proceeded in my full time pursuit of getting us some seed funding. The seed funding is to get the whole team working full time on the startup and for prototyping. Then I began an endless cycle of pitching, networking, improving my pitch, applying to accelerators and grants, pitching, tweaking, listening to feedback, improving my pitch. You get the general idea.
So far I’ve been pitching an idea, the team who will execute it and some early user-testing I did to test the need for our product. Team meetings happen around once a month and not always with all three of us. While I’m frustrated by the slow progress, I also appreciate that it’s difficult to build a product without funding, it’s a catch 22. So, we’ve decided to build a demo with the little time we have as a team.
Our design Co-Founder sends me some designs and an email saying he would prefer to be a Co-Founder. As this is what I originally wanted I agreed, not questioning the change of mind.
We have a team meeting again and our design Co-Founder can’t make it. I bring up the need for a Co-Founders vesting agreement soon as we’ve had some time to test our relationship both ways and are making funding applications. With our design Co-Founder not being at the meeting I should have called him to explain the Co-Founders agreement discussion but I didn’t. What happened next is good but felt really bad.
SOMETIME THINGS THAT FEEL BAD ARE GOOD
A couple of days later my design Co-Founder suggested, on Slack, we should incorporate our company as we’re making funding applications. I explained to him that it’s OK to register our company once we get either funding or revenue and to re-assure him that it’s standard practice for startups (or at least the sensible ones) to do this. I brought up the Founders agreement and sent him a link to check it out. He continued to put forward an argument on why we should incorporate including that it doesn’t cost much (as I had raised expense as an issue), wanting to make sure we’re all committed to each other and to the project.
I re-iterated my preference to focus more on building a product and testing it at this stage over spending time, money and effort on incorporating. I suggested we have a team meeting. The first date that we could all mutually meet was in two weeks time. It was beginning to bother me that while we all live in the same city we can’t meet up to discuss an important issue.
So, the days go on and an accelerator deadline comes up. I feel quite uneasy about the difference in opinion regarding incorporating and take time out to think about it. To simplify I ask myself a question ‘can I work with this person as a Co-Founder?’ it was an easy question to answer, so I fired off an email explaining why I don’t think it’s working. With an impending application I wanted to be upfront and not mislead anyone. I received an email back stating that I’m being harsh about this decision. Yes, it perhaps did sound harsh but it was such a different way of doing business that I felt that it’s not a good match. I realised a fundamental problem had arisen; a startup person, me, is trying to partner with someone who has an agency or consultancy mindset, my design Co-Founder. Both are valid businesses but not a good marriage.
All the electronic communication was not helping the disagreement so I suggested a phone call, since meeting up was not a possibility. During the phone call I realised that there was a trust issue playing out too. It became a slightly heated conversation and I was still being told that incorporating is such a simple thing to do that I’m obviously not doing it as an excuse to exercise more power, such as getting rid of founders as I just had on a whim. Wow! It was time to end the conversation there.
I didn’t regret making the phone call as that was the right thing to do. Earlier I said that some of this stuff felt bad and it felt really shitty to put myself out there, share ideas, be open and collaborative to then be accused of taking a power trip! So, why was it good? I have figured out really early on that I had the wrong match as a Co-Founder before things get more complicated. Disagreements will happen but just like in a marriage there are some things that can’t be compromised on.
DON’T DO A STARTUP WITH A STRANGER BUT…
Ideally, it’s better to found a company with someone you’ve worked with before and know well, however that is not always a possibility. Inevitably if you meet new people to start a business with then it means you will be taking a risk on a stranger and they’ll be taking a risk on you. Only time will tell if it can work, but there are a few indicating factors that Guy Kawasaki has articulately shared as a guide to finding a Co-Founder.
A few related resources:
Openly sharing my learnings as I build Peeka, a smart camera for kids