How to Choose a Great Co-Founder
You might call me sensitive, but I really wish my co-founder would ask how I am feeling more often. But aside from that, we are a perfect match. He is the technical genius, who also enjoys legalese and finance. And I know my way around strategy, product management, marketing, sales, and general company building. After three companies and two acquisitions, we grok each other. But how do you know if your co-founder is a jerk before committing your working life to one another?
Travel back about 16 years with me. I was at a middle-of-the-pack mainframe, screen-scrapping software company, where the founders made each other nuts. I knew it was time to leave when one of them started chasing the other around a table in a meeting. I slowly stood up as they ran by and started looking for a new job. As I walked down the hallway, I concluded that Silicon Valley was an intense place and choosing a co-founder carefully was a big deal.
The key question is, How do you know if your co-founder is “the one” for you? It is unlikely that you will “just know,” but there are signs that might clue you in. Let’s start by considering what it means to be “the one.” I suggest that a perfect match starts with alignment around what integrity means to you. It then is bolstered when founders bring complementary skills together, have similar aspirations, and contribute similar efforts.
If there is a general co-founder match — you will build trust and that is ultimately the most important trait you will need to succeed.
It is not easy to figure that out how compatible you are before you work together for a year or more and face difficult times. And by “difficult times” I mean any of the following: you are not sure how you are going to make the next payroll, your lead investor tells you that he will not invest in the next round after verbally committing, you need to lay off employees, customers sign up but do not actually use your product. I am talking about the type of problems that give you GI problems and exhaust you.
So here is what we have discovered after starting or being early employees of six software companies, living in Silicon Valley for over 20 years, and thinking about startups our entire careers. You can use a simple two-by-two matrix to figure out if you are likely to be a good match before you get going.
We suggest that you and your co-founder (or co-founders) create a similar matrix. Fill it out and then discuss what you wrote. Here is what each section represents and how I recommend you use it:
Our corporate motto is to “win with integrity.” That might be a bit strong — or not strong enough — for some folks, but it reminds us that we are in business to succeed with dignity. The integrity part is easy most of the time, because we are not always presented with situations that test our values to treat people with respect and play fairly. But over time, especially when times are tough, our integrity has been tested and we have always tried to do what is right and to treat others as we would like to be treated. We have not always succeeded. Integrity is at the core of this model, because everything vectors from it. You should talk with your co-founder about what integrity means to you. For example, would you lie about the number of paying customers you have? How would you think about dealing with an under-performing employee? How would you respond to a competitor who trashes you via Twitter?
The key here is to honestly assess what skills you bring to the team. Consider two different questions. First, what exceptional skills do I truly have? And second, does the team need those skills now? In an ideal world, you would have close to zero ability overlap with others on the team. The only overlap that is truly acceptable early on is technical chops. You are looking for balance across the required skill sets needed to build a product that customers love and prove that they will pay you for it. And you are looking for historical proof that your (and your co-founder’s) skills truly are unique. In terms of the second question, you need to really ask yourself if the team needs people with specialized skills like business development, sales, operations, or even support as you get rolling.
I thought I wanted to be a psychologist in college, until I spent a summer working in a lab at U.C. Berkeley coding the facial reactions of toddlers when they were presented with various age appropriate images. So, that is a way of saying I am no shrink. But I do think if you give me a bit of time I can understand someone’s emotional structure. This ends up being an important “soft skill.” The idea that “it’s just business” is nonsense — working is personal. Starting a company is about creating, and we all know artists can be fragile. This means you need to peer into the heart of your co-founder. So, get real and start talking about your feelings and how you react to stressful situations. What is the half-life of your anger when something really pisses you off? What does soul-busting failure do to you? What’s the most difficult emotional matter you have had to overcome? In places like Silicon Valley, start-up suffering is a badge-of-honor. It is glamorous for those who make it and wounding for those who do not. It is not clear that there is a recipe for success here, but by gaining some emotional intelligence about each other you can better understand the team’s strengths and blindspots.
A number of companies ago, our board decided to replace the first CEO with someone “experienced.” (This is a pattern that seems to repeat itself over and over again in technology companies — typically to the detriment of the company and ultimately the investors themselves.) The new CEO came in and immediately got rid of most of the management team that was performing reasonably well and then spent the majority of his time getting his pilot’s license, learning to fly, and talking about building a “lifestyle company.” This was a massive disconnect with the majority of the remaining employees who were young, aggressive, and looking to have a major impact. I share this story because while there is nothing wrong with creating “lifestyle companies” his aspirations were radically different than what the team wanted to accomplish. So, where are you and your co-founder in your own lives? What are you trying to accomplish and where do you see yourselves in five years? Can you afford to invest in a company and receive little to no salary for 12 to 24 months and remain upbeat?
Do you know the 80s band, Oingo Boingo? They had a popular song titled “Nasty Habits.” I am reminded of that song every so often. There was the guy who chewed tobacco at one of our companies and carried around a spit can, or the guy who snarfed food continuously between sales calls and threw what he did not want under the desk, and of course the multitude of folks over the years who have feared soap and water. These are extreme cases, but you need to be able to work with someone (a lot). And this means you actually need to see and speak with one another regularly to collaborate and work through challenges. Does your co-founder like to code all night and you get up every morning at 5 and are working by 6:30? While you probably don’t have to worry about leaving the toilet up or down or other types of bothersome personal routines, building a company is about some brilliance and performing the mundane well. Little annoyances can be big distractions.
So, that is our simple guide to figuring out if you and your co-founder will likely work well together. Finding success is difficult, but you can tilt the odds with the right team.
At a celebration dinner after our last company was acquired by Citrix, with teary eyes, I announced that my co-founder could ‘build it, if I could dream it.’
Looking back, that was a testament to what we and the team accomplished, but it was also a nod to the relationship that we had developed.