How Conflicts between Co-Founders Can Kill Startups
65% of startups fail as a result of co-founder conflict.
In 2012, Harvard Business School professor Noam Wasserman studied 10,000 founders for his book “The Founder’s Dilemma. His research found that 65% of startups fail as a result of co-founder conflict. That’s higher than the divorce rate.
I have founded companies. I spent years working as a turnaround CEO. I have experienced toxic conflict and healthy conflict in organizations first hand. Today, I am a coach to high growth venture backed startups. Each week I meet with co-founding teams who are struggling. Who are in pain.
My first request of new co-founder clients is, “Tell me where it hurts.”
If you are reading this and nodding your head in agreement because this relates to your own experience, please understand that you are not alone. My calendar is full clients that are experiencing the pains and struggles that are common in co-founding teams.
There are patterns to this pain. Over a series of five posts, I’ll be sharing the three most common manifestations of co-founder conflict I see in my office, along with preventative maintenance tactics co-founders can employ in their relationships to avoid becoming another tally in that co-founder failure statistic. But before we dive into specifics, I want to talk about conflict in co-founder relationships in broader terms.
Having conflict in your co-founder relationship is normal. Having a conflict is not a sign of failure. In fact, not having conflict can be a sign of a bigger problem.
Lack of conflict tells me one of two things, either you don’t think your co-founder can handle open and honest feedback or you think the relationship is already so fragile that you are walking on eggshells. Either way there is a fundamental rift in the relationship that if not addressed will likely lead to the even deeper conflict. It is how you deal with conflict that makes the difference.
My partner Jerry Colonna asks leaders to be fierce, not ferocious. What does that mean?
It means that one of the most compassionate things you can do for a human being is to tell them when you observe that they are not succeeding in a role. We often think that we need to be nice we need to be kind and not hurt anyone’s feelings, but that is actually one of the most violent, least compassionate things you do for somebody because we are allowing them to fail and then learn and grow from that failure. You’re watching them fail. Then the next thing is they will get fired, they will leave, something will happen. The relationship will break. They will be left wondering how you could sit there and watch them fail and not say anything. By being really nice things go really, really wrong and then we wonder what happened. That is what the absence of conflict looks like.
Imagine watching your co-founder (or substitute co-worker, direct report, etc.) struggle in a role and hearing about it via feedback from employees or the board and not sharing that feedback with your co-founder until enough time has gone by that you have to or you will either lose a valuable employee or lose the trust of the board. So you finally give your co-founder the feedback and in their mind they are thinking “you have watched me fail for months and have been talking about it to the board and/or employees for months but not telling me”. At this moment a large portion of the trust that may have existed between co-founders is lost. This is the same trust that is necessary to repair the relationship.
Healthy feedback is always given in the context of caring.
One of my often repeated prescriptions to co-founders is that their new favorite word is the word is “because”. Because when you are going to give feedback, you are going to give context. That context is going to be something like, “Because you are an amazing CTO, and I think you can be an amazing people leader, I want to give you some feedback.” Then you give the feedback. Without context our brains will always make the worst meaning possible about any feedback. Our survival wiring is setup to see threat before reward.
Understanding the detrimental effects conflict can have on a co-founder relationship and their company, you face a choice. Will you choose to navigate conflict mindfully? Will you choose to invest in building trust, in building a solid relationship with your co-founder(s)? This post is the first in a five part series on co-founder conflict. Next, we’ll go into more detail around the three most common co-founder conflicts I usually encounter in my coaching work with clients, along with strategies to move through that conflict, or better still, prevent it in the first place. I’ll leave you with one Reboot’s favorite quotes around conflict from the author David Richo,
“To be adult in relationship is not to be conflict-free. Its to resolve conflicts mindfully.”
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This article first appeared on the Techstars blog.