Ride-hailing company Bolt has launched its Business Delivery service to help smaller firms fulfil orders during the COVID-19 lockdown. The service will operate between…
They say that starting a business with a partner is like a marriage. What they don’t tell you is that if your marriage does really well it’s like having a few hundred kids too. When things go wrong they can go really wrong, so here are ten tips for picking the right startup co-founder.
- Do not marry Lorena Bobbit
The first and probably most obvious part of the selection process is to try avoid starting a tech company with a psychopath or someone who acts rashly and against the best interests of the people around them. You will know this person because their projects never gain momentum and are constantly punctuated by angry closures.
If someone tells you that their previous four or five partners were all full of shit, remind yourself who is the common element in all those relationships and do not think to yourself that it will be different this time.
- Pick a partner you know
The best screening process for a business partner is a prior relationship, sort of like living together out-of-wedlock. If you have worked with someone for more than a year and have been through at least one hard situation together without turning on each other, then you’re probably going to work as business partners. What you want to avoid is surprises.
- Threesomes end in tears, foursomes in competitors
In my opinion and those of other VCs, two is the optimal number of co-founders for a tech startup.
When you have three people then it becomes easier to vote for a decision than make a decision based on its merit and actually sell it to your partner, which is bad for the business. Normally when there are four partners people pair up and create silos but even more concerning about four co-founders is that you’re going to have to split the money four ways when you exit.
- Don’t wear gloves to fill the dishwasher A startup is a messy business and you’re going to have to get your hands dirty. You need to be sure that your partner is not the kind of person who will try to be “management” from the get-go because this normally means you’re going to have to do all the work.
This is a tricky one because it requires a bit of EQ on both parts as there will be times where the workload is not evenly distributed. You’ve won if you both come out of the kitchen smelling like onions.
- Find someone who makes you a better person
This is difficult because often it feels like all the good people are already taken. If you’re technical you need to find someone who is good at business and marketing. If you’re good at business you need to find someone technical.
Two technical people with no sales capability will not end well and two sales people with no ability to execute will also end up nowhere. The best kind of pairing is a business-technical combination for many reasons but most significantly (in my opinion) because a) it’s the most efficient way to get a business rolling in terms of headcount and b) it allows you to specialise instead of competing with each other.
- Make sure at least one of you will care for the children
As your startup grows you’re going to hire people and with that comes HR responsibilities that can sometimes seem like a chore. In your co-founder pair you need to make sure that someone is clearly designated as the go-to person for the staff so that they don’t feel orphaned from your collective genius.
- Ear-plugs versus duct tape
If one of you snores (metaphorically) then you need to be sure that the other person will be prepared to deal with the imperfections. You can’t be trying to duct tape the person’s nose and mouth closed while they are sleeping. What you have to remember is that no-one is perfect and often those imperfections are what bond you closer together if you have the right chemistry.
- Money is the biggest cause of marital strife
It’s true no matter how much you might try convincing yourself otherwise. Disagreements about money are the number one cause of problems. When you choose your startup co-founder you need to be clear and explicit with each other about how the money is going to work and how you are going to engage about it.
This means setting out a clear policy on salaries, bonuses etc and making sure that you’re both transparent about this at all times. It also means equal access to the bank account and the management accounts. If you’re the person responsible foe the money side of things make sure that you make an extra effort to keep your partner up-to-date.
- Avoid pretentious titles early on
If you go about calling yourself the CEO of a two-person company people might think you’re an idiot so keep that in mind. For the first year of business rather call yourself co-founders while you get to grips with the business.
If you are the technical co-founder then make sure you’ve selected a partner who you will be comfortable with being the CEO. Do not try to be the CEO and technical co-founder at the same time, there simply isn’t enough time in the day.
- Contracts and insurance
This will be covered by another post in more detail but let me just summarise here by saying that at a bare minimum you need to have shareholders agreements and to be explicit about who owns what in the company when you start it. Getting married without a contract is stupid and so is starting a business without one.
If you can tick all these boxes then you’re on to a good thing and have a fighting chance at building a business knowing that the person you’re working with is going to be there to help when things get tough and to laugh and celebrate when things go well. Life is too hard to have enemies on your own side, that’s why we get married in the first place. It’s about taking on the world as a team.
I hope you’ve found this post useful and keep in mind it’s by no means a rigid list, obviously there are significant exceptions and examples but this is my rule-of-thumb list. Feel free to comment about your experiences and lets start a conversation.