Founder alignment: more crucial than you think.
Why alignment of the Founders’ values matters, even if they don’t always agree on everything.
At ScreenCloud there are three Founders: me, Luke and Mark. But ScreenCloud wasn’t our first rodeo. In fact, we started our first business together in 2004: what was then a digital agency, Codegent. As we evolved, we started to understand that our spiritual home was in products, rather than consultancy. It means that our 15 years together has seen considerable change and therefore disagreements along the way. But we’ve never properly fallen out: we’ve never had one Founder say that they can’t work with another. And, aside from my family, there are no other people I trust as much in the world.
How has our relationship endured the highs and lows of being in a state of constant flux?
Is it that we’re just nice people? I don’t think we are particularly. Is it that we are all natural diplomats? I think some people would testify to the fact that we’re not. Or is it just luck that nothing has been so bad that one of us hasn’t snapped and told the other two where to get off? We’ve been under extreme stress at times and believe me, it would have been easy to blame someone else.
No. The reason we’ve managed to stay a tight unit is because we share the same values. Whether this is by coincidence, or by learning our values through shared experiences, I don’t know. But what I do know, is, faced with any type of judgement about an issue related to our values, we would all make the same decision.
I’ll give you a simple example. Recently, we had an applicant for a job as a developer. It was a full-time job, but the best applicant wanted to work four days because she has young children. Mark, who was doing the interview, agreed and then later told me, saying “I didn’t bother checking with you because I already knew what you would say.”
We hadn’t specifically spoken about our policy on people wishing to work less days a week than the role we had planned, but we all knew what our view would be if someone asked for it.
Why does this matter?
If the Founders’ values aren’t aligned, it would be easy to see how these could cause problems. Some examples might be:
- One Founder believes profit trumps everything, another doesn’t. A potential customer sends a brief, but it turns out that they are a major contributor to rainforest deforestation.
- One Founder believes that everyone working for the company should put the company before everything else. Another thinks that as a responsible employer, the company should introduce policies that encourage people to manage a sustainable work-life balance. A long-term employee has asked for a 6 month sabbatical to go travelling with his young family before his children start school.
- One Founder thinks that a primary function of business is keeping costs as low as possible. Another believes that investing in external help should be a strategic objective and wants to hire an agency to manage a rebrand of the business.
Should you do a ‘Values Pre-nup’ before you co-found a business?
Before we started Codegent, me and Mark tried a little exercise (Mark’s idea): we both went away and wrote on one side of A4 how we hoped the business would evolve. Remarkably, we both wrote it in a similar way: a mixture of expectations about the commercial future of the company, but also about the cultural values of the company: and they both pretty much matched. This wasn’t really a statement that we used beyond that, like some sort of Founding Fathers Declaration, but it would have given us both reassurance that we were thinking along the same lines.
I suspect if more co-founders tried an exercise like this, it might highlight if there were any glaring concerns in advance.
And, although sharing the same values is really important, that doesn’t mean you always agree. Great design might be something that everyone believes is important, but the decision to rebrand might generate differing opinions amongst Founders. The key difference is that Founders know that the disagreement is about the route, rather than the destination. In other words, if you know that your co-founder only wants the same outcome as you, you should never feel offended if they say that they disagree with your opinion.
And although, we’ve never since officially written down our values (they’ve just kind of evolved), I’m going to have an attempt at listing them here and what they actually mean in practice.
- Honest with a sense of fair play
Honesty has always been a core principle for us. We’ve always tried to do what feels fair by our staff, customers and our suppliers. If we say we will do something, then we do it. I can honestly hand on heart say, that if we’ve promised to pay someone for something, even where there was no contractual agreement in place or something was a bit unclear, we’ve honoured it because it’s the right thing to do. A recent example was when we agreed to pay someone a commission for any introductions they made that converted— they made an introduction which came to nothing. However, the person we were introduced to then passed us on to someone else who did convert. Strictly speaking we weren’t legally compelled to pay the original person any commission, but we felt it was the right thing to do, so we did. Sadly, we haven’t always experienced the same behaviour the other way — and perhaps because we judge people by our own standards, this has traditionally caused us to come out fighting.
It’s just never occurred to us that we would ever judge anyone other than by their output and contribution. We have people working for us who are based all over the world, different ages, sizes, religions, languages, gender, sexuality, hairstyles, musical tastes — it makes no difference to us so long as they are good at what they do. If they aren’t good at what they do, or at least are unable to be good at what they do when they work for us (there is a difference), then we don’t continue to work together. It’s not fair on us, on them or the rest of the team if we end up carrying someone.
You can see in the way that we write that we err on the side of being open. If you work for us, or if you have invested in us, you will have experienced it in a much more overt way. We share virtually everything with our staff (apart from confidential information about colleagues): we share all of our numbers, both good and bad and we share it on a regular and frequent basis. By the same token, our investors are given a full ‘warts and all’ update from us month-in-month-out, without fail. We’ve always worked liked this and we always will.
One thing you learn when you run a business, is that everyone is out to screw you. OK — not everyone, but enough of a minority of people to taint your view a bit. We won’t stand for it. There have been times when we’ve taken people to court, not because the financial loss was so much that it was going to damage us, but primarily out of a sense of injustice because they were taking advantage of our good nature. When we ran our agency we fired clients who behaved badly towards our staff on more than one occasion. If you value something, you have to be prepared to fight for it: and we’ve had more than our fair share of battles in the 15 years that we’ve worked together. But you know what? When you’re faced with a mean opponent, having people you trust in your corner is a great feeling.
Starting a business, then starting a load of other businesses, constantly pushing yourself outside what feels comfortable, trying new things — are all scary and in many cases don’t work out. We’ve had a few successes along the way, but we’ve also had some magnificent failures too. But if we’d panicked after the first time something went wrong, we’d never have started ScreenCloud or the other businesses that we were able to sell along the way. Being able to take risks and knowing that your co-founders have got your back is important. Even when one of us has clearly messed up, the other two have never rounded on them. Why? Because the mistakes we made were never done with malice and they were always made in good faith whilst trying to make our combined futures brighter. If you felt that at the first sign of failure, the knives would be out, you’d never want to try anything out of the ordinary again.
And trying things out of the ordinary is what has got us to the place we are today. In our own different ways, we’re all slightly rebellious. We’ve never enjoyed being told what to do or think. When we were still an agency we were advised by more than one person with more experience than us, that becoming a product company would end up bankrupting us (or words to that effect). Something that gives me a massive sense of happiness is when I can see we’ve gone against conventional wisdom and it’s worked out well for us. ScreenCloud is at odds with the rest of the industry: where others were focused on hardware, we focused solely on software; where others felt that getting content onto a screen was where their job ended, we obsessed about how we could make it as easy as possible for customers to get great content onto their screens; where others focused primarily on their reseller channels, we decided that we had to build a brand and a reputation so that our end-users could trust that ScreenCloud was the best solution out there.
In so many ways, our values aren’t just the things that have stopped us from having a massive falling out, they have also shaped our story by informing the choices we have made along the way.